A Summary Of Recent Developments In Insurance, Reinsurance And Litigation Law

This Week's Caselaw

Masefield AG v Amlin Corporate Member Ltd & Anor

Court of Appeal upholds decision that act of piracy does not amount to actual total loss

http://www.bailii.org/ew/cases/EWCA/Civ/2011/24.html

Section 57(1) of the Marine Insurance Act 1906 ("the Act") provides that there is an actual total loss ("ATL") where "the subject-matter insured is destroyed, or so damaged as to cease to be a thing of the kind insured, or where the assured is irretrievably deprived thereof". In this case, Somali pirates had seized a tanker and the claimant cargo owner served a notice of abandonment on the defendant cargo insurer. The notice was declined. Eleven days later the shipowners paid the pirates a ransom and the vessel was released. At first instance, it was held that there had been no actual total loss (nor constructive total loss ("CTL") as defined in section 60 of the Act). The claimant appealed on two grounds: