PIRACY UPDATE - HFW

PiracyJanuary2011PIRACY UPDATEMasefield AG v Amlin Corporate Member Ltd [2011] EWCA Civ 24LondonParisRouenBrusselsGenevaPiraeusDubaiHong KongShanghaiSingaporeMelbourneSydneyIn February 2010 we provided a short clientbriefing on the ramifications of the judgmentof the High Court in Masefield AG v AmlinCorporate Member Ltd [2010] EWHC 280(Comm). Following an appeal by Masefield AG,the Court of Appeal published its judgment inthe matter on 26 January 2011.The questions on appeal by the appellantswere:• Was the cargo an actual total loss (“ATL”)?• Does the hijacking of the vessel constitutetheft?• Is payment of ransom in the public interestor is it contrary to “universal principles ofmorality”?The appellants did not appeal the High Court’sdecision that the vessel was not a constructivetotal loss (“CTL”) or any issues of fact.The Court of Appeal began with a lengthyanalysis of the law of ATL and concluded, inaccordance with the finding of the Judge atfirst instance, by deciding that the cargo wasnot an ATL because there was no irretrievabledeprivation of property. The hijacking was atypical “wait and see” situation given that “therewas not only a chance, but a strong likelihood,that payment of a ransom of a comparativelysmall sum, relative to the value of the vessel andher cargo, would secure recovery of both...”.Although not an issue on appeal, the Court ofAppeal also noted that “the facts would noteven have supported a claim for a CTL, for thetest of that is no longer uncertainty of recovery,but unlikelihood of recovery”.The Court of Appeal went on to considerwhether the taking of the vessel and cargo,even with an intention of returning them onpayment of a ransom, constitutes theft underEnglish law. This point was dealt with quicklyand the Court concluded that there was nointention to permanently deprive (deemed orotherwise) and therefore the argument fails.