CASE STUDY 1 A vessel and its cargo and crew were seized off Somalia by pirates. Negotiations for release were commenced almost immediately, but before they were concluded the cargo owners gave notice of abandonment to the insurer, which was rejected by them. Ten days later the vessel, cargo and crew were released following the payment of a ransom. The cargo was then sold at a loss. It was allaged that the cargo had not been lost because it had been known from the outset that a ransom would be paid, and the evidence was that pirates in that region always returned the seized subject matter in return for a ransom. In the case the vessel was captured by pirates together with cargoes of biodiesel on board. The vessel and cargo was recovered about 11 weeks after the vessel was captured.

C.1.1. In Marine Insurance Act the term 'perils of the seas' refers only to fortuitous accidents or casualties of the seas. Give examples for the perils of the sea in marine adventure and explain each of them briefly.

C.1.2. Please discuss whether the ransom payment can be covered by the marine insurance policies.