UNDERWRITERS in Hong Kong have set a precedent by invoking a law for the first time that dates back to 1906, to avoid paying a claim on cargo that disappeared in the high seas aboard a phantom ship.

Section 44 of the Marine Insurance Act (MIA), a law replicated in many Commonwealth countries, says that insurers are not liable if a shipping line has no intention from the outset of taking the cargo on its contracted voyage. It was used to defeat the policy claims of the owner of missing palm oil cargo worth US$2.5 million put aboard the ...

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