A ship carrying a cargo of fresh fruit from Brazil to Malaysia was stopped by Brazilian authorities because it was identified as the ship which had illegally discharged oil into Brazil's coastal waters during the voyage to Brazil. When the ship finally arrived in Malaysia, the cargo had perished and was completely ruined owing to the delay.

(a) The Malaysian Insurance company has denied a claim by a cargo policy holder, on the grounds that the policy is void for legality. Has the owner of the cargo breached the warranty of legality?

(b) The same insurance company is denying a claim by the owners of the ship who were also covered by an insurance policy. The owners had made a claim for the loss of freight charges and additional expenses they incurred through this incident. Have the owners of the ship breached the warranty of legality?

Apply the Marine Insurance Act 1906 to ascertain the rights and liabilities of the seller, the buyer and/or the insurer.