There was a man in Orkney named Erik Red Hand, generally well-thought-of, though said by some to be over-ruthless.
A dispute arose between this Erik and a man named Ketil Asmundsson over which of them was the rightful owner of the island of Hvalsey.
The dispute went back and forth until finally they reached an agreement. At sunrise on the last day of Yule they would both set sail from Torshavn ("Thor's Harbor") Bay to Hvalsey. Whoever reached the island first would become its rightful lord.
Next morning they set off at the appointed time. It soon became clear that Ketil's ship was the faster of the two and would be first to land.
Seeing this, Erik Red Hand took up his ax, laid his left wrist across the gunwale, and chopped off his hand. He lobbed the hand to shore over Ketil's head, and in this way became first to reach the island.
His descendants still live there today.
This was in the days of the Norse land-take in Orkney.
Up Helly Aa ("holiday all up"), originally Thirty-Ninth Night (3 x 13), is now officially observed on the last Tuesday in January.
Callum G. Brown, Up-Helly-Aa: Custom, Culture and Community in Shetland (1998). Mandolin.