INTERTANKO CHARTERING SEMINAR ATHENS PIRACY Jonathan Hare Skuld

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Frank Erik Lawrence
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1 INTERTANKO CHARTERING SEMINAR ATHENS 2011 PIRACY Jonathan Hare Skuld

2 BACKGROUND

4 BELUGA NOMINATION ASPHALT VENTURE

6 Charterparty issues What is piracy? Hire or off-hire? Employment & Routeing Indemnity Extra costs Insurance K&R Others Seaworthiness BMP3 Armed guards

7 What is piracy? In the context of an insurance policy, if a ship is, in the ordinary meaning of the phrase, at sea, or the attack upon her can be seen as a maritime offence the for the purposes of a polcy of insurance she is, in my judgement, in aplace where piracy can be committed Andreas Lemos 1982 Not defined in c/p clauses Terrorism - is the motive criminal or political?

8 War Risk Clauses BIMCO Clauses CONWARTIME 2004 War Risks shall include any actual, threatened or reported.acts of piracy Reasonable judgement of Master or Owners Increase in risks since C/P entered into? Product Star SHELLTIME 4 Cl 35 no direct reference to piracy

9 Piracy Clauses INTERTANKO Time & voyage December 2008 BIMCO Time, Voyage & COAs March 2009 Revised November 2009

10 Hire or off-hire? SHELLTIME 4 (2003) Clause 21(a): On each and every occasion that there is a loss of time (whether by way of interruption in the vessel s service or from reduction in the vessel s performance, or in any other manner): (v) due to detention of the vessel by authorities at home or abroad attributable to legal action against or breach of regulations by the vessel, the vessel s owners or Owners the vessel shall be off-hire from the commencement of such loss or time Amendment (vi) due to an act of piracy or any other unauthorised physical capture and/or control of the vessel of whatsoever nature..

11 Hire or off-hire? INTERTANKO The vessel shall remain on hire for any time lost as a result of taking (..preventive measures etc ) or for any time spent during or as a result of an actual or threatened attack or detention by pirates BIMCO hire shall cease on the 91st day after the seizure and shall resume once the vessel is released CHARTERER S CLAUSE The vessel shall be off-hire for any time lost as a result of taking (preventive measures etc..) and for any time spent during or as a result of an actual or threatened attack or detention. Time & costs shall be shared equally..for awaiting convoys

12 Hire or off-hire What does the Clause say? Is there an off-hire event? If no express reference to piracy, probably not off-hire Saldanha (2010) NYPE But is there a c/p breach?

13 Employment Shelltime 4 (2003) Cl 13 (a) The Master shall be under the orders and direction of Charterers as regards employment of the vessel Charterers hereby indemnify Owners against all consequences or liabilities that may arise (i) from..the Master otherwise complying with Charterers or their agents orders but see limits of this indemnity Thinking time may be allowed - The Houda

14 Indemnity Implied Island Archon (1993) Express Charterers shall indemnify Owners against all liabilities costs and expenses arising out of actual or threatened acts of piracy or any preventive or other measures taken by Owners including but not limited to aditional insurance premiums, additional crew costs and costs of security personnel or equipment INTERTANKO

15 Routeing Obligation on Master to take quickest & shortest route Hill Harmony (2001) BUT - The master remains responsible for the safety of the vessel, her crew and cargo. If an order is given which exposes the vessel to a risk which the owners have not agreed to bear, the master is entitled to refuse to obey it. (Hill Harmony) - Indemnity

16 Routeing Owners shall not be required to follow Charterers orders that the Master or owners determine would expose the vessel, her crew or cargo to the risk of acts of piracy. INTERTANKO The Vessel shall not be obliged to proceed or required to continue through any port or place which, in the reasonable judgement of the Master and/or the Owners is dangerous BIMCO What risks have the owners accepted? Product Star (1991)

17 Extra Costs - Insurance Additional Premium Hull & P&I War risks excluded Terrorism excluded Piracy not excluded War risks included Terrorism included Piracy may be included - Hull - P&I

18 Extra costs Insurance AP under existing insurances K&R Kidnap & Ransom ransom negotiators fees incidental costs Who pays? General average unseaworthiness

19 Who pays ransom? RANSOM o K&R Cover o Cargo o Hull ocharterers oowners insurers War Hull P&I (?)

20 Seaworthiness Shelltime 4 (2003) Clause 1 At the date of delivery of the vessel under this charter and throughout the charter period (c) she shall be in every way fitted for the service (g) she shall have on board all certificates, documents and equipment required from time to time by any applicable law to enable her to perform the charter service without delay Clause 2 At the date of delivery of the vessel under this charter and throughout the charter period she shall have a full and efficient complement of master officers & crew...who shall be trained to operate the vessel and her equipment competently and safely.

21 Seaworthiness Seaworthiness also implied BMP3 Best Management Practices to Deter Piracy off the Coast of Somalia and in the Arabian Sea Relevance of BMP3 to seaworthiness

22 BMP VESSEL REGISTRATION & REPORTING 2 May 2011 MSCHOA* enlarged Vessel Movement Registration Area with immediate effect on entering an area bounded by Suez, 10 S, 78 E and 23 N consistent with UKMTO Voluntary Reporting Area High Risk Area as defined in BMP "Each transit through High Risk Area requires registration to MSCHOA: If Vessel registration is not made under these conditions the ship is NOT BMP compliant as recognised by the Shipping Industry including the IMO, the Military and Flag States. Norwegian proposal to make registration and reporting mandatory *Maritime Security Centre (Horn of Africa)

Armed guards Shell Piracy Clause It is a condition of this Charter that if owners deploy Guards or Protection personnel to sail on the vessel such Guards or

23 Armed guards Shell Piracy Clause It is a condition of this Charter that if owners deploy Guards or Protection personnel to sail on the vessel such Guards or Protection personnel shall be at Owners expense and shall not be armed and any equipment they employ shall be non-lethal. Flag state requirements observed? SOLAS ISPS Port state

Piracy - Industry Guidance on Citadels & Revised International Group FAQs 26th September 2011

Archive Piracy - Industry Guidance on Citadels & Revised International Group FAQs 26th September 2011 Translations: Vietnamese Industry Guidance Relating to the Construction and Use of Citadels Detailed