BIMCO Piracy Clause (2009) and duty to proceed with due despatch

 

 

In London Arbitration 13/18 the vessel was time chartered under a charter on NYPE form which incorporated the BIMCO Piracy Clause for Time Charter Parties (March 2009). This provides:.

(c) If the Owners consent or if the Vessel proceeds to or through an area exposed to risk of piracy the Owners shall have the liberty:

(i) to take reasonable preventive measures to protect the vessel, her crew and cargo including but not limited to taking a reasonable alternative route, proceeding in convoy, using escorts, avoiding day or night navigation, adjusting speed or course, or engaging security personnel or equipment on or about the vessel,

 

Owners employed armed guards and purchased additional security equipment when proceeding through an area exposed to risk of piracy, in this case the Gulf of Aden. Charterers contended that the options in paragraph (c)(ii) of the Piracy Clause were disjunctive so that owners could not recover both costs. The Tribunal disagreed and held that the clause made it clear that the owners were not so limited and could recover both costs. However, owners’ liberty to take ‘reasonable preventive measures’ did not justify their decision to proceed via a route which skirted the border of the high risk area, and constituted a breach of their obligation under cl. 8 to prosecute voyages with due despatch. The vessel employed armed guards for the fourth voyage and had installed a new set of protective materials and had the maximum level of security measures as set out under Best Management Practices 4 for Gulf of Aden Transits, Somalia Transits and Indian Ocean Transits. It was unreasonable to route the vessel in such a way that there would be no chance of interference from pirates and the owners were in breach of cl.8 for which the charterers were awarded damages in hire and fuel costs.

 

A further issue arose as to owners’ right to claim crew war bonuses from charterers. Clause 57 provided that when trading in the Gulf of Aden the crew war bonus if any was to be for charterers’ account. Owners claimed that the only condition was that the war bonus must actually have been paid to the crew. However, the Tribunal pointed to the BIMCO Piracy Clause which provided:

(d) Costs…

(ii) If the Owners become liable under the terms of employment to pay to the crew any bonus or additional wages in respect of sailing into an area which is dangerous in the manner defined by the said terms, then the actual bonus or additional wages paid shall be reimbursed to the owners by the charterers at the same time as the next payment of hire is due, or upon redelivery, whichever occurs first.

 

To be recoverable from charterers any bonus had to be one which owners were obliged to pay under the crew’s terms of employment. Here, the relevant terms provided that a bonus for transit of the Extended Risk Zone would be paid only if the vessel were attacked, which had not been the case. Accordingly, owners were not entitled to recover from charterers the bonus they had paid to the crew.

 

 

 

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