“My wife may capture my heart”. Off hire and capture by pirates.

 

Owners time chartered the “Eleni P” on an amended NYPE 1946 form and during a voyage from Ukraine to China the vessel was routed via the Suez Canal and the Gulf of Aden. After transiting the Gulf of Aden without incident she was attacked and captured by pirates in the Arabian sea and released some seven months later.

Owners claimed US$ 4.5 million hire for this period. The Tribunal rejected the claim on the grounds that two additional typed clauses, clauses 49 and 101, excluded it. Owners appealed in respect of the correct construction of each pursuant to s69 of the Arbitration Act 1996. In Eleni Shipping Limited v Transgrain Shipping BV (“The ELENI P”) [2019] EWHC 910 (Comm) Popplewell J held that the appeal succeeded in respect of clause 49, but failed in respect of clause 101.

Clause 49 – Capture, Seizure and ArrestShould the vessel be captures [sic] or seized or detained or arrested by any authority or by any legal process during the currency of this Charter Party, the payment of hire shall be suspended for the actual time lost […]

Owners contended before Popplewell J that Clause 49 only applied when the Vessel was captured, seized, detained or arrested by any authority or any legal process – it therefore did not apply to capture by pirates. Charterers argued that only the word “arrested” was qualified by the phrase “by any authority or by any legal process” andnot  the word “captured” , and therefore as a matter of ordinary language, the Vessel had been captured.

Popplewell J held that the clause only applied to capture by an authority or legal process, and therefore not to capture by pirates. The words “any authority or any legal process” applied to the whole preceding list of events. To limit it to arrest would be superfluous. The tribunal had stated that ‘capture’ was not something that an ‘authority’ could be involved with. Not so, Popplewell J stating “capture does not necessarily connote the use of force. Unoccupied land or undefended goods may be captured. My wife may capture my heart. I see no difficulty as a matter of the ordinary use of language in the concept of a governmental authority or ruler capturing a vessel.”

Clause 101 – Piracy ClauseCharterers are allowed to transit Gulf of Aden any time, all extra war risk premium and/or kidnap and ransom as quoted by the vessel’s Underwriters, if any, will be reimbursed by Charterers. […] In case vessel should be threatened/kidnapped by reason of piracy, payment of hire shall be suspended. It’s remain understood [sic] that during transit of Gulf of Aden the vessel will follow all procedures as required for such transit including but not limited the instructions as received by the patrolling squad in the area for safe participating to the convoy west or east bound.

Did the suspension of hire only operate if the vessel were threatened or kidnapped by reason of piracy while transiting the Gulf of Aden, as owners argued, or did it operate wherever the Vessel was threatened in the Gulf of Aden or as an immediate consequence of her transiting or being about to transit the Gulf, a charterers argued? The Tribunal had accepted charterers’ argument and so did Popplewell J. The purpose of the Clause was to allocate the risks associated with such trade, not solely within a specifically defined geographical area. Its first sentence allocates the burden of an extra war risk premium and the sentence concerning hire suspension allocates the risk of delay from detention as a consequence of the transit which the first sentence requires.

Accordingly, owners were unable to claim hire for the seven months during which the vessel was held by the pirates.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s