The Brillante Virtuoso was sailing from Ukraine to China with a cargo of fuel oil when she was boarded by pirates off Gulf of Aden on 5 July 2011. The pirates directed the vessel to Somalia but when the engine stopped and could not be re-started, they allegedly placed a detonator in the engine room causing a huge damage to the vessel. The vessel was insured for $US 55 million with an additional $US 22 million increased cover with ten Lloyd’s underwriters. The underwriters refused to indemnify the assured (Suez Fortune Investments Ltd). The assured and its bank (Pireus Bank AE) brought a claim against the insurers. In the first stage of the trial, the claimants were successful and Flaux, J, (as he then was) held that the vessel was a constructive total loss under s. 60(2)(i) of the Marine Insurance Act 1906 as she was damaged by an insured peril and the cost of repairs would exceed the insured value of the ship when repaired  EWHC 42 (Comm). The insurers argued unsuccessfully that in taking into account the repair value of the damage, the cost of repairs at China should be taken into account. The claimants, on the other hand, argued that the repairs were completed in Dubai and the cost incurred at Dubai should be taken into account even though the cost of repairs in Dubai was 17.5 % more than the cost of repairs in China. Flaux, J, held that that the appropriate location for repairs will depend on the individual circumstances of the case. In this case, he was of the view that Dubai was the most appropriate place for repairs taking into account i) risks that will be associated with further towage to China; ii) cost of insurance for the tow; iii) loss of income for additional period of time; and iv) reputation of yards (not only with regard to the quality of workmanship but also accuracy of cost estimates and the risk of delay).
The second stage of the trial which will determine the issues of liability of the insurers commenced on 18 February 2019. Parties have different views of what happened to the Brillante Virtuoso in July 2011. The owners argue that the attack was carried out by the pirates who were or used to be members of the Yemeni navy or coast guard. The insurers, on the other hand, put forward the view that the attack was staged by the owners of the ship so this is a case of “wilful misconduct” of the assured. The insurers also rely on other defences, such as breach of various warranties in the policy. It is expected that this will be a lengthy trial but hopefully we shall finally find out what really happened to The Brillante Virtuoso.