This dispute originated under a Time Charter Party based on the NYPE form and was brought before a Panel that rendered its decision in 2010. Notably, similar disputes have been presented before London arbitration tribunals and the High Court in England concerning deviations and delays in transiting the Gulf of Aden (GOA) due to piracy-related incidents. Such incidents remain a subject of significant debate, as the prevailing conditions in the Red Sea and GOA continue to be volatile.
Charterers fixed the Vessel for a voyage from Dumai to Dublin. Thereafter, the Owners advised the Charterers by email that in view of "lots of piracy incidents" off Somalia and in the Gulf of Aden, in order to protect the Vessel, her crew and Charterers' cargo, it would be prudent to route the Vessel via the Cape of Good Hope and not via the Suez Canal. The Owners advised further that if the Charterers ordered the Vessel via Suez, the Owners would engage a security service to place three unarmed security experts on board the Vessel at Salalah (Mina Rasut), Oman and disembark these experts at Djibouti, and that as a result of complying with Charterers' orders to proceed via the Gulf of Aden, the resultant risks, additional costs and time lost "would rest with Charterers only."
The Charterers asserted that the deviation was unwarranted and, consequently, deducted the sum of $ 25,346.58 in respect of the time lost and additional bunkers consumed, as well as refused to pay the cost of the security experts.
Owners argued that the sole purpose of the deviation was to take on security guards to protect life (i.e., the crew) and property (i.e., the vessel and her cargo) and that the cost of the security experts flowed directly from Owners' compliance with Charterers' voyage orders.
Charterers have argued that Clause 74 of the Charter Party describes "the type of deviation agreed to between the parties with respect to the Somali pirate problem."
The Panel found that - given the circumstances prevailing in the Gulf of Aden at that time- the Owners' decision to deviate to embark those security experts was not unwarranted and was, in fact, quite reasonable. In that regard, reasonable deviation was provided for by Section 4(4) of the Carriage of Goods by Sea Act of the United States as well as by similar sections of the Hague Rules and the Hague-Visby Rules, which were all incorporated into the Charter Party under Clause 31(a), the Clause Paramount.
Indeed, the many advisories issued by governmental and other international maritime agencies recommend the engagement of security personnel as an element among the counter-measures to be taken by vessels to deter attack by pirates.
Moreover, even Charterers acknowledged that "we do not fault the Owner for taking further precautions, beyond the Charter Party precautions, if it felt those precautions were suddenly warranted. Nevertheless, the Charterer cannot unilaterally be expected to bear the costs of the Owner's further precautions."
Therefore, the deviation and the employment of the security team must be seen to have been reasonable exercises of due diligence and good seamanship in order to protect the Vessel, its crew and its cargo under the circumstances existing in the Gulf of Aden at that time, and which continue today.
The Panel opined that the Charterers should not unilaterally bear the entirety of the costs associated with this claim, as the deviation served the interests of both parties. Regarding the deduction of hire, the Panel awarded the Owners the full amount deducted, along with interest.
SMA, 2010
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Editors’ comment: The Gulf of Aden has long been classified as a "High-Risk Area" by the marine insurance industry due to its persistent history of piracy, including hijackings and ransom demands. Following a series of attacks by Houthi forces during November and December 2023, the region's security concerns have further disrupted commercial shipping operations, affecting the rights and obligations of parties under various contractual frameworks. Disputes arising from transits through the Gulf of Aden have frequently required adjudication by English courts and arbitration tribunals, addressing pivotal issues such as: (1) Costs under the BIMCO Piracy Clause, (2) Allocation and determination of additional expenses incurred during high-risk transits, (3) Evaluations of shipmasters' decisions to deviate from charterers' instructions, particularly avoiding the Suez Canal due to piracy-related threats, (4) Off-Hire Claims: Disputes arising from vessel seizures by Somali pirates, specifically regarding hire payment obligations and (5) Interpretation of Key Clauses: Legal scrutiny of the BIMCO Piracy Clause and CONWARTIME Clause.
In some disputes, the reasonableness of a master’s decision was a central consideration. Such decisions must balance the duty to safeguard the vessel, its crew, and its cargo against the specific risks presented by the prevailing conditions. Reasonableness is inherently a question of fact, evaluated in light of the circumstances at the time of the decision. Nonetheless, the assessment of risk often diverges between stakeholders ashore and the crew on board, who confront the realities of the situation directly.
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