PIRACY - Questions & Answers
PIRACY - Questions & Answers
PIRACY - Questions & Answers
Like all Clubs and other insurance providers, Gard has received and continues to
receive many and different questions concerning piracy, principally off the coast
of Somalia and in the Indian Ocean and the Gulf of Aden, but increasingly in
relation to piracy in the Gulf of Guinea, from clients and members. While no
two cases are identical and each case must be assessed on its own facts, we set
out below some of most frequently asked questions and the answers we have
given.
Q1: What is being done to reduce the risk of piracy in the Gulf of Aden
and off the coast of Somalia?
In March 2012, the European Union agreed to expand its mission against
Somali pirates by allowing military forces to attack land targets as well as
those at sea. In a two-year extension of its mission, EU defence ministers
agreed warships could target boats and fuel dumps. At that time, up to
10 EU naval ships were currently on patrol off the Horn of Africa. The
extension means they will stay until at least December 2014.
http://www.mschoa.org/Pages/default.aspx
http://www.shipping.nato.int/operations/OS/Pages/PAGmap.aspx
Web: www.shipping.nato.int
E-mail: info@shipping.nato.int
Phone: +44 (0)1923 956574
Fax: +44 (0)1923 956575
Q2: Where can I find guidelines for Owners, Operators and Masters for
protection against piracy and armed robbery in the Gulf of Guinea
region?
Copies of the Interim Guidance are available for download from the
Members area of the Intercargo website under Piracy. Alternatively,
copies can be obtained from Gard.
A3: Piracy may be considered a marine risk or a war risk depending on the
terms and conditions of the war risk insurances for the ship. For
example, under English conditions (ITC), piracy has traditionally been
treated as a marine risk, although more and more insurers now seek to
exclude piracy from the standard hull and machinery cover and treat it as
a war risk. Under Norwegian conditions, however (Norwegian Marine
Insurance Plan (NMIP)), piracy is treated as a war risk. If it is a war
risk, the P&I cover will be subsidiary to the war risk cover. See Gard Rule
71. If it is a marine risk, the standard scope of cover is available under the
P&I insurance. For example, cover is available for the shipowners liability
for injury or death to crew members as a consequence of a pirate attack
on the ship, as well as for the shipowners legal liability to cargo owners
for loss or damage to cargo. See also comments in the Gard Guidance to
the Statutes and Rules, page 334 and Gard News Issue 192, pages 30
32.
It should be kept in mind that the facts of each case are likely to be
different. Therefore, Gard will assess the existence and availability of
cover on a case by case basis.
http://www.igpandi.org/downloadables/piracy/news/Piracy_FAQs_28%20A
ugust%202013.pdf
Q4: Can a shipowner refuse to comply with an order from the time
charterer to transit the Gulf of Aden or the Indian Ocean on
account of protecting his ship, crew and/or cargo from pirate
attacks?
A4: There is no one answer to this question. The rights and duties of the
parties to relevant contracts of carriage or period employment, which will
commonly involve time charterparties, voyage charterparties and bills of
lading, will depend on the terms and conditions of those contracts, and
how they operate together, as well as the level of risk of pirate attacks
that is prevalent at the relevant time,which could be when the
employment order is given, the fixture date or the time the vessel decides
to avoid the Gulf of Aden or the Indian Ocean. Gard will help Members
with Defence cover to consider rights and remedies in this regard after
having reviewed the relevant contractual terms. A ship owner may also
have a (different) contractual relationship under a bill of lading with
cargo owners. This will also have to be taken into account when
considering choice of route.
Gard is aware of major ship owners who have taken the decision that,
unless contractually obliged to sail through the Gulf of Aden, all their
vessels will, for the foreseeable future, sail around South Africa. Other
A5: Current public information suggests that, so far, no vessel with armed
private security guards on board has been hijacked (although many
vessels have been attacked). Insofar as this is correct, it would seem that
the use of armed private security guards may, up to now, have prevented
pirates getting on board and hijacking such vessels, although whether the
continued use of such armed guards will serve to escalate the level of
violence and thereby risks to personnel and property, remains to be seen
and continues to be debated in the industry. Gard has noted that many
shipping industry organizations, such as ICS and a number of Flag States
have changed their position from recommending against the use of armed
private security guards to being neutral. Gards position has also been
changed to neutral. A relatively small number of States have enacted
legislation which expressly permits the employment on board of armed
guards.
http://www.imo.org/OurWork/Security/SecDocs/Documents/Piracy/MSC.1
-Circ.1405-Rev2.pdf
http://www.marisec.org/piracybmp.htm
Members should note that the International Group has advised that .a
causative failure to comply with the BMPs could prejudice a shipowners
right of recovery particularly in cases where cover is provided on a
discretionary basis. See paragraph 10 of the Groups FAQs.
Again, clients and members are strongly recommended to follow the Best
Management Practices to deter Piracy in the Gulf of Aden and off the Coast
of Somalia. The current version is version 4 (August 2011). This can be
found at:
http://www.marisec.org/piracybmp.htm
A7: In March 2012, BIMCO released the GUARDCON contract. This has
become the industry standard contract for the employment of PMSCs in
the Gulf of Aden/Indian Ocean. However, an unamended GUARDCON is
not a suitable contract to use in West Africa/Gulf of Guinea. Therefore,
the International Group has developed an amended version of GUARDCON
for use in West Africa/Gulf of Guinea, called GUARDCON West Africa. This
was published in April 2014. Clients and members employing (armed)
security personnel in this area are recommended to do so only under this
contract.
Members and clients are reminded that GUARDCON does not represent a
recommendation by BIMCO or Gard for, or endorsement of, the use of
security guards on board vessels. Nor are security guards a substitute for
strict compliance with Best Management Practices. Placing security guards
on board a vessel should also only be considered after a risk assessment
A8: Under English law, the position is that a ransom payment to pirates (but
not to fund or support terrorism) appears to be regarded as not being
illegal and to be generally accepted as being a General Average expense,
which will be apportioned between the interested parties in accordance
with the values at stake. In such circumstances, P&I cover would not
respond in respect of the ransom payment itself, but may be involved,
pursuant to Rule 41 (a), if cargo interests proportion of GA is
irrecoverable solely by reason of a breach of the contract of carriage.
Under certain insurance conditions, notably English conditions, H&M cover
would respond, subject to deductible, in respect of the Ships proportion of
GA. Under certain other conditions, notably the NMIP, piracy is treated as
a war risk, not a marine peril, so unless the H&M cover includes war risks,
it would not respond. See also Q2 and A2.
Q9: As from 1/4/11, the existing High Risk Area surrounding the coast
of Somalia has been extended into the Arabian Sea and the North
Indian Ocean. This is now called the Extended Risk Zone.
Under previously amended CBAs IBF/POEA/Model Agreement,
certain crew were entitled to extra benefits (extra wages/bonus,
double disability/death compensation) when in transit through the
High Risk Area. These crews are now entitled to a bonus
equivalent to 100% of basic pay if the vessel on which they are
serving is attacked, on a day by day basis. Compensation for
death or disability is also doubled while passing through the
Extended Risk Zone. To what extent, if any, are such additional
costs/exposure covered by Gard?
Cover for liability for damage to ships in areas declared as war risks
restricted zones by the war risk insurance market would be conditional
upon use of approved charter party terms as set out in the Certificate of
Entry. Information as to acceptable charter party terms can be obtained
from Gards underwriting department.
Q11: Will Gard assist or take the lead in any negotiations with the
pirates/hijackers?
A11: No. Gard does not have the experience or the expertise to do so. However,
there are a number of crisis consultants and/or London law firms who offer
such a service. Gard has no direct experience of such a service and
members and clients considering using such an organization may wish to
seek the views of ship owners/operators who have previously employed
such an organization.
10.4.14
DISCLAIMER
This note is intended to assist and clarify issues relating to the issue of
piracy in/around the Gulf of Aden and in the Indian Ocean and/or the
Gulf of Guinea. It is not intended to and should not be taken to provide
definitive answers in all situations. Readers should seek specific
guidance in specific situations. Everything stated in this note is stated
in good faith and to the best of the knowledge and understanding of the
contributors to it, but should not be treated as legal advice or as legally
binding on Gard in relation to any particular case or matter.