British court makes landmark ruling on whether piracy is “on hire"

A British arbitration tribunal has ruled that a vessel held by pirates remains on-hire throughout its detention. The high court made the ruling in June on the case of the Saldana, a 38,000 ton coal carrier en route from Indonesia to Slovenia that was hijacked by pirates in the Gulf of Aden on February 22, 2009.

The vessel had been on a so-called New York Produce Exchange (NYPE) charter. The vessel and crew were subsequently held near Eyl, Somalia for 62 days until their release on April 25, 2009.

During the hostage period the charterer claimed the ship was off-hire and refused to pay hire, arguing clause 15 of the NYPE, which states that “in the event of loss of time from default and/or deficiency of men (or by) detention by average accident…the payment of hire shall cease.”

However, the tribunal ruled in favor of the UK Defense Club and the vessel’s owner, stating that a piracy hijacking did not qualify as a “detention by average accident.” The judge cited the lack of specific wording in the NYPE and concluded that, had the off-hire language been amended to “any other cause whatsoever,” the charterer might have had a case. He concluded that the wording should be tightened up for more clarity.

Source: UKDefense.com