38 min

Ep #82 Polar Explorers Case by Case

    • Business

In this complex maritime case, the vessel MT POLAR was seized by Somali pirates in 2010 while traversing the Gulf of Aden with a cargo of fuel oil. After ten months in captivity, the vessel was released upon payment of a hefty ransom by the shipowner, totaling US$7,700,000. Subsequently, the shipowner declared a general average, claiming US$5,914,560.75 from the cargo interests.

The cargo interests disputed their liability, arguing that the shipowner's recourse for the ransom payment lay solely in additional insurance obtained under the voyage charterparty, with premiums covered by the charterer. The dispute centered on the interpretation of the war risk clauses and the additional Gulf of Aden clause in the charterparty, and whether these terms were incorporated into the bills of lading.

Arbitration ensued, resulting in a split decision. The arbitrators ruled in favor of the cargo interests, holding that they were not liable for general average. However, their decision was partially overturned on appeal. While Sir Nigel Teare agreed with the arbitrators on some issues, he disagreed on others, ultimately allowing the shipowner's appeal.

The Court of Appeal affirmed the decision, concluding that the cargo interests were indeed obligated to contribute to general average. Despite some differences in opinion on certain issues, the courts ultimately upheld the shipowner's claim, establishing precedent for similar disputes in maritime law.

In this complex maritime case, the vessel MT POLAR was seized by Somali pirates in 2010 while traversing the Gulf of Aden with a cargo of fuel oil. After ten months in captivity, the vessel was released upon payment of a hefty ransom by the shipowner, totaling US$7,700,000. Subsequently, the shipowner declared a general average, claiming US$5,914,560.75 from the cargo interests.

The cargo interests disputed their liability, arguing that the shipowner's recourse for the ransom payment lay solely in additional insurance obtained under the voyage charterparty, with premiums covered by the charterer. The dispute centered on the interpretation of the war risk clauses and the additional Gulf of Aden clause in the charterparty, and whether these terms were incorporated into the bills of lading.

Arbitration ensued, resulting in a split decision. The arbitrators ruled in favor of the cargo interests, holding that they were not liable for general average. However, their decision was partially overturned on appeal. While Sir Nigel Teare agreed with the arbitrators on some issues, he disagreed on others, ultimately allowing the shipowner's appeal.

The Court of Appeal affirmed the decision, concluding that the cargo interests were indeed obligated to contribute to general average. Despite some differences in opinion on certain issues, the courts ultimately upheld the shipowner's claim, establishing precedent for similar disputes in maritime law.

38 min

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