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COSCO BULK CARRIER CO LTD and TEAM-UP OWNING CO LTD (2010) EWHC 1340 (Comm) (The Saldanha)

In an important ruling for the maritime industry Mr Justice Gross has upheld the unanimous decision of an eminent arbitration tribunal that a vessel chartered on the New York Produce form which was seized by pirates remained on hire whilst under the control of the pirates.

The Judge held as follows:

  1. Capture of the vessel by pirates could not properly be described as an "accident".
  2. Damage to the ship is an essential ingredient of an "average ship".
  3. The expressions "default of men" does not encompass inadvertent or negligent errors by the crew and its meaning is restricted to a wrongful refusal by the crew to perform their duties.
  4. A failure or inability of the officers and crew to perform their duties in circumstances where they were under duress by the pirates falls outside the scope of the sweep-up provision ("by any other cause preventing the full working of the vessel").
  5. Seizure by pirates is a "classic example" of a totally extraneous cause that falls outside the scope of the off-hire clauses.

The successful owners were represented by Andrew Baker QC instructed by Ince & Co.

Click here to see judgment.