Brillante Virtuoso not victim of piracy attack, High Court rules

The High Court in London has ruled that tanker Brillante Virtuoso was not the victim of a pirate attack, but was instead intentionally damaged by the ship’s owner, Marios Iliopoulos.

The ship’s Greek owner and its creditor Piraeus Bank had said the tanker was hit by Somali pirates off Aden on July 5th 2011. It was asserted that the ship was hit by an RPG. Fire and damage made the vessel a total loss.

The war risk underwriters disputed the piracy claims. The matter went to court in 2012. Iliopoulos was charged with fraud in 2016, but Piraeus bank persisted with its piracy claims.

The English High said on Monday October 7th 2019 that the ship’s beneficial owner was the “instigator of the conspiracy” to destroy the vessel in order to commit insurance fraud. Teare J wrote that “I do not consider that there is a plausible explanation of the events which befell Brillante Virtuoso which is consistent with an innocent explanation. I have found that in the present case a group of armed men, on the instructions of the Owner, were permitted to board the vessel and set fire to it, as part of an attempt by the Owner to defraud the Underwriters.”

The High Court ruled that the suezmax was irreparably damaged not by pirates but by a group of conspirators. Teare found that the owner’s claims of piracy were improbable, and he reached the “firm conclusion” that the attackers intended to destroy the vessel, that they had the assistance of the master and chief engineer as they went about the task, and that the owner orchestrated the scheme in order to defraud his insurer”.

Brillante Virtuoso was drifting off Aden, awaiting a team of unarmed security contractors before transiting Bab el-Mandeb, when a small boat approached carrying seven masked, armed men. The men informed the crew that they were “security,” and they came aboard with the master’s permission.

The disputants in the case agreed that the boarding party’s members were likely current or former Yemeni Coast Guard or Navy service members.

The boarders ordered the crew to the day room, subsequently escorting the master to the bridge and the chief engineer to the engine room.

On the bridge they ordered the master to head for Somalia, which would require a course east-southeast. Instead, the master steered southwest, towards Djibouti and away from Somalia. Some hours later the engine came to a stop, either due to mechanical failure or to the chief engineer’s actions. The attackers then detonated an IED in the fuel purifier room, starting a fire. An accelerant and additional fuel caused the fire to spread. The attackers departed and the chief officer made a distress call reporting a pirate attack. The master and crew (except for the chief engineer) abandoned ship about an hour later and were rescued by a nearby US cruiser.

The chief engineer remained on board for the next two hours, but failed to deploy standard engine room fire-fighting actions.  After a survey of the fire damage, the vessel was judged a total loss, and owner Marios Iliopoulos and banker Piraeus Bank filed a $77m insurance claim. Iliopoulos declined to provide electronic documents related to the case to his own counsel or to the plaintiffs, which raised questions for the court.

Justice Teare noted multiple inconsistencies in the owners’ account of the attack. The incident occurred within Yemeni waters off Aden, a location where Somali pirates had never attempted a boarding before and have not since.

In VDR recordings the attackers identified themselves as security, suggesting that if they were pirates, they would have had to have known that the vessel was awaiting a security detail. They brought with them an incendiary device. The master allowed them to come aboard, even though they were masked and armed and the ship was awaiting an unarmed security team. When directed to steer towards Somalia, the master selected a different heading, but the attackers either did not detect this or, if it did, failed to correct it.