Legal considerations over attacks on shipping in the Red Sea: Skuld

Norway-based marine insurer and Group Club Skuld has noted that there had been a number of recent attacks on commercial ships in waters around the Red Sea and off the coast of Yemen (see recent IMNs for coverage of the vessels mentioned – the Galaxy Leader, the Central Park, the CMA CGM Symi, the Unity Explorer, the Number 9 and the Sophie II).

Skuld noted that the issue arises as to whether owners/disponent owners might be entitled to refuse to proceed on a particular route in order to minimize the risk of being attacked, under charter parties which incorporate (say) the latest version of the Conwartime 2013 or Voywar 2013 clauses.

For purposes of these clauses, owners/disponent owners may refuse to proceed if, in the reasonable judgement of the master and/or the owners, the vessel “may be exposed” to actual, threatened or reported hostilities, warlike operations or seizure which “may be dangerous or may become dangerous”.

Skuld noted that there was a lack of clarity as to what is meant by “may” or the level of danger required. Although the BIMCO Commentary suggests that the test is based on whether an area is dangerous and that the level of danger is likely to be high, that intention may not be clearly reflected in the clauses.

However, it was clear that, under English Law, any judgement must be made in good faith and be “objectively reasonable”, for which purposes owners/disponent owners should make “all necessary enquiries”; (see The Triton Lark [2012] 1 Lloyd’s Rep. 151).

In practice, the question as to whether owners/disponent owners would be entitled to refuse to proceed on a particular route under a particular clause would be contract-and fact-dependent, said Skuld, noting that “this may depend upon the security measures in place at the relevant time, the extent to which attacks continue (or are permitted to continue) and the extent to which vessels have some nexus with Israel”.

Skuld expressed its gratitude to Glenn Winter at Winter & Co for preparing the update.