INTERTANKO Provides Model Piracy Clauses

The frequency and seriousness of the piracy attacks in the Gulf of Aden and off Somalia need no introduction. Whilst the marine and technical teams at INTERTANKO have responded with practical advice and assistance, INTERTANKO’s Documentary Committee has responded quickly to the need for a model piracy clause. This was produced in December last year for both voyage and time charters and has been well received, being widely used and accepted by brokers and charterers. Many current charterparties will not have anticipated the possibility of the vessel being hijacked. Owners should therefore check the terms of their existing charters and bills of lading before, for example, taking any decision to re-route the ship. Re-routing may expose an owner to claims for breach of charter - for example a failure to prosecute the voyage with ‘due’ or ‘utmost despatch’, and also to claims under the bill of lading – for example for deviation and late delivery. Owners should also check their war risk clauses, some of which permit a deviation in appropriate circumstances. For new fixtures, INTERTANKO's Documentary Committee has produced the following clauses which address the main issues involved in transiting the Gulf of Aden and/or re-routing the ship. These clauses are not comprehensive and will need to be amended to suit the particular factors affecting each ship and voyage. The need for these clauses must also be assessed in the context of the charterparty as a whole. Owners should ensure that such provisions are also included in the bills of lading. INTERTANKO PIRACY CLAUSES are quoted as follows: • INTERTANKO Piracy Clause – Voyage Charterparties 1. If the Master or Owners determine that the vessel, her crew or cargo may be exposed to the risk of acts of piracy on any part of the normal, direct or intended route for the contracted voyage, Owners shall be entitled (a) to take reasonable preventive measures to protect the vessel, her crew and cargo including but not limited to proceeding in convoy, using escorts, avoiding day or night navigation, adjusting speed or course, or engaging security personnel or equipment on or about the vessel, (b) to follow any instructions or recommendations given by the flag state, any governmental or supragovernmental organisation, and (c) to take a safe and reasonable alternative route in place of the normal, direct or intended route to the next port of call, in which case Owners shall give Charterers prompt notice of the alternative route, an estimate of time and bunker consumption and a revised estimated time of arrival. 2. Charterers shall pay Owners additional freight calculated at the demurrage rate for all time spent as a consequence of exercising the rights referred to in Paragraph 1 of this Clause, together with the cost of all additional bunkers consumed, any additional insurance premiums, and additional crew or other costs incurred by Owners as a result of actual or threatened piracy or as a consequence of exercising the rights referred to in Paragraph 1 of this Clause. All additional costs to be paid together with freight as per Owner’s invoice and supporting documents. 3. Charterers warrant that the terms of this Clause will be incorporated effectively into any bill of lading issued pursuant to this charterparty. INTERTANKO Piracy Clause – Time Charterparties 1. Owners shall not be required to follow Charterers’ orders that the Master or Owners determine would expose the vessel, her crew or cargo to the risk of acts of piracy. 2. Owners shall be entitled (a) to take reasonable preventive measures to protect the vessel, her crew and cargo including but not limited to proceeding in convoy, using escorts, avoiding day or night navigation, adjusting speed or course, or engaging security personnel or equipment on or about the vessel, (b) to follow any instructions or recommendations given by the flag state, any governmental or supragovernmental organisation and (c) to take a safe and reasonable alternative route in place of the normal, direct or intended route to the next port of call, in which case Owners shall give Charterers prompt notice of the alternative route, an estimate of time and bunker consumption and a revised estimated time of arrival. 3. The vessel shall remain on hire for any time lost as a result of taking the measures referred to in Paragraph 2 of this Clause and for any time spent during or as a result of an actual or threatened attack or detention by pirates. 4. Charterers shall indemnify Owners against all liabilities costs and expenses arising out of actual or threatened acts of piracy or any preventive or other measures taken by Owners whether pursuant to Paragraph 2 of this Clause or otherwise, including but not limited to additional insurance premiums, additional crew costs and costs of security personnel or equipment. 5. Charterers warrant that the terms of this Clause will be incorporated effectively into any bill of lading issued pursuant to this charterparty. Contact: Michele White, INTERTANKO’s Legal Counsel / Phone: +44 20 7977 7038 / E-mail: [email protected]