Dry Log Bulk Carriers v Phaethon International Co SA

Dry Log Bulk Carriers v Phaethon International Co SA

The correct interpretation of the BIMCO Piracy Clause 2009 is that 'additional insurance costs' for which reimbursement may be claimed are limited to actual premiums paid to underwriters for insurance cover necessitated by the vessel proceeding through a piracy risk area. Sums paid by disponent owners to head owners do not qualify unless they correspond to such actual insurance costs. The appeal failed because the disponent owners did not provide evidence of actual premiums paid to underwriters or that additional insurance cover was necessary.

Parties
Claimant: Dry Log Bulk Carriers; Respondent/defendant: Phaethon International Co SA
Jurisdiction
England and Wales
Judgment Date
25 November 2016
Procedural Posture
Commercial Arbitration Appeal / Judgment on Appeal Under Section 69 of the Arbitration Act 1996
Outcome
Appeal dismissed
Legal Topics
Interpretation of BIMCO Piracy Clause 2009, Reimbursement of Additional Insurance Costs, Evidence Required for Insurance Claims Under Charterparty, Sub Charter Obligations
Commercial Law Maritime Law Arbitration Interpretation of BIMCO Piracy Clause 2009 Reimbursement of Additional Insurance Costs Evidence Required for Insurance Claims Under Charterparty Sub Charter Obligations

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Parties

Dry Log Bulk Carriers

Claimant

Phaethon International Co SA

Respondent/defendant

Procedural Posture

Commercial Arbitration Appeal / Judgment on Appeal Under Section 69 of the Arbitration Act 1996

Legal Issues

  1. 1 What documentation must a disponent owner provide to obtain reimbursement for additional insurance costs under the BIMCO Piracy Clause 2009?
  2. 2 Does 'additional insurance costs' include sums paid by disponent owners to head owners, or only premiums paid to underwriters?

Ratio Decidendi

The correct interpretation of the BIMCO Piracy Clause 2009 is that 'additional insurance costs' for which reimbursement may be claimed are limited to actual premiums paid to underwriters for insurance cover necessitated by the vessel proceeding through a piracy risk area. Sums paid by disponent owners to head owners do not qualify unless they correspond to such actual insurance costs. The appeal failed because the disponent owners did not provide evidence of actual premiums paid to underwriters or that additional insurance cover was necessary.

Court Disposition

Appeal dismissed

Orders

  • Appeal under section 69 of the Arbitration Act 1996 dismissed
  • No reimbursement due to disponent owners for claimed insurance costs