Background
Olam International Limited chartered the motor vessel Grande Island from Pacific Basin Supramax Limited for a time-charter trip from Ghent to Nigeria carrying bulk wheat. After arriving off Warri, the vessel could not berth. Because of the piracy risk in the Gulf of Guinea, the owner directed it to leave Warri and return temporarily to Lagos. The dispute concerned approximately three days between the vessel’s departure from and return to Warri.
The charterparty incorporated the BIMCO Piracy Clause for Time Charter Parties 2013 as clause 81, but expressly deleted sub-clauses 81(a) and (b). A London maritime tribunal unanimously held that leaving Warri was a “reasonable preventative measure” under the retained clause 81(c)(i), so the vessel remained on hire. Olam appealed under section 69 of the Arbitration Act 1996, arguing that the deletions, together with bespoke provisions permitting departure from certain other Nigerian locations but not Warri, showed that the owner had no right to leave Warri while remaining on hire.
The Court’s Holding
His Honour Judge Hodge KC dismissed the appeal and held that the tribunal had reached the correct result. Clause 81(c)(i) unambiguously permitted the owner to take reasonable preventative measures against piracy and stated that the listed measures were not exhaustive. Nothing confined those measures to conduct within the risk area, and leaving that area could therefore qualify when reasonable in the circumstances.
Because the retained language was unambiguous, the court held that resort to the deleted sub-clauses as an interpretive aid was unnecessary and impermissible. Alternatively, even if the deletions were considered, sub-clauses 81(a) and (b) conferred a different, additional, and more extensive package of rights and obligations; deleting them did not narrow the separate right under clause 81(c)(i). The bespoke Nigerian trading provisions addressed different circumstances, such as congestion or berth availability, and did not restrict the piracy clause.
The court also rejected the suggestion that the tribunal’s failure expressly to recite contractual-construction principles established legal error. On a section 69 appeal, an experienced tribunal is presumed to have understood and applied the law unless an error is demonstrated. Because the departure was permitted under clause 81(c)(i), clause 81(g) treated it as due performance rather than a deviation, and the vessel remained on hire.
Key Takeaways
- An owner’s liberty to take “reasonable preventative measures” against piracy may include temporarily leaving the affected area when the clause’s non-exhaustive language does not impose a geographic limitation.
- Deleted standard-form wording may be consulted only in limited circumstances; where the retained language is unambiguous, the deletion is not an available interpretive aid.
- Deleting one package of contractual rights does not necessarily narrow a distinct retained provision, particularly where the provisions operate differently and impose different consequences.
Why It Matters
The decision confirms that English courts may give broad practical effect to non-exhaustive piracy-prevention language in time charterparties. A reasonable decision to withdraw temporarily from a piracy-risk area can constitute contractual performance and preserve hire, even where standard-form provisions expressly addressing refusal to proceed or remain have been deleted.
It also illustrates the restrained approach to appeals from arbitral awards under section 69. Permission granted on the ground that an award appeared “obviously wrong” does not predetermine the substantive appeal, and a court will not infer legal error merely because experienced maritime arbitrators did not spell out familiar principles of contractual interpretation.