Update – The Longchamp

Claims, Corruption, Disputes, Health and Safety, Insurance and Reinsurance, Legal, Marine Insurance, Maritime Fraud, Piracy and Terrorism, Safety and Security, Seizures — By on August 1, 2016 at 9:10 AM

Clyde & Co logoInsight / Update – 01 August 2016 

Are expenses incurred during negotiation of a pirate ransom recoverable in general average?

In The Longchamp [2016] EWCA Civ 708, the Court of Appeal has ruled on an issue that had not previously been considered by the English courts, namely, whether expenses incurred by a shipowner during the period of negotiation of a pirate ransom should be recoverable in general average.

Facts

The laden chemical tanker LONGCHAMP was transiting the Gulf of Aden on passage to Vietnam.  The ship was subject to a pirate attack on 29 January 2009 following which she was taken, under the command of the pirates, to Eyl, Somalia.

The owners immediately formed a crisis team and, within a day, the pirate negotiator had made an initial ransom demand of US$6,000,000.  This was countered with an offer from the owners of US$373,000.  The day following Owners’ initial offer of payment of a ransom demand, Owners declared General Average.  A payment of US$1,850,000 was finally made on 22 March after a 51 day negotiation period…

Authors

David Handley

Master Mariner- Solicitor

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