TT Talk - What is piracy?


  • Date: 13/04/2006
  • Source: TT Talk 82

The concept of piracy has something of a romantic ring to it, with 18th-century rogues such as Captain Kidd, Henry Morgan and others receiving a much more favourable press (not to mention treatment from Hollywood) than they deserve. Many people unconnected with the sea probably think that piracy died out with the age of sail but sadly they are very mistaken.

Modern pirates are still very active and are now armed with an alarming arsenal of automatic weapons, rocket launchers and grenades, as well as swords, scimitars, machetes and knives. There is absolutely nothing romantic about them: they are extremely violent and unscrupulous criminals The International Maritime Bureau reports that last year there were 276 attacks on ships and that 509 seafarers were injured, kidnapped or taken hostage. The waters off Iraq and Somalia have now joined the Malacca straits as areas of high risk.

The High Court of Singapore was recently asked to decide what constituted "piracy" in the context of modern marine insurance practice. A tug had been tied up for the night in the port of Batu Ampar, Batam, Indonesia, when it was attacked by intruders armed with parangs (a kind of machete). The gang severed the mooring ropes and made off with the tug. The owners, Bayswater Carriers Pte Ltd made a claim on their insurers for the insured value, but when they rejected it on the grounds that the loss did not come within the insurance definition of "piracy", Bayswater sued.

The Singapore High Court rejected the insurer’s arguments and held that piracy could occur anywhere while the vessel was afloat: it did not have to be on the high seas but could, as in this case, be in port. It was also immaterial whether the ship was moored or anchored.

Interestingly, the court’s decision is at variance with article 101 of the 1982 United Nations Convention on the Law of the Sea (UNCLOS) which defines piracy as a violent act committed for private ends against the crew or passengers of a ship and which occurs on the high seas outside the jurisdiction of any state. Technically therefore, an attack within a harbour area would constitute "armed robbery" rather than "piracy", although such fine legal distinctions would probably be lost on the majority of victims.

A free download copy of the IMB’s report on pirate incidents in 2005 can be obtained from www.icc-ccs.org/main/publication.php

Fuller details and analysis of the Bayswater Carriers case can be read on David Martin-Clark’s website DMC’s CaseNotes at:

http://archive.onlinedmc.co.uk/bayswater_carriers_v__qbe_insurance.htm

24 Hour Claims Hotline
+44 7000 882582

Through Transport Mutual Insurance Association Limited and TT Club Mutual Insurance Limited, trading as the TT Club. TT Club Mutual Insurance Limited, registered in the UK (Company number: 02657093) is authorised by the Prudential Regulation Authority and regulated in the UK by the Financial Conduct Authority and Prudential Regulation Authority. In Hong Kong, TT Club Mutual Insurance Limited is authorised and regulated by the Hong Kong Insurance Authority, in Singapore by the Monetary Authority of Singapore and in Australia by the Australian Prudential Regulation Authority. In the United States, TT Club Mutual Insurance Limited is approved as a surplus lines insurer in all states and is accessible through properly licensed surplus lines brokers. The registered offices are: 90 Fenchurch Street, London, EC3M 4ST.

Through Transport Mutual Insurance Association Limited, registered in Bermuda (Company number: 1750) is authorised and regulated in Bermuda by the Bermuda Monetary Authority and is authorised in the UK by the Prudential Regulation Authority and regulated in the UK by the Financial Conduct Authority and Prudential Regulation Authority.

The UK VAT Identification number for Through Transport Mutual Insurance Association Limited is: GB 564 5244 35 and for TT Club Mutual Insurance Limited is: GB 564 3375 30. The Italian VAT Identification number for TT Club Mutual Ltd is: 03627210101.