Court rules on the meaning of phrase “additional insurance costs” in BIMCO Piracy Clause
In early September 2017 an interesting English Commercial Court judgment was handed down dealing with the meaning of the phrase “additional insurance costs” in the BIMCO Piracy Clause for Time Charters 2009 in the context of a chain of time charters. The Court held that a disponent owner seeking to obtain reimbursement from a sub (time) charterer in respect of costs of this nature must show clear evidence that (i) said costs where in fact incurred in respect of either an additional premium under an existing policy or premium to obtain additional cover and (ii) the underwriters had required that additional premium or the additional cover was necessary. It is therefore not sufficient for a disponent owner to show they had become contractually obliged to pay to the head owners costs which do not correspond to costs actually incurred by the head owners in obtaining insurance for piracy risks. Full evidence in the form of invoices issued by the headowners’ underwriters (as opposed to general debit notes from the head owners to the disponent owners) is legally required.