WHEN Somali pirates captured the vessel Asphalt Venture off the coast of Mombassa during September 2010, no-one could have foreseen the far-reaching human and legal dramas that would result. These have spanned the globe, and, with further legal action scheduled for later this year, they have culminated in a trend-setting international dispute heard in the high court, Durban.
Complicating the story is the problem of who is really responsible for the crew and the vessel. For ordinary readers, unfamiliar with shipping law terms and practices, it’s a maze – multi-layered agreements obscuring the question of who owns a vessel, who leases it, who hired the crew and who is responsible for paying them. Sometimes there are several answers to the questions, and so the story that follows has been simplified at points.
When the vessel was hijacked it had been carrying bitumen to various international ports. The company bearing immediate responsibility for the ship and crew was Concord Worldwide which had employment contracts with all 15 crew members.
Like the rest of the non-affected public my chief – perhaps only – concern at the time of hearing about the hijack would have been about the immediate safety of the crew and whether they would escape alive. But it seems capture of ships has become common enough that a protocol has evolved to deal with a variety of issues resulting from hijacks, issues that you might never consider when you read the news about pirate action such as this.
Advised of the vessel’s fate Concord followed what the high court in Durban has since heard is standard practice in such cases, ‘engaging with its insurers, instructing solicitors, consulting security advisers and, most importantly, appointing a negotiator to deal with the pirates’.
The upshot of all this feverish activity was that a deal was made with the pirates and in mid April 2011, they were paid a ransom of USD 3.4million. In exchange the pirates were to release the vessel and all 15 crew.
But pirates being what they are, in fact only half the crew were freed. The remaining seven Indian crew were kept on as further hostages. The pirates said they would only be freed if 120 Somali detainees, held in India pending trial – presumably on piracy charges – were freed.
India however has a strict policy not to negotiate with pirates and so the last seven Asphal Venture crew seemed likely to remain indefinitely as captives of the hijackers.
Concord’s contract with the crew varies between four and nine months of fixed service but the last contract of the seven who remained in captivity was due to expire at the end of February 2011, meaning that by the time the vessel had been released the contracts of all seven had expired.
Concord continued to pay their salaries however even after the rest of the crew had returned home, up to October 2011. Then Concord ran out of money and stopped paying salaries for the seven.
Early the following year relatives of the seven captive sailors arrested the UACC Eagle, a vessel moored in Mumbai, India. They said they had done so because under Indian law, the Eagle was a sister ship of the unfortunate Asphalt Venture – this was later shown not to be correct.
The families hoped that by holding the Eagle they could induce the owners of the Asphal Venture to agree to their claim of almost USD 7-million, on the basis that the families of each hostage should be paid a daily wage until the age of 70.
The company owning the Eagle had little choice but to comply and settle with the relatives, partly because of how long it takes to resolve litigation in the Indian courts. This is apparently not a completely unusual response: what normally happens, as in this case, is that the ‘owners’ of the Eagle will bring an action against the ‘owners’ of the Asphalt Venture for compensation.
Part of the settlement between the Eagle and the families was that wages would be paid for the seven crew up to the end of the 2013. The families then ceded their claims under this settlement to the Eagle whose owners could then act against the Asphalt Venture and try to recoup what had been guaranteed to the families. With the settlement concluded between the relatives and the Eagle, the Mumbai courts then allowed the Eagle to sail.
When the Asphalt Venture docked in Richard’s Bay some time later, representatives of the Eagle had the vessel arrested so that the question of the crew payments could be resolved.
The resulting litigation has raised many questions of huge interest to shipping experts. Most novel, in that it has not been dealt with in South African cases before, is the question whether crew are entitled to be paid only during the term of their contract and subsequent repatriation, or whether there is some further basis for a continued payment.
It’s a question made more crucial – and complex – because if crew members are entitled to further payment, that entitlement attaches itself to the vessel as a maritime lien.
As an experienced shipping lawyer explained such a lien fixes itself like ‘a mollusc’ to a ship, moving with it permanently until it is paid, regardless of who currently owns or runs the vessel.
Added to the complexities surrounding this question is that the fact that South African judge Peter Olsen who heard the matter had to consider relevant Indian jurisprudence – the contracts had been concluded under that country’s law – and he was given expert written opinion on the issue by three senior Indian lawyers including a former chief justice.
In the end Olsen concluded that in theory at least, even once the crew’s contracts expired, some benefits remained as a maritime lien. With this principle established, the case now moves on to its next phase in which later this year, legal representatives of the two vessels will argue whether the principle now established, applies to the facts of this case.
- At least the human drama has reached some conclusion: Olsen was told that the last seven crew members have also now been released.