The case of Cosco Bulk Carrier Co. Ltd v Team-Up Owning Co. Ltd  EWHC 1340 (Comm) was an appeal to the High Court of a decision by an arbitration panel. Mr Justice Gross, who heard the appeal, noted that the subject of the case was topical and of interest to the industry and therefore set out a lengthy judgment, despite his decision to dismiss the appeal in full.
On 5 July 2008 the vessel, a Panamax size bulk carrier, was delivered into the charter of Cosco by Team-Up Owning. On 22 February 2009 she was seized by Somali pirates whilst sailing through a transit corridor in the Gulf of Aden. The pirates compelled the Master to sail the vessel to the waters off the Somali town of Ely where she remained until she was released on 25 April 2009. She was able to resume her voyage on 2 May 2009. Team-Up Owning sought from Cosco the cost of hire of the vessel for the period 22 February 2009 to 2 May 2009. Cosco refused to pay and the matter went before an arbitration tribunal; which found in Team-Up Owning's favour.
The question which had faced the arbitrators and which was subsequently put before Mr Justice Gross was whether or not detention by pirates, piracy, or the effect of piracy entitled charterers to put the vessel "off-hire" in reliance upon clause 15 of the NYPE form of charterparty agreed between the parties. The case concentrated on the following three exceptions contained within clause 15, which set out when the charterparty would not have to pay hire: loss of time due to the "detention of the vessel by average accidents to ship or cargo"; loss of time due to the "default and/or deficiency of men"; or loss of time by "any other cause."
As with the arbitration tribunal before him, Mr Justice Gross held that the detention of the vessel by pirates did not fall within any of these exceptions. His reasoning was as follows:
- the facts of the present case did not amount to an "average accident". An accident required a lack of intent by all protagonists, including therefore, the pirates, who clearly did intent to seize the vessel.
- There was no "default or deficiency of men" as the clause had a limited meaning and was focussed on a refusal of the crew to perform duties rather than their being prevented from doing so.
- •The phrase "any other cause" was limited in its meaning as it did not contain the word "whatsoever". It would not cover an entirely extraneous cause, which was beyond the natural or reasonably foreseeable. The seizure of the vessel by pirates was a "classic example" of a totally extraneous cause.
Mr Justice Gross concluded that if parties were minded to treat seizures by pirates as an "off-hire" event under a time charterparty, they should include an express provision relating to piracy into a "seizures" or "detention" clause. Mr Justice Gross highlighted the current importance of judgments relating to piracy and therefore welcomed this case "for crossing the threshold from the private realm of arbitration into a public judgment."