Shipping Update - Significant Marine Market Response To Attacks Off Fujairah

In a response to attacks on four vessels off Fujairah on 12 May, the Joint War Committee (comprising representatives involved in writing marine hull war business in both the Lloyd's and IUA company markets) has updated its Listed Areas (JWLA024) to reflect the perceived heightened risk across the region.

The additions to the existing Listed Areas are:

Oman Persian or Arabian Gulf and adjacent waters including the Gulf of Oman west of Longitude 58°E United Arab Emirates Saudi Arabia (excluding transits) was already included in the previous List, but this has been amended so that all trade on the Gulf coast of the country, including transits, is now included. Trade in these areas must be declared under insurance policies to which JWLA024 is applicable and additional premium may be payable, to be negotiated on a case by case basis.

There has been significant uncertainty about the nature of the attacks that occurred on 12 May and in reaching its decision the JWC recognised that the circumstances and methods employed in the attack remained unclear. However, it was acknowledged that considerable damage had been done and that significant claims would arise.

Although charterparty clauses dealing with war risks will vary, in practice charterers are likely to be prohibited from ordering a ship to a place where, in the reasonable judgment of the master or the owners, the situation may be dangerous or likely to be or to become dangerous to the vessel, her cargo or crew. However, if owners agree to comply with a voyage order, any additional insurance costs incurred (usually together with other extra costs such as additional crew wages) are likely to be payable by charterers under express or implied terms.

In a recent joint press release, INTERTANKO and OCIMF have provided additional details of the incident. Whilst confirming that four tankers were struck in Fujairah on 12 May, INTERTANKO and OCIMF go further to state that this appeared to have been a well-planned and coordinated attack involving the use of sub-surface explosive devices placed by either a remotely-operated vessel or diver. The report acknowledges that while Waterborne Improvised Explosive Devices (WBIED) have been used against vessels in the Southern Red Sea, the use of a...