THE recent Supreme Court judgment in Herculito Maritime v Gunvor International has implications for the right of owners to refuse orders to transit the Red Sea, an audience of shipping barristers was told this morning.

Quadrant’s Nigel Cooper KC made his comments at a seminar in London this morning, arguing that matters remain far from clear cut, even though some of his peers believe the threat from Yemeni rebels has reached sufficient intensity to merit such outcomes.

The Houthi faction has now launched dozens of drone and missile strikes on vessels off the Yemen coast since last November, and have hijacked car carrier Galaxy Leader (IMO: 9237307).

This has triggered a strong western response, including naval convoy efforts and US and UK airstrikes on Houthi targets.

Herculito Maritime v Gunvor International — known as the Polar case, after the ship involved — centred on whether ransoms paid by shipping companies to criminals are subject to general average contributions.

But the hearing saw the Supreme Court reject any analogy between the traditional safe port warranties and a requirement that sea areas involved in a voyage are safe, which could weaken owners’ hands in the current circumstances in the Red Sea, Cooper contended.

In theory, the Conwartime clauses incorporated in many dry bulk contracts and the Voywar clauses that form part of the general purpose Gencon charterparty give owners substantial discretion on whether to put ships in harm’s way.

The 2013 wording of Conwartime sets the threshold at war or a wide range of hostile acts undertaken by “any person, body, terrorist or political group, or the government of any state or territory whether recognised or not”, which “in the reasonable judgement of the master and/or the owners, may be dangerous or may become dangerous to the vessel, cargo, crew or other persons on board”.

War risk clauses in tanker charters, such as Shelltime and Shellvoy charters, are more restrictive and may not apply except where there are formally declared hostilities.

But inevitably, these considerations are never straightforward. Owners need to be able to make a case before declining instructions from charterers, and each individual case will be fact sensitive.

Where there is apparent conflict between Conwartime or Voywar and the wider terms of a charterparty, the issue of whether owners or masters can refuse transit of an area expressly included in the charterparty depends on construction and is thus fact sensitive.

Charterers may well be able to argue that owners agree to bare risks that were known at commencement of the charterparty, and it will be up to owners to establish that the situation is now materially different.

The mere fact that the Houthis have made verbal threats, or even that they have carried out physical attacks on shipping, does not establish a right to divert round the Cape of Good Hope, which being the longer route, earns additional money.

Owners have to show that risks are relevant to their particular vessel, and show the steps they took in reaching their determination.