Piracy Clause

What it does

A piracy clause deals with the danger of piracy affecting the route the vessel must take, particularly through recognised high-risk areas. It addresses whether and how the ship transits such areas, the protective measures that may be taken, such as routing adjustments, additional watchkeeping, or security arrangements, and the owner's rights where piracy presents a serious danger to the ship and crew.

The clause allocates the costs and risks of piracy exposure between the parties. Transiting a high-risk area can attract additional insurance premiums, security costs, and slower or longer routing, and the clause addresses who bears these and how delay is treated. It is read alongside the war-risks and liberty provisions, since piracy is often handled within the broader framework for warlike and security threats.

Commercial effect

The clause assigns the cost and risk of a serious security threat on certain routes. By providing for protective measures and for the owner's rights where piracy is a real danger, it protects the ship and crew, while the allocation of additional premiums, security costs, and any routing delay determines the financial impact and on whom it falls in affected trades.

Because piracy risk concentrates in particular areas and can change with conditions, the clause interacts with insurance and with routing decisions, and it is read with the war-risks and liberty clauses. Its treatment of who pays for transiting or avoiding high-risk areas, and how delay and protective measures are handled, makes it commercially material wherever the route passes through piracy-prone waters.

Owner's perspective

The owner wants the ability to take protective measures and, where piracy presents a serious danger, to avoid or alter the route to protect the ship and crew. It treats the safety of the crew as paramount and relies on the clause to support routing and security decisions without being penalised for prudently responding to a genuine piracy threat.

The owner also wants the additional costs of transiting high-risk areas, premiums, security, and any delay, placed on or shared with the charterer, since the route arises from the employment. It negotiates the clause so that responding to piracy protects both the people aboard and the owner's position, with the cost of security and routing fairly allocated rather than absorbed by the owner alone.

Charterer's perspective

The charterer needs the vessel to perform the voyage and wants protective measures and any routing changes to be reasonable and not to disrupt its cargo plans more than the piracy risk genuinely requires. It is conscious that avoidance routing and security costs add expense and time, so it wants these tied to real, recognised high-risk areas rather than applied broadly.

The charterer also focuses on the cost allocation, wanting additional premiums and security costs to be reasonable and clearly defined, and on how delay from protective routing is treated. It negotiates the piracy clause alongside the war-risks and liberty provisions so that the response to piracy is balanced against its commercial need to complete the voyage on acceptable terms.

Negotiation points

• The protective measures permitted and the owner's rights where piracy is a serious danger.
• Whether and how the vessel transits or avoids recognised high-risk areas.
• Who bears additional insurance premiums, security costs, and routing delay.
• The interaction with the war-risks and liberty provisions.

Common variations

• A clause permitting protective measures and security for high-risk-area transit.
• A piracy clause based on a recognised standard provision.
• A clause placing additional premiums and security costs on the charterer.
• A provision allowing avoidance routing where piracy is a serious danger.