Olam International Limited v Pacific Basin Supramax Limited the ‘Grande Island’

On a section 69 appeal, an arbitral award is read fairly and commercially, with a starting assumption that the tribunal understood and applied the law. The substantive question is whether the award was wrong, not whether the permission-stage threshold was met.

Deleted contractual words may be considered only after the retained wording is found ambiguous. Broad wording allowing reasonable preventative measures, expressly followed by including but not limited to examples, can encompass leaving an area exposed to piracy risk where the risk exists and departure is reasonable. Deleting separate piracy rights, or adding bespoke rights for other ports, does not automatically narrow the retained clause. Conduct within clause 81(c)(i) is due fulfilment and the vessel remains on hire.

The charterer appealed under section 69 of the Arbitration Act 1996 from an award dated 2 January 2025. The tribunal held that the owner’s decision to leave Warri and return temporarily to Lagos because of piracy risk was a reasonable preventative measure under clause 81(c)(i) of the BIMCO Piracy Clause, so that the vessel remained on hire.

Clauses 81(a) and (b) had been deleted. The charterer argued that the deletion, together with bespoke provisions allowing departure or waiting in relation to Port Harcourt and Calabar, meant that leaving Warri was impermissible and triggered the off-hire clause. Permission to appeal was granted on 9 June 2025. The owner relied on clause 81 and, alternatively, clauses 79 and 17. The central issue was whether the retained wording of clause 81(c)(i) permitted departure from an area exposed to piracy risk.

Disposition. The charterer’s appeal was dismissed. The arbitral tribunal had reached the correct result: the vessel remained on hire when it temporarily left Warri as a reasonable preventative measure against piracy.

1. On an appeal under section 69 of the Arbitration Act 1996, the award must be read fairly and commercially. The court begins with a benevolent assumption that the tribunal understood and applied the law, and does not require every legal principle to be expressly stated. The permission-stage conclusion that an award was obviously wrong must be reconsidered at the substantive hearing, where the question is whether the award was wrong. The court gives appropriate weight to the experience of specialist arbitrators. The different conclusion reached at the permission stage was also understandable because that ruling had been made on the papers and without full oral argument; see Zermalt Holdings SA v Nu-Life Upholstery Repairs Ltd [1985] 2 EGLR 14, Reliance Industries Ltd v The Union of India [2018] EWHC 822 (Comm), Aston Martin MENA Ltd v Aston Martin Lagonda Ltd [2025] EWHC 2531 (Comm) and Cordell v Second Clanfield Properties Ltd [1969] 2 Ch 9.
2. Contractual interpretation is a unitary, objective exercise. The court considers the language, the contract as a whole, the relevant background, commercial consequences, drafting quality and the possibility of compromise. Deleted wording is considered only after the retained wording has been construed. If the retained wording is unambiguous, recourse to the deletion is unnecessary and impermissible. The court applied the principles discussed in Lukoil Asia Pacific Pte Ltd v Ocean Tankers (Pte) Ltd (The ‘Ocean Neptune’) [2018] EWHC 163 (Comm), Mopani Copper Mines plc v Millennium Underwriting Ltd [2008] EWHC 1331 (Comm) and Narandas-Girdhar v Bradstock [2016] EWCA Civ 88.
3. Clause 81(c)(i) was unambiguous without reference to deleted clauses 81(a) and (b). The words allowing reasonable preventative measures to protect the vessel, crew and cargo were not confined to measures within the area. The words including but not limited to made the listed examples non-exhaustive. Temporary departure from the area could therefore qualify where there was an actual piracy risk and departure was reasonable. The vessel consequently remained on hire under clause 81(d)(i). The approach was consistent with Transocean Drilling UK Ltd v Providence Resources plc (The ‘GSF Arctic III’) [2016] EWCA Civ 372.
4. Alternatively, even if the deleted clauses could be considered, clauses 81(a) and (b) conferred independent and more extensive rights, with different triggers and charterer obligations. Their deletion did not cut down clause 81(c)(i). The bespoke Nigerian trading provisions created a different, overlapping suite of rights and did not limit the retained piracy clause.
5. The alternative issues under clauses 79 and 17 did not require determination. The court observed that a pre-existing piracy risk would not satisfy clause 79(b)’s condition concerning danger arising after entry. It also treated Osmium Shipping Corporation v Cargill International SA (The ‘Captain Stefanos’) [2012] EWHC 571 (Comm) as binding authority that a due-fulfilment provision does not override an otherwise applicable off-hire clause. Deviation to save life or property requires an immediate prospect of loss or damage and is distinct from taking precautions.
6. Had the appeal succeeded, remission would have been inappropriate because it would have caused unnecessary delay and expense without requiring further factual findings. The question of remission did not arise because the appeal was dismissed.

1. Arbitration tribunal — By an award dated 2 January 2025, experienced London maritime arbitrators held that leaving Warri and temporarily returning to Lagos fell within clause 81(c)(i) and that the vessel remained on hire.
2. High Court, permission stage — On 9 June 2025, HHJ Pelling KC granted permission to appeal under the Arbitration Act 1996, considering the tribunal’s construction arguably obviously wrong.
3. High Court (Circuit Commercial Court) — The substantive appeal was dismissed and the arbitral award upheld.