4.1 The factual background and main submissions
The case concerned the bulk vessel Team Tango (TT). TT was owned by a Greek company and registered in the Marshall Islands.(1) The arbitration award (n 1) 2. TT sailed on a voyage charter party contracted by the Swiss company Vertical. Vertical sold 13 995 532 tonnage of fexrtilizer containing urea to the Nigerian company Elephant Group Limited (Elephant). The fertilizer was loaded onto TT in Ukraina. TT then sailed to Lagos, where the cargo was to be received by Elephant. TT arrived at Lagos on 18 July 2016, but then had to wait at anchor until it could go into port to discharge the cargo. While it was still anchored, the Nigerian navy boarded the vessel on 29 August 2016, with marine soldiers carrying weapons. TT was neither allowed to go into port to discharge the cargo, nor to leave the area. The detainment lasted until 14 December 2018, when TT was allowed into the port to discharge the cargo. TT sailed from Lagos on 10 January 2019.
It was undisputed that Elephant did not have the necessary permissions to import the cargo of urea fertilizer, because such import was prohibited by anyone other than two specified Nigerian companies. This was the reason for the vessel being boarded on arrival. The customs authorities went to court to forfeit both the vessel and its cargo in December 2016, but the ship-owner, Elephant and Vertical, intervened in April 2017 and the customs authorities’ claim was denied by the High Court on 5 June 2017. The detainment also resulted in several other court cases, i.a. between Elephant and the Nigerian State and between Vertical and the Nigerian State, before the vessel was freed due to diplomatic intervention in December 2018.
It was also undisputed that one reason for the prohibition against the import of urea fertilizer was to prevent the terrorist group Boko Haram from gaining access to urea, in order to make bombs.
TT was insured with the Norwegian Hull Club (NHC) under the NP 2013 Version 2016 against both war risk and marine risk with hull insurance and hull interest insurance, and it claimed cover for total loss under the war risk insurance according to NP Clause 15-11, which provided cover for total loss if the vessel was detained for 12 months. As the vessel was allowed to sail in January 2019, it was clear that there was no cover for total loss under the marine risk insurance. If the detainment was a marine peril, the insurer would pay for any damage caused by the detainment. However, as the time lost was not caused by damage to the vessel, but instead by the detainment, loss of income would not be covered.
The principal submission of the assured was that the detainment of TT constituted a war peril and thus triggered cover according to NP Clause 2-9 sub-clause 1 (b), cf. Clause 15-11. As a secondary submission, the assured pleaded that there was a combination of a marine peril and a war peril according to NP Clause 2-14, and that the war peril was the dominant cause of the loss. As the arbitration tribunal concluded that there was no war peril involved, it was not necessary to consider the secondary submission, but this is discussed further in 5 below.
The starting point for the decision is NP Clause 2-9 sub-clause 1 (b), stating that war insurance covers “capture at sea, confiscation and other similar interventions by a foreign State power”. The tribunal addressed this issue in four steps: the first step outlined the legal starting points, the second the security situation in Nigeria at the time, the third Elephant’s failure to obtain import regulation, and the fourth the concrete legal assessment.