Update 13/06/19: Due to the recent attack on vessels in the Sea of Oman, Members are reminded of the following update and to exercise extreme caution in the region.
On 12 May 2019, four commercial ships were damaged off a tanker-refuelling hub in the United Arab Emirates (UAE). The Ministry of Foreign Affairs of the United Arab Emirates reported that the ships had been subject to a "sabotage attack" but did not elaborate on who was responsible or how the sabotage took place. No loss of life occurred as a result of the incident and the port has remained operational since the incident.
The UAE launched a joint investigation probe with United States and France. Initial investigation identified holes of about 5-to-10-foot near or below all the ships' waterlines were likely caused by explosive charges.
Following the incident the Joint War Committee (JWC) added the UAE to its Listed Areas (areas of perceived enhanced risk) for Hull War, Piracy, Terrorism and Related Perils. It is a decision for individual war risk underwriters whether they will designate the UAE as a war risk or additional premium area. Members should check the position with their war risk underwriter if unclear.
The incident occurred at a time of increasing tension with the United States tightening sanctions on Iran. Saudi Arabia has announced an emergency summit of Gulf and Arab leaders on 30 May 2019 to discuss the incident. While no one has claimed responsibility for the attacks, experts believe Iran was involved.
Impact on Cover
Although the facts surrounding the incident are not fully known at this stage, it is likely that the incident would be classed as an act of terrorism, excluded from standard P&I cover under Rule 5 E “Exclusion of War Risks”. In such cases, members should expect their P&I liabilities to fall within the scope of their War Risk policies.
The type and extent of primary War P&I cover provided by war risks insurers can vary depending on the member’s policy. In some cases, War P&I cover is effectively a “write back” of the member’s P&I cover which has been excluded by reason of the operation of the war risk peril causing the loss or giving rise to actual or potential liabilities; cover provided by the war risks insurer is then on the basis of P&I rules which Members are familiar with. In other cases, war risks policies have their own wordings for terms of P&I war risks cover.
Members are reminded that the Club provides Special War Risks P&I excess cover to respond to claims in excess of the proper value of the entered ship as defined in Rule 5D (which for this purpose is deemed not to exceed US$100 million), or whatever sum is recoverable from war risk underwriters, whichever is the greater. Further details of the cover, which is limited to $500 million, are set out in Circular 3/19 “Special War Risks P&I excess cover and Biochem cover” .
Risk mitigation measures
INTERTANKO and OCIMF have recommended that companies review BMP5 and consider sending the following guidance to vessels making calls in the region:
The Club is currently assisting a Member and their war risk insurer involved in the incident with survey reports, port of refuge and dealing with local issues.
Members are advised to contact the Club if they have any questions.