As it is well known by now, the MSC ARIES was seized by Iranian authorities on April 13th. The 15,000 TEU container ship, currently chartered by Mediterranean Shipping Company (MSC), is owned by the British company Zodiac Maritime, which is owned by Israeli magnate Idan Ofer.
The official reason for the seizure according to the Iranian government is that the MSC ARIES turned off its AIS and radar system in Iranian territorial waters, jeopardizing navigation safety, and thus triggering judicial custody. However, it should be noted that just a week before the seizure, there was a missile attack on the Iranian embassy in Damascus, likely orchestrated by the Israeli government.
The ship has been anchored in Bandar Abbas for several weeks, along with other seized vessels Advantage Sweet and Niovi.
The question we are asking ourselves today concerns the marine hull insurance, namely:
What happens if the MSC ARIES is not released within a period of not less than 12 months (or 6 months)?
If we consider the Institute War and Strikes Clauses (01.10.83) as an example, we can see that Clause 3 Detainment provides a comprehensive answer:
“In the event that the Vessel shall have been the subject of capture seizure arrest restraint detainment confiscation or expropriation, and the Assured shall thereby have lost the free use and disposal of Vessel for a continuous period of 12 months then for the purpose of ascertaining whether the Vessel is a constructive total loss the Assured shall be deemed to have been deprived of the possession of the Vessel without any likelihood of recovery.”
In this case, if the vessel is not released within the 12-month period (which could be reduced to 6 months in case of clause modification – a common practice among shipowners especially before the Russo-Ukrainian conflict), the insured, being deprived of the use of the vessel, would have the right to declare a constructive total loss.
The insurers, therefore, would be obligated to pay the insured the entire value of the vessel, which today, according to recent estimates, is around $130 – $140 million.
The hope, for all market players, is that the vessel can be released as soon as possible.
Meanwhile, a positive development concerns the release of the onboard crew (25 mariners), which occurred on 02.05.2024.
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