Gunvor has told the UK’s highest court that a shipowner and its insurers should shoulder the entire burden of a $7.7m ransom paid to Somali pirates to secure the release of a product tanker in 2011.

The dispute being heard at the Supreme Court centres on the seizure by pirates of the 72,800-dwt MV Polar (built 2005) in October 2010 in the Gulf of Aden while carrying fuel oil from St Petersburg in Russia to Singapore.

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The ship was held for 10 months before the ransom was paid, and it was eventually able to discharge the vast bulk of its cargo in Singapore.

Greek shipowner Herculito Maritime claimed $4.8m from the shippers as part of a general average settlement.

The ship was chartered in September 2010 to Clearlake Shipping, part of the Geneva-based Gunvor group, which took out war risk and kidnap, and ransom insurance policies. Herculito also took out insurance for 14 days, including the vessel’s transit through the Gulf of Aden.

While both sides had insurance cover because of the risk from piracy, Gunvor argued that the wording of contracts and the bills of lading indicated that the ransom payments should be the sole responsibility of the owner.

An arbitration hearing initially sided with Gunvor, which has turned to the Supreme Court after two subsequent appeals went against it.

The case is one of the last disputes related to shipping and Somali piracy, which peaked between 2007 and 2012.

Following the last ruling in the Polar case, law firm Kennedys said ransom payments were unlikely to disappear from the maritime world, and clarity was needed with competing insurer interests in general average cases.

“It seems right that each party with an interest in the marine adventure will bear its share of the risk which it has agreed to cover,” it said in a commentary in 2021.

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