"The Longchamp" – A Reasonable Ransom

On 24th Oct 2014 in The Longchamp the High Court held that expenses incurred by the Owners of a Vessel hijacked in negotiating the reduction of the ransom demanded by pirates are allowable in GA as a "substitute expense" under Rule F of YAR. The Court stated in this respect that ".... the rule of contribution which has been invoked in the Adjustment under consideration has its foundation in the plainest equity and that the circumstances of this case were such that natural justice requires that all should contribute to the substituted expenses incurred by the [Owners]. The reduction in the amount of the ransom was only achieved by a process of negotiation which necessarily involved the ship-owner incurring expenditure".