The question of whether drug smuggling was a malicious act has been tested in the UK's Supreme Court.
It is widely acknowledged that trading in certain parts of the world carries with it particular risks, such as piracy, political uncertainty, social instability, corruption or drug trafficking. Colombia and surrounding countries, such as Venezuela, carry a particularly large risk in relation to drug smuggling where, despite the fact that law enforcement agencies have tightened up security to prevent smugglers from attaching drug-filled containers to ships, traffickers continue to regard ocean carriers as a cheap and relatively risk-free way to move their product internationally. All that is required is to find a way to attach the drugs to the hull of the vessel in one port and to retrieve them in the desired destination. The involvement of the captain or the crew is neither necessary nor, in fact, desired.
In August 2007, the vessel B Atlantic loaded a cargo of coal in Lake Maracaibo, Venezuela, for discharge in Italy.
As had happened to a number of other unfortunate vessels in the same period (African Future, Christopher Oldendorff, IDC-1 and Yeoman Brook, to name a few), prior to sailing, a routine underwater inspection revealed that a cache of drugs had been strapped to the ship's hull. In this case, three bags containing 132 kg of cocaine were found 10 m below the waterline.
Neither the owners nor the crew were implicated in the drug smuggling. This did not, however, prevent the Venezuelan authorities from detaining the vessel indefinitely and arresting the crew under the country's strict 2005 Anti-Drug Law, which provides that any person who illicitly traffics or transports drugs by any means will be punished with a prison sentence.
The law was implemented in such a way that crews were arrested for drug trafficking even if they themselves had alerted the authorities to the fact that drug smugglers were in the process of attaching drugs to the hold of their vessel (as in the case of IDC-1).
Eventually, in August 2010, the Venezuelan courts sentenced the master and second officer to nine years in prison for complicity in the drug trafficking. They also ordered the continued detention of B Atlantic.
In the intervening period, the owners served a notice of abandonment of the vessel on 18 June 2008 and presented their war risk insurers, Navigators, with a claim for the constructive total loss of their vessel, on the basis of the...