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by Vault Law Editors | February 10, 2009


Last November, the palm oil-laden tanker Biscaglia was hijacked by Somali pirates in the Gulf of Aden and diverted to the coastal waters near the notorious pirate town of Eyl. (The Wall Street Journal profiled the efforts to rescue the crew and save the ship in this Jan. 31 story.)

Immediately upon receiving news of the hijacking, Biscaglia’s owner, Stamford, Conn.-based Industrial Shipping Enterprises (ISE), called in Lawrence Rutkowski, head of Seward & Kissel’s  maritime and transportation finance group, and a self-described ISE ‘consigliere.’  Today, The American Lawyer gives us an inside look at the lawyers’ role in the affairthe first time a U.S. law firm advised on a hostage negotiation with Somali pirates (Apparently, the surge in piracy around the Horn of Africa has been keeping British firms like Stephenson Harwood and Holman Fenwick & Willan busy.)

After two months of tense negotiations, ISE arranged ransom by airdrop.  An undisclosed sum of money was placed in a tube with a parachute and dropped into the ocean.  The pirates then retrieved the ransom using the same boats they used to hijack the tanker in the first place.  In addition to the ransom details (“It was actually a very straightforward contract”), the Seward & Kissel team faced a thorny tangle of issues: insurance (including ‘kidnap and ransom’ coverage), communications with tanker cargo stakeholders and their underwriters, as well as myriad relevant regulatory concerns, including  the Foreign Corrupt Practices Act and U.S. Treasury Department's Office of Foreign Assets Control.

-posted by brian

Opposing counsel employed hardball tactics.


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