Fighting Piracy with Private Security Measures: When Contract Law should Tell Parties to Walk the Plank
30 Pages Posted: 3 Mar 2010
Date Written: March 1, 2010
This Article addresses the following question: when should contract law permit parties to discontinue performance under a private security contract aimed to combat piracy? Piracy has been 'on the rise' off Somalia and in East Asia, with serious attacks escalating. Some shipping companies have responded by drafting 'best management practices', hiring security companies to advise on countering the threat and hiring armed or unarmed security protection. After presenting representative factual situations involving pirate attacks, the Article describes the traditional approach to defining the obligations of parties and the performance issues that arise during contractual performance. This approach takes into account interpretation through reasonable expectations, trade usage and public policy and would deny a party the right to excuse the failure of performance in instances where the particular risk might be categorized as foreseeable or is expressly or impliedly allocated to the contracting party. An excuse approach does not necessarily give the parties guidance as to when security forces onboard a ship attacked by pirates should not attempt to fulfill contractual obligations, perhaps because performance may escalate the risk to employees of both parties due to the particular acts of the pirates. This uncertainty of obligation may lead to escalation of the dangers of piracy necessitating increased use of force or depriving a contracting party of a needed contractual out, leaving the non-performing security provider in breach.
After describing and critiquing efforts to combat piracy, the Article provides a contractual analysis of the relationship between the private parties, shipper and security company. It then proposes a approach to the problem of performance that anticipates use of force - one that would hold parties to the security contracts in most circumstances where the response to piracy is likely to be effective, but would allow and perhaps encourage cessation of performance in situations that require a governmental response such that private ordering for use of force is less appropriate, could result in escalation with the pirates or could increase risk to employees or non-pirate third parties. Employing a comparison to domestic robbery, an interpretative approach that favors non resistance when pirates actually board should be not only permitted but encouraged where the risk associated with combating piracy requires a more governmental response and, therefore, responsibility should remain with the Government or international community as a whole. The Article concludes with a discussion of the specific balancing of contractual obligations and public policy and public interest where civilians contract for the use of force implicating the international community's need to maintain peace.
Keywords: Security, Pirates, Piracy, High Seas, International, Contract, Trade Usage, Interpretation, Public Policy, Excuse, Impracticability, Force, Civilians, Maritime
JEL Classification: K12
Suggested Citation: Suggested Citation