High Court: "Pirate Attack" was Attempted Fraud


Published Oct 7, 2019 9:35 PM by The Maritime Executive

In a ruling issued Monday, the High Court of London ruled that the tanker Brillante Virtuoso was irreparably damaged not by pirates, as her owner and banker claimed, but by a group of conspirators. Justice Nigel Teare found that the owner's claims of piracy were improbable, and he reached the "firm conclusion" that the attackers intended to destroy the vessel, that they had the assistance of the master and chief engineer as they went about the task, and that the owner orchestrated the scheme in order to defraud his insurer. 

On July 6, 2011, Brillante Virtuoso was drifting off Aden, awaiting a team of unarmed security contractors before transiting Bab el-Mandeb. A small boat approached carrying seven masked, armed men. The men informed the crew that they were "security," and they came aboard with the master's permission. (The disputants in the case agreed that the boarding party's members were likely current or former Yemeni Coast Guard or Navy servicemenbers.) They ordered the crew to the day room, and escorted the master to the bridge and the chief engineer to the engine room. 

On the bridge, at about 0024, they ordered the master to make way for Somalia, which would require a course east-southeast. Instead, he steered southwest, towards Djibouti and away from Somalia. At about 0228, the engine came to a stop, either due to mechanical failure or to the chief engineer's actions.  At 0245, the attackers detonated an IED in the fuel purifier room, starting a fire. An accelerant and additional fuel caused the fire to spread. The attackers departed, and the chief officer made a distress call reporting a pirate attack (at 0303). The SSAS was activated at 0306. The master and crew (except for the chief engineer) abandoned ship at 0416 and were rescued by the cruiser USS Philippine Sea. 

The chief engineer remained on board for the next two hours, but did not carry out standard engine room fire-fighting provisions like shutting down vents, closing off remotely-activated fuel valves or activating the fixed firefighting system. 

After a survey of the fire damage, the vessel was judged a total loss, and owner Marios Iliopoulos and banker Piraeus Bank filed a $77 million insurance claim. As the case proceeded, Iliopoulos declined to provide electronic documents related to the case to his own counsel or to the plaintiffs, raising questions for the court. 

In his ruling on the case, Justice Teare noted multiple inconsistencies in the owners' account of the attack. The incident occurred within Yemeni waters off Aden, a location where Somali pirates had never attempted a boarding before (and have not since). In VDR recordings, the attackers identified themselves as "security," suggesting that if they were pirates, they would have had to have known that the vessel was awaiting a security detail. They brought with them an incendiary device. The master allowed them to come aboard, even though they were  masked and armed and the ship was awaiting an unarmed security team. When directed to steer towards Somalia, the master selected a much different heading, but the attackers did not detect this or correct it.  

"I do not consider that there is a plausible explanation of the events which befell Brillante Virtuoso which is consistent with an innocent explanation," Teare wrote. "I have found that in the present case a group of armed men, on the instructions of the Owner, were permitted to board the vessel and set fire to it, as part of an attempt by the Owner to defraud the Underwriters." 

In 2016, Marios Iliopoulos was arrested in London and charged with conspiracy to commit fraud in connection with the Brillante Virtuoso case.