UK Judge: Greek Owner Faked Pirate Attack, Set Own Ship Ablaze

It sounds like a preposterous movie script, although it still might sell in Hollywood…

Close-up on the embattled Greek ship owner. He rubs his worry beads. The banks are closing in, poised to collect on debts in the wake of the global financial collapse. Then, he has an idea, an audacious plan to save himself. His ship isn't worth enough if he sells it, but if something catastrophic were to happen to it – if were to burn or sink and be declared a total loss – he could use the massive insurance payout to save himself.

But how to get the crew off the ship before "scuttling" it? He's a businessman, not a murderer. Ah, another writer has already figured this plot point out: In "The Hunt for Red October," Captain Marko Ramius and his co-conspirators fake an accident with the nuclear propulsion system aboard the Russian submarine Red October; the unwitting crew abandons ship and Ramius defects to America with the sub.

How does the Greek owner get the crew off his own ship before torching it? What can he fake to get his crew off safely and cover his tracks? Another light bulb goes off: a fake pirate attack! All he needs is a few co-conspirators in the shipboard officer ranks, a bogus team of pirates off the coast of Africa, an explosive device and some accelerant. What could possibly wrong?

As a scriptwriter might pitch it: It's Hitchcock meets Tom Clancy meets "Captain Phillips." This is not a movie, though or at least, not yet. 

This is what actually happened to the tanker Brilliante Virtuoso in the Gulf of Aden in July 2011, according to Justice Nigel Teare of the U.K. High Court of Justice, as detailed in his final ruling on a long-running case between the ship's banker and insurers that was handed down on Oct. 7.

Timeline of Brilliante Virtuoso's Demise

According to a copy of Teare's 80,000-word-long decision, the 1992-built, 150,000-deadweight-ton Brilliante Virtuoso was purchased in August 2008 by Suez Fortunes Investments Ltd., a company owned by Marios Iliopoulos. The price was $46 million, financed by Piraeus Bank.

It was incredibly bad timing: Immediately thereafter, global economies and shipping markets crashed. By 2011, the ship was worth only $13.5 million and after a series of refinancings, Suez Fortunes was receiving notices of default. It was insured for $77 million though, almost six times its value.

The Brilliante Virtuoso loaded a cargo of fuel oil in Kerch, Ukraine, on June 23, 2011, for transport to China for a lump-sum price of $3.2 million, $500,000 to be paid in advance after the ship passed the Suez. The vessel passed through the Suez Canal on June 30. Because the ship would traverse the Gulf of Aden piracy danger zone, arrangements were made for a security team to board off Yemen on July 6.

Shortly before midnight on July 5, a small boat approached with seven armed men aboard. They said they were "security"; the master let them aboard. Once onboard, the armed men forced the crew to assemble and took the master to the bridge and chief engineer to the engine room. Shots were fired. The captain was ordered to set a course for Somalia; he set a course for Djibouti instead.

The engine stopped around 2 a.m. on July 6. At 2:45 a.m., a fire broke out in the engine room. According to Teare's court ruling, "It is common ground [accepted by both parties in the case] that the fire was started by the detonation of an improvised explosive incendiary device, an ‘IEID,' which was brought on board the vessel by the armed men." The accelerant used to light the IEID was sourced onboard the ship.

At 3 a.m., the chief officer on the ship radioed the USS Philippine – a U.S. guided-missile cruiser on the hunt for pirates – and reported that the Brilliante Virtuoso was under attack. "The armed men had in fact left the vessel, presumably by means of the small boat in which they had arrived," wrote Teare in his court ruling.

At 4:16 a.m., the captain gave an "abandon ship" order. A photograph showed a large fire on the vessel as of 5:43 a.m. Everyone had left the ship but the chief engineer, who was not taken to the USS Philippine until 7:44 a.m.

A salvage tug from Aden-based Poseidon Salvage arrived at the scene at 7:23 a.m. The fire appeared to be dying out by 10:30 a.m. on July 6, then resurged, then diminished in late afternoon, resurged overnight, lasting throughout July 7, and was finally put out on July 8.

Courtroom Drama Aftermath

The ship was badly damaged and was scrapped. The owner claimed it was a total constructive loss; the insurers denied the claim, alleging that the fire was deliberately set. In 2016, a U.K. judge ruled in favor of the insurers, finding that Iliopoulos refused a court order to provide certain documents and lied to the court.

The case that has just been concluded was brought by the bank, which argued that it should be paid by the insurers even if "willful misconduct of the owner" was proven. The case led to an unusually long trial, with Teare ultimately dismissing the bank's claim and ruling that the loss of the ship "was caused by the willful misconduct of the owner, Mr. Iliopoulos."

"There are many improbabilities which, when viewed collectively, cogently suggest that the supposed attack by pirates was a fake attack. The improbable can happen. But when a number of improbabilities occur consecutively within a short period of time it is very difficult to accept that they are coincidences. Collectively, they are a cogent indication that the improbable did not happen," wrote Teare.

What he's saying is that however bizarre the fake pirate-attack scenario sounds, the alternative is even more unbelievable. According to Teare, if it wasn't a fake attack, the armed men would had to have somehow known the ship was expecting a security team and that the captain would be so lax that he would let them aboard. Then the armed men, who turned out to be members of the Yemini coast guard, would had to have been somehow unaware that the ship was going the wrong way when they had ordered it to set sail for Somalia.

"The armed guards would also have to have had the foresight to have brought on board an IEID – for use in an unintended eventuality – and yet to have lacked the foresight to bring on board a suitable accelerant," continued to justice.

After the main engine stopped, the alternate scenario implies that the armed men then "decided to abandon their plan to hijack the vessel and instead, for whatever reason, [decided] to activate the IEID with minimal delay and then have the good fortune to locate, with minimal further delay, a suitable accelerant in an unfamiliar engine room. I am unable to accept that this sequence of improbabilities occurred," concluded Teare.

Iliopoulos is currently chief executive officer of Greek ferry company SeaJets. He accepted the award on behalf of SeaJets from Lloyd's List for 2018 Passenger Line of the Year in the Greek Shipping Awards. This July, he accepted a humanitarian award on behalf of his support of wildfire victims in Greece. FreightWaves has sought comment from Iliopoulos via SeaJets on the statements made by the U.K. justice. At the time of this story's posting, Iliopoulos had yet to respond. More FreightWaves/American Shipper articles by Greg Miller

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