Iran purports to have seized the vessel to satisfy a debt. As I’ve explained, this argument fails on its own. Moreover, fundamental rules of international law prohibit the arrest of vessels in transit for the debts incurred on prior transits or by other vessels. This is codified in Art. 20(2) of the Convention on the Territorial Sea and the Contiguous Zone, to which Tehran is a party.
The Islamic Republic has no legal authority to seize the ship. Releasing it on payment of money is not piracy, because that can only committed by non-state actors, but it is definitely a shake-down, and an assertion of general sovereign rights over international shipping lanes. It is likely not the last such ransom Iran will demand.