All characters in Billy Budd, including the villain Claggart, try to justify their behavior in terms of loyalty to the English King. In 1797, shortly after the Nore Mutiny, loyalty is not just something that is respected or valued; it is something that is desperately needed in the English fleet. Often, it is difficult to distinguish whether or not a character is acting out of natural feelings of loyalty or out of fear. It is in this mutinous climate that the loyalty of Captain Vere and Billy Budd will be put to the test.
Though Captain Vere appeals to his duty under the English King when he decides to execute Billy Budd, his main motivation is actually loyalty to the men on board his ship.
The tragedy in the novel results from an excess of loyalty. If Captain Vere were able to break his loyalty to the English King in order to make a moral decision in the case of Billy Budd, then Budd would not have to be executed.