p&i rules 2005
TRANSCRIPT
P&I and Defence Class Rules and Correspondents 2005/06
The Standard
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Protection and Indemnity Class Rulesand Defence Class Rules for the 2005/06 policy year
of
The Standard Steamship Owners’ Protection and IndemnityAssociation (Bermuda) Limited
and
The Standard Steamship Owners’ Protection and IndemnityAssociation (Europe) Limited
ManagersCharles Taylor & Co. (Bermuda)
Dallas Building, 7 Victoria Street, Hamilton, Bermuda,
PO Box 1743 HMGX
Telephone: +1 441 292 7655 Fax: +1 441 292 8992
Managers’ London AgentsCharles Taylor & Co. LimitedInternational House, 1 St. Katharine’s Way, London E1W 1UT, United KingdomTelephone: +44 (0)20 7488 3494 Fax: +44 (0)20 7481 9545E-Mail: p&[email protected]
and
The Standard Steamship Owners’ Protection and IndemnityAssociation (Asia) Limited
ManagersCharles Taylor Mutual Management (Asia) Pte. Limited
140 Cecil Street, #10-02 PIL Building
Singapore 069540
Telephone: +65 6221 1060 Fax: +65 6221 1082
E-Mail: p&[email protected]
Website: www.standard-club.com
The Standard
Emergency telephone no. +44 (0) 7932 113573
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Contents
1 The Directors v
2 The Managers and their London Agents vii
3 The P&I Club Rules of Standard (Bermuda) 1
The P&I Club Rules of Standard (Europe) 82
The P&I Club Rules of Standard (Asia) 82
4 Index to the P&I Club Rules 85
5 Special Covers and Clauses:
Charterers’ Liability for Damage to Hull Clause 2005 97
P & I War Risks Clause 2005 99
War Risks Clause for Extended Covers 2005 102
Bio-Chemical Risks Inclusion Clause 2005 106
United States Oil Pollution Inclusion Clause 2005 108
Paperless Trading Clause 2005 111
Section No. Page No.
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6 The Defence Club Rules of Standard (Bermuda) 113
The Defence Club Rules of Standard (Europe) 149
The Defence Club Rules of Standard (Asia) 149
7 Index to the Defence Club Rules 151
8 Recommended Charter Party Clauses and Agreements
Pollution charterparty clauses 157
Inter-Club New York Produce Exchange Agreement 1996 160
9 Selected Circulars
Minimum standards 165
Bills of lading – delivery of cargo 176
10 Oil Spills in the United States 199
11 Maps and list of correspondents 201
Section No. Page No.
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1 The Standard SteamshipOwners’ Protection andIndemnity Association(Bermuda) Limited
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1 The Standard Steamship Owners’ Protectionand Indemnity Association (Bermuda) Limited
R. Menendez, ArgentinaPresident and ChairmanUltraocean S.A.
The Hon. Sir John Swan K.B.E., J.P., BermudaVice-President
B.F. Sauer, United StatesDeputy ChairmanMaersk Line Ltd.
J. de Sendagorta, SpainDeputy ChairmanMaritima del Norte
N.Aksoy, TurkeyTurkish Cargo Lines
J.Andrasick, United StatesMatson Navigation Company Inc.
B. Bekker, The NetherlandsDockwise N.V.
F. Blanchelande, MonacoSBM Production Contractors
P. Clerici, ItalyCoeclerici S.p.A.
C. D’Amico, ItalyD’Amico di Navagazione S.p.A.
T. Dool, CanadaAlgoma Central Corporation
P. Goodfellow, United Kingdom
E.L. Johnsen, United StatesCentral Gulf Lines Inc.
R. M. Jones, United StatesCSL International Inc.
H.D.W. Laing, Bermuda
C. Peraticos, GreecePleiades Shipping Agents S.A.
J.B. Rae-Smith, SingaporeSwire Pacific Offshore Ltd.
S.S.Teo, SingaporePacific International Lines (Pte) Ltd.
W.D.Thomson, Bermuda
F.Tisi, ItalySaipem S.p.A.
J.M.Truchan, United StatesPatriot Holdings LLC.
F.C.P.Tsai, CanadaOak Maritime (Canada) Inc.
G.Westgarth, CanadaTeekay Shipping (Canada) Ltd.
A.J. Groom, United KingdomManager
J.S.M. Rowe, United KingdomManager
Directors
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The Standard Steamship Owners’ Protectionand Indemnity Association (Europe) Limited
Directors
R. Menendez, ArgentinaChairmanUltraocean S.A.
J. de Sendagorta, SpainMaritima del Norte
B.F. Sauer, United StatesMaersk Line Ltd.
J.M.Truchan, United StatesPatriot Holdings LLC.
A.J. Groom, United KingdomManager
J.S.M. Rowe, United KingdomManager
The Standard Steamship Owners’ Protectionand Indemnity Association (Asia) Limited
Directors
S.S.Teo, SingaporeChairmanPacific International Lines (Pte) Ltd.
T.G. Bernardino, PhilippinesLoadstar International Shipping Inc.
B. Harinsuit, ThailandHarinsuit Transport Co. Ltd.
A.G. Nasaruddin, MalaysiaSutrajaya Shipping SDN BHD
2 The Managers and their Agents
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2 The Managers and their Agents
Direct line and home telephone numbers of directors andexecutives, shown with the International dialling code
Emergency telephone No. +44 (0) 7932 113 573
Directors and executives can also be contacted by email [email protected]
Charles Taylor & Co. (Bermuda)
Managers
Norman Long Home No. +1 441 293 8699Jimmy Smith Home No. +1 441 236 4914
Please note that in case of emergency members should contact theManagers’ London Agents or the emergency telephone number
Charles Taylor & Co. Limited
Managers’ London Agents
John Rowe – Chairman +44 (0) 20 7759 4900Home No. +44 (0) 1359 230374
Alistair Groom – Chief Executive +44 (0) 20 7522 7422Home No. +44 (0) 1725 519204
Mobile +44 (0) 7932 113584
Paul Engels – Deputy Chief Executive +44 (0) 20 7522 7413Home No. +44 (0) 118 971 4378
Mobile +44 (0) 7717 228031
Brian Glover – Director of Claims +44 (0) 20 7522 7417Home No. +44 (0) 20 8549 8399
Mobile +44 (0) 7932 113575
John Reily – Director of Underwriting +44 (0) 20 7522 7443Home No. +44 (0) 1708 445 961
Mobile +44 (0) 7712 865750
Stephen Matthews – Group Finance Director +44 (0) 20 7759 4918Home No. +44 (0) 20 8341 7960
Mobile +44 (0) 7932 113592
Ivan Keane – Director of Business Development +44 (0) 20 7522 7439Home No. +44 (0) 20 7722 9412
Mobile +44 (0) 7712 877192
Jeremy Grose – Operations Director +44 (0) 20 7522 7438Home No. +44 (0) 20 7226 7342
Mobile +44 (0) 7932 113594
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Hunter Smith – Compliance Officer +44 (0) 7522 7449Home No. +44 (0) 1449 740641
Mobile +44 (0) 7932 113590
Andrew Clarke – Claims Services Director +44 (0) 20 7522 7407Home No. +44 (0) 20 8981 4693
Mobile +44 (0) 7712 871314
James Cross – Claims Services Director +44 (0) 20 7680 5602Home No. +44 (0) 1634 724391
Mobile +44 (0) 7785 792861
Offshore
Barbara Jennings – Director, Offshore +44 (0) 20 7522 7429Home No. +44 (0) 20 8672 5358
Mobile +44 (0) 7775 515877
Finance & Secretariat
Phil Greenwood – P&I Finance Director +44 (0) 20 7522 7454Home No. +44 (0) 1206 394405
Mobile +44 (0) 7885 094185
Vicky Hawkins – Secretariat +44 (0) 20 7522 7529Mobile +44 (0) 7977 517521
Loss Prevention
Eric Murdoch – Director, Safety and +44 (0) 20 7522 7440Loss Prevention Home No. +44 (0) 1892 537019
Mobile +44 (0) 7932 113579
Bill McNamee – Senior Surveyor +44 (0) 20 7522 7441Mobile +44 (0) 7932 113577
David Sporle – Surveyor +44 (0) 20 7522 7554Mobile +44 (0) 7764 169180
Underwriting Services
Andrew Charlton – Underwriting Services +44 (0) 20 7522 7405Director Home No. +44 (0) 1474 744037
Mobile +44 (0) 7932 113578
Reinsurance
Noel MacKenzie – Reinsurance Director +44 (0) 20 7522 7469Home No. +44 (0) 1444 416 752
Mobile +44 (0) 7919 478517
Paul Smith – Reinsurance Technician +44 (0) 20 7522 7517Home No. +44 (0) 20 8884 0871
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Syndicate A
Robert Drummond – Syndicate Director +44 (0) 20 7522 7411Home No. +44 (0) 1798 873646
Mobile +44 (0) 7712 874482
Claims Directors and Executives
Kieron Moore – Syndicate Claims Director +44 (0) 20 7522 7483Home No. +44 (0) 20 8949 5485
Mobile +44 (0) 7712 871313
Iain Cassell +44 (0) 20 7680 5605Home No. +44 (0) 20 8325 9642
Mobile +44 (0) 7810 158800
Kelly Day +44 (0) 7522 7433Mobile +44 (0) 7717 431843
Edward Dempster +44 (0) 7522 7559Home No. +44 (0) 8241 0956
Mobile +44 (0) 7919 476931
Laurence Guy +44 (0) 20 7522 7414Home No. +44 (0) 20 7498 2287
Mobile +44 (0) 7979 655790
Sharmini Murugason +44 (0) 20 7522 7434Home No. +44 (0) 20 7289 9890
Mobile +44 (0) 7775 783194
Underwriting
Robert Dorey – Underwriter +44 (0) 20 7522 7433Home No. +44 (0) 7498 2287
Mobile +44 (0) 7775 515878
Alex More – Deputy Underwriter +44 (0) 20 7522 7425Mobile +44 (0) 7733 121330
(Syndicate A – Fax: +44 (0) 20 7522 7540)
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Syndicate B/CDavid J. Roberts – Syndicate Director +44 (0) 20 7522 7462
Home No. +44 (0) 20 7376 7834Mobile +44 (0) 7720 285859
Claims Directors and Executives
John White-Thomson – Syndicate Claims Director +44 (0) 20 7522 7479Home No. +44 (0) 1449 736787
Mobile +44 (0) 7717 505867Paul Flowers (Piraeus) – Regional Claims Director+30 210 429 0733/4
Mobile +30 6944 761147Fiona Wetherell (Piraeus) – Claims Director +30 210 429 0733/4
Mobile +30 6945 431591Barry Gower – Claims Director +44 (0) 20 7522 7420
Home No. +44 (0) 20 7537 9959Mobile +44 (0) 7712 867706
Chris Doe +44 (0) 20 7522 7410Home No. +44 (0) 1256 464672
Mobile +44 (0) 7900 052194Stuart Kempson +44 (0) 20 7522 7484
Home No. +44 (0) 1462 480407Mobile +44 (0) 7801 494923
Melanie Odell +44 (0) 20 7522 7463Home No. +44 (0) 1628 532032
Mobile +44 (0) 7775 515871Andrew Pearson +44 (0) 20 7522 7436
Home No. +44 (0) 1372 842016Mobile +44 (0) 7795 635993
Colin Snell +44 (0) 20 7522 7486Mobile +44 (0) 7917 065943
Christina Soulaki (Piraeus) +30 210 429 0733/4Mobile +30 6948 531613
Underwriting
Colin Fowles – Underwriter +44 (0) 20 7522 7470Home No. +44 (0) 1189 341219
Mobile +44 (0) 7770 667372Mark Collins – Deputy Underwriter +44 (0) 20 7522 7472
Home No. +44 (0) 1206 871460Mobile +44 (0) 7712 871315
Claire Beard – Deputy Underwriter +44 (0) 20 7522 7567Mobile +44 (0) 7795 837940
(Syndicate B/C – Fax: +44 (0) 20 7522 7543 – London+30 210 429 0818/0950 – Pireaus)
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Syndicate D
William Robinson – Syndicate Director +44 (0) 20 7522 7497Home No. +44 (0) 20 7622 7867
Mobile +44 (0) 7734 972408
Claims Directors and Executives
Andrew Paton – Syndicate Claims Director +44 (0) 20 7680 5637Home No. +44 (0) 20 8467 2499
Mobile +44 (0) 7798 775075
Paul Barnes (New York) – Vice President +1 212 809 8085Charles Taylor P&I Management Home No. +1 732 530 3208
Mobile +1 917 593 9858
Les Bashford +44 (0) 20 7522 7551Home No. +44 (0) 20 8641 0725
Mobile +44 (0) 7778 709386
Gillian Musgrave (New York) +1 212 809 8085Mobile +1 646 321 2146
Amanda Nelson +44 (0) 20 7522 7455Home No. +44 (0) 20 7237 2876
Mobile +44 (0) 7905 226654
Ryan Puttick (New York) +1 212 809 8085Home No. +1 718 356 2230
Mobile +1 646 321 1494
Robert Steer +44 (0) 20 7522 7474Home No. +44 (0) 1707 654540
Mobile +44 (0) 7969 336510
Underwriting
Darren Webb – Underwriter +44 (0) 20 7522 7564Home No. +44 (0) 20 8524 9558
Mobile +44 (0) 7712 877235
David Archard – Deputy Underwriter +44 (0) 20 7522 7496Home No. +44 (0) 1702 204690
Mobile +44 (0) 7717 835532
(Syndicate D – Fax: +44 (0) 20 7522 7542)
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The Standard Steamship Owners’ Protection andIndemnity Association (Asia) Limited
Managers
Charles Taylor Mutual Management (Asia) Pte. Limited
Tel: +65 6221 1060Fax: +65 6221 1082E-mail: p&[email protected]
Directors
David Alwyn – General Manager/Underwriter Home No. +65 6469 7097Mobile +65 9661 9930
Christopher Tang – Managing Director Home No. +65 6466 8970Mobile +65 9789 3938
Alistair Groom – Chairman Home No. +44 (0) 1725 519204Mobile +44 (0) 7932 113584
Stephen Matthews – Finance Director Home No. +44 (0) 20 7759 4918Mobile +44 (0) 7932 113592
Claims Directors and Executives
Nick P.Williams – Regional Claims Director Home No. +65 6438 3324Mobile +65 9127 7178
Michael Lee – Senior Claims Consultant Mobile +65 9030 1622
Wendy Ng – Claims Executive Mobile +65 9624 5797
Ching Weng Thim – Claims Executive Mobile +65 9661 2510
Yu Siew Fun – Claims Executive Mobile +65 9627 5606
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3 Rules of the Protection and Indemnity Class
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3 Rules of the Protection and Indemnity Class
Introductory
Definitions
1 In these Rules the words and phrases hereinafter set out shall have thefollowing meanings or effects if not inconsistent with the subject orcontext:
These Rules means these Rules (including regulations under Rule 30)as originally framed or as from time to time altered, abrogated or addedto and for the time being in force.
The Act means The Standard Steamship Owners’ Protection andIndemnity Association (Bermuda) Limited Consolidation andAmendment Act 1994 and every modification thereof for the time beingin force.
The Bye-Laws means the Bye-Laws for the time being of the Club.
The Club means The Standard Steamship Owners’ Protection andIndemnity Association (Bermuda) Limited.
Applicant means any person seeking to enter a ship on his own oranother’s behalf or on whose behalf an application is made.
Board means the Directors for the time being of the Club or, as thecontext may require, a quorum of Directors present at a duly convenedmeeting of the Board.
Cargo means goods (other than a container supplied by or on behalf ofa Member) carried or intended to be carried from one place to anotherplace.
General Cargo means any cargo other than a Bulk Cargo and includessteel.
Bulk Cargo means any cargo falling within one of the followingcategories:
(i) cargoes that are homogeneous and are trimmed or self-trimming andwhich are not stowed;
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(ii) cargoes consisting solely of bagged produce;
(iii) cargoes consisting solely of grain, when part is shipped in bulk and partin bags; or
(iv) cargoes of homogeneous liquids in bulk.
Container includes any device or receptacle in or on which cargo iscarried including trailer, flat, pallet, tank or similar receptacle which issupplied by or on behalf of a Member for the carriage of cargo, andwhich is either designed to be, or expected to be, carried in an enteredship.
Contribution includes Estimated Total Premium, SupplementaryPremium and any other Calls or Premiums which may be due from aMember.
Convention Limit means, in respect of a ship, the limit of liability ofthe shipowner of that ship for claims (other than claims for loss of life orpersonal injury, at the Overspill Claim Date, calculated in accordancewith Article 6 paragraph 1(b) of the International Convention onLimitation of Liability for Maritime Claims 1976 (the ‘’Convention’’)and converted from Special Drawing Rights into United States Dollars atthe rate of exchange conclusively certified by the Board as being the rateprevailing on the Overspill Claim Date, provided that,
(i) where a ship is entered for a proportion (the ‘’relevant proportion’’) of its tonnage only, the Convention Limit shall be the relevantproportion of the limit of liability calculated and converted as aforesaid,and
(ii) each ship shall be deemed to be a seagoing ship to which theConvention applies, notwithstanding any provision in the Convention tothe contrary.
Demise Charterer means a charterer who has sole possession of theship and sole control of its management and crew.
Effects includes clothes, documents, navigation and other technicalinstruments and tools, but does not include cash.
Entered Ship means a ship which has been entered in the Club for anyof the risks enumerated herein in the manner provided under theseRules.
Entered Tonnage means the tonnage on the basis of which a ship isentered for insurance in the Club; and Entered Ton refers to the unit ofsuch tonnage.
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Fines includes penalties and other impositions similar in nature to finesimposed in respect of any entered ship by any court, tribunal orauthority of competent jurisdiction
General Excess Loss Reinsurance Contract means the excess of lossreinsurance policies effected by parties to the Pooling Agreement.
Group Rating Agreement means any agreement whereby thecontributions of an entered ship are assessed by reference to the record ofany other ships which are or were entered through the group in theClub, whether the ships are in the same registered or beneficialownership or not.
Group Reinsurance Limit means the amount of the smallest claim(other than any claim and excluding any part of a claim, arising inrespect of oil pollution), including the costs and expenses associatedtherewith, incurred by the Club or by any other party to the PoolingAgreement which would exhaust the largest limit for any type of claim(other than any claim and excluding any part of a claim arising in respectof oil pollution) from time to time imposed in the General Excess LossReinsurance Contract provided that, for the purpose of this definition, allclaims (other than any claim and excluding any part of a claim arising inrespect of oil pollution) incurred by the Club or by any other party tothe Pooling Agreement under the entry of any one ship arising from anyone incident or occurrence including any claim in respect of liability forthe removal or non-removal of any wreck shall be treated as if they wereone claim.
Hull Policies means the Policies effected on the hull and machinery ofa ship, including excess liability policies.
Managers means the Managers for the time being of the Club.
Member means every owner or other person who becomes and is forthe time being a Member of the Club and more particularly of theProtection and Indemnity Class of the Club as hereinafter provided andas provided in the Bye-Laws.
Overspill Call means a call levied by the Club pursuant to Rule 15.4for the purpose of providing funds to pay part of an Overspill Claim.
Overspill Claim means that part (if any) of a claim (other than a poolclaim, and excluding any part of a pool claim arising in respect of oilpollution) incurred by the Club or by any other party to the PoolingAgreement under the terms of entry of a ship which exceeds or mayexceed the Group Reinsurance Limit provided that, for the purpose of
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this definition, all claims (other than a pool claim, and excluding any partof a pool claim arising in respect of oil pollution) incurred by the Clubor by any other party to the Pooling Agreement under the entry of anyone ship arising from any one incident or occurrence including anyclaim in respect of liability for the removal or non-removal of any wreckshall be treated as if they were one claim.
Overspill Claim Date means, in relation to any Overspill Call, the timeand date on which there occurred the incident or occurrence giving riseto the Overspill Claim in respect of which the Overspill Call is made or,if the Policy Year in which such incident or occurrence occurred hasbeen closed in accordance with the provisions of Rules 15.5.1 and15.5.2, noon G.M.T. on 20th August of the Policy Year in respect ofwhich the Club makes a declaration under Rule 15.5.3.
Owner includes an owner, owners in partnership, owners holdingseparate shares in severalty, a part owner, and a trustee, mortgagee,charterer, operator or manager, builder, insurer or reinsurer who enters aship in the Club or who is a Principal Assured, Joint Entrant or a Co-assured.
Passenger means any person carried on board an entered ship by virtueof holding a ticket of passage.
Policy Year means the year from noon G.M.T. on the 20th February tonoon G.M.T. on the 20th February next ensuing.
Pooling Agreement means the agreement to which the Club is a party,between the International Group of Protection and IndemnityAssociations, dated 20th February, 1989, and any addendum to, orvariation or replacement of, the said agreement.
Premium Rating means in relation to an entered ship (not being a shipentered under Rule 5 on terms where a fixed premium is payable) therate per entered ton determined in accordance with Rule 14.
Seaman means any person (including the master and apprentices)engaged or employed in any capacity in connection with thebusiness of any entered ship as part of such ship’s complement (or anysubstitute for such person) and includes a supernumerary.
Ship means any ship, boat, hydrofoil, hovercraft or any other description ofvessel, whether completed or under construction, (including a lighter, bargeor similar vessel howsoever propelled but excluding a fixed platform or afixed rig) used or intended to be used for any purpose whatsoever innavigation or otherwise on, under, over or in water or any part of such ship,boat, hydrofoil, hovercraft or other description of vessel or any part thereofor any proportion of the tonnage thereof or any share therein.
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Supernumerary means any relative of a seaman, or any other person,whom a Member has agreed to maintain or carry on board an enteredship (except a passenger) and includes any person engaged under articlesof agreement for nominal pay.
Statutory Obligation includes any direction, obligation, or liabilityimposed by enactment, decree, order or regulation having the force oflaw.
Tonnage means the gross tonnage of a ship as certified or stated in theCertificate of Registry or other official document relating to the registryof the ship; and Ton refers to the unit of such tonnage.
Towage means any operation in connection with the holding, pushing,pulling, moving, escorting or guiding of or standing by a ship or object.
Words importing the singular number only shall include the pluralnumber and vice versa.
Words importing the masculine gender only shall include the femininegender.
Words importing persons shall include bodies corporate.
Insurance
2.1 These Rules, which are subject to the Act and the Bye-Laws, contain theterms upon which the Protection and Indemnity Class of the Clubconducts its business.The Protection and Indemnity insurance given bythe Club shall be in accordance with these Rules.
Governing Law
2.2 These Rules and any contract of insurance between the Club and aMember or any other person claiming under these Rules shall begoverned by and construed in accordance with English Law. In particularthey are subject to and incorporate the provisions of the MarineInsurance Act, 1906, of the United Kingdom and any statutorymodifications thereof except insofar as such Act or modification mayhave been excluded by these Rules or by any term of such contract.
2.3 In the event of any conflict between the English text of these Rules andany text thereof written in any other language, the English text shallprevail.
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Headings
2.4 The headings and notes in these Rules are for information only and arenot to be taken into account in the interpretation or construction ofthese Rules.
Powers of Board and Managers
3.1 Whenever any power, duty or discretion is stated in these Rules to bevested in the Board such power, duty or discretion shall be exercisable bythe Board unless the same shall have been delegated to any sub-committee of the Board or to the Managers in accordance with theprovisions as regards delegation contained in the Bye-Laws, in whichevent the power, duty or discretion may be exercised by any person towhom the same shall have been so delegated.
3.2 Whenever any power, duty or discretion is conferred or imposed uponthe Managers by virtue of these Rules, or is delegated to them underparagraph 1 of this Rule, such power, duty or discretion may, subject toany terms, conditions or restrictions contained in these Rules, beexercised by the Managers or by any authorised employee or agent of theManagers.
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Application and Entry
Entry
4.1 The Managers may in their discretion, and without giving any reason,refuse any application for the entry of a ship in the Club whether or notthe applicant is already a Member of the Club.
4.2 Each person whose entry has been accepted under the Rules agrees withthe Club for himself, his heirs, executors, administrators, assigns andsuccessors that both he and they and each and all of them are bound byand will observe and perform the obligations under these Rules. Eachsuch person shall furnish the Club with an address for the service ofnotices. In the case of a Member the address shall be deemed to be theaddress appearing in the Register of Members.
4.3 The Managers shall be at liberty to accept entries from those not alreadyMembers. If an application is accepted such person shall become aMember unless the Managers in their discretion decide that he is not tobe a Member.Whenever the Managers accept an entry by way ofreinsurance, they may in their discretion decide that the insurer reinsuredby the Club or person insured by such an insurer or both shall become aMember or that neither of them shall become a Member and theManagers may accept the application on either such basis.
4.4 Where a person whose entry has been accepted under the Rules has notbecome a Member of the Club, he shall have the same rights andobligations under these Rules (but not under the Bye-Laws) as thoughhe were a Member, and all such rights and obligations shall apply to him.
4.5 The Managers shall be at liberty to enter into contracts of reinsurance onbehalf of the Club whereby the Club agrees to reinsure the risks arisingin connection with any one or more ships insured by another insurer orelse agrees to reinsure the whole or any part or proportion of theinsurance business of any other insurer.The consideration payable to theClub and the terms and conditions on which the reinsurance is acceptedby the Club shall be such as are agreed between the Managers and suchother insurer. Save where otherwise agreed in writing the other insurershall be in every respect subject to and bound by the provisions of theseRules and his contract with the Club shall for all purposes take effect asthough he were the Owner of any ship or ships in connection withwhich the relevant risks may arise and has as owner entered the ship orships in the Club for insurance.
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Note: Under this Rule, the Managers can enter into contracts on behalf of theClub to reinsure other insurers for P & I and non P & I risks.
Terms of entry, assignment and special entries
Terms of entry
5.1.1 The standard terms of entry upon which ships will be accepted by theManagers are those set out in the Rules.
5.1.2.1. The standard risks against which a Member is insured are those set out inRule 20.
5.1.2.2 However, a Member shall only be insured against the risks specified inparagraphs 4.A, 15.A, 19.A, 21.2, 29.A, 35 and 36 of Rule 20 if theinsurance, and any sum insured, any additional contribution and anyother terms have been specifically agreed in writing with the Managersand specified (other than the amount of any additional contributionpayable to the Club) in the Certificate of Entry.
5.1.2.3 The rights of recovery set out in these Rules may be excluded, limited,modified or otherwise altered by any special terms which have beenagreed in writing between an applicant and the Managers.
5.1.2.4 The Terms of Entry and the insurance provided by the Club shall not,nor is intended to, confer any right or benefit on any third party underthe Contracts (Rights of Third Parties) Act 1999 save to the extentprovided in Rule 8.
5.1.3 The Managers may, subject to the directions of the Board, accept entrieson terms as to contribution other than those set out in the Rules. Inparticular an entry may be accepted on the basis that a fixed premium isto be paid instead of Calls.
Assignment
5.1.4.1 No insurance given by the Club and no interest under these Rules orunder any contract between the Club and any Member may be assignedwithout the written consent of the Managers who shall have the right intheir discretion to give or refuse such consent without stating any reasonor to give such consent upon any terms or conditions as they may thinkfit.Any purported assignment made without such consent or withoutthere being due compliance with any such terms and conditions as theManagers may impose shall, unless the Managers in their discretionotherwise determine, be void and of no effect.
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5.1.4.2 Whether or not the Managers shall expressly so stipulate as a conditionfor giving their consent to any assignment, the Club shall be entitled insettling any claim presented by the assignee to deduct or retain suchamount as the Managers may then estimate to be sufficient to dischargeany liabilities of the assignor to the Club whether existing at the time ofthe assignment or having accrued or being likely to accrue thereafter.
Special entries
5.2.1 A Member may be insured in respect of special risks including risksother than those set out in Rule 20, or in respect of risks otherwiseexcluded, where such special risks have been agreed in writing betweenthe Member and the Managers. In particular, the Club may acceptinsurance for the following classes of cover under the provisions of thisparagraph:
(i) owner’s hull cover
(ii) charterers’ hull cover
(iii) charterers’ liability for loss of bunkers
(iv) charterers’ liability for freight
(v) Owner’s loss of hire
(vi) war risks
(vii) shipowners’ liability insurance
(viii) costs and expenses in respect of freight, dead freight, demurrage anddefence risks,
and other such risks as the Managers from time to time thinkappropriate.
5.2.2 Unless otherwise expressly agreed, such insurance shall be subject to thewarranties, conditions, exceptions, limitations and other terms set out inthese Rules. Subject to Rule 5.2.3, the nature and extent of the risks andthe terms of the cover, and in particular the extent of the recovery that aMember may make from the Club shall be as agreed in writing betweenthe Member and the Managers and endorsed upon the Certificate ofEntry.
5.2.3 Save insofar as any other limit and/or special terms are expressly agreedin writing by the Managers, cover for war risks including any limitationof liability shall be, or shall be deemed to be, in all respects on the terms
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of the P & I War risks Clause – 2005, issued by the Club or anysubsequent amendments thereto in force at the time of such insurance.
PROVIDED ALWAYS THAT the Managers shall be at liberty toreinsure in whole or in part the risk or risks of the Club against any ofthe costs, liabilities or expenses insured by a Member under this Rule 5.2and in the event that such reinsurance is arranged such a Member shallbe entitled to recover from the funds of the Club only the net amountactually recovered under such reinsurance arrangements, together withthat portion (if any) of the risk or risks retained by the Club.
5.3 Where a ship is entered by a charterer other than a demise or bareboatcharterer the charterer shall be entitled to recover for his liability,together with costs and expenses incidental thereto, to indemnify theowner or disponent owner of the entered ship in respect of the risks setout in Rule 20.
Application for entry
6.1 Every applicant shall apply for an entry in such manner and form as theManagers may from time to time require.
6.2 The applicant must furnish to the Managers:
(i) all material particulars and information; and
(ii) all such additional particulars and information as the Managers mayrequire.
6.3 An applicant warrants on his own behalf and on behalf of any otherperson entitled under these Rules that he has furnished all materialparticulars and information and that all such particulars and informationare, so far as he knew or could with reasonable diligence ascertain, trueand complete, and will remain so throughout the period of insurance.The particulars and information so furnished shall, if the entry of therelevant ship be accepted, be deemed to form the basis of the contract ofinsurance between the Member or applicant and the Club.
6.4 Before any application for entry is accepted by the Managers, theManagers shall agree in writing the terms and conditions that will applyto the entry if the application is accepted, including (without prejudiceto the generality of the foregoing) the contribution to be paid to theClub, the commencement of cover, and the terms and conditions onwhich the ship is to be accepted.
6.5 The provisions of this Rule apply throughout the period of entry of theship in the Club and the Member is obliged to disclose any change orchanges in any material particulars relating to such entry, such as, but notlimited to, change of management, the entered ship’s flag, nationality ofcrew, tonnage, trading area and nature of trade.
6.6 Failure to comply with any obligation contained in this Rule or toprovide complete information or the provision of inaccurate informationdeprives an applicant, and any other person otherwise entitled to claimfor recovery under these Rules, of any right to recovery whether or notthe omission or inaccuracy was material to the recovery in question.
Certificates of entry
7.1 As soon as reasonably practicable after the acceptance of an applicationfor entry of a ship for insurance in the Club, the Managers shall issue tothe Member in respect of such a ship a Certificate of Entry in such formas they may from time to time determine but so that such Certificate ofEntry shall state the date of the commencement of the period ofinsurance and the terms and conditions (other than the sums payable tothe Club) on which the vessel has been accepted for insurance.
7.2 If at any time there shall be a variation in the terms of entry relating toan entered ship, the Managers shall, as soon as reasonably practicablethereafter, issue to the Member in respect of such a ship an endorsementslip, in such form as they may from time to time determine, stating theterms of such variation and the date from which such variation is to beeffective.
7.3 Every Certificate of Entry and every endorsement slip issued as aforesaidshall be conclusive evidence and binding for all purposes as to thecommencement of the period of insurance, as to the terms andconditions on which the ship has been entered for insurance, and as tothe terms of any variation and the date from which such variation is tobe effective; provided that in the event that any Certificate of Entry orany endorsement slip shall in the opinion of the Managers contain anyerror or omission the Managers may in their discretion issue a newCertificate of Entry or a new endorsement slip which shall be conclusiveevidence and binding as aforesaid.
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Joint Entrants, Co-assureds, Group Entries,and Affiliated and Associated Companies
Joint Entrants
8.1.1 The Managers may accept an application from a Member for anotherperson or persons to become Joint Entrants in respect of that Member’sentry. In such a case, the Managers may agree that none, one or moresuch persons may become Members of the Club. Each Joint Entrant shallhave an independent right of recovery from the Club in respect of anyliabilities, costs or expenses arising out of a particular casualty or event.
8.1.2 In the event that the application is accepted by the Managers, theMember who has made the application shall be designated the PrincipalAssured and shall be the person who is deemed irrevocably to have fullpower and authority to act in the name of and/or on behalf of all theJoint Entrants, and neither the Club nor the Managers, their servants oragents, shall be liable in any other manner whatsoever to any JointEntrant in the event that the Member did not, in fact, have such powerand authority.
8.1.3 Unless otherwise agreed in writing with the Managers, the Member andall Joint Entrants shall be jointly and severally liable to pay all amountsdue to the Club in respect of such entry.
8.1.4 Any Member who is designated a Principal Assured warrants that he is,in relation to the entered ship, either the owner, owner in partnership,owner holding separate shares in severalty, part owner, trustee, charterer(whether bareboat, demise or otherwise) of the entered ship, a manageror operator having control of the operation and employment of theentered ship (being such control as is customarily exercised by ashipowner), or any other person in possession and control of the enteredship.
8.1.5 In relation to any such application from a Member for any person orpersons to become a Joint Entrant the Member and each Joint Entrantwarrants that the Joint Entrant is, in relation to the entered ship, either:
(i) interested in the operation, management or manning of an insured ship;or
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(ii) the holding company or the beneficial owner of the person identified in the Certificate of Entry as the Principal Assured or of anyperson interested in the operation, management or manning of theentered ship; or
(iii) a mortgagee of the entered ship; or
(iv) the charterer of the entered ship.
Co-assureds
8.2.1 The Managers may accept an application from a Member for anotherperson or persons to become Co-assureds in respect of that Member’sentry.
8.2.2 The liability of the Club to all Co-assureds shall only extend insofar asthey may be found liable to pay in the first instance for liabilities whichare properly the responsibility of the Member which, if the Member hasentered into a contract with the Co-assured, shall mean those liabilitieswhich are to be borne by the Member under such contract. Nothingherein contained shall be construed as extending cover in respect of anyamount which would not have been recoverable from the Club by theMember had the claim been made or enforced against him or to anyliabilities to be borne by any of the Co-assureds under the said contractwhich shall always be excluded. Once the Club has madeindemnification to such Co-assureds it shall not be under any furtherliability and shall not make any further payment to any person orcompany whatsoever, including the Member, in respect of that claim.
PROVIDED ALWAYS THAT in relation to Rules 8.1 and/or 8.2:
(i) the receipt by the Member or any one Joint Entrant or Co-assured ofany sums paid by the Club in respect of such an entry shall be sufficientdischarge by the Club for the same;
(ii) any provision of these Rules by which a Member or Joint Entrant orCo-assured ceases to be insured or ceases to be entitled to recover fromthe Club in respect of any liability, loss or damage to which he might beentitled under these Rules shall be deemed to apply to all Members andall Joint Entrants and all Co-assureds. Failure by the Members or any oneof the Joint Entrants or Co-assureds to comply with any of theobligations under these Rules is deemed to be the failure of theMembers and all the Joint Entrants and all the Co-assureds. Conduct of aMember or any one Joint Entrant or Co-assured which would haveentitled the Club to decline to indemnify it shall be deemed to be theconduct of all Members and all Joint Entrants and Co-assureds.
(iii) the contents of any communication between the Member or anyJoint Entrant or Co-assureds and the Club or the Managers, theirservants or agents, shall be deemed to be within the knowledge of theMember and all Joint Entrants or Co-assureds;
(iv) the Member and all Joint Entrants and all Co-assureds agree that nodisputes of whatsoever nature or howsoever arising amongst themselvesshall be the subject of any insurance or recovery from the Club and JointEntrants and Co-assureds shall only be accepted on this basis:
(v) no Member or Joint Entrant or Co-assured shall recover any amountsfrom the Club save for those liabilities arising out of operations and/oractivities customarily carried on by or at the risk of or responsibility ofshipowners and which are within the scope of the Member’s operationsas a Member insured hereunder.
(vi) Unless otherwise expressly agreed in writing with the Managers andrecorded in the Certificate of Entry, where a charterer is named as a JointEntrant or Co-assured, the Member and all Joint Entrants or Co-assureds, including such charterer, warrant that the charterer is either:
(a) affiliated to or associated with the Member or such of any Joint Entrantsas is agreed by the Managers in writing or
(b) has contracted with the Member or a Joint Entrant for the provision ofservices to or by the entered ship and that contract
(aa) has been approved by the Managers; and
(bb) provides that each party should be similarly responsible for any lossor damage to its own (or its sub-contractors’) property and loss of life orpersonal injury to its own (or its sub-contractors’) personnel;
and the charterer shall only be covered for liabilities, costs and expenseswhich are to be borne by the Member or other Joint Entrant under theterms of the aforesaid contract and would, if borne by the Member orthat Joint Entrant be recoverable by either from the Club.
(vii) Unless otherwise expressly agreed in writing with the Managers andrecorded in the Certificate of Entry, where a charterer or other party isnamed as a Joint Entrant or Co-assured and a waiver of subrogation isrequired under a contract, rights of subrogation against such Joint Entrantor Co-assured shall be waived only where the Managers have agreedsuch a waiver in writing; any such waiver will apply only in respect ofthose liabilities, costs and expenses which are borne by the Member orother Joint Entrant under the terms of the relevant contract and shall not
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apply to any liabilities, costs and expenses which are to be borne by thecharterer or other party under the terms of that contract.
Group Entries
8.3.1 The Managers may accept any entry on the basis that the ship is part of aGroup Rating Agreement and assess contributions accordingly.
8.3.2 One person shall be designated Group Principal and any communicationfrom or on behalf of the Club to the Group Principal shall be deemed tobe within the knowledge of all members, Joint Entrants and Co-assuredsin the Group, and any communication from and action taken by theGroup Principal shall be deemed conclusively to be made with the fullapproval of any and all Members, Joint Entrants and Co-assureds withinthat Group.
8.3.3 All persons entering ships under a Group Rating Agreement and theGroup Principal will remain jointly and severally liable to pay allamounts due to the Club in respect of any and all ships in the samegroup.
Affiliated and Associated Companies
8.4 In the case of a claim which would be recoverable from the Club beingenforced through or against an affiliated or associated company of aMember but not of a Joint Entrant or a Co-assured, such company shall,if the Member so requires in writing, be entitled to recover such sumfrom the Club but only to the extent to which the Member would havebeen entitled to recover if the claim had been enforced against him. Inthe event that the Club makes such payment then the Club shall not beunder any further liability and shall not make any further payment to anyperson or company, whatsoever, including that Member, in respect ofsuch a claim.
Period of Insurance
Period of Insurance, period of contribution, laid-up returns, cessation,
cancellation and releases
Period of insurance
9.1 Unless otherwise agreed at the time of entry or unless otherwiseprovided by these Rules, the insurance afforded by the Club shall beginat the time stated in the Certificate of Entry for the commencement ofthe cover, and shall continue until noon G.M.T. on the 20th Februarynext following, and thereafter from Policy Year to Policy Year.
9.2.1 If a Member does not desire to continue the insurance in respect of anentered ship he shall give notice in writing to that effect to the Managersnot later than 30 days prior to the expiry of the period of insurance.
9.2.2 The Managers may in respect of an entered ship at any time and withoutgiving any reason:
(i) give to a Member 7 days notice that he shall not be entitled to anyrecovery from the Club in respect of any claim arising during the periodfrom the expiry of that notice until such further time as the Managersshall specify and notify to the Member; or
(ii) terminate the entry on 30 days notice in writing given not later than 30days prior to the expiry of the period of insurance.
9.2.3 In either event the insurance in respect of such ship shall cease at noonG.M.T. on that day, save that, if the ship be then at sea, the insurancemay, if the Member so requires by notice in writing to the Managers, becontinued until the ship has arrived in berth or at anchorage at her nextport.
9.3 An entered ship shall not be withdrawn from the Club at any other timeor in any other manner except with the consent of the Managers.
Period of contribution and laid-up returns
10.1 Subject to the provisions of Rule 15.4 in respect of Overspill Calls aMember shall (provided that he gives notice in writing to and submitshis claim to the Managers within one month after the happening of anyof the events specified below) be liable for contribution in respect of anentered ship to the Premiums and Calls levied by the Club for the
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current Policy Year pro rata only to the period beginning with thatPolicy Year and ending:
(i) at noon G.M.T. of the day upon which the ship was legally transferredby bill of sale or other formal document whereby the ownership waslegally transferred;
(ii) at noon G.M.T. of the day upon which the ship became an actual orconstructive total loss or was accepted by hull underwriters as being aconstructive or compromised total loss; or such later date as the Boardmay in its absolute discretion determine;
(iii) ten days from the date of the ship being last heard of or from her beingposted at Lloyd’s as missing.
10.2 If a ship shall be and remain in any safe port without any cargo on boardfor a period of thirty or more consecutive days after finally mooringthere (such period being computed from the day of arrival to the day ofdeparture, one only being included), the Member shall be allowed areturn of Premiums or Calls at a rate of no more than 75%;
PROVIDED ALWAYS THAT
(i) unless otherwise agreed in writing by the Managers, there shall be noreturn if there are crew members on board the ship other than forsecurity or for maintenance necessary for the safety of the ship duringlay-up or if repairs are carried out other than for the safety of the shipduring lay-up, and
(ii) there shall be no return of Overspill Calls.
Such returns shall be calculated pro rata per consecutive day for the totalperiod during which the ship so remains. If the ship once finally mooredshall thereafter shift its position within port limits, the Managers mayallow the return subject to a deduction therefrom for the time taken toshift position; the deduction shall be reckoned by the number of daysoccupied, in whole or in part, by such shifting.
Note: For example, if the ship shall be moored for 30 days and takes 6 hours toshift position during the 30 days, the return may be allowed for 29 days and ifthe ship takes 27 hours to shift position, the return may be allowed for 28 days.
However insofar as any risk or part of any risk in respect of which thecalls or premium have been paid is reinsured, the Club shall only make areturn to the same extent that the reinsuring underwriters have made areturn of premium to the Club.
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10.3 If a Member does not notify and submit his claim to the Managerswithin one month under paragraph 10.1 or within three months of theend of the Policy Year under paragraph 10.2, no pro rata allowance orlaid-up return shall be made unless the Board in its sole discretionotherwise determines.
10.4 Where the entry of a ship in the Club is in the name of or on behalf ofa time charterer the Member shall be under an obligation to notify theClub of the date of redelivery of the ship or other termination of thetime charter.The Member will remain liable for the payment of Premiumsor Calls in respect of each ship entered until the date of redelivery orother termination provided always that if the said notification to theClub is more than one month after the redelivery or termination thenthe Member shall be liable to pay Premiums and Calls up to the date ofnotification unless the Board in its discretion otherwise decides.
Note:Attention is drawn to the obligations set out in Rule 21.4.
Cessation of insurance and cancellation
11.1 A Member shall cease to be insured by the Club in respect of any and allships entered by him upon the happening of any of the following events:
(i) if, being an individual, upon his death or if a receiving order is madeagainst him or if he shall become bankrupt or make any composition orarrangement with his creditors generally or if he shall become incapableby reason of mental disorder of managing and administering his propertyand affairs;
(ii) if, being a corporation, upon the passing of any resolution for voluntarywinding-up or upon an order being made for compulsory winding-upor upon dissolution or upon seeking protection from its creditors underany bankruptcy or insolvency laws or upon a receiver or manager of allor any part of the corporation’s business or undertaking being appointedor upon possession being taken by or on behalf of the holders of anydebentures secured by a floating charge on any property comprised in orsubject to the charge;
(iii) if he ceases to have any ship entered for insurance in the Club.
11.2 A Member shall cease to be insured by the Club in respect of any shipentered by him upon the happening of any of the following events inrelation to such ship:
(i) if the Member shall part with or assign the whole or any part of his
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interest in the entered ship whether by bill of sale or other formaldocument or otherwise, or shall cease to have an interest in the enteredship, unless the Managers shall have consented to such parting with orassignment or cessation of interest and to an assignment of the relevantinsurance by the Club pursuant to Rule 5.1.4.1. hereof;
. (ii) if the entered ship shall become an actual or constructive total loss orshall be accepted by hull underwriters as an actual or constructive totalloss or if there shall be any compromise with hull underwriters on thebasis of the ship being considered or deemed to be an actual orconstructive total loss, except as regards liabilities flowing directly fromthe casualty which gave rise to the actual or constructive loss of the shipor such later date as the Board in its discretion may determine;
(iii) if the entered ship shall be missing for ten days from the date she was lastheard of or from her being posted at Lloyd’s as missing, whichever shallbe the earlier;
(iv) if the managers of the entered ship shall be changed by the appointmentof new managers, unless the Board shall otherwise determine;
(v) if notice is given under Rule 9.2 and the notice is not withdrawn byagreement before the expiry of the period of insurance;
(vi) if the entry is terminated or ceases under the provisions of Rule 9.2.2 orRule 21.
11.3.1 If a Member fails to pay when due and demanded by the Managers anysum owing from him to the Club (including any sum of which he isjointly and severally liable under Rule 8.3.1)
(i) unless and to the extent the Board otherwise decides, a Member shall notbe entitled to any recovery from the Club in respect of any claim arisingfrom the date of such failure until the date such sum owing to the Clubis paid in full and
(ii) a Member’s insurance shall be cancelled (whether or not such insurancemay already have ceased for some other reason) if after service on him byor on behalf of the Managers or the Club of a notice certifying the sumowing from him to the Club and requiring him to pay such sum on orbefore any date which may be specified in such notice a Member fails topay such sum in full on or before the date so specified.
11.3.2 For the purpose of this Rule 11.3 a notice issued by the Managers underRule 11.3.1(ii) shall be conclusive evidence of the sum owing to the Club.
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Effect of cessation of insurance and cancellation
12.1 When a Member ceases to be insured by virtue of sub-paragraphs i, ii oriii of Rule 11.1 or when a Member ceases to be insured in respect ofany ship by virtue of Rule 11.2 or Rule 21.1.v or Rule 21.3.2.i or forany other reason (all of which times are hereinafter in this Rule 12.1referred to as ‘’the date of cessation’’) then:
(i) such Member and his successors shall be and remain liable for allcontributions in respect of the whole of the Policy Year in which thedate of cessation occurs and in respect of previous Policy Years unless andto the extent that Rule 10 is applicable or such liability may have beenotherwise agreed or assessed under Rule 13; and
(ii) the Club shall remain liable in respect of any ship entered by suchMember or in the case of such entered ship (as the case may be) for allclaims under these Rules arising by reason of any event which hadoccurred prior to the date of cessation, but shall be under no liabilitywhatsoever by reason of anything occurring after the date of cessation.
PROVIDED ALWAYS THAT
(i) when a Member ceases to be insured by virtue of the entered shipbecoming an actual or constructive total loss or being accepted by hullunderwriters as being a constructive or compromised total loss, theMember shall continue to be insured by the Club in respect of wreckliabilities in accordance with Rule 20.14.6, and Rule 20.18.
(ii) when a Member ceases to be insured by reason of termination underRule 9.2.2 other than upon the expiry of the period of insurance, theMember shall be liable for contributions for the Policy Year in which thecessation occurs pro-rata only from the period begining with the date ofentry and ending with the date of termination.
12.2 When a Member’s insurance is cancelled by virtue of Rule 11.3 then:
(i) subject to the provisions of Rule 15.4 in respect of Overspill Calls, if thecancellation occurs while the Member is, but for the cancellation,insured, such Member and his successor shall be and remain liable for allcontributions in respect of the Policy Year during which the datespecified in the notice given in accordance with Rule 11.3 (“the date ofcancellation”) occurs pro rata only for the period beginning at thecommencement of the Policy Year (or in the case of a ship enteredduring that Policy Year, the date of entry) and ending with the date ofcancellation and in respect of previous Policy Years irrespective ofwhether or not notice has been given under that Rule;
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PROVIDED ALWAYS THAT the Managers in their discretion mayselect a date earlier than the date of cancellation and may require theMember or his successors to pay contributions on a pro rata basis for theperiod beginning as specified above and ending with the date so selected.
(ii) if the cancellation occurs after the Member has ceased to be insured forsome other reason, such Member and his successor shall remain liable forall contributions as provided for in Rule 12.1.i above.
(iii) the Club shall thereupon cease to be liable for all and any claims underthese Rules in respect of all and any ships entered by such Member:
(iii.a) which may arise by reason of any event occurring after the date ofcancellation;
(iii.b) which have accrued or arisen during a Policy Year for which sumsremained owing but unpaid by the Member in full or in part at the dateof cancellation;
(iii.c) which may have accrued or arisen in any year other than thosereferred to in iii.b above;
irrespective of whether the Club may have admitted liability for orappointed lawyers, surveyors or any other persons to deal with suchclaims; and irrespective of whether at the date of cancellation the claimswere likely to accrue or the events giving rise thereto were or were notknown to the Club; but as from the date of cancellation any liability forsuch claims shall retrospectively terminate and the Club shall be underno liability to such Member on any account whatsoever.
PROVIDED ALWAYS THAT the Board may, in its discretion and uponsuch terms as to payment of contributions or otherwise as it thinks fit,admit either wholly or partly any claim in respect of any ship entered bya Member for which the Club is under no liability under eitherparagraph 1 or paragraph 2 of this Rule, whether arising before or afterany date of cancellation as hereinbefore referred to, or remit wholly orpartly any payment of contribution due under either such paragraph.
Releases
13.1 Upon the cessation of insurance of any ship, the Managers may release aMember from all further liability for contributions to the Club, otherthan in respect of any Overspill Call assessed in accordance with theprovisions of Rule 15.4 and 15.5, and in such case shall prepare aRelease which shall be calculated by reference to such percentage of thePremium Rating as the Board may in its discretion from time to timedecide.
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13.2 The Member shall pay the Release prepared in accordance withparagraph 1 of this Rule within such time as may be specified by theManagers, unless within such time he gives notice in writing to theManagers that he will pay all further contributions as they fall due.
13.3 If in accordance with paragraph 2 of this Rule the Member elects to payfurther contributions as they fall due, he shall, unless he has other shipsremaining entered in the Club under an Owner’s Entry, provide at hisown expense within such period as may be specified by the Managers, aguarantee acceptable to the Managers in favour of the Club for the fullamount of the Release. Should he fail to provide such a guarantee withinthe period specified, the Release shall automatically become payable. If,during the period that the Member is still liable to pay furthercontributions to the Club, he subsequently withdraws all his ships, or hasno other ships remaining entered for insurance in the Club, then theMember shall provide forthwith a guarantee acceptable to the Managersin favour of the Club for the full amount of all Releases, or amendedReleases, prepared by the Managers in respect of all his ships.
13.4 If after the original Release is prepared the Board shall amend theRelease percentage, the Managers may prepare an amended Release; andin such case, if the Member has not elected to pay further contributionsas they fall due and has not paid the original Release within such time asmay be specified by the Managers in paragraph 2 above, the amendedRelease shall supersede the original Release and shall be immediatelypayable. If the Member has elected to pay further contributions as theyfall due, the Member shall provide within such time as may be specifiedby the Managers an amended guarantee acceptable to the Managers forthe full amount of the amended Release, and should the Member fail toprovide such amended guarantee within the period specified then hisright to pay further contributions shall be withdrawn and the fullamount of the amended Release shall become immediately payable.
13.5 In all such cases the Managers may impose such other terms andconditions as they think fit.
13.6 A Member or former Member who has paid a Release shall be under noliability for any contributions in respect of any ship which is the subjectof the Release assessed after the date of the Release, other than in respectof any Overspill Call assessed in accordance with the provisions of Rule15.4 and 15.5, and shall have no right to share in any return ofcontributions or other receipts which the Board may thereafter decide tomake.
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Contributions
Basis of contribution, contributions, calls, Managers’ remuneration, payment,
closing of policy years, reserves, investment and reinsurance
Basis of contribution
14.1 Before any application for the entry of a ship for insurance in the Club isaccepted by the Managers, the applicant and the Managers shall, unlessthe ship is to be entered on the terms that a fixed premium is payable tothe Club, agree the Premium Rating on the basis of which contributionsare payable to the Club in respect of that ship.
14.2.1 The Managers may agree with a Member to vary the Premium Ratingduring a Policy Year. If no variation agreement is agreed, the PremiumRating will remain effective until the end of the Policy Year in question.
14.2.2 Prior to the start of a policy year the Board shall decide the percentageby which there is to be a general change in the Premium Ratings of allMembers which are to be levied upon entered ships, and unlessotherwise agreed between the Managers and the Member, the PremiumRatings so changed shall apply in respect of such Policy Year.
Mutual contributions
15.1 Members who have ships entered for insurance in the Club in respect ofany Policy Year (not being a closed Policy Year), otherwise than on termsthat a fixed premium shall be payable, shall severally and not jointly, buteach in his own name only, mutually insure each other in accordancewith the provisions of these Rules against all claims, liabilities, costs andexpenses for which all or any of them may become liable in respect ofany entered ship in any Policy Year and for this purpose the Members shallcontribute to the funds or other obligations of the Club required to meet:
(i) all such claims, liabilities, costs, expenses and other outgoings (actual oranticipated) as, in the opinion of the Board, necessarily and properly fallon the Club;
(ii) all such transfers to reserves or provisions as the Board in its discretionmay deem it expedient to make, including transfers to reserves andprovisions in respect of any deficiency, actual or anticipated, in respect ofany closed Policy Year;
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(iii) all such sums as the Club may by any governmental or other similarlegislation or regulation be required to set aside in order to establishand/or maintain an adequate solvency margin and/or guarantee fund inrespect of any Policy Year.Without in any way limiting the obligations ofMembers to pay such sums, the Board may, in its discretion and at anytime or times, require any or all Members to guarantee specifically thepayment of such sums in such terms and with such security as the Boardmay from time to time decide.
Estimated Total Premium
15.2.1 Prior to or at the beginning of each Policy Year, the Club shall levy uponMembers an Estimated Total Premium calculated on the basis of thePremium Rating per entered ton.The Board shall decide the number ofinstalments in which payment is to be made and may authorise theManagers to allow a variation in the number of instalments.
15.2.2 If at any time before any instalment of Estimated Total Premium due inrespect of the Policy Year becomes payable the Board determines that thewhole of the Estimated Total Premium (including any transfers fromreserves) is not required to meet the obligations of the Club under Rule15.1;
(i) the Board may decide to reduce the Estimated Total Premium in respectof the policy year and declare an Estimated Total Premium discount ofsuch percentage of the Estimated Total Premium or any instalment therofas it shall think fit, and
(ii) the liability of the Member to pay Estimated Total Premium under Rule15.2.1 shall be reduced accordingly.
15.2.3 If a Member ceases to be insured in respect of any ship before anyinstalment of Estimated Total Premium due in respect of a Policy Yearbecomes payable, any such instalment or balance thereof, after anyprorating in accordance with Rule 12.2(i), shall be paid at such time andin such manner as may be specified by the Managers provided alwaysthat such instalments or any remaining balance thereof shall beimmediately payable if the Member has no other ships entered forinsurance in the Club or subsequently withdraws all his ships.
Supplementary Premium
15.3.1 At any time or times during or after the end of each Policy Year (but notafter such Policy Year has been closed) the Board may decide to levyfrom the Members who have or had ships entered for insurance in
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respect of that year (other than fixed premium entries) one or moreSupplementary Premiums. Such Supplementary Premium or Premiumsshall be calculated by reference to such percentage of the Estimated TotalPremium as the Board may in its discretion decide.
15.3.2 Notwithstanding the provisions of paragraph 3.1 above, the Managersmay agree with a Member for the payment of an estimatedSupplementary Premium to be paid with the Estimated Total Premiumbut such agreement shall not relieve that Member from the obligation topay the balance, if any, of any Supplementary Premium as may be leviedby the Board.
Overspill Calls
15.4.1 The funds required to pay any Overspill Claim incurred by the Clubshall be provided
(i) from such sums as the Club is able to recover from the other parties tothe Pooling Agreement as their contributions to the Overspill Claim, and
(ii) from such sums as the Club is able to recover from any special insurancewhich may, in the discretion of the Board, have been effected to protectthe Club against the risk of payments of Overspill Claims, and
(iii) from such proportion as the Board in its discretion determines of anysums standing to the credit of such reserves as the Board may in itsdiscretion have established, and
(iv) by levying one or more Overspill Calls in accordance with Rules 15.4.3to 15.4.6, irrespective of whether the Club has sought to recover or hasrecovered all or any of the sums referred to in Rule 15.4.1.ii butprovided the Board shall first have made a determination in accordancewith Rule 15.4.1.iii, and
(v) from any interest accruing to the Club on any funds provided asaforesaid.
15.4.2 The funds required to pay such proportion of any Overspill Claimincurred by any other party to the Pooling Agreement which the Club isliable to contribute under the terms of the Pooling Agreement shall beprovided in the manner specified in Rules 15.4.1.ii, iii, iv and v.
15.4.3 If
(i) the Board shall at any time determine that funds are or may in future berequired to pay part of an Overspill Claim (whether incurred by theClub or by any other party to the Pooling Agreement); and
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(ii) the Board shall have made a declaration under Rule 15.5.1 or 15.5.3 thata Policy Year shall remain open for the purpose of levying an OverspillCall or Calls in respect of that Overspill Claim,
the Board in its discretion, at any time or times after such declaration hasbeen made, may levy one or more Overspill Calls in respect of thatOverspill Claim in accordance with Rule 15.4.4.
15.4.4 The Board shall levy any such Overspill Call
(i) on all Members entered in the Club on the Overspill Claim Date inrespect of ships entered by them at that time, notwithstanding the factthat, if the Overspill Claim Date shall be in a Policy Year in respect ofwhich the Club has made a declaration under Rule 15.5.3, any such shipmay not have been entered in the Club at the time the relevant incidentor occurrence occurred, and
(ii) at such percentage of the Convention Limit of each such ship as theBoard in its discretion shall decide.
15.4.5 Any Overspill Call shall not be levied in respect of any ship entered onthe Overspill Claim Date with an overall limit of cover equal to or lessthan the Group Reinsurance Limit.
15.4.6 The Board shall not levy on any Member in respect of the entry of anyone ship an Overspill Call or Calls in respect of any one Overspill Claimexceeding in the aggregate two and a half per cent (2.5%) of theConvention Limit of that ship.
15.4.7 If at any time after the levying of an Overspill Call upon the Membersentered in the Club in any Policy Year, it shall appear to the Board thatthe whole of such Overspill Call is unlikely to be required to meet theOverspill Claim in respect of which such Overspill Call was levied, theBoard may decide to dispose of any excess which in the opinion of theBoard is not so required in one or both of the following ways:
(i) by transferring the excess or any part thereof to reserves in accordancewith Rule 15.11.4; or
(ii) by returning the excess of any part thereof to those Members who havepaid that Overspill Call in proportion to the payments made by them.
15.5.1 If at any time prior to the expiry of a period of thirty-six months fromthe commencement of a Policy Year (the “relevant Policy Year”), any of theparties to the Pooling Agreement sends a notice (an “Overspill Notice”)in accordance with the Pooling Agreement that an incident or occurrencehas occurred in the relevant Policy Year which has given or at any time
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may give rise to an Overspill Claim, the Board shall as soon as practicabledeclare that the relevant Policy Year shall remain open for the purpose oflevying an Overspill Call or Calls in respect of that claim and the relevantPolicy Year shall not be closed for the purpose of making an Overspill Callor Calls in respect of that claim until such date as the Board shall determine.
15.5.2 If at the expiry of the period of thirty-six months provided for in Rule15.5.1, no Overspill Notice as therein provided for has been sent, therelevant Policy Year shall be closed automatically for the purpose oflevying Overspill Calls only, whether or not closed for any otherpurposes, such closure to have effect from the date falling thirty-sixmonths after the commencement of the relevant Policy Year.
15.5.3 If at any time after a Policy Year has been closed in accordance with theprovisions of Rules 15.5.1 and 15.5.2, it appears to the Board that anincident or occurrence which occurred during such closed Policy Yearmay then or at any time in the future give rise to an Overspill Claim, theBoard shall as soon as practicable declare that the earliest subsequentopen Policy Year (not being a Policy Year in respect of which the Boardhas already made a declaration in accordance with Rule 15.5.1 or 15.5.3)shall remain open for the purpose of levying an Overspill Call or Calls inrespect of that claim and such open Policy Year shall not be closed forthe purpose of making an Overspill Call or Calls in respect of that claimuntil such date as the Board shall determine.
15.5.4 A Policy Year shall not be closed for the purpose of levying OverspillCalls save in accordance with this Rule 15.5.
15.6.1 If
(i) the Board makes a declaration in accordance with Rule 15.5.1 or 15.5.3that a Policy Year shall remain open for the purpose of levying anOverspill Call or Calls, and
(ii) a Member who is liable to pay any such Overspill Call or Calls as maybe levied by the Board in accordance with Rule 15.4 ceases or hasceased to be insured by the Club for any reason, or the Board determinesthat the insurance of any such Member may cease the Board may requiresuch Member to provide to the Club by such date as the Board maydetermine (the “due date”) a guarantee or other security in respect ofthe Member’s estimated future liability for such Overspill Call or Calls,such guarantee or other security to be in such form and amount (the“guarantee amount”) and upon such terms as the Board in its discretionmay deem to be appropriate in the circumstances.
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15.6.2 Unless and until such guarantee or other security as is required by theBoard has been provided by the Member, the Member shall not beentitled to recovery from the Club of any claims whatsoever andwhensoever arising in respect of any and all ships entered in the Club forany Policy Year by him or on his behalf.
15.6.3 If such guarantee or other security is not provided by the Member to theClub by the due date, a sum equal to the guarantee amount shall be dueand payable by the Member to the Board on the due date, and shall beretained by the Club as a security deposit on such terms as the Board inits discretion may deem to be appropriate in the circumstances.
15.6.4. The provision of a guarantee or other security as required by the Board(including a payment in accordance with Rule 15.6.3.) shall in no wayrestrict or limit the Member’s liability to pay such Overspill Call or Callsas may be levied by the Club in accordance with Rule 15.4.
Managers’ remuneration
15.7 The Managers shall be remunerated by the Club on such basis as may befixed by the Board.
Payment
15.8.1 The Estimated Total Premium, and every Supplementary Premium andRelease due under Rule 13, shall be designated in U.S.$ or such othercurrency as the Managers shall agree and any such Premium or Releaseand any Overspill Call shall be payable in such instalments, in suchmanner and on such dates as the Board shall specify and withoutprejudice to the rights and remedies of the Club under these Rules. Ifany Premium or instalment or part thereof or any other sum ofwhatsoever nature due from a Member is not paid on the specified date(time being of the essence) such Member shall pay interest on theamount outstanding from and including the date so specified down tothe date of payment at such rate or rates as the Board shall from time totime determine whether during the currency of the Policy Year to whichthe amount outstanding relates or otherwise; provided always that theBoard may waive payment of such interest in whole or in part.
15.8.2 The Club shall be entitled to, and the Member hereby grants, a lien onthe entered ship in respect of any amount whatsoever owed by theMember to the Club.
15.9 Subject to the provisions of Rule 15.4 in respect of Overspill Calls, if any
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Member defaults in payment of any sum due from him such sum shall bepaid by all other Members rateably in proportion to the aggregatecontributions due from them in respect of the Policy Year(s) concerned;provided that the Board may make any Supplementary Premium orPremiums on Members by reference to their estimated liability underthis Rule 15.9 and where any Member defaults in respect of thatPremium or Premiums then the other Members shall be liable for anydeficiency in accordance with the provisions of this paragraph 15.9 andpayment may be enforced by the Club. Each Member who may for thetime being be entitled to receive from the Club any payment in respectof any loss, claim or demand shall bear and contribute the proportionthereof due in respect of any ship or ships entered by him, including theship in respect of which the loss, claim or demand arises.
Closing of Policy Years
15.10.1 Subject to the provisions of Rule 15.5 above, the Board may decide thatany Policy Year shall be closed at such time as it may deem expedient.
15.10.2 If the contributions obtained in respect of such Policy Year shouldexceed the claims, liabilities, costs, expenses and other outgoings fallingupon the Club for that year, the Board may either carry that surplus tosuch reserve or reserves as the Board may think proper or may return itin whole or in part to the persons who made such contributions inproportion to the aggregate contributions made by them in such policyyear.
15.10.3 If at any time or times after a Policy Year has been closed it shall appearto the Board that the claims (other than Overspill Claims), expenses andoutgoings arising in respect of a Policy Year exceed or are likely toexceed the totality of the Premium and Calls (other than Overspill Calls)and other receipts in respect of such Policy Year (and of all transfers fromreserves and provisions made for the credit of or in respect of such PolicyYear) then the Board may decide to provide for such deficiency in anyone or more of the following ways:
(i) by transferring funds from the reserves of the Club;
(ii) by transferring funds standing to the credit of any different closed PolicyYear;
(iii) by levying Estimated Total Premium or Supplementary Premium inrespect of an open Policy Year with the intention of applying a partthereof to meet any such deficiency.
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Reserves
15.11.1 The Board may in its discretion establish and maintain such reserve fundor other accounts as it thinks fit.
15.11.2 Without prejudice to the generality of Rule 15.11.1, the Board may, inits discretion, establish and maintain a reserve to provide a source offunds which may be applied towards meeting any Overspill Claim orClaims.
15.11.3 The Board may apply the sums standing to the credit of any reserve forany of the purposes for which the reserve was maintained even thoughthe sum be paid in respect of a different Policy Year or years from thatfrom which the funds originated.The Board may also apply the sumsstanding to the credit of any reserve (other than an Overspill Reserve)for any other or different purposes whenever the Board considers this tobe in the interests of the Club or its Members.The Board may also atany time transfer sums from one reserve (other than an OverspillReserve) to another.
15.11.4 The funds required to establish such reserves or accounts may be raisedin any of the following ways:
(i) the Board, when considering the amount of the Estimated TotalPremium or any Supplementary Premium for any Policy Year, mayresolve that any specified amount or proportion of such Call shall betransferred to and applied for the purposes of any reserve or account;
(ii) the Board may on the closing of any Policy Year resolve that anyspecified amount or proportion of the funds standing to the credit of thatPolicy Year shall be transferred to and applied for the purposes of anysuch reserve or account;
(iii) the Board may in reviewing the funds available for the settlement ofclaims arising in all closed Policy Years resolve that any specified amountstanding to the credit of the closed Policy Years shall be transferred toand applied for the purposes of such reserve or account.
(iv) the Club may transfer to any reserve established by the Board anybalance of an Overspill Call not required to satisfy the Overspill Claim inrespect of which it was levied, as contemplated in Rule 15.4.7.i.
Investment
15.12.1 The funds of the Club may be invested by the Board by means of the
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purchase of such stocks, shares, bonds, debentures or other securities orthe purchase of such currencies, commodities, or other real or personalproperty, or by means of being deposited in such accounts as the Boardmay think fit.The funds of the Club may also be invested in any otherway the Board may approve.
15.12.2 Unless the Board otherwise decides, all the funds standing to the credit ofany Policy Year or of any reserve or account shall be pooled and investedas one fund.
15.12.3 When funds are pooled as provided in paragraph 15.12.2 above, theinvestment income arising on the pooled funds (taking into account anycapital gains or losses) shall be apportioned among and between thedifferent Policy Years, reserves and accounts from which the fund orfunds, so invested, originated, in such manner as to ensure so far aspossible that each is credited with a proportion of such incomecorresponding to the proportion which the amount standing to the creditof the Policy Year, reserve or account over the period during which theincome arose bears to the total of the pooled funds over the same period.
15.12.4 Without prejudice to paragraph 15.12.3 of this Rule, the Board maydirect that after the closing of any Policy Year that year shall not becredited with any share of the apportionments made under that paragraphand that its share shall instead be credited to any reserve or accountmaintained by the Club.
Reinsurance
15.13 The Club may continue to be a party to the Pooling Agreement, or toany other agreement of a similar nature or purpose.
15.14 The Managers shall have the right in their discretion to effect on behalfof the Club the reinsurance or ceding of any risks insured by the Club(including any risk which may fall on the Club by reason of the PoolingAgreement) with such reinsurers and on such terms as the Managers shallconsider appropriate.
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Right and Extent of Recovery
16.1 Subject always to the provisions of paragraph 16.7 below, if any Membershall incur any liabilities, costs or expenses as hereinafter set out in Rule20 of these Rules in respect of a ship which was entered in the Club atthe time of the casualty or event giving rise to such liabilities, costs orexpenses, such Member shall be entitled to recover out of the funds ofthe Club the amount of such liabilities, costs or expenses, less any savingsaccruing to the member, to the extent and upon the terms, conditionsand exceptions provided by these Rules, unless otherwise agreed inwriting with the Managers.
16.2.1 Unless and to the extent that the Board otherwise determines, under nocircumstances shall the recovery by a Member or any other person exceed:
(i) the amount to which the Member is entitled to limit his liability:
(ii) the amount to which the Member would have been entitled to limitliability under any relevant law or statute had he so petitioned;
(iii) if less than the full tonnage of the ship was entered in the Club, suchproportion of the amount referred to in paragraph 16.1 above, as theentered tonnage bears to the full tonnage of the ship, unless the entry ofthe ship has been accepted under special terms stipulating otherwiseprovided that, if the Member’s claim is subject to any other limits underthese Rules, that proportion shall be applied after the application of suchlimits;
(iv) any other limit contained in these Rules or set out in the Members’terms of entry.
16.2.2 Any limits on the cover provided by the Club and set out in a Member’sCertificate of Entry or these Rules shall apply in the aggregate to theMember, and all Joint Entrants, Co-assureds, affiliated or associatedcompanies or other persons, as if the ship had been entered by theMember only.
16.2.3 The Club shall not be liable to any Member or other person in respectof such claims, liabilities, costs and expenses except to the extent of thefunds which the Club is able to recover from the Members or otherpersons liable for the same and which are applicable for that purpose.
16.2.4 The right of recovery is subject to the provisos to Rule 20.
Recovery by charterers
16.3 Where recovery is sought from the Club by or on behalf of a charterer,not being a bareboat or demise charterer, then such recovery shall belimited in respect of all claims arising out of any one incident or
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occurrence to such sum or sums as the Board may from time to timedetermine, whether or not the charterer has received notice of suchdetermination.
Note:The Board has determined that in addition to any other limitations of covercontained in the Rules or set out in the Certificate of Entry the followinglimitations of cover, unless otherwise agreed in writing by the Managers, shallapply from 20th February 2005:
(i) For the purposes of this note;
(i.a) any reference to a charterer shall be deemed to be a reference to a chartererother than a bareboat or demise charterer;
(i.b) “Charterer’s” Entry means an entry which has a charterer as Member or asPrincipal Assured;
(i.c) “Owner’s Entry” means an entry other than a Charterer’s Entry;
(ii) In respect of all claims arising under any one Charterer’s Entry or arising inrespect of charterers insured as Joint Entrants or as Co-assureds under any oneOwner’s Entry or arising out of the Member’s capacity as slot or space charterer orparticipant in a consortium or space-sharing or similar agreement howsoeverdescribed recovery shall be limited to U.S. $300 million each incident oroccurrence.
Amounts owing to the Club
16.4 There shall be deducted from any sum recoverable under these Rules orthe Member’s Certificate of Entry any amount owing to the Club inrespect of the entered ship or any other ship entered by the Member orentered by any other owner of a ship or ships entered in the same GroupRating Agreement.
16.5 The entitlement of the Member referred to in paragraph 16.1 above,shall in all cases be subject to the right of the Club to decline to makeany payment in respect of any claim in the event that there are anycontributions due and owing from the Member to the Club, whethersuch contributions are owed in respect of the year in which theMember’s entitlement arises or any other year, provided that nothingherein shall affect, vary or derogate from the rights of the Club uponCessation of Insurance and Cancellation as set out in Rule 12 above.
Interest
16.6 In no case whatsoever shall interest be paid upon sums due from the Club.
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Member to pay claim first
16.7 Unless the Board shall in its discretion otherwise determine, it is acondition precedent of a Member’s right to recover from the funds of theClub in respect of any liabilities, costs or expenses that he shall first havepaid the same out of funds belonging to him unconditionally and not byway of loan or otherwise.
16.7.2 Where the Club has paid a claim to or on behalf of a member, thewhole of any recovery from a third party in respect of that claim shall becredited and paid to the Club up to an amount corresponding with thesum paid by the Club, including any interest and legal costs and expenses.
Deductibles
16.8.1 Any deductible set out in this paragraph 8 of Rule 16 or in theCertificate of Entry of the entered ship shall be deducted from any sumrecoverable under these Rules or the said Certificate of Entry.
16.8.2 Unless otherwise expressly agreed in writing all claims shall be subject tosuch standard deductibles as the Board may from time to time determine,whether or not a Member has received notice of such determination.
16.8.3 Without prejudice to the applicability of any deductible the Club may,by direction of the Board or the Managers, undertake the defence of aMember or institute legal proceedings on his behalf in respect of anyamount not recoverable from the Club by reason of any deductible forthe purpose of ascertaining in due course the legal liability or right ofthe Member; and the Club shall bear the expense of such legalproceedings; but the Member shall himself bear any damages thereinadjudged or awarded against him.
Note: Unless otherwise specifically agreed in writing with the Managers thefollowing standard deductibles will apply to all claims:
(i) Claims under Rule 20.20, 21 and 23 relating to loss of or damage to orresponsibility in respect of cargo or for Cargo’s proportion of General Average,including special charges or salvage, shall be limited to the excess of U.S. $10,000in respect of each cargo voyage, SAVE THAT in respect of any cargo or part cargoof steel, claims shall be limited to the excess of U.S. $22,500 each cargo voyage;
(ii) all other claims shall be limited to the excess of U.S. $10,000 in respect of anyone accident or occurrence.
Overspill claims
16.9.1 Without prejudice to any other applicable limit, any Overspill Claimincurred by the Club shall not be recoverable from the Club in excess ofthe aggregate of
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(i) that part of the Overspill Claim which is eligible for pooling under thePooling Agreement but which, under the terms of the PoolingAgreement, is to be borne by the Club; and
(ii) the maximum amount that the Club is able to recover from the otherparties to the Pooling Agreement as their contributions to the OverspillClaim.
16.9.2 The aggregate amount referred to in Rule 16.9.1 shall be reduced to theextent that the Club can evidence
(i) that costs have been properly incurred by it in collecting or seeking tocollect
(a) Overspill Calls levied to provide funds to pay that part of theOverspill Claim referred to in Rule 16.9.1.i, or
(b) the amount referred to in Rule 16.9.1.ii; or
(ii) that it is unable to collect an amount equal to that part of the OverspillClaim referred to in Rule 16.9.1.i which it had intended to pay out ofthe levy of Overspill Calls because any Overspill Calls so levied, or partsthereof, are not economically recoverable, provided that if, due to achange in circumstances, such amounts subsequently becomeeconomically recoverable, the aggregate amount referred to in Rule16.9.1 shall be reinstated to that extent.
16.9.3 In evidencing the matters referred to in Rule 16.9.2.ii the Club shall berequired to show that
(i) it has levied Overspill Calls in respect of the Overspill Claim referred toin Rule 16.9.1 on all Members entered in the Club on the OverspillClaim Date in accordance with and in the maximum amounts permittedunder Rule 15.4; and
(ii) it has levied those Overspill Calls in a timely manner, has not released orotherwise waived a Member’s obligation to pay those calls and has takenall reasonable steps to recover those calls.
16.9.4 To the extent that the Club intends to provide funds required to pay anyOverspill Claim incurred by it in the manner specified in Rule 15.4.1.iv,the Club shall only be required to pay such Overspill Claim as and whensuch funds are received by it, provided that it can show from time totime that, in seeking to collect such funds, it has taken the steps referredto in Rule 16.9.3.i and ii.
16.10.1 Any of the issues referred to in Rule 16.10.2 on which the Club and aMember cannot agree shall be referred to a panel (the “Panel”)constituted in accordance with arrangements established in the Pooling
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Agreement which, acting as a body of experts and not as an arbitrationtribunal, shall determine the issue.
16.10.2 This Rule 16.10 shall apply to any issue of whether, for the purpose ofapplying any of Rules 16.9.2, 16.9.3 and 16.9.4 in relation to anyOverspill Claim (the “relevant Overspill Claim”)
(i) costs have been properly incurred in collecting or seeking to collectOverspill Calls, or
(ii) any Overspill Call or part thereof is economically recoverable, or
(iii) in seeking to collect the funds referred to in Rule 16.9.4, the Club hastaken the steps referred to in that Rule.
16.10.3 If the Panel has not been constituted at a time when a Member wishesto refer an issue to it, the Board shall, on request by the Member, give adirection for the constitution of the Panel as required under the PoolingAgreement.
16.10.4 The Board may (and, on the direction of the Member, shall) give suchdirection as is required under the Pooling Agreement for the formalinstruction of the Panel to investigate any issue and to give itsdetermination as soon as reasonably practicable.
16.10.5 The Panel shall in its discretion decide what information, documents,evidence and submissions it requires in order to determine an issue andhow to obtain these, and the Board and the Member shall co-operatefully with the Panel.
16.10.6 In determining any issue referred to it under this Rule 16.10 the Panelshall endeavour to follow the same procedures as it follows indetermining issues arising in respect of the relevant Overspill Claimwhich are referred to it under the Pooling Agreement.
16.10.7 In determining an issue the members of the Panel
(i) shall rely on their knowledge and expertise, and
(ii) may rely on any information, documents, evidence or submissionprovided to it by the Club or the Member as the Panel sees fit.
16.10.8 If the three members of the Panel cannot agree on any matter, the viewof the majority shall prevail.
16.10.9 The Panel shall not be required to give reasons for any determination.
16.10.10 The Panel’s determination shall be final and binding upon the Club andthe Member (subject only to Rule 16.10.11) and there shall be no rightof appeal from such determination.
16.10.11 If the Panel makes a determination on an issue referred to in Rule16.10.2.ii or iii the Board or the Member may refer the issue back to thePanel, notwithstanding Rule 16.10.10, if it considers that the position hasmaterially changed since the Panel made its determination.
16.10.12 The costs of the Panel shall be paid by the Club.
16.10.13 Costs, indemnities and other sums payable to the Panel by the Club inrelation to any Overspill Claim, whether the reference to the Panel hasbeen made under this Rule 16.10 or under the Pooling Agreement, shallbe deemed to be costs properly incurred by the Club in respect of thatOverspill Claim for the purposes specified in Rule 16.9.2.i.
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General Exceptions
Risks covered by hull policies, etc.
17.1 Unless and to the extent that the Managers shall have otherwise agreedin writing as a term of entry there shall be no recovery from the Club inrespect of any liability, loss, cost or expense against which the memberwould have been insured if at the time of the incident giving rise to thatliability, loss, cost or expense the entered ship had been fully insured forits proper value under hull policies on terms equivalent to those of theLloyds Marine Policy MAR Form 1.1.82 with the Institute TimeClauses (Hulls) 1.10.83 (including the three quarter collision liabilityclause) attached.
Exclusion of war risks
17.2 Unless otherwise agreed in writing with the Managers and specified inthe Certificate of Entry, there shall be no recovery from the Club inrespect of any liabilities, costs or expenses (irrespective of whether acontributory cause of the same being incurred was any neglect on thepart of the Members or on the part of the Members’ servants or agents)when the loss or damage, injury, illness or death or other accident inrespect of which such liability arises or cost or expense is incurred, wascaused by:
(i) war, civil war, revolution, rebellion, insurrection or civil strife arisingtherefrom, any hostile act by or against a belligerent power, or any act ofterrorism;
(ii) capture, seizure, arrest, restraint or detainment (barratry and piracyexcepted) and the consequences thereof or any attempt thereat;
(iii) mines, torpedoes, bombs, rockets, shells, explosives or other similarweapons of war, PROVIDED ALWAYS THAT this exclusion shall notapply to liabilities, costs and expenses which arise solely by reason of:
(iii.a) the transport of any such weapons whether on board the enteredship or not; or
(iii.b) the use of any such weapons, either as a result of Governmentorder or through compliance with a written direction given by theManagers or the Board, where the reason for such use was the avoidanceor mitigation of liabilities, costs or expenses which would otherwise fallwithin the cover given by the Club.
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In the event of any dispute as to whether or not any act constitutes anact of terrorism, the decision of the Board shall be final.
PROVIDED ALWAYS THAT:
(a) the exclusion in Rule 17.2 shall not apply to liabilities, costs andexpenses of an Owner insofar only as they are discharged by theAssociation on behalf of the Owner pursuant to a demand made under
(i) a guarantee or other undertaking given by the Association to theFederal Maritime Commission under Section 2 of U.S. Public Law89-777, or
(ii) a certificate issued by the Association in compliance with ArticleVIIof the International Conventions on Civil Liability for Oil PollutionDamage 1969 and 1992 or any amendments thereof, or
(iii) an undertaking given by the Association to the International OilCompensation Fund 1992 in connection with the Small Tanker OilPollution Indemnification Agreement (STOPIA),
to the extent such liabilities, costs and expenses are not recovered by theOwner under any other policy of insurance or any extension to thecover provided by the Association, and
(b) where any such guarantee, undertaking or certificate is provided by theAssociation on behalf of the Owner as guarantor or otherwise, theOwner agrees that any payment by the Association thereunder indischarge of the said liabilities, costs and expenses shall, to the extent ofany amount recovered under any other policy of insurance or extensionto the cover provided by the Association, be by way of loan and thatthere shall be assigned to the Association all the rights of the Ownerunder any other insurance and against any third party.
Other insurances
17.3 Where a Member is insured elsewhere in any manner whatsoever againstany of the liabilities, costs or expenses enumerated which wouldotherwise have been recoverable under these Rules, no contribution shallbe made by the Club to such liabilities, costs or expenses, on the basis ofdouble insurance or otherwise, to the extent to which the Member is soinsured; nevertheless, with the approval of the Board, a Member may beinsured by special agreement with the Club made either directly withhimself or with other insurers upon the terms that certain liabilities, costsor expenses shall be borne by the Club notwithstanding such otherinsurance.
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Radioactive contamination exclusion clause
18.1 In no case shall the Club be liable for any losses, costs, expenses andliabilities, directly or indirectly caused by or contributed to or arising from:
(i) ionising radiation from, or the radioactive, toxic, explosive or otherhazardous or contaminating properties of;
(a) any nuclear fuel or any nuclear waste or combustion of nuclear fuel, or;
(b) any nuclear installation, reactor or other nuclear assembly or nuclearcomponent thereof;
(ii) any weapon of war employing atomic or nuclear fusion or other likereaction or radioactive force or matter;
(iii) the radioactive, toxic, explosive or other hazardous or contaminatingproperties of any radioactive matter;
other than liabilities, losses, costs and expenses arising out of carriage of‘excepted matter’ (as defined in the United Kingdom NuclearInstallations Act of 1965 or any regulations made thereunder) as cargo inan entered ship, and such further exceptions as the Board may approve.
Note:The United Kingdom Nuclear Installations Act 1965 reflects the provisionsof the OECD Paris Convention on Carriage of Nuclear Material.“Exceptedmatter” is nuclear matter consisting only of one or more of the following:
(i) isotopes prepared for use for industrial, commercial, agricultural, medical orscientific purposes;
(ii) natural uranium;
(iii) depleted uranium;
(iv) small quantities of nuclear matter as prescribed (see the U.K. Nuclear Installations(Excepted Matter Regulations 1978)).
Unlawful and hazardous trades
18.2 No claim shall be recoverable from the Club if it arises out of or isconsequent upon an entered ship carrying contraband, blockade runningor being employed in an unlawful trade, or if the Board, having regard toall the circumstances, shall be of the opinion that the carriage, trade orvoyage was imprudent, unsafe, unduly hazardous or improper.
Risks specifically excluded
19 Except as provided in this Rule or otherwise agreed in writing with theManagers, the Club shall not provide cover for any of those risks, or payfor any of those losses set out in the paragraphs of this Rule 19 below.
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19.1 Loss of or damage to an entered ship or any part thereof, save asprovided in Rule 20.37 (Confiscation of ships by customs authorities).
19.2 Loss of or damage to any equipment on board an entered ship or to anycontainers, lashings, stores, or fuel on board to the extent that they areowned or leased by the member or any associated company.
19.3 The costs of repairs to an entered ship or any charges or expenses inconnection therewith (except to the extent that the same is recoverablein respect of cargo’s or ship’s proportion of general average).
19.4 Loss of freight or hire or any proportion thereof in relation to an enteredship, save where such loss, with the agreement of the Managers, formspart of a claim for liabilities in respect of cargo.
19.5 Salvage or other services in the nature of salvage rendered to an enteredship, and any costs and expenses in connection therewith, other thansuch as may be covered under Rule 20.10 (Life salvage), Rule 20.14.5(pollution), Rule 20.23 (cargo’s proportion of General Average) or Rule20.24 (ship’s proportion of General Average).
19.6 Liabilities, costs and expenses arising out of salvage operations conductedby an entered ship or provided by a Member other than liabilities, costsand expenses arising out of salvage operations conducted by an enteredship for the purpose of saving or attempting to save life at sea.
19.7 Loss arising out of the cancellation of a charter or other engagement ofan entered ship.
19.8 Loss arising out of irrecoverable debts or out of the insolvency of anyperson including the insolvency of agents.
19.9 Demurrage on, detention of, costs of delay of or, except as provided forin Rule 20.9, running costs of an entered ship save where such loss, withthe agreement of the Managers, forms part of a claim for liability inrespect of cargo.
19.10 Pollution risks except as provided in Rules 20.14 and 20.36.
19.11 Liabilities, costs and expenses incurred by a Member during the courseof performing specialist operations including but not limited to dredging,blasting, pile-driving, well stimulation, cable or pipe laying, construction,installation or maintenance work, core sampling, depositing of spoil,professional oil spill response or professional oil spill response trainingand tank cleaning (otherwise than on the entered vessel), (but excludingfire-fighting) to the extent that such liabilities, costs and expenses arise asa consequence of:
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(i) claims brought by any party for whose benefit the work has beenperformed, or by any third party (whether connected with any party forwhose benefit the work has been performed or not), in respect of thespecialist nature of the operations; or
(ii) the failure to perform such specialist operations by the Member or thefitness for purpose and quality of the Member’s work, products or services.
(iii) any loss of or damage to the contract work.
Provided that this exclusion shall not apply to liabilities, costs andexpenses incurred by a Member in respect of:
(a) loss of life, injury or illness of crew and other personnel on board theentered vessel;
(b) the wreck removal of the entered vessel;
(c) oil pollution emanating from the entered vessel or the threat thereof;
but only to the extent that such liabilities, costs and expenses are coveredby the Club in accordance with these Rules.
19.12.1 Liabilities, costs and expenses incurred in respect of an entered ship,being a drilling vessel or barge or any other vessel or barge employed tocarry out drilling or production operations in connection with oil or gasexploration or production, including any accommodation unit mooredor positioned on site as an integral part of any such operations, to theextent that such liabilities, costs or expenses arise out of or duringdrilling or production operations.
19.12.2 A vessel shall be deemed to be carrying out production operations if(inter alia) it is a storage tanker or other vessel engaged in the storage ofoil, and either:
(i) the oil is transferred directly from a producing well to the storage vessel;or
(ii) the storage vessel has oil and gas separation equipment on board and gasis being separated from oil whilst on board the storage vessel other thanby natural venting.
19.13 Liabilities, costs and expenses incurred by a Member in connection withany claim brought against him arising out of:
(i) waste incineration or disposal operations carried out by the entered ship(other than any such operations carried out as an incidental part of othercommercial activities not being specialist operations);
(ii) the operation by the Member of submarines, mini submarines or divingbells;
(iii) the activities of professional or commercial divers where the Member isresponsible for such activities, other than:
(iii.a) activities arising out of salvage operations being conducted by an enteredship where the divers form part of the crew of that entered ship (or ofdiving bells or other similar equipment or craft operating from theentered ship) and where the Member is responsible for the activities ofsuch divers; and
(iii.b) incidental diving operations carried out in relation to the inspection,repair or maintenance of the entered ship or in relation to damagecaused by the entered ship; and
(iii.c) recreational diving activities.
19.14 Liabilities, costs and expenses incurred by the Member in respect of anyof the following:
(i) personnel (other than marine crew) on board the entered vessel (beingan accommodation vessel) employed otherwise than by the Memberwhere there has not been a contractual allocation of risks as between theMember and the employer of the personnel which has been approved bythe Managers;
(ii) hotel and restaurant guests and other visitors and catering crew of theentered ship when the entered ship is moored (otherwise than on atemporary basis) and is open to the public as a hotel, restaurant, bar orother place of entertainment.
PROVIDED ALWAYS THAT the foregoing exclusions shall not apply toclaims under the following paragraphs of Rule 20:
Paragraph 33 — relating to Sue and Labour, and
Paragraph 34 — relating to expenses incurred by direction of the Board.
19.15 Loss of or damage to or wreck removal of cargo carried on a semi-submersible heavy lift vessel or any other vessel designed exclusively forthe carriage of heavy lift cargo, save to the extent that such cargo isbeing carried under the terms of a contract on Heavycon terms or anyother terms approved in writing by the Managers.
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Risks Covered
20 The liabilities, costs and expenses in respect of which a Member shall beinsured by the Club are the following;
PROVIDED ALWAYS THAT:
(i) the liabilities, costs and expenses shall have arisen by reason of theMember’s interest in the entered ship, out of events occurring during theperiod of entry of the ship in the Club and in connection with theoperation of the ship by or on behalf of the Member;
(ii) the Member shall not be insured for any liabilities, costs and expensesincurred by him in a capacity other than the capacity in which he hasentered into the contract of insurance with the Club, including (withoutlimitation) any liabilities, costs and expenses incurred by the Member inhis capacity as an owner of cargo;
(iii) a Member shall only be insured against the risks specified in paragraphs4.A, 15.A, 19.A, 21.2, 29.A, 35, and 36 of Rule 20, if the insurance andany sum insured and any additional contribution and any other termshave been specifically agreed in writing with the Managers and specified(other than the amount of any additional contribution payable to theClub) in the Member’s Certificate of Entry.
Liabilities in respect of third parties (other than passengers, seamen and
stevedores) for death, injury and illness
20.1.1 Damages or compensation for loss of life of or personal injury to orillness of any person other than a person referred to in paragraphs 1.2, 2,3, 4 and 4.A of this Rule, including hospital, medical and funeralexpenses, for which a Member may in consequence be liable, arising outof the negligent navigation or management of the entered ship or othernegligent act or omission on board or in relation to the entered ship, orfor which a Member may become liable under the terms of anindemnity given by him to the owners or operators (including port ordock authorities) of any dock or drydock.
PROVIDED ALWAYS THAT the terms of the indemnity shall havebeen approved by the Managers, and that the Board shall have power atany time to prohibit any such indemnity or form of indemnity for use atany particular port or place.
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Liabilities in respect of passengers
20.1.2.1 Damages or compensation for loss of life or personal injury to or illnessof any Passenger, including hospital, medical and funeral expenses, forwhich a Member may be liable.
20.1.2.2 Damages or compensation to, or costs and expenses incurred in respectof, passengers on board an entered ship for which a Member may beliable in consequence of a casualty to an entered ship while they are onboard, including the cost of forwarding such passengers to theirdestination or returning them to their port of embarkation, and of theirmaintenance ashore.
20.1.2.3 Loss of or damage to a passenger’s baggage or effects for which aMember may be liable save that there shall be no cover in respect ofspecie, bullion, precious or rare metals or stones, plate, works of art orother objects of rare or precious nature, bank notes or other forms ofcurrency, bonds or other negotiable instruments.
PROVIDED ALWAYS in respect of this Rule 20.1.2:
(i) that the Club shall not be liable for liabilities, costs and expenses incurredby a Member arising in respect of death, personal injury, loss of ordamage to property, delay or any other consequential loss sustained byany passenger of the entered ship by reason of carriage of that passengerby air except where such liabilities, costs and expenses occur:
(i.a) during the repatriation by air of an injured or sick passenger or of apassenger following a casualty to the entered ship, or
(i.b) during excursions from the entered ship but always subject to theprovisions of proviso ii below.
(ii) that the Club shall not be liable for contractual liabilities, costs andexpenses incurred by a Member arising in respect of a passenger whilston an excursion from the entered ship in circumstances where either:
(ii.a) a separate contract has been entered into by the passenger for theexcursion, whether or not with the Member; or
(ii.b) the Member has waived any or all of his rights of recourse against anysub-contractor or other third party in respect of the excursion.
(iii) that the ticket of passage shall relieve the Member of liability, costs andexpenses to the maximum extent permitted under the appropriate law.
(iv) for the purposes of this Rule only “casualty” means:
(iv.a) collision, stranding, explosion, fire or any other cause affecting the
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condition of the entered ship so as to render it incapable of safenavigation to its intended destination; or
(iv.b) a threat to the life, health or safety of passengers.
Liabilities in respect of seamen for death, injury or illness
20.2 Damages, compensation or expenses (including hospital, medical andfuneral expenses) for which a Member may be liable in consequence ofthe loss of life of or personal injury to or illness of any seaman whetheror not on board an entered ship arising out of the negligent navigationor management of the entered ship, or arising under statutory obligation,or under the terms of any crew agreement or other contract of service oremployment, PROVIDED ALWAYS THAT the terms of such agreementor contract shall previously have been approved by the Managers inwriting. In giving such approval the Managers may impose any suchterms or conditions as they may think fit, including an amendment ofthe Premium Rating of the entered ship or the imposition of anadditional premium.
Liabilities in respect of stevedores for death, injury or illness
20.3 Damages, compensation or expenses for which a Member may be liablein consequence of the loss of life of or personal injury to or illness of anyperson arising in relation to the handling of the cargo of an entered shipor in consequence of the negligence of persons employed solely for thatpurpose, from the time of receipt for shipment on quay or wharf untilfinal delivery ex quay or wharf at the port of discharge, or for which theMember may become liable under a contract of indemnity between theMember and his stevedores or other sub-contractor.
PROVIDED ALWAYS THAT the terms of the contract of indemnityshall have been approved by the Managers, and that the Board shall havepower at any time to prohibit any contract of indemnity or form ofcontract of indemnity for use at any particular port or place or in anyparticular trade.
Collision liabilities for death, injury or illness
20.4 Damages or compensation for which a Member may be liable inconsequence of the loss of life of or personal injury to or illness of anyperson in or on board any other ship or vessel caused by the negligentnavigation or management of an entered ship or other negligent act oromission on board or in relation to an entered ship.
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Death, injury or illness liabilities arising out of the carriage of cargo
20.4.A Damages or compensation for which a Member may be liable inconsequence of the loss of life of or personal injury to or illness of anyperson (not being a person specified in paragraphs 1 to 4 of this Rule)arising out of the carriage of any cargo or container by or on behalf of aMember;
PROVIDED ALWAYS THAT:
(i) the cargo or container, as the case may be, is intended to be or has beencarried on an entered ship;
(ii) the Club shall not be liable to reimburse a Member in respect of liabilityto any person employed by him (other than any seaman) unless theManagers shall have specifically agreed in writing that the Member’scover shall include insurance in respect of liability to his employees;
(iii) a Member shall not be entitled to be reimbursed by the Club in respectof any liability which would not have arisen but for the terms of anycontract or indemnity made or given by the Member, unless the terms ofthe relevant contract or indemnity shall have been approved by theManagers in writing.
Note: If insurance is required under this paragraph it must first be specificallyagreed in writing with the Managers and specified in the Certificate of Entry.
Repatriation
20.5 Repatriation expenses not recoverable under any other paragraph of thisRule and incurred under statutory obligation or under the terms of anycrew agreement or contract of service or employment in respect of anyseaman on an entered ship or proceeding to or from such ship;
PROVIDED ALWAYS THAT:
(i) the terms of such an agreement or contract shall have been approved bythe Managers in writing;
(ii) no such expenses shall be recoverable if they arise out of or ensue uponthe termination of any agreement either in accordance with the termsthereof or by mutual consent, or the sale of the entered ship, or any otheract of the Member in respect of the entered ship, unless the Board in itsdiscretion considers that such termination or other act was necessary inthe interests of the safety of the ship or crew or the proper running ofthe ship.
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Crew substitute expenses
20.6 Expenses necessarily incurred in sending abroad substitutes, or insecuring, engaging, repatriating or deporting a substitute engaged abroad,to replace any seaman on board an entered ship who shall have died, orwho shall have been left ashore in consequence of injury, illness,desertion or in any other case in which the Board shall determine thatsuch expenses were reasonably incurred;
PROVIDED ALWAYS THAT:
(i) no such expenses shall be recoverable if they arise out of or ensue upon:
(i.a) the breach by the Member of any of the statutory or contractualobligations, or of the terms or conditions of any collective agreement; or
(i.b) the termination of any agreement either in accordance with theterms thereof or by mutual consent, unless the Board in its discretionconsiders that such breach or termination was necessary in the interestsof the safety of the ship or crew or the proper manning of the ship;
(ii) wages shall only be recoverable as part of such expenses when payable tosubstitutes, engaged abroad, while awaiting and during repatriation.
Loss of seaman’s effects
20.7 Payments made to seamen in respect of the loss of their effects understatutory or other legal obligation or under the terms of any crewagreement or other contract of service or employment, PROVIDEDALWAYS THAT the terms of such an agreement or contract have beenapproved by the Managers in writing.
Shipwreck unemployment indemnity
20.8 Wages or other compensation payable to any seaman under statutoryobligation or under the terms of any crew agreement or other contractof service or employment, in consequence of the actual or constructivetotal loss of an entered ship, PROVIDED ALWAYS THAT the terms ofsuch agreement or contract have been approved by the Managers inwriting.
Port and deviation expenses
20.9.1 Port and other charges solely incurred for the purpose of landing ordisposing of stowaways or refugees, or others saved at sea or landing orsecuring the necessary treatment for an injured or sick person (other
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than a crew member) being carried in an entered ship, including the netloss to Members in respect of fuel, insurance, wages, stores and provisionsincurred for such purpose or while awaiting a substitute for such person.
20.9.2 Port and other charges as described in Rule 20.9.1 incurred in relationto crew members.
Life salvage
20.10 Life salvage shall be recoverable to the extent only that the same is notrecoverable from hull underwriters on the entered ship.
Collision liability
20.11.1 One fourth collision liability or such other proportion as is specificallyagreed in writing with the Managers and specified in the certificate ofentry, with costs and expenses incidental thereto:
PROVIDED ALWAYS THAT:
(i) the liability is not recoverable under the collision liability clausecontained in the hull policies of the entered ship and,
(ii) the liability, with costs and expenses are those which would have beencovered under the usual form of Lloyd’s policy with the institute timeclauses (hulls) attached or other form of hull policies on the entered shipprovided such other policies have previously been approved by theManagers in writing.
20.11.2 Collision liability with costs and expenses incidental thereto relating to:
(i) the costs, charges and expenses of or incidental to raising, removal,destruction, lighting or marking of wrecks, cargoes or other property.
(ii) damage done by such other ship to any harbour, dock, pier, jetty or anyother fixed or moveable thing whatsoever (not being another ship or anyproperty therein or the cargo or other property intended to be or beingor having been carried in the entered ship).
20.12 That part of collision liability with costs and expenses incidental theretowhich exceeds the sum recoverable under the hull policies of the enteredship solely by reason of the fact that the liability, costs and expensesexceeds the valuation of the ship in those policies;
PROVIDED ALWAYS THAT:
(i) the Board may for the purpose of assessing any sum recoverable under
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paragraph 12 of this rule determine the proper value which the enteredship should have been insured under the hull policies, and the Club shallpay only the excess (if any) of the amount which would have beenrecoverable under the hull polices if the entered ship had been insuredthereunder at such value. For the purposes of this Rule the ‘proper value’shall mean the market value of the ship without commitment;
(ii) the Managers shall have power, but shall not be bound, at the request ofthe member to agree for the purpose of this Rule, the proper value atwhich an entered ship shall be insured for the current year but theagreement of a limit of liability for cover under paragraph 11.1 of thisRule by reference to the value of the ship shall not constitute anyagreement by the Club that such value is a proper value of the ship andthe Board may determine the proper value at which the ship should havebeen insured;
(iii) unless otherwise agreed at the time of entry, a Member shall not beentitled to recover from the Club any excess, franchise or deductibleborne by him under the hull policies;
(iv) if a claim arises under this rule upon a collision involving two shipsbelonging to the same Member, he shall be entitled to recover from theClub and the Club shall have the same rights, as if the ships hadbelonged to different owners;
(v) if both ships are to blame, then unless the liability of the owners of oneor both of them becomes limited by law, claims under this Rule shall besettled upon the principle of cross-liabilities, as if the owner of each shiphad been compelled to pay the owner of the other ship one-half orother proportion of the latter’s damages as may have been properlyallowed in ascertaining the balance or sum payable by or to the former inconsequence of the collision;
(vi) there shall be no recovery from the Club under paragraph 12 of thisRule insofar as the collision liability, with costs and expenses incidentalthereto, is not recoverable under the hull policies by reason of a breachor breaches of any term, warranty or condition of such policies.
Note:When considering the proper value for which an entered ship should beinsured or deemed to be insured for the purposes of claims under paragraph 12,the Board will require to be satisfied that the hull and/or excess liability policiesof the Member concerned have been kept under regular review as marketconditions may require, so that the total liability coverage contained in those
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policies is maintained at levels approximating to the market value of the shipwithout commitment.
In the light of the above, Members are recommended to consult their brokersand/or ship valuers to assess the proper amount for which insurances should beeffected.
Damage to property (otherwise than by pollution)
20.13.1 Loss of or damage to or for interference with rights in relation to anyharbour, dock, pier, jetty, land or any fixed or moveable thing whatsoever,not being another ship or any property therein or the cargo or otherproperty intended to be or being or having been carried in the enteredship, if liability for such loss or damage is imposed by statute or arose outof the negligent navigation or management of an entered ship or othernegligent act or omission on board or in relation to an entered ship.
20.13.2 Loss of or damage to or for interference with rights in relation to anyharbour, dock, pier, jetty, land or any fixed or moveable thing whatsoever,including other ships, if the liability of the Member for such loss ordamage arises under the terms of an indemnity given by him to theowners or operators (including port and dock authorities) of any dock ordrydock;
PROVIDED ALWAYS THAT:
(i) the terms of the indemnity shall have been approved by the Managers,and that the Board shall have power at any time to prohibit any suchindemnity or form of indemnity for use at any particular port or place;
(ii) if a claim is made on the Club under paragraph 13 of this Rule uponloss of or damage to any property or object belonging to the Member inrespect of whose entered ship the claim arose, the Member shall beentitled to recover from the Club and the Club shall have the samerights, as if such property or object had belonged to a third party, but tothe extent only that such loss or damage is not recoverable under anyother insurance upon the said property or object.
Pollution risks
20.14.1 Liability for loss, damage or contamination caused by the discharge orescape from the entered ship of oil or any other substance.
20.14.2 The costs of any measures reasonably taken after the discharge or escapeof oil or any other substance from the entered ship for the purpose of
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avoiding or minimising any resulting loss, damage or contamination orcleaning up any resulting pollution, together with any liability for anyloss of or damage to property caused by any measures so taken.
20.14.3 The costs of any measures reasonably taken to prevent an imminentdanger of the discharge or escape from the entered ship of oil or anyother substance.
20.14.4 Any extraordinary expenses or liabilities incurred as the result ofcompliance with any order or direction given or any measures taken byany Government or other authority in connection with an entered shipor her cargo (other than the effecting of any permanent structuralalteration to an entered ship) for the purpose of preventing or reducingpollution or the risk thereof by the escape from the entered ship of oil orany other substance;
PROVIDED ALWAYS THAT such expenses or liabilities are notrecoverable under the hull policy or any other insurance.
20.14.5 Any liability of a Member under a salvage agreement to compensatesalvors for work done or measures taken to prevent or reduce pollutionor the risk thereof by the escape from the entered ship of oil or anyother substance.
20.14.6 Any liability of a Member incurred after the entered ship has become awreck arising from the discharge or escape from such wreck of oil or anyother substance.
20.14.7 Any liabilities, costs and expenses incurred by a Member in respect ofpollution where such liabilities arise from the following:
(i) collisions as described in paragraphs 11.1, 11.2 and 12;
(ii) damage to property as described in paragraph 13;
(iii) damage caused other than by collision as described in paragraph 15;
(iv) towage contracts as described in paragraph 16;
(v) indemnities and other contracts as described in paragraph 17;
(vi) wreck liabilities as described in paragraph 18;
(vii) sue and labour as described in paragraph 33.
PROVIDED ALWAYS THAT:
(i) unless otherwise expressly agreed the Club’s maximum liability for allclaims under paragraph 14 of this Rule in respect of any one event
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involving oil pollution shall be limited to such sum or sums and besubject to such terms and conditions as the Board may from time to timedetermine, whether or not a Member has received notice of suchdetermination, and a Member shall not be entitled to recover more thansuch limit by bringing a claim under some other paragraph of this Rule(including without prejudice to the generality of the foregoing, thosespecified above);
(ii) the liability of the Member referred to in sub-paragraphs (i) to (vii) ofparagraph 14.7 of this Rule shall have arisen either under statute orunder the general law or under an agreement the terms of which shallhave been approved by the Managers prior to the relevant casualty orincident and the Member shall have undertaken to pay such additionalcalls or contributions as may be required by the Club;
(iii) a Member insured in respect of a vessel which is a relevant ship asdefined in the Small Tanker Oil Pollution Indemnification Agreement(STOPIA) shall, unless the Managers otherwise agree in writing, be aparty to STOPIA for the period of entry of that vessel in the Club.Unless the Managers have agreed in writing or unless the Directorsotherwise determine, there shall be no cover under paragraph 14.7 of thisRule in respect of such vessel so long as that Member is not a party toSTOPIA;
(iv) without prejudice to the terms, limitations and provisions applicable tothis paragraph 14 of this Rule the liability of the Club under sub-paragraph vi shall be subject to the same provisions as apply to paragraph18.3 of this Rule;
(v) in the event of any legislation coming into force anywhere in the worldduring the currency of entry affecting the Member’s liabilities forpollution by oil or any other substance, the Club shall have the right toincrease the Member’s rate of contribution, or to charge an additionalpremium.
(vi) unless the Board in its discretion shall otherwise determine, there shall beno recovery under paragraph 14 of this Rule in respect of any liabilities,costs and expenses which but for the terms of any charter or contract ofcarriage would have been allowed in general average adjusted under theunamended York Antwerp Rules 1994.
(vii) unless the Board otherwise determines, there shall be no recovery inrespect of any liability, loss, damage, cost or expense, including, withoutlimitation, liability for the cost of any remedial works or clean-upoperations, arising as a result of the presence in, or the escape or
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discharge or threat of escape or discharge from, any land based dump,site, storage or disposal facility of any substance previously carried on theentered ship whether as cargo, fuel, stores or waste and whether at anytime mixed in whole or in part with any other substance whatsoever.
Note:The Board has determined that in addition to any other limitations of covercontained in the Rules or set out in the Certificate of Entry the limitations ofcover set out below shall apply to Owner’s Entries from 20th February 2005.Relevant limitations for Charterer’s Entries are set out in the note to Rule 16.3.
(i) The provisions of paragraph i of the note to Rule 16.3 shall apply to this note.
(ii) The aggregate liability of the Club for all claims in respect of oil pollution arisingunder any one Owner’s entry shall be limited to U.S. $1 billion any one event.
(iii) In the event that there is more than one Owner’s Entry in respect of the sameship with the Club and/or with any other insurer which participates in thePooling Agreement, the aggregate recovery in respect of all oil pollution claimsarising under such Owner’s Entries shall not exceed U.S. $1 billion any oneevent, and the liability of the Club under each such Owner’s Entry shall belimited to such proportion of U.S. $1 billion as the claims arising under thatOwner’s Entry bear to the aggregate of all such claims recoverable from the Cluband any such other insurer.
(iv) When a ship entered under an Owner’s Entry provides salvage or other assistanceto another vessel following a casualty, all claims for oil pollution howsoever arisingincurred by the entered ship in respect of oil pollution shall be aggregated with allclaims incurred in respect of oil pollution by any other ships whilst engaged inproviding salvage or other assistance in connection with the same casualty, whenand to the extent that those ships either:
(iv.a) are entered under Owner’s Entries in the Club and covered for the oilpollution risks set out in Rule 20.14; or
(iv.b) are covered for those risks under Owner’s Entries with any other Clubwhich participates in the Pooling Agreement.
In such circumstances the limit of liability of the Club in respect of the enteredship shall be such proportion of U.S. $1 billion as the said claims for oil pollutionincurred by the entered ship bear to the aggregate of all claims in respect of oilpollution of all such other ships in connection with the said casualty.
(v) If the total amount of any oil pollution claim against a member to which thisRule 20.14 applies, exceeds a sum equal to the Club’s limit or limitation for oilpollution claims, as determined by the Directors in accordance with the note to this
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Rule, the Club will not be liable to make any payment in respect of that amountby which any such claim exceeds the sum equal to the limit aforesaid.
Damage caused other than by collision
20.15 Liability for loss of or damage to, or delay to, or wreck removal of, anyother ship or any property therein (and costs and expenses incidentalthereto) occasioned otherwise than by collision with the entered shipand arising out of the negligent navigation or management of theentered ship or other negligent act or omission on board of or in relationto the entered ship. If a claim arises under paragraph 15 of this Ruleupon loss of or damage to any other ship belonging to the Member, inrespect of whose entered ship the claim arose, the Member shall beentitled to recover from the Club, and the Club shall have the samerights, as if the ship lost or damaged, had belonged to a third party, but tothe extent only that such loss or damage is not recoverable under anyother insurance upon such ship.
Damage arising out of the carriage of cargo
20.15.A Liability of a Member for loss of or damage to any fixed or moveableproperty whatsoever (other than any cargo carried or intended to becarried by or on behalf of the Member or any container owned, hired orused by the Member) arising out of the carriage of any cargo orcontainer by or on behalf of the Member.
PROVIDED ALWAYS THAT:
(i) the cargo or container, as the case may be, is intended to be or has beencarried on an entered ship; and
(ii) a Member shall not be entitled to be reimbursed by the Club in respectof any liability which would not have arisen but for the terms of anycontract or indemnity made or given by the Member, unless the terms ofthe relevant contract or indemnity shall have been approved by theManagers in writing.
Note: If insurance is required under this paragraph it must first be specificallyagreed in writing with the Managers and specified in the Certificate of Entry.
Towage of an entered ship
20.16.1 Loss or damage arising out of or during the course of customary towageof an entered ship in the ordinary course of trading for which theMember may become liable under the terms of the towage or other
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contract but only to the extent to which such liability is not recoverableunder the hull policies;
PROVIDED ALWAYS THAT:
(i) the expression “customary towage” shall mean either:
(i.a) towage for the purpose of entering or leaving a port, ormanoeuvring within a port, during the ordinary course of trading; or
(i.b) the towage of such entered ships (e.g. barges) as are habitually towedin the ordinary course of their trading from port to port or from place toplace;
(ii) as to any other towage of an entered ship other than customary towageas defined in (i) above, the Managers shall have the power to grant specialcover in respect thereof on such terms as the Managers may think fit;PROVIDED THAT the nature of the proposed towage and the terms ofthe proposed contract shall have been disclosed to and approved by theManagers in writing;
(iii) the Board may reject or reduce a claim arising out of or during thecourse of customary towage if it decides that it was unreasonable, havingregard to all the circumstances of the case, to perform the particulartowage or to enter into the particular contract of towage or if in itsopinion the particular contract of towage should reasonably haveprovided that the relevant risks and liabilities did not fall upon the ownerof the tow.
Towage by an entered ship
20.16.2 Liability which a Member may incur, together with costs and expensesincidental thereto, under the terms of a contract for, or arising out of, thetowage by an entered ship of any ship or object.
PROVIDED ALWAYS THAT:
(i) such liability relates to the risks specified in the other paragraphs of thisRule 20 and also fulfils the requirements of this paragraph 16.2;
(ii) an entered ship specially designed or converted for the purpose oftowage shall have been declared as such to the Managers at the time ofentry or at the time of conversion for the purpose of towage;
(iii) the towage contract has been approved by the Managers in writing priorto the commencement of the tow and the Member has paid or agreed topay such additional Call or premium as may be required by the Club; or
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(iv) the Board in its discretion shall having regard to all the circumstances,consider the terms of the towage contract or the circumstances of thetowage as reasonable and the liability as coming within the scope of thecover afforded by the Club;
(v) that notwithstanding anything provided in this paragraph 16.2 orelsewhere in these Rules, there shall be no recovery by a Member inrespect of liability for loss of, or damage to, or wreck removal of, a towedship or object and/or its cargo or other property, whether such liabilityarises under the terms of the contract or otherwise, unless the Managershave agreed in writing to cover such liability.
Note:The Managers will normally approve contracts which are made on orincorporate the following terms and conditions:
(i) towage contracts
(i.a) the United Kingdom or Netherlands standard towage conditions or othersimilar conditions, or Scandinavian standard towage conditions, for harbour towageonly;
(i.b) Towcon and Towhire;
(i.c) Lloyd’s standard form of salvage agreement – no cure no pay – we add thewords for salvage situations:
PROVIDED THAT the terms or conditions referred to in (i.a), (i.b) and (i.c)above are not amended so as to increase the liability of the entered ship;
(i.d) a term as between the Member on the one part, and the owner of the towand the owners of any cargo or other property on board the tow on the other part,that each shall be responsible for any loss or damage to his own ship, cargo orproperty without any recourse whatsoever against the other (a knock-for-knockclause).
If the contract is likely to be subject to consideration by the United States Courts,it shall also require the Member to be named as an additional insured on thetow’s hull insurance and that hull insurance should contain a waiver ofsubrogation against the Member.
(i.e) in addition, the Member will normally be covered where the towage orattempt thereat is made for the purpose of saving or attempting to save life orproperty at sea.
(ii) supply boat charters
If the tug is working under a time charter and there is no contract between thetugowner and the owner of the tow, then liability for loss of or damage to, or wreck
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removal of, a towed object and/or property on board shall only be covered providedthe Managers have approved in writing the charter which in their opinioncontains:
(ii.a) a knock-for-knock clause as above covering the property of sub-contractors ofthe charterers as well as the property of the charterers themselves; or
(ii.b) a separate clause requiring that all towage can be carried out on terms noworse than knock-for-knock.
Liability arising under contracts for hire of cranes, lighters or other loadingand discharging appliances
20.17 Loss or damage for which a Member may become liable under the termsof an indemnity given by him to the owners or operators of floatingcranes or lighters or other appliances or craft used during the operationsof loading or discharging an entered ship or for carrying passengers,members of the crew or other authorised persons to or from an enteredship; including liability for loss of life or personal injury, but excludingliability for any cargo or other property intended to be or being orhaving been carried in the entered ship.
PROVIDED ALWAYS THAT:
The terms of the indemnity shall have been approved by the Managers,and that the Board shall have power at any time to prohibit any suchindemnity or form of indemnity for use at any particular port or place orin any particular trade.
Wreck liabilities
20.18.1 Costs and expenses of or incidental to the raising, removal, destruction,lighting or marking of the wreck of an entered ship.
20.18.2 Liabilities incurred by a Member as the result of the raising, removal ordestruction of the wreck of an entered ship or any attempt thereat.
20.18.3 Liabilities incurred by a Member as the result of the presence orinvoluntary shifting of the wreck of an entered ship.
20.18.4 Liabilities incurred, including costs and expenses of or incidental to theraising, removal, destruction or otherwise disposing of cargo which isbeing carried or has been carried on an entered ship;
PROVIDED ALWAYS THAT:
(i) in relation to paragraphs 18.1, 2 and 3 of this Rule
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(i.a) the entered ship became a wreck as the result of a casualty or eventoccurring during the period of that ship’s entry in the Club; and
(i.b) no sum shall be recoverable from the Club under paragraph 18 ofthis Rule if the Member shall, without the consent of the Managers inwriting, have transferred his interest in the wreck otherwise than byabandonment, at any time after the entered ship shall have become awreck.
(ii) in relation to paragraph 18.1 of this Rule
(ii.a) the raising, removal, destruction, lighting or marking of the wreckwas compulsory by law, or the costs thereof were legally recoverable fromthe Member by virtue of a contract or indemnity previously approved bythe Managers in writing; and
(ii.b) the value of all stores and materials saved, as well as the wreck itself,shall first be deducted from such costs and expenses and only the balancethereof, if any, shall be recoverable from the Club.
(iii) in relation to paragraph 18.2 of this Rule
(iii.a) the raising, removal or destruction of the wreck was compulsory bylaw or the Member was legally liable to carry out the same by virtue of acontract or indemnity previously approved by the Managers in writing;and
(iii.b) unless the Board in its discretion shall otherwise determine, aMember shall not be entitled to be reimbursed by the Club in respect ofany liability unless (i) the Member has taken such measures as werereasonable to raise, remove or destroy the wreck; (ii) the Member hasemployed independent contractors to perform the relevant operationsand has taken such measures as were reasonable to provide that under theterms of the contract the risk of incurring the relevant liabilities fellupon the contractors and (iii) those contractors effected such insurance aswas reasonable to insure themselves against such risks. No liabilitiesinsured under a contractor’s policy shall be recoverable from the Club.
(iv) in relation to paragraph 18.3 of this Rule
(iv.a) the liability was caused by the casualty or event which led to theloss of the entered ship;
(iv.b) unless the Board in its discretion shall otherwise determine, aMember shall not be entitled to be reimbursed by the Club in respect ofany liability unless the Member shall have taken measures as werereasonable to raise, remove, destroy, light or mark the wreck; and
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(iv.c) unless the Board in its discretion shall otherwise determine, aMember shall not be entitled to be reimbursed by the Club in respect ofany liability incurred more than two years after the entered ship becamea wreck.
(v) in relation to paragraph 18.4 of this Rule
(v.a) the raising, removal, destruction or disposal of the cargo wascompulsory by law or the Member was legally liable to carry out thesame by virtue of a contract or indemnity previously approved by theManagers in writing; and
(v.b) unless the Board in its discretion shall otherwise determine, aMember shall not be entitled to be reimbursed by the Club in respect ofany liability unless the Member has taken such measures as werereasonable to raise, remove, destroy or otherwise dispose of the cargo; and
(v.c) the value of all cargo saved which accrues to the Members shall firstbe deducted from such costs and expenses and only the balance thereof,if any, shall be recoverable from the Club.
Quarantine expenses
20.19 Quarantine expenses and extraordinary expenses incidental to theoutbreak of infectious or contagious disease upon an entered shipincurred for or by way of:
(i) the disinfection of the entered vessel or of persons on board her underquarantine or public health enactments, regulations or orders, includingthe cost of taking in fuel in quarantine, and of loading and dischargingcargo and of the victualling of the crew and passengers after deductingthe ordinary expenses of loading, discharging and victualling;
(ii) fuel consumed or towage in proceeding to and from and lying at aspecial station or place in accordance with such enactments, regulationsor orders;
(iii) expenses directly consequent upon bearing up for, or putting into a portor place of refuge and resuming the voyage thereafter by reason solely ofthe outbreak of infectious or contagious disease upon an entered ship.
PROVIDED ALWAYS THAT:
There shall be no recovery under paragraph 19 of this Rule if theentered ship at the time such expenses were incurred was chartered toproceed to or was under orders from the Member or her managers toproceed to a port at which it was known or should in the determination
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of the Board have reasonably been anticipated at the time of the charteror orders that she would be quarantined.
20.19.A Expenses necessarily incurred by a Member by way of:
(i) the disinfection of any cargo or container under quarantine or publichealth enactments, regulations or orders, including the cost oftransporting any cargo or container to any place for the purpose ofenabling such disinfection to be carried out and the cost of dischargingcargo from any container in order to enable such disinfection to becarried out and of subsequently reloading the cargo into such container;or
(ii) expenses otherwise directly consequent upon compliance by a Memberwith any quarantine or public health enactment, regulations or ordersand incurred in connection with any cargo or container carried by or onbehalf of a Member after deducting the ordinary expenses which wouldhave been incurred by the Member in any event apart from the outbreakof disease or the application of such enactments, regulations or orders.
PROVIDED ALWAYS THAT:
(i) the cargo or container, as the case may be, is intended to be or has beencarried on an entered ship; and
(ii) unless the Board in its discretion shall otherwise determine, a Membershall not be entitled to recover any of the above expenses from the Clubif he is entitled to be paid the same by any other party.
Note: If insurance is required under this paragraph it must first be specificallyagreed in writing with the Managers and specified in the Certificate of Entry.
Liability for loss or shortage of cargo or other property
20.20.1 Loss of cargo or other property intended to be, or being, or having beencarried in, on or by an entered ship arising out of any breach by theMember, or by any person for whose acts, neglect or default he may belegally liable, of his obligation properly to load, handle, stow, carry, keep,care for, discharge and deliver such cargo or property, or out ofunseaworthiness or unfitness of the entered ship.
Liability for damage to or responsibility in respect of cargo or other property
20.20.2 Damage to or responsibility in respect of cargo or other propertyintended to be or being or having been carried in, on or by an enteredship arising out of any breach by the Member, or by any person forwhose acts, neglect or default he may be legally liable, of his obligation
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properly to load, handle, stow, carry, keep, care for, discharge and deliversuch cargo or property, or out of unseaworthiness or unfitness of theentered ship.
20.21.1 The extra costs incurred by the Member:
(i) in the actual discharge or disposal of damaged or worthless cargoprovided that the Member shall only be entitled to recover such extracosts if the Member has no recourse to recover such costs from anyother party; or
(ii) as a direct consequence of the failure by cargo interests to collect orremove cargo from the port or place of discharge or deliveryprovided that the Member shall only be entitled to recover such extracosts if and to the extent they exceed the proceeds of the sale of thecargo and the Member has no recourse to recover such costs fromany other party.
20.21.2 Loss of or damage to or responsibility in respect of cargo or otherproperty being carried by means of transport other than the entered ship,for which the Member may be liable under a through or transhipment orcombined transport bill of lading or other form of contract of carriage,approved by the Managers, providing for carriage partly to be performedby the entered ship.
Note: If insurance is required under the above paragraph it must first be specificallyagreed in writing with the Managers and specified in the Certificate of Entry.
20.21.3 Loss of or damage to or responsibility in respect of cargo or otherproperty for which the member may become liable under the terms of acontract with or in respect of an indemnity given by him to the ownersor operators of floating cranes or lighters or other appliances or craftused during the operations of loading or discharging or forwarding cargoin or from an entered ship, or to persons responsible for the custody ofcargo to be loaded in or having been discharged from an entered ship,PROVIDED THAT the terms of the contract or the indemnity have firstbeen approved by the Managers, and the Board shall have power at anytime to prohibit any such contract or indemnity or form of indemnityfor use at any particular port or place or in any particular trade.
20.21.4 Liabilities incurred as a slot or space charterer of the entered ship toother cargoes carried in the entered ship, provided that the terms of thecharter have first been approved in writing by the Managers.
PROVIDED ALWAYS THAT in relation to paragraphs 20 and 21 of thisRule:
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(i) There shall be no recovery from the Club in relation to claims arisingunder paragraphs 20 and 21 of this Rule if the contract of carriage underwhich any cargo is carried is not subject to the provisions of the HagueRules or Hague-Visby Rules or to equally wide exemptions of thecarrier from liability (save where the contract of carriage is on suchterms solely by reason of the incorporation by operation of law of theHamburg Rules, or parts thereof) unless;
(a) The terms of the contract of carriage have been approved in advanceby the Managers in their discretion and the member has paid or agreedto pay such additional call or premium, if any, as may be required by theClub; or
(b) The Board in its discretion, having regard to all the circumstances,considers the terms of the contract of carriage as reasonable.
(ii) A Member shall not be entitled to recover from the Club any liabilities,costs or expenses arising out of the carriage of specie, bullion, precious orrare metals or stone, plate or other objects of a rare or precious nature,bank notes or other forms of currency, bonds or other negotiableinstruments, whether carried as cargo or as passengers’ baggage or ascrew’s effects and whether the value is declared or not unless (i) theManagers have been notified by the Member prior to any such carriageand (ii) the Member has complied with any directions made by theManagers in relation thereto and (iii) the Member shall have given to theManagers such particulars as the Managers may require to enable themto decide whether or not they require the Member specially to insure hisliability for the safe carriage of the cargo under the bill(s) of lading. Inthe event of the Managers requiring special insurance to be arranged,they may agree on behalf of the Club that the Club will bear the wholeor part of the cost thereof, or they may require the Member to do so,subject if necessary to subsequent ratification by the Board;
(iii) If the cargo in respect of which a claim is made on the Club underparagraphs 20 and 21 of this Rule is the property of the Member, theMember shall be entitled to recover such liabilities, costs and expenses aswould have been recoverable if that property belonged to a third party andthat third party had concluded a contract of carriage with the Member;
(iv) There shall be no recovery from the Club in respect of liabilities, costsand expenses which arise out of or which are incurred as a consequenceof a deviation, which includes but is not limited to a geographicaldeparture or any other departure from the contractually agreed voyage oradventure, by reason of which the Member may be deprived of the rightto rely on defences or rights of limitation which would otherwise have
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been available to him to reduce or eliminate his liability, unless (i) in thecase of deviation authorised by the Member, prior notice of the intendeddeviation has been given to the Managers or (ii) in the case of adeviation without the Member’s authority, the earliest possible notice hasbeen given to the Managers after the Member has received informationthereof and (iii) in either case the Managers have confirmed to theMember in writing that his cover under this Rule continuesunprejudiced. Nevertheless, the Board shall have power to authorise thepayment by the Club of such a claim in whole or in part if in itsdiscretion it considers that, having regard to all the circumstances of thecase, the Member should be excused for failure to give such notice;
Note: If the Contract of Carriage contains a Voyage Clause approved by theBoard the necessity of effecting a special insurance may in certain cases be avoided,in the discretion of the Managers.
(v) Unless the Board in its discretion otherwise determines there shall be norecovery under paragraphs 20 and 21 of this Rule in respect of aMember’s liability:
(v.a) arising out of the discharge of cargo at a port or place other thanthat stipulated in the contract of carriage;
(v.b) arising out of the failure to arrive or late arrival of the entered shipat a port of loading, or out of the failure to load or delay in loading anyparticular cargo or cargoes in the entered ship otherwise than under abill of lading already issued;
(v.c) arising out of delivery of cargo carried under a negotiable bill oflading or similar document of title without production of that bill oflading or document by the person to whom delivery is made exceptwhere the cargo has been carried on the entered ship under the terms ofa non-negotiable bill of lading, waybill or other non-negotiabledocument, and has been properly delivered as required by thatdocument, notwithstanding that the Member may be liable under theterms of a negotiable bill of lading or other similar document of titleissued by or on behalf of a party other than the Member providing forcarriage in part upon the entered ship and in part upon another vessel;
(v.d) arising out of the issue of an ante-dated or post-dated bill of lading,waybill or other document containing or evidencing the contract ofcarriage recording the loading or shipment or receipt for shipment on adate prior or subsequent to the date on which the cargo was in factloaded, shipped or received as the case may be;
(v.e) arising out of a bill of lading, waybill or other document containing
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or evidencing the contract of carriage issued with the knowledge of theMember or his Master with an incorrect description of the cargo or itsquantity or its condition;
(v.f ) for loss of, damage to or responsibility in respect of cargo carried ondeck unless either:
(i) the cargo is carried under a contract of carriage which permits thecargo to be carried on deck, states that the cargo is being carried ondeck and exonerates the Member from all liability in respect of suchcargo; or
(ii) such carriage has been approved by the Managers in writing.
(v.g) arising out of the arrest or detention of the ship pursuant to a claimagainst the Member, liability for which is not the subject of cover underthese Rules;
(v.h) for goods carried under an ad valorem bill of lading where the valueper unit, piece or package has been stated to be in excess of U.S. $2,500.
(vi) In the event of the entered ship carrying finished steel products, theMember warrants that:
(vi.a) the Member will arrange for a pre-loading survey as to thecondition of the cargo to be carried out by a surveyor approved by theClub at each port of shipment;
(vi.b) the bills of lading will be claused in accordance with the findingsof the surveyor as to the condition of cargo at the time of loading.
Collision liability to cargo carried in an entered ship
20.22 Loss of or damage to cargo or other property being carried in an enteredship arising out of collision between the entered ship and another shipagainst which the Member of the entered ship is liable by law toindemnify the owner or charterer of such other ship.
If the cargo carried in the entered ship is the property of the Member,such cargo shall be deemed to be fully insured under policies on termsnot less wide than those of the usual Lloyd’s Marine Policy MAR 1.1.82with Institute Cargo Clauses (C) attached, and the Member shall beentitled only to recover from the Club the amount, if any, by which suchindemnity exceeds the sum recoverable under such insurance.
Note: Provided that the contract of carriage contains the usual exemption of thecarrier from liability for the negligent navigation or management of the enteredship, the indemnity specified in paragraph 22 of this Rule can only arise if
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responsibility for the collision is determined under the laws of a country which hasnot adopted the International Convention for the Unification of Certain Rules togovern the Liability of Vessels when collisions occur between them, signed atBrussels, 1910, which is incorporated in the law of England by The MaritimeConventions Act, 1911.
Cargo’s proportion of General Average
20.23 Cargo’s proportion of General Average, including special charges orsalvage, which is not legally recoverable solely by reason of a breach ofthe contract of carriage;
PROVIDED ALWAYS THAT:
(i) if the cargo’s proportion is irrecoverable by reason of a deviation, theterms of Rule 20.21 proviso iv shall likewise apply to any claim underRule 20.23;
(ii) the Board may reject or reduce a claim under paragraph 23 of this Ruleif the contract of carriage under which the cargo concerned was beingcarried did not contain as part of its terms the provisions of Article IVRule (2)(a) of the International Convention for the Unification ofCertain Rules relating to Bills of Lading, signed at Brussels on the 25thAugust, 1924, known as “The Hague Rules”, as amended by theProtocol to that Convention, signed at Brussels on the 23rd February,1968, and known as “The Hague/Visby Rules”, (or an equally wideexemption from liability, whereby neither the carrier nor the ship isliable for loss or damage arising or resulting from the act, neglect, ordefault of the master, mariners, pilot or the servants of the carrier in thenavigation or management of the ship).
Ship’s proportion of General Average
20.24 Ship’s proportion of General Average, special charges or Salvage notrecoverable under the hull policies by reason of the value of the enteredship being assessed for contribution to General Average or Salvage at asound value in excess of the insured value under the hull policies;
PROVIDED ALWAYS THAT:
(i) the Board may, for the purpose of assessing any sum recoverable underparagraph 24 of this Rule, determine the proper value at which theentered ship should have been insured under the hull policies, and theClub shall pay only the amount, if any, of the Ship’s proportion ofGeneral Average which would not have been recoverable under the hullpolicies, even if the ship had been insured thereunder at such value. For
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the purpose of paragraph 24 of this Rule, the “proper value” shall meanthe market value of the ship without commitment;
(ii) the Managers shall have power, but shall not be bound, at the request of aMember to agree for the purpose of paragraph 24 of this Rule, theproper value at which an entered ship should be protected andindemnified for the current year but the agreement of a limit of liabilityfor cover under paragraph 11.2 of this Rule by reference to the value ofthe ship shall not constitute any agreement by the Club that such value isthe proper value of the ship and the Board may determine the propervalue for which the ship should have been insured.
Note:When considering the proper value for which an entered ship should beinsured or deemed to be insured for the purposes of claims under paragraph 24,the Board will require to be satisfied that the hull and/or excess liability policiesof the Member concerned have been kept under regular review as marketconditions may require, so that the total liability coverage contained in thosepolicies is maintained at levels approximating to the market value of the shipwithout commitment.
In the light of the above, Members are recommended to consult their brokersand/or ship valuers to assess the proper amount for which insurances should beeffected.
Fines
20.25 Fines imposed for short or over delivery of cargo, or for failure tocomply with regulations relating to declarations of goods or to thedocumentation of the cargo.
20.26 Fines imposed for smuggling or any infringement of any customs law orcustoms regulation.
20.27 Fines imposed for breach of any matter relating to immigration inrespect of an entered ship.
20.28 Fines imposed in respect of the accidental escape or discharge of oil orany other substance
PROVIDED ALWAYS THAT:
the member is insured for pollution liabilities by the Club, and subject tothe terms of entry, the Rules and the limit of liability applicable to such cover.
20.29 Fines imposed in respect of an entered ship (other than those specified inparagraphs 25 to 28 of this Rule) to the extent that:
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(i) the Member has satisfied the Board that he took such steps as appear toit to be reasonable to avoid the event giving rise to the fine or penaltyand;
(ii) any amounts claimed in respect of such fines shall be recoverable to suchextent only as the Board in its absolute discretion may determinewithout having to give any reason for its decision.
20.29.A Fines imposed for any other offence relating to the carriage of any cargoor container by or on behalf of a Member provided that the cargo orcontainer, as the case may be, is intended to be or has been carried on anentered ship.
Note: If insurance is required under this paragraph it must first be specificallyagreed in writing with the Managers and specified in the Certificate of Entry.
PROVIDED ALWAYS THAT (in relation to paragraphs 25 to 29.A ofthis Rule inclusive):
(i) (i.a) the fine has been imposed on the Member; or
(i.b) the fine has been imposed upon any seaman of the entered ship orother person whom the Member is legally liable to reimburse orreasonably reimburses or reasonably discharges the fine; or
(i.c) the Member is legally liable to indemnify a third party for the finein whole or in part.
(ii) there shall be no recovery from the Club in respect of a fine imposed onany seaman of an entered ship or other person by reason of any wilfulmisconduct committed by such seaman or other person unless;
(ii.a) the Member has been compelled by law to pay such fine; or
(ii.b) the Member has reasonably paid such fine in order to prevent thearrest of the entered ship or any other ship or property belonging tosuch Member or in order to secure its release from arrest; or
(ii.c) the Board in its sole discretion shall otherwise determine.
(iii) unless the Board in its discretion otherwise determines there shall be norecovery in respect of a fine imposed for or arising out of;
(iii.a) the overloading of an entered ship; or
(iii.b) illegal fishing; or
(iii.c) any personal act or default on the part of the Member or on thepart of his managers.
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Enquiry expenses
20.30 Costs and expenses incurred by a Member in defending himself or inprotecting his interests before a formal enquiry into the loss of orcasualty to an entered ship in cases in which, in the opinion of theManagers, a claim upon the Club is likely to arise out of such loss orcasualty, or in other cases to the extent and on such conditions as theBoard in its sole discretion may determine.
Expenses arising from interference by local authorities
20.31 Costs and expenses incurred with the authority of the Board, in thedefence of or obtaining redress for a Member in cases of interference byany lawful authority of any country, which the Board shall decide to beunwarranted or to require investigation.
Expenses incidental to shipowning
20.32 Liabilities, costs and expenses incidental to the business of owning,operating or managing ships which the Board may decide to be withinthe scope of the Club, but only to the extent that the Board may decidethat the Member shall recover from the Club.
Costs of Sue and Labour
20.33 Costs and expenses, including legal costs and charges, which a Membermay incur in respect of (or in avoiding or attempting to avoid) anyliability or expenditure against which he is indemnified by the Club;
PROVIDED ALWAYS THAT:
(i) save as otherwise expressly provided in these Rules, no such costs orexpenses shall be recoverable unless either (i) the same have beenincurred with the prior consent in writing of the Managers or (ii) theBoard shall determine that such costs or expenses were reasonablyincurred;
(ii) unless the Managers or the Board, as the case may be, otherwise decide,there shall be deducted from such costs and expenses the deductible, ifany, which would have been applicable had the liability or expenditureagainst which the Member is indemnified by the Club been incurred.
Expenses incurred by direction of the Board
20.34 Costs, expenses and loss which a Member may incur by special directionof the Board in cases in which the Board consider that the interests ofthe Club or its Members may be affected.
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Additional contractual liabilities
20.35 Liabilities, costs and expenses insofar as such liabilities, costs and expenseswould be covered under the other paragraphs of this Rule 20, but whicharise under the terms of an indemnity or contract made by the member.
PROVIDED ALWAYS THAT:
(i) the terms of such indemnity or contract shall have been approved by theManagers in writing and the member shall have undertaken to pay suchadditional calls and contributions as may be required by the Managers.
(ii) Cover under this paragraph shall be limited to such sum and to such of the liabilities, costs and expenses covered under this Rule 20 and not excluded in the Certificate of Entry as may be agreed from time to time between the Member and the Managers and endorsed thereon.
Note: Insurance under the above paragraph must first be specifically agreed inwriting with the Managers and specified in the Certificate of Entry. It providessupplementary cover under which the member can recover in respect of theliabilities falling within the standard risk rules under Rule 20 where suchliabilities have been assumed under an indemnity or contract not envisaged withinthe standard risk rules and which cannot, therefore, be recovered under themember’s cover for standard risks.
Special cover for salvors
20.36.1 Liabilities, costs and expenses which a Member, being a professionalsalvor, may incur arising out of salvage operations performed or to beperformed by the Member and which arise out of the operation of andin respect of the Member’s interest in the entered ship where the ship isa salvage tug or other ship intended to be used in salvage operations, butonly where such cover has been first agreed in writing with theManagers and on such terms as the Managers may think fit.
PROVIDED ALWAYS THAT such liabilities, costs and expenses relate tothe risks specified in the other paragraphs of this Rule 20.
20.36.2 Liabilities in respect of oil pollution arising out of salvage operationswhere cover is given on the terms that the liabilities need not arise inrespect of any entered ship or out of the operation of any entered shipprovided always that they arise in connection with the Member’s businessas a professional salvor, but always excluding liability, if any, assumedunder contract where such liability would not have arisen but for theexistence of such a contract (but not excluding liability assumed bycontract in respect of sub contractors’ tortious and/or statutory liability),and provided always that in respect of any claim arising under this
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sub-paragraph cover shall be limited to such sum or sums as from time totime shall be determined by the Club.
Note: cover under this paragraph is currently limited to U.S. $100 million anyone salvage operation.
20.36.3 The cover referred to in sub-paragraph 1 of this Rule 20.36, with theexception of cover in respect of oil pollution liabilities, may be given onterms that the liabilities, costs and expenses need not arise in respect ofany entered ship or out of the operation of any entered ship providedalways that they arise in connection with the Member’s business as aprofessional salvor.
PROVIDED ALWAYS THAT:
(i) cover under sub-paragraph 36.3 shall not be effective until and to theextent that the Managers arrange reinsurance in respect of the cover andthe Member shall be entitled to recover from the funds of theAssociation only the net amount actually recovered under suchreinsurance arrangements together with that portion, if any, of the risk orrisks retained by the Association;
(ii) it shall be a condition precedent of any insurance on the terms referredto in sub-paragraphs 36.2 and 36.3 of this Rule that the Member andany company which is a subsidiary or holding company of the Memberor an associated company of the Member shall, at the time when theinsurance is given, and thereafter within 30 days before the beginning ofeach Policy Year, apply to enter for insurance in the Club every shipintended to be used in connection with salvage operations of which it isthen the owner or operator (on terms that every such application may beaccepted in respect of such one or more ships as the Club in itsdiscretion may determine).
Note: If insurance is required under any provision of this paragraph 36 it mustfirst be specifically agreed in writing by the Managers and specified in theCertificate of Entry.
Confiscation of ships by customs authorities
20.37 Loss of an entered ship following confiscation of the ship by any legallyempowered court, tribunal or authority by reason of the infringement ofany customs law or customs regulation but only if and to the extent that,notwithstanding the terms of Rule 19.1, the Board in its discretion hasauthorised the payment, in whole or in part;
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PROVIDED ALWAYS THAT:
(i) the amount recoverable from the Club shall under no circumstancesexceed the market value of the ship without commitment at the date ofthe confiscation;
(ii) the Member shall have satisfied the Board that he took such steps asappear to the Board to be reasonable to prevent the infringement of thecustoms law or regulation giving rise to the confiscation;
(iii) any amount claimed under this Rule 20.37 shall be recoverable to suchextent only as the Board in its discretion may determine without havingto give any reasons for its decision;
(iv) no such claim shall be considered by the Board until such time as theMember has been deprived of his interest in the entered ship.
Liabilities arising under indemnities or contracts
20.38 Liabilities, costs and expenses incurred by a Member for death, illness orinjury or for loss of or damage to cargo or other property arising underthe terms of an indemnity given, or contract made, by the Member inrelation to services provided to or by or in connection with an enteredship;
PROVIDED ALWAYS THAT:
(i) the terms of the indemnity or contract have been approved in writing bythe Managers and cover for the liabilities arising thereunder has beenspecifically agreed in writing by the Managers, and the Member has paidor agreed to pay such additional Call or premium as may be required bythe Club; or
(ii) the Board in its discretion shall, having regard to all the circumstances,consider the terms of the indemnity or contract as reasonable and theliability as coming within the scope of the cover afforded by the Club.
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General Terms and Conditions
Classification, condition and management of ships
21.1 Unless otherwise agreed in writing between the Member and theManagers, the following conditions are terms of the insurance of everyship entered in the Club;
(i) the ship must be and remain throughout the period of entry fully classedwith a Classification Society approved by the Managers;
Note:The Club will normally only approve full or associate members of theInternational Association of Classification Societies (I.A.C.S.).
(ii) any incident or condition in respect of which the Classification Societymight make recommendations as to repairs or other action to be takenby the Member must be promptly reported to the Classification Society;
(iii) the Member must comply with all the Rules, recommendations andrequirements of the Classification Society relating to the entered shipwithin the time or times specified by that Society;
(iv) the Member hereby permits the Managers to inspect any documentand/or obtain any information relating to the maintenance of class of theentered ship, in the possession of any Classification Society with whichthat ship is or at any time has been classed, and hereby authorises, andwill where necessary authorise, such Classification Society or Societies todisclose and make available such documents and/or information to theManagers upon request by the Managers and for whatsoever purposesthe Managers may consider necessary;
(v) any change of Classification Society must forthwith be notified to theManagers, whereupon the Managers shall have the power to amend thePremium Rating or terminate the entry in respect of such ship from thedate of such change, in which case a return of premium (other than ofOverspill Calls) shall be allowed pro rata from the date of termination ofthe entry.
(vi) The Member must comply with all statutory requirements of the State ofthe ship’s flag relating to the construction, adaptation, condition, fitment,equipment and manning of the entered ship and must at all timesmaintain the validity of such statutory certificates as are issued by or onbehalf of the State of the ship’s flag in relation thereto.
(vii) The Member must at all times maintain the validity of such statutory
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certificates as are issued by or on behalf of the State of the ship’s flag inrespect of the International Safety Management Code and theInternational Ship and Port Facility Security Code.
Unless and to the extent that the Board otherwise decides, a Membershall not be entitled to any recovery from the Club in respect of anyclaim arising during a period when the Member is not fulfilling or hasnot fulfilled any conditions referred to in this Rule 21.1.
PROVIDED ALWAYS THAT:
Where the ship is entered solely by a charterer other than a demise orbareboat charterer the entitlement of that charterer to recovery from theClub shall not be dependent on the fulfilment of conditions ii, iii, iv, v, vior vii of this Rule 21.1.
Surveys for entry
21.2 The Managers may, as a condition of acceptance or renewal of entry in theClub, require a Member to submit his ship to be surveyed by a surveyornominated by the Managers at the Member’s expense within thirty daysof such acceptance or renewal of entry, or such other period as may beagreed by the Managers and unless and until any repairs or other actionrecommended by the surveyor have been carried out to the satisfaction ofthe Managers within the time prescribed by the surveyor or the Managers,the entry will not be accepted or renewed save on such special terms asthe Managers may, in their discretion agree. Furthermore the Managersshall be empowered, as a condition of the renewal of the entry of theship in the Club, to amend the terms of entry in the light of such survey.
Surveys for condition
21.3.1 Without prejudice to the provisions of Rule 21.1 and 21.2 the Managersmay at any time require a Member to submit his ship to be surveyed ona date and at a place satisfactory to the Managers by a surveyornominated by the Managers, but at the expense of the Member, withinsuch period as may be specified by the Managers. No claim for recoveryfrom the Club as a result of any incident whatsoever arising after theexpiry of such period shall be allowed save in the sole discretion of theBoard if the ship shall not have been made available for survey asaforesaid in the period specified.
21.3.2 In the light of the survey and any recommendations by the surveyor as torepairs or other action to be taken by the Member, the Managers shallhave the power, in their discretion, to:
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(i) terminate the Member’s entry forthwith whereupon the Member shallcease to be insured and shall be allowed a return of premium (other thanof Overspill Calls) pro rata for the period in respect of which theinsurance has ceased;
(ii) amend or vary the terms of such entry in such manner as they think fit;
(iii) impose conditions on the terms of entry in such form as they think fitincluding, without limitation, the exclusion of all or part of the risksspecified in Rule 20 unless and until the Member has complied with therecommendations of the surveyor as to repairs or other action to betaken by the Member within such time as may be specified by theManagers to the satisfaction of the Managers and their surveyor.
21.3.3 Notwithstanding the above, any recommendations of the surveyorappointed under the provisions of this Rule as to repairs or other actionto be taken by the Member must be carried out forthwith, or withinsuch time as may be specified by the Managers, to the satisfaction of theManagers and their surveyor and no claim for recovery from the Clubshall be allowed in respect of any incident whatsoever arising after anyrecommendations have been made by the surveyor until thoserecommendations have been complied with to the satisfaction of thesurveyor or the Managers save in the sole discretion of the Board.
21.4 In the event that a Member has laid his ship up for more than ninetydays, whether or not a claim for laid-up returns can be made under Rule10.2, the Member shall, unless the Managers have otherwise agreed, inwriting, at least 7 days prior to the ship resuming trading notify theManagers of his intention to trade the ship.The Managers may thenrequire a Member to submit that ship to be surveyed by a surveyornominated by the Managers at the Member’s expense and anyrecommendations of the surveyor appointed under the provisions of thisparagraph as to repairs or other actions to be taken by the Member mustbe carried out forthwith, or within such time as may be specified by theManagers, to the satisfaction of the Managers and their surveyor and noclaim for recovery from the Club shall be allowed either (i) in respect ofany incident whatsoever arising during the period when any suchrecommendations are still outstanding, or (ii) in the event that theMember has not notified the Club of his intention to trade the ship, savein the sole discretion of the Board.
Obligation to sue and labour
22 Upon the occurrence of any casualty, incident or other event which maygive rise to a claim by a Member upon the Club, it shall be the duty of
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the Member and his agents to take and continue to take such measures asmay be reasonable for the purpose of averting or minimising any loss,damage, expense or liability in respect whereof he may be insured by theClub. In the event that a Member commits any breach of this obligation,the Board may in its discretion reject any claim by the Member againstthe Club arising out of the casualty, incident or event, or reduce the sumpayable by the Club in respect thereof by such amount as the Board maydetermine.
Obligations with regard to claims
23.1 A Member must promptly, and in every case within twelve months,notify the Managers in writing of every casualty, incident or other eventwhich is likely to lead to a claim for recovery by the Member upon theClub and of every event or matter which will or may cause the Memberto incur liabilities, costs or expenses for which he may be insured by theClub.
23.2 A Member shall notify the Managers of every claim made by a thirdparty against him as soon as possible but in no case later than twelvemonths after the Member has received notice that the claim is or may bemade against him.
23.3 A Member must promptly notify the Managers in writing of everysurvey or opportunity for survey in connection with a matter referred tounder paragraph 1 above.
23.4 A Member must at all times promptly notify the Managers of anyinformation, documents or reports in his or his agents’ possession, poweror knowledge relevant to such casualty, incident, event or matter, as isreferred to in paragraph 1 above, and shall further, whensoever requestedby the Managers, promptly produce to the Club and/or allow the Clubor its agents to inspect, copy or photograph, all relevant documents ofwhatsoever nature in his or his agents’ possession or power and shallfurther permit the Club or its agents to interview any servant, agent orother person who may have been employed by the Member at thematerial time or at any time thereafter or whom the Club may considerlikely to have any direct or indirect knowledge of the matter or whomay have been under a duty at any time to report to the Member inconnection therewith. If any such person is required to appear and togive evidence at any hearing, trial or other proceedings relating to amatter referred to in paragraph 1 above, the Member will use his bestendeavours to secure the appearance of that person.
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23.5 A Member must keep the Managers closely informed of the progress of,or any development in, any claim, event or matter which will or maycause the Member to incur liabilities, costs or expenses for which he maybe insured by the Club, and of any action proposed in relation to suchclaim, event or matter, notwithstanding that he may have previouslynotified the Managers of such event or matter.
23.6 A Member shall not settle or admit liability for any claim for which hemay be insured by the Club without the prior written consent of theManagers.
23.7 A Member must submit his claim for reimbursement by the Club of anyliabilities, costs or expenses to the Club within twelve months afterdischarging or settling the same, and shall produce in support of eachclaim such vouchers, survey reports, adjustments and other documentsand information as the Managers may require.
23.8 If a Member fails to comply with any obligation under paragraphs 1 to 7of this Rule, the Club shall not be under any obligation whatsoever toreimburse the Member save at the discretion of the Board.
Powers of the Managers relating to the handling and settlementof claims
24.1 The Managers shall have the right, if they so decide, to control or directthe conduct of any claim or legal or other proceedings relating to anyliability, loss or damage in respect whereof the Member is or may beinsured in whole or in part, and in particular to direct the Member touse a particular lawyer, surveyor or other person.
24.2 The Managers shall have the right if they so decide to require theMember to settle, compromise or otherwise dispose of any claim orproceedings in such manner and upon such terms as the Managers seefit.
24.3 If a Member fails to comply with any obligation under paragraphs 1 and2 above the Club shall not be under any obligation to reimburse theMember save at the discretion of the Board.
Bail
25.1 The Club is under no obligation to provide bail or other security onbehalf of a Member, but where the same is provided, it shall be on suchterms as the Managers may consider appropriate and shall not constituteany admission of liability by the Club for the claim in respect of whichthe bail or other security is given.
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25.2 A Member on whose behalf bail or other security has been provided bythe Club, whether or not at the Member’s request, shall on demand payto the Club a sum corresponding to the amount of such bail or othersecurity whether or not such amount may be recoverable in whole or inpart from the Club.
25.3 In no case shall the Club be liable for the detention of an entered ship,or for any other detention or attachment of a Member’s funds or assets,or for any damage whatsoever caused to a Member by reason of theprovision or non-provision of bail or other security.
Appointment of experts
26 Without prejudice to anything contained in these Rules, the Club mayat any time appoint and employ, on behalf of a Member at the expenseof the Club, lawyers, surveyors or other persons, with a view toinvestigating, advising upon or otherwise dealing with any matter whichmay result in loss, damage, expense or liability in respect whereof theMember is entitled to insurance under these Rules and the Club maythereafter at any time discontinue such employment in connection withthe matter.The Managers shall at all times be entitled to call upon suchpersons to give advice or to produce to the Club any documents orinformation in their possession or power relating to such matters.
Meetings of the Board
27 The Board shall meet as often as it may consider necessary for thesettlement of claims which shall be paid by the Club as the Board maydetermine in accordance with these Rules; but the Board shall have thepower from time to time to authorise the Managers, without priorreference to the Board, to effect payment of claims of such types and upto such sums as the Board may determine. No member of the Boardshall act as such in the settlement of any claim in which he is interested.
Forbearance and Reimbursement
28.1 No act, omission, course of dealing or forbearance and reimbursement bythe Club of any kind whatsoever, and whensoever occurring, whetherrelating to the same or a different matter, shall be treated as any evidenceof a waiver of the Club’s rights under these Rules, and the Club shall atall times and without notice be entitled to insist upon the strictapplication thereof.
28.2 Without prejudice to the Club’s rights under Rule 25.2 a member shallupon demand reimburse the Club such sum or sums as the Club has
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paid on behalf of the member or under bail or other security providedby the Club to the extent that such payment is, in the opinion of theManagers, in respect of liabilities, costs and expenses not recoverable fromthe Club.
Club may subscribe to societies
29 The Board may cause the Club, in respect of such of the Members of theClub as are eligible, or members individually to become a member of, oraffiliated to such societies or organisations as the Board in its solediscretion shall consider appropriate, and for this purpose may authorisethe payment by the Club to those bodies of such subscriptions or grantsas the Board may think fit.
Regulations and recommendations by the Board
30.1 The Board shall have power from time to time to make regulationsprescribing the conditions or forms of contracts of carriage or thepractice to be followed either generally or for use in connection withany particular cargo or cargoes or any particular trade or at any particularport or place. Upon the passing of any such regulation, of which noticeshall be sent by the Managers to all the Members, it shall be deemed tobe incorporated in these Rules, and every Member shall conform theretoin so far as the same may apply to the voyages performed by the shipsentered by him or on his behalf in the Club, or to the trades in whichthey may be engaged: and, if any Member shall commit a breach of anyregulation, the Board may reject or reduce any claim made by theMember to the extent to which it would not have arisen if he hadcomplied with the regulation, and may further impose such terms uponhim as they may think fit as a condition of the continuance of the entryof the Member’s ship or ships in the Club.
30.2 The Board may also from time to time recommend the use of anyparticular form of contract of carriage in any particular trade. Memberswhose ships are engaged in such trades will endeavour to use theappropriate form of contract of carriage when the circumstances of thefixture or engagement of such ships permit.
Notices
31.1 All notices and documents required by these Rules to be given to theClub or to the Managers shall be in writing (whether by letter, fax,electronic mail or telex) and addressed to the Managers.
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31.2 A notice or other document that is required to be served by the Club ona Member or any other person may be served on him personally, or inthe case of a company, by handing it in to a director or officer of suchcompany, or by post, courier, telex, fax or electronic mail, addressed inthe case of a Member to his address or to his telex or fax number orelectronic mail address as last recorded by the Managers, in the case of anon-Member to the address or telex or fax number or electronic mailaddress furnished by him for the service of notice as his address and inboth cases at any place of business of a broker or other intermediarythrough whom a ship to which the notice relates is or was entered in theClub for insurance. Subject always as aforesaid, in the case of JointEntrants all notices shall be given to the person designated as PrincipalAssured under Rule 8.1.2 and in the case of a ship entered under aGroup Rating Agreement all notices shall be given to the persondesignated as Group Principal under Rule 8.3.2.
31.3.1 Any notice or other document, if served personally, shall be deemedserved on the day it was served.
31.3.2 Any notice or other document, if served by post or courier, shall bedeemed to have been served on the day following the day on which theletter containing the same was put in the post or handed to the courierand in proving such service it shall be sufficient to prove that the lettercontaining the notice or other document was properly addressed and putinto the post as a prepaid letter or handed to the courier.
31.3.3 Any notice or other document, if served by telex, fax or electronic mail,shall be deemed to have been served on the day on which it wastransmitted and in proving such service it shall be sufficient to prove thatsuch telex, fax or electronic mail was duly transmitted.
31.3.4 Every legal or personal representative, administrative receiver, receiver,curator bonis or other legal curator, trustee in bankruptcy or liquidatorof a Member shall be bound by a notice given in accordance with thisRule 31 notwithstanding that the Club may have notice of the death,lunacy, bankruptcy, liquidation, disability or administration of suchMember.
Disputes and differences
32.1 The Member hereby submits to the jurisdiction of the High Court ofJustice of England in respect of any action brought by the Club torecover any sums which the Club may consider to be due to it from aMember.Without prejudice to the foregoing the Club shall be entitled
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to commence and maintain any action to recover any sums which theClub may consider to be due to it from a Member in any jurisdiction.
32.2 If any other difference or dispute between a Member or any otherperson claiming under these Rules and the Club shall arise out of or inconnection with these Rules or any regulations made thereunder, or asto the rights or obligations of the Club or the Member or such otherperson thereunder or in connection therewith, other than an issuereferred to in Rule 16.10.2, such difference or dispute shall first bereferred to the Board notwithstanding that the Board may have alreadyconsidered the matter which has given rise to the difference or dispute,and such reference shall be on written submissions only.
32.3 If, after the difference or dispute has been referred to the Board inaccordance with Rule 32.2 above, the Member or any other personclaiming under these Rules does not accept the decision of the Boardthe difference or dispute shall be referred to the arbitration in London oftwo Arbitrators, one to be appointed by each of the parties, and anUmpire to be appointed by the two Arbitrators.The submission toarbitration and all the proceedings therein shall be subject to theprovisions of the English Arbitration Act 1996, and Schedules thereto orany statutory modification or re-enactment thereof.
32.4 No Member or any other person claiming under these Rules shall beentitled to maintain any action, suit or other legal proceedings against theClub upon any such difference or dispute unless and until the same hasbeen submitted to the Board and the Board shall have given its decisionthereon, or shall have made default for six months in so doing; and, ifsuch decision be not accepted by the Member or such other person orsuch default be made, unless or until the difference or dispute shall havebeen referred to arbitration in the manner provided in this Rule, and theaward shall have been published; and then only for such sum as the awardmay direct to be paid by the Club.
And the sole obligation of the Club to the Member or such other personunder these Rules or otherwise howsoever in respect of any disputedclaim made by the Member or such other person shall be to pay suchsum as may be directed by such an award.
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The Standard Steamship Owners’ Protection andIndemnity Association (Europe) Limited
Rules of the Protection and Indemnity Class
The Rules of The Standard Steamship Owners’ Protection andIndemnity Association (Europe) Limited shall be the same as the Rulesof The Standard Steamship Owners’ Protection and IndemnityAssociation (Bermuda) Limited amended and varied as follows:
Save as hereafter provided or the context otherwise so requires “theClub” means The Standard Steamship Owners’ Protection and IndemnityAssociation (Europe) Limited and references to “the Act” and/or “theBye-Laws” shall be references to the Memorandum and Articles ofAssociation of the Club.
The Standard Steamship Owners’ Protection andIndemnity Association (Asia) Limited
Rules of the Protection and Indemnity Class
The Rules of The Standard Steamship Owners’ Protection andIndemnity Association (Asia) Limited shall be the same as the Rules ofThe Standard Steamship Owners’ Protection and Indemnity Association(Bermuda) Limited amended and varied and supplemented as follows:
1 Save as hereafter provided or the context otherwise so requires “theClub” means The Standard Steamship Owners’ Protection and IndemnityAssociation (Asia) Limited and references to “the Act” and/or “the Bye-Laws” shall be deemed to be a reference to the Memorandum andArticles of Association of the Club.
2 “Reinsuring Club” means any Protection and Indemnity Association ofwhich the Club is a Member.
3 “The opening words of rule 15.4.1 shall be substituted by the following:
“Where the Club is a Member of a Reinsuring Club and the Reinsuring Clubor another party to the Pooling Agreement incurs an Overspill Claim for all or aproportion of which the Reinsuring Club is liable under the Terms of the Pooling
Agreement or otherwise then, if the Club is or may become obliged to pay theReinsuring Club an Overspill Call in respect of such liability the funds requiredto pay the Reinsuring Club in respect of the Overspill Claim shall be provided.”
4 Where the expression Overspill Claim is used this shall be deemed toinclude an Overspill Claim or any part thereof for which the ReinsuringClub is liable and
(a) in the definition of Overspill Claim the words “any other party” will besubstituted with “any party”; and
(b) in the definitions of Group Reinsurance Limit and Pooling Agreementreferences to the Club shall be understood to be references to theReinsuring Club.
5 Rules 16.9.1 – 16.10.13 shall be substituted by the following Rule 16.9:
“Without prejudice to any other applicable limit, there shall be no right ofrecovery of any Overspill Claim from the Club in excess of the maximumamount that the Club is able to recover from the Reinsuring Club in respect ofthat Overspill Claim.”
6 Rule 15.13 shall be substituted by Rule 15.14 amended as follows:
“The Managers shall have the right in their discretion to effect on behalf of theClub the reinsurance or ceding of any risks insured by the Club with suchReinsurers and on such terms as the Managers shall consider appropriate.”
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4 Index to the P&I Rules
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85
Rule No. Page No.
Arbitration Act, English 1996 32.3 81
Acts,
Act, The, definition of 1 1
Marine Insurance 1906 2.2 5
Maritime Convention 1911 20.22 65
United Kingdom Nuclear Installations 1965 18.1 40
Additional contractual liabilities 20.35 70
Affiliated Companies 8.4 15
Applicant
definition of 1 1
obligations of 6 10
Arrest of ship, cargo claims 20.21.4.v.g 65
Arrival of ship 20.21.4.v.b 64
Assignment 5.1.4.1 8
Associated Companies 8.4 15
Bail 25 77
Bank notes 20.21.4.ii 63
Bills of lading
ante-dated 20.21.4.v.d 65
combined transport 20.21.2 62
delivery without production of 20.21.4.v.c 64
Hague Rules/Hague-Visby Rules relating to 20.21.4.i 63
incorrect description 20.21.4.v.e 65
post-dated 20.21.4.v.d 64
through 20.21.2 62
transhipment 20.21.2 62
Board, definition of 1 1
Approval relating to:
discretions 3.1 6
pollution 20.14.7 52
Discretion relating to:
claims settlements 27 78
classification 21.1 73
confiscation of vessels 20.37 71
contracts of carriage 20.21.4.i 63
cover after cessation 12.2.i 20
4 Index to the P&I Rules
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Rule No. Page No.enquiry expenses 20.30 69
exclusions from cargo cover 20.21.v 64
expenses by direction of the Board 20.34 69
fines 20.25-20.29.A 67
Proviso ii c 68
incidental expenses (Omnibus Rule) 20.32 69
interference by authorities 20.31 69
indemnities or contracts 20.38 72
laid-up returns 10.3 18
Members’ obligations 23.8 77
quarantine 20.19.A Proviso ii 61
removal of wreck 20.18.4.iii.b 59
iv.b, iv.c, v.b 59, 60
repatriation 20.5.ii 47
salvors’ liability 20.36 Proviso ii 71
substitutes 20.6.i.b 48
sue and labour 20.33.i 69
surveys for condition 21.3 74
towage of an entered ship 20.16.1.iii 56
towage by an entered ship 20.16.2.iv 57
Meetings of 27 78
Powers 3.1 6
Powers of Prohibition relating to indemnities for:
additional contractual liabilities 20.35.ii 70
contracts of carriage 20.21.4.ii 63
crane hire 20.17 58
personal injury 20.1.1 44
property damage 20.13.2 51
stevedores 20.3 46
Bonds 20.21.4.ii 63
Brussels Convention 1910 20.22 65
Brussels Convention 1924 20.23.ii 66
Brussels Convention 1968 20.23.ii 66
Bullion 20.21.4.ii 63
Bulk cargo, definition of 1 1
Bunkers
exclusion 19.1 40
liability for loss of 5.2.1.iii 9
Bye-Laws, definition of 1 1
Calls 14,15 23-31
Cancellation of Insurance 11 18
effect of cancellation 12 20
Cargo
collision liability 20.22 65
damage 20.21 62
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Rule No. Page No.damage to property risks 20.15.A 55
deck 20.21.v.f 65
deductibles 16.8 34
definition of 1 1
disposal of 20.21 62
documentation (fines for) 20.26 67
fines in respect of 20.29.A 68
loss 20.20 61
loss of life, injury risks 20.4.A 47
owner’s property 20.21.4.iv 63
proportion of General Average 20.23 66
quarantine expenses 20.19.A 61
refrigerated 20.21.4.iii 63
responsibility for 20.21 62
responsibility under contractual indemnity 20.21.1 62
shortage 20.20 61
slot charterer’s responsibility 20.21.4 62
Carrier, breach of obligation or duty 20.20, 20.21 61, 62
Certificate of Entry 7 11
Cessation of insurance 11 18
effect of cessation 12 20
Charterer’s cover, limitation on recovery 16.3 32
Charterer’s hull cover 5.2.1.ii 9
liability for loss of bunkers 5.2.1.iii 9
liability for freight 5.2.1.iv 9
Classification of ships 21.1 73
Claims, obligations with regard to 23 76
Closing of Policy Years 15.10 29
Club, definition of 1 1
Co-Assured 8.2 13
Collision between ships of same ownership 20.12.v 50
1/4 collision liability 20.11.1 49
3/4 collision liability 20.11.2 49
cross- liabilities 20.12.v 50
excess liability 20.12.vi 50
liability to cargo 20.22 65
liability and excess cover 20.12 49
Compensation, loss of life, etc., relating to:
collision liability 20.4 46
containers 20.4.A 47
crew 20.2 46
passengers 20.1.2.1 45
stevedores 20.3 46
third parties 20.1.1 44
Condition, surveys 21.3 74
Confiscation of vessels 20.37 71
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Rule No. Page No.Container cargo risks:
damage to property 20.15.A 55
definition of 1 2
fines in respect of 20.29.A 68
loss of life, injury risks 20.4.A 47
quarantine expenses 20.19.A 61
Contractual liabilities, additional 20.35 70
Contribution, definition of 1 2
Contribution
basis 14 23
Estimated Total Premium 15.2 24
mutual 15.1 23
payment 15.8, 15.9 28, 29
period 10.1 16
Convention Limit,definition of 1 2
Costs 20.30, 20.33, 20.34 69
Cover: exclusions from 17, 18, 19 38-43
Cover, in relation to:
associated companies 8.4 15
Co-assureds 8.2 13
Group Principals 8.3 15
Group Rating Agreements 8.3 15
special entries 5.2 9
Joint Entrants 8.1 12
affiliated companies 8.4 15
Craft, hire of 20.17 58
Cranes, hire of 20.17 58
Crew
effects 20.7 48
loss of life, etc 20.2 46
shipwreck unemployment indemnity 20.8 48
substitutes 20.6 48
Cross-liabilities 20.12.v 50
Customs authorities
confiscation of vessels 20.37 71
fines 20.27 67
Currency 20.21.4.ii 63
Damage without collision 20.15 55
Dead freight risks 5.2.1.viii 9
Debts, irrecoverable, exclusion 19.8 41Deck cargo 20.21.v.f 65Deductibles 16.8 34Defence risks 5.2.1.viii 9Definitions 1 1-5Delivery of Cargo 20.21 62Demise Charterer, definitions of 1 2
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Rule No. Page No.Demurrage risks 5.2.1.viii 9
exclusion 19.9 41Desertion 20.6 48Detention of ship
exclusion 19.9 41security 25 77
Deviation 20.21.iv 63expenses 20.9.1 48
Diseases 20.19 60Disinfection 20.19, 20.19.A 60, 61Disputes and differences 32 80Diving operations, exclusion 19.13 43Docks, damage to 20.13 51Double Insurance 17.3 39Drilling operations, exclusion 19.12 42Effects, definition of 1 2
loss of 20.7 48Enquiries, formal 20.30 69Entered ship, definition of 1 2Entered tonnage, definition of 1 2Entry
application for 6 10Certificate of 7 11terms of 5.1.1, 5.1.2, 5.1.3 8variations of 7.2, 7.3 11by non-Members 4.3, 4.4 7Co-assureds 8.2 13Group 8.3 15Group Rating Agreements 8.3 15Joint 8.1 12special 5.2 9terms of 5.1.1, 5.1.2.1, 5.1.3 8
Estimated Total Premium 15.1 23Excess collision liability 20.12 49Exclusion from Cover 17, 18, 19 38-43Expenses incidental to shipowning 20.32 69Experts, appointment of 26 78Fines 20.25-20.29.A 67, 68
definition of 1 3Fixed and moveable objects 20.13 51
damage to 20.13 51excess collision liability 20.12 49
Fixed Premium 5.1.3 8
Forbearance 28 78
Freight - costs and expenses 5.2.1.viii 9
exclusion 19.4 41
Funeral expenses 20.1.1 44
20.1.2.1 45
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Rule No. Page No.General Average, cargo’s proportion 20.23 66
ship’s proportion 20.24 66
General Cargo, definition of 1 1
General Excess Loss Reinsurance Contract
definition of 1 3
Governing law 2.2, 2.3 5
Group entries 8.3 15
Group Principal 8.3.2 15
Group Rating Agreement, definition of 1 3
Group Reinsurance Limit, definition of 1 3
Hague Rules 20.21.4.i 63
20.23.ii 66
Hague/Visby Rules 20.21.4.i 63
20.23.ii 66
Hamburg Rules 20.21.4.i 63
Hazardous trades 18.2 40
Headings to rules 2.4 6
Hire, exclusion 19.4 41
Hire contracts 20.17 58
Hospital expenses 20.1.1, 20.1.2.1 44, 45
20.2 46
Hotel, restaurant guests, exclusion 19.14 43
Hull cover, Owner’s 5.2.1.i 9
Charterer’s 5.2.1.ii 9
Hull Policies, collision excess 20.12 49
cover under 17.1 38
definition of 1 3
franchise 20.11 49
Institute Time Clauses (Hulls) 20.11 49
Illness, crew, passengers etc 20.1, 20.2, 44, 46
20.3, 20.4.A, 20.6 46, 48
Immigration fines 20.28 67
Incidental expenses (Omnibus Rule) 20.32 69
Indemnities
for hire of cranes, lighters, etc 20.17 58
liabilities arising under 20.38 72
loss of life/personal injury 20.1.1 44
to stevedores 20.3 46
Injury 20.1, 20.2, 20.3 44, 45, 46
20.4, 20.4.A, 20.6 46, 47, 48
Insurance 2.1 5
cessation 11 18
deviation (cost of) 20.21.4.v 64
double 17.3 39
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Rule No. Page No.effect of cessation 12 20
period of 9 16
withdrawal by Owner 9.2.1 16
withdrawal by Managers 9.2.2 16
Institute Cargo Clauses 20.21.4.iv, 20.22 63, 65
Institute Time Clauses (Hull) 20.11 49
International Safety Management Code 21.1.vii 73
Interest
payment by the Member 15.8.1 28
payment by the Club 16.6 33
Investments 15.12 30
Joint Entrants 8.1 12
Jetties 20.13 51
Jewellery 20.21.4.ii 63
Laid-up returns 10.2 17
Landing expenses 20.9 48
Lawyers, appointment of 26 78
Liability, admission of 23.6 77
Life salvage 20.10 49
Lighters, hire of 20.17 58
Limitation
Of cover 16.2 32
Of liability,
deemed to apply 8.2.2 13
recovery 16.2.1 32
Lloyd’s Marine Policy 20.11 49
Local Authorities, interference by 20.31 69
Loss of Hire, Owner’s 5.2.1.v 9
Management of ships 21.1 73
Managers, definition of 1 3
Approval relating to contracts or indemnities for:
carriage of cargo 20.15.A 55
20.21.4.i.a 63
cranes, lighters 20.17 58
crew 20.1.1, 20.2, 20.4.A 44, 46, 47
docks and drydocks 20.13.2 51
passengers tickets 20.1.2 45
personal injury 20.1.1, 20.2 44, 46
personal injury (containers) 20.4.A 47
removal of wreck 20.18.4 58
services 20.38 72
slot charter contracts 20.21.4 62
sue and labour expenses 20.33 69
towage by an entered ship 20.16.2.v 57
towage of an entered ship 20.16.1.ii 56
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Rule No. Page No.Discretions 3.2 6Discretion relating to:
assignments 5.1.4.1 8date of cessation 12.2.i 20
Enquiry expenses 20.30 69issue of new Certificates 7.3 11naming of Members 4.3 7refusal of entry 4.1 7reinsurance 15.13 31releases 13.1 21
Powers 3.2 6Powers, relating to:acceptance of special risks 5.2 9agreement to withdraw ships 9.3 16claims handing 24 77refusal to renew cover 9.2.2 16reinsurance 4.5 7towage by an entered ship 20.16.2 56towage of an entered ship 20.16.1 56valuation of ship 20.12.ii 50
20.24.ii 67Remuneration 15.7 28
Memberdefinition of 1 3obligations 4.2 7
Negotiable instruments 20.21.4.ii 63Notes to Rules 2.4 6Notices, of casualties, incidents etc 23.1-23.4 76
of services 31 80Notification of claims, by Member 23 76Objects, fixed and floating 20.13 51Oil pollution
fines 20.28 67liability under salvage agreement 20.14.5 52limit of cover 20.14 51risks covered 20.14.1-20.14.7 51, 52salvor’s liabilities for 20.36.2 70
Overspill Calls 15.4, 15.5, 15.6 25-27Overspill Call - Guarantee for 15.6.1 27Overspill Claim, definition of 1 3Overspill Claim Date, definition of 1 4Overspill Claim - Panel 16.10.1-16.10.3 35, 37Overspill Claim, recovery of 16.9,16.10 34, 37Overspill Notice 15.5.1 26Owner’s
hull cover 5.2.1.i 9loss of hire 5.2.1.v 9
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Rule No. Page No.Passenger, definition of 1 4
Passengers 20.1.2 45
quarantine expenses 20.19.i 60
Payment of calls 15.8, 15.9 28, 29
Payment of claims, Member to pay first 16.7 34
Period of cover 9 16
Piers 20.13 51
Policy year
closing of 15.10 29
definition of 1 4
Pollution
exclusion 19.10 41
risks 20.14 51
Pooling Agreement, definition of 1 4
Port expenses 20.9 48
Precious metals 20.21.4.ii 63
Premium rating, definition 5, 14 4
Premium, return of 15.10.2 29
Principal Assured 8.1.2 12
Production operations, exclusion 19.12.1 42
Property damage 20.13 51
Quarantine expenses 20.19, 20.19.A 60, 61
Radioactive contamination exclusion 18.1 40
Recovery
by charterers 16.3 32
limitation of liability 16.2 32
limits on cover 16.2 32
Refrigerated cargo 20.21.4.iii 63
Reinsurance
Pooling Agreement 15.13 31
other risks 15.14 31
recovery under 16.1 32
Refugees 20.9 48
Regulations 30 79
Releases 13 21
Removal of wreck 20.18 58
Repatriation 20.5 47
Reserves 15.11 30
Right and extent of recovery 16 32
Risks
covered 20 44
excluded 17, 18, 19 38-43
Rules of the Club
definition of 1 1
disputes and differences 32 80
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Rule No. Page No.subject to Marine Insurance Act 2.2 5
Running costs, exclusion 19.9 41
Sale, of entered ship 11 18
Salvage
cargo’s proportion of 20.23 66
exclusion of 19.5 41
life 20.10 49
ship’s proportion of 20.24 66
Salvor’s liability 20.36.1 70
Seaman
definition of 1 4
cover for 20.2, 20.5-20.8 46-48
Settlement of claims 24 77
Ship definition of 1 4
Shipowner’s liability insurance 5.2.1.vii 9
Shipwreck unemployment indemnity 20.8 48
Shortages
cargo 20.20 61
fines for 20.26 67
Smuggling, fines for 20.26 67
Special charges (G/A) 20.23, 20.24 66
Special entries 5.2 9
Specialist operations, exclusion 19.11 41
Statutory obligations, definition of 1 5
Stevedores 20.3 46
Storage of oil, exclusion 19.12.2 42
Stores, exclusion 19.1 41
Stowaways 20.9.1 48
Submarines, exclusion 19.13 42
Subrogation - waiver of 8.2.2.vii 14
Subscription to societies 29 79
Substitutes, crew 20.6 48
Sue and labour
cover for 20.33 69
obligations to 22 75
Supernumerary, definition of 1 5
Supplementary Premium 15.3.1 24
Surveys
for entry 21.2 74
for condition 21.3, 21.4 74, 75
Termination of entry 9.2 16
of insurance 11 18
Terms of entry 5.1.1, 5.1.2, 5.1.3 8
Tonnage, definition of 1 5
Towage
by an entered ship 20.16.2 56
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Rule No. Page No.definition of 1 5
of an entered ship 20.16.1 56
Towage contract 20.16.1, 20.16.2 56Transhipment 20.21.2 62Unemployment, S.U.I. 20.8 48Unlawful and hazardous trades 18.2 40Variation of entry 7.2, 7.3 11Vessel - confiscation of 20.37 71Waiver of subrogation 8.2.2.vii 14“Wash” damage 20.15 55War Risks P & I 5.2.1.vi 9War Risks, exclusion of 17.2 38Waste disposal, exclusion 19.13 42Withdrawal 9 16Wreck liabilities 20.18 58York Antwerp Rules 1994 20.14.7 Proviso (vi) 53 4
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5 Special Covers andClauses
5
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5
5 Special Covers and Clauses
The special covers and clauses which follow do not form part of the Rules,
and do not form part of any Member’s cover unless and to the extent that
they are expressly incorporated into the Member’s Certificate of Entry
Charterers’ Liability for Damage to Hull Clause 2005
Cover
1.1 In accordance with and subject to the provisions of Rule 5.2, and subjectalso:
1.1.1 to the Club’s Rules to the extent that they are not inconsistent with theprovisions of this endorsement; and
1.1.2 to the limits of liability and the deductibles stipulated below,
1.2 cover is extended to indemnify the Member in respect of his liability ascharterer (other than as demise charterer) for:
1.2.1 loss or damage to the chartered ship or any part thereof;
1.2.2 damages for detention or loss of use or hire or demurrage paid or due tothe owner for a period during which the use of the ship is lost as a resultof physical damage to the chartered ship;
1.2.3 salvage, salvage charges and/or general average contributions in respect ofcharterers’ freight at risk and/or charterers’ bunkers and/or the charteredship, following loss of or damage to the chartered ship or any part thereof,
1.3 cover is extended to indemnify the Member as charterer (other than asdemise charterer) in respect of loss of or damage to his bunkers on thechartered ship as a consequence of fire, grounding, stranding, collision orthe total loss of the chartered ship.
Limits
2.1 The limits of the Club’s liability under this extension of cover, whichshall apply any one accident or occurrence or series thereof in theaggregate shall be:
2.1.1 in respect of claims under Clause 1.3, U.S. $1 million;
2.1.2 in respect of claims under Clause 1.2.1, the value of the entered ship as
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declared by the Member to the Managers, but not in any eventexceeding U.S. $50 million;
2.1.3 in respect of all claims in the aggregate under Clauses 1.2.2 and 1.2.3,the value of the entered ship as declared by the Member to theManagers, but not in any event exceeding U.S. $50 million.
Deductibles
3 Claims under this extension of cover, including claims for fees andexpenses, shall be subject to a deductible in accordance with thefollowing table.The appropriate deductible will apply any one accidentor occurrence of series thereof in the aggregate but only one deductibleper port will apply to claims arising out of loading and/or dischargingoperations.
Claims arising out of the carriage of scrap or fishmeal: U.S. $25,000
Claims arising out of grab discharges: U.S. $25,000
Claims arising from the use of unsuitable bunkers: U.S. $25,000
Claims for loss of or damage to bunkers under Clause 1.3: No deductible
All other claims
– ships not exceeding 50,000 gt U.S. $10,000
– ships of more than 50,000 gt U.S. $15,000
P & I War Risks Clause 2005
1.1 In accordance with and subject to the provisions of Rule 5.2 and subjectalso to the limits of liability stipulated in Clause 7 below, it is agreed thatcover is extended to include such liabilities, costs and expenses as wouldbe covered by the Club and the Member’s terms of entry but for theexclusion of war risks as set out in Rule 17.2.
1.2 However, there shall be no cover under this clause for the risks specifiedin paragraphs 4A, 15A, 19A, 29A, 35, 36.2 and 36.3 of Rule 20 or anyadditions to or extensions of cover beyond the standard cover providedunder the Rules without amendment.
Excluded Areas
2.1 At any time or times before, or at the commencement of, or during thePolicy Year, the Club may in its discretion determine that any ports,places, countries, zones or areas (whether on land or sea) be excludedfrom the cover hereunder.
2.2 Unless otherwise agreed by the Managers the cover shall cease in respectof the ports, places, countries, zones or areas so determined in accordancewith Clause 2.1 upon the expiry of seven days from midnight on the daynotice of such determination is given by the Managers to the Members.
2.3 Unless and to the extent that the Directors in their discretion otherwisedecide there shall be no recovery from the Club under the cover in respectof any claim howsoever arising out of any event, accident or occurrencewithin the said ports, places, countries, zones or areas after such date.
Cancellation
3 Cover hereunder in respect of the risks of war, etc may be cancelled byeither the Club or the Member giving 7 days notice (such cancellationbecoming effective upon the expiry of 7 days from midnight on the dayon which notice of cancellation is issued by or to the Club).The Clubagrees however to reinstate cover subject to agreement between the Cluband the Member prior to the expiry of such notice of cancellation as tonew rate of premium and/or conditions and/or warranties and/or limits.
Automatic Termination of Cover
4 Whether or not such notice of cancellation has been given, coverhereunder in respect of the risks of war, etc, shall TERMINATEAUTOMATICALLY:
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4.1 upon the outbreak of war (whether there be a declaration of war or not)between any of the following:
the United Kingdom, the United States of America, France, the RussianFederation, the People’s Republic of China;
4.2 in respect of any vessel, in connection with which cover is grantedhereunder, in the event of such vessel being requisitioned either for titleor use.
Five Powers War and Nuclear Exclusions
5 This insurance excludes
5.1 loss, damage, liability or expense arising from:
5.1.1 the outbreak of war (whether there be a declaration of war or not)between any of the following:
the United Kingdom, the United States of America, France, the RussianFederation, the People’s Republic of China;
5.1.2 requisition either for title or use;
5.2 loss, damage, liability or expense directly or indirectly caused by orarising from:
5.2.1 ionising radiations from, or the radioactive, toxic, explosive or otherhazardous or contaminating properties of:
5.2.1.1 any nuclear fuel or any nuclear waste or the combustion of nuclear fuel; or
5.2.1.2 any nuclear installation, reactor or other nuclear assembly or nuclearcomponent thereof; or
5.2.2 any weapon of war employing atomic or nuclear fission and/or fusion orother like reaction or radioactive force or matter,
other than liabilities, costs and expenses arising out of carriage of“excepted matter” (as defined in the Nuclear Installations Act 1965 ofthe United Kingdom or any regulations made thereunder) as cargo in aninsured ship.
Chemical, Biological, Bio-Chemical, Electromagnetic Weapons andComputer Virus Exclusion Clause
6 This clause shall be paramount and shall override anything contained inthis insurance inconsistent therewith.
6.1 In no case shall this insurance cover loss damage liability or expensedirectly or indirectly caused by or contributed to by or arising from:
6.1.1 any chemical, biological, bio-chemical or electromagnetic weapon;
6.1.2 the use or operation, as a means for inflicting harm, of any computer virus.
Limit of Liability
7.1 Subject to Clause 7.2, the limit of the Club’s liability under this extensionof cover shall be U.S. $500 million any one accident or occurrence orseries thereof in the aggregate or any lesser amount specified in theCertificate of Entry.
7.2 In the event that there is more than one entry by any person for P&I WarRisks cover in respect of the same ship with the Club and/or any otherinsurer which participates in the Pooling Agreement or General ExcessLoss Reinsurance Contract, the aggregate recovery in respect of allliabilities, costs and expenses arising under such entries shall not exceedthe amount stipulated in Clause 7.1, and the liability of the Club undereach such entry shall be limited to such proportion of that limit as theclaims arising under that entry bear to the aggregate of all such claimsrecoverable from the Club and any such other insurer.
Deductibles
8.1 The cover hereunder shall be in excess of the greater of:
8.1.1 U.S. $50,000 any one accident or occurrence or series thereof in theaggregate; or
8.1.2 the U.S.$ equivalent of the proper value of the entered ship (proper valuemeaning the market value of the ship free of any commitment) any oneaccident or occurrence or series thereof in the aggregate; or
8.1.3 the amount recoverable under any other policy of insurance, whether ofwar risks or otherwise.
8.2 For the purpose of this cover, where the proper value exceeds U.S. $100million, the proper value will be deemed to be U.S. $100 million.
Law and Practice
9 This clause is subject to English law and practice.
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War Risks Clause for Extended Covers 2005
Cover
1.1 In accordance with and subject to the provisions of Rule 5.2, and subjectalso to:
1.1.1 the limit of liability stipulated in Clause 8; and
1.1.2 the deductible stipulated in Clause 9; and
1.1.3 the terms, conditions and exclusions set out herein,
1.2 cover is extended to include such liabilities, costs and expenses as wouldbe covered by the Club but for the exclusion of war risks as set out inRule 17.2, but only in respect of any additions to or extensions of coverset out in the Certificate of Entry beyond the standard cover provided bythe Rules without amendment.
Excluded Areas
2.1 The provisions of Rule 17.2 shall apply and liabilities, costs and expensesshall be excluded, where:
2.1.1 the ship sails for, deviates towards or is within the territorial waters ofany of the countries or places listed in this Clause 2.1.1 or, upon theexpiry of seven days from midnight on the day notice is given by theManagers that any other country or place as the Managers may fromtime to time so decide is to be included in the list, such other country orplace (including any port area that at the date of this endorsementconstitutes part of such a country or place however hereafter it may bedescribed).
(a) Persian or Arabian Gulf and adjacent waters including the Gulf of OmanNorth of 24••N
(b) Angola (including Cabinda)
(c) Israel
(d) Lebanon
(e) Libya (including Gulf of Sidra/Sirte)
(f) Eritrea
(g) Somalia
(h) Congo, Democratic Republic of (formerly Zaire)
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(i) Liberia
(j) Sri Lanka
(k) Sierra Leone
(l) Gulf of Aqaba and the Red Sea
(m) Republic of Yemen
(n) Pakistan
(o) Oman
(p) Syria
(q) Algeria
(r) Egypt
(s) Indonesia excluding transiting vessels
(t) Ivory Coast
(u) Nigeria and the Bakassi Peninsular
Cancellation
3 Cover hereunder in respect of the risks of war, etc may be cancelled byeither the Club or the Member giving 7 days notice (such cancellationbecoming effective upon the expiry of 7 days from midnight on the dayon which notice of cancellation is issued by or to the Club).The Clubagrees however to reinstate cover subject to agreement between the Cluband the Member prior to the expiry of such notice of cancellation as tonew rate of premium and/or conditions and/or warranties and/or limits.
Automatic Termination of Cover
4 Whether or not such notice of cancellation has been given, coverhereunder in respect of the risks of war, etc, shall TERMINATEAUTOMATICALLY:
4.1 upon the outbreak of war (whether there be a declaration of war or not)between any of the following:
the United Kingdom, the United States of America, France, the RussianFederation, the People’s Republic of China;
4.2 in respect of any vessel, in connection with which cover is grantedhereunder, in the event of such vessel being requisitioned either for titleor use.
Five Powers War and Nuclear Exclusions
5 This insurance excludes
5.1 loss, damage, liability or expense arising from:
5.1.1 the outbreak of war (whether there be a declaration of war or not)between any of the following:
the United Kingdom, the United States of America, France, the RussianFederation, the People’s Republic of China;
5.1.2 requisition either for title or use;
5.2 loss, damage, liability or expense directly or indirectly caused by orcontributed to by or arising from:
5.2.1 ionising radiations from, or the radioactive, toxic, explosive or otherhazardous or contaminating properties of:
5.2.1.1 any nuclear fuel or any nuclear waste or the combustion of nuclear fuel; or
5.2.1.2 any nuclear installation, reactor or other nuclear assembly or nuclearcomponent thereof; or
5.2.2 any weapon of war employing atomic or nuclear fission and/or fusion orother like reaction or radioactive force or matter,
other than liabilities, costs and expenses arising out of carriage of “exceptedmatter” (as defined in the Nuclear Installations Act 1965 of the UnitedKingdom or any regulations made thereunder) as cargo in an insured ship.
Chemical, Biological, Bio-Chemical, Electromagnetic Weapons andComputer Virus Exclusion Clause
6 This clause shall be paramount and shall override anything contained inthis insurance inconsistent therewith.
6.1 In no case shall this insurance cover loss damage liability or expensedirectly or indirectly caused by or contributed to by or arising from:
6.1.1 any chemical, biological, bio-chemical or electromagnetic weapon;
6.1.2 the use or operation, as a means for inflicting harm, of any computervirus.
Charterers’ Liability for Damage to Hull
7.1 Notwithstanding Clause 2.1 but without prejudice to Clauses 3, 4, 5 and6, the provisions of Rule 17.2 shall not apply to a ship chartered to the
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Member in respect of liabilities, losses, costs and expenses covered underthe Charterers’ Liability for Damage to Hull Clause 2005 if:
7.1.1 the ship is chartered on terms to the effect that:
(i) the Owner is entitled to refuse to send the ship to any port or place thatis dangerous by reason of war risks (as defined in any current standardwar risks insurance policy); and
(ii) the Owner is in any event entitled to insure his interests against such warrisks; and
(iii) the Member is liable to reimburse the Owner in respect of any war riskspremium incurred as a result of the ship being ordered to or employed insuch port or place,
or on terms no less favourable to the Member as regards his liability forloss or damage caused by war risks; or
7.1.2 having given the Managers as soon as practicable notice of any voyage ordeviation to, or presence within, any country or place specified in Clause2.1, the Member has paid such additional premium as the Managers mayat their discretion impose.
7.2 In the event of the Member not requiring war risks cover for a shipsailing to or remaining in a country or place specified in Clause 2.1, heshall so advise the Managers before the commencement of the voyage ordeviation and it shall be at the Managers’ discretion whether and on whatterms war risks cover shall be reinstated.
Limit
8 The limit of the Club’s liability under this clause shall be the limit of therelevant addition to or extension of cover set out in the Certificate ofEntry or U.S. $100m, any one accident or occurrence or series thereof inthe aggregate, whichever is the lesser.
Deductible
9 The deductible shall be the deductible applicable to the relevant additionto or extension of cover set out in the Certificate of Entry.
Law and Practice
10 This clause is subject to English law and practice.
Bio-Chemical Risks Inclusion Clause 2005
1.1 In accordance with and subject to the provisions of Rule 5.2 and subjectto the terms and conditions and exclusions set out herein, cover isextended to include the liability of the Member:
(a) to pay damages, compensation or expenses in consequence of thepersonal injury to or illness or death of any seaman (including deviationexpenses, repatriation and substitute expenses and shipwreckunemployment indemnity),
(b) for the legal costs and expenses incurred solely for the purpose ofavoiding or minimising any liability or risk insured by an Association(other than under Rule 20.32)
1.2 where such liability is not recoverable under either
(a) cover provided by the Club for such liabilities, costs, losses and expensesas would be covered under the Rules but for the exclusion of war risks inRule 17.2, or
(b) any underlying war risk policies covering the same risks,
1.3 solely by reason of the operation of an exclusion of liabilities, costs, lossesand expenses directly or indirectly caused by or contributed to by orarising from
(a) any chemical, biological, bio-chemical or electromagnetic weapon
(b) the use or operation, as a means for inflicting harm, of any computer,computer system, computer software programme, malicious code,computer virus or process or any other electronic system,
1.4 other than liabilities, costs, losses and expenses arising from
(i) explosives or the methods of the detonation or attachment thereof
(ii) the use of the entered ship or its cargo as a means for inflicting harm,unless such cargo is a chemical, biological or bio-chemical weapon
(iii) the use of any computer, computer system or computer softwareprogramme or any other electronic system in the launch and/or guidancesystem and/or firing mechanism of any weapon or missile.
2 Excluded Areas
2.1 Unless and to the extent the Directors may in their discretion otherwisedecide, there shall be no recovery in respect of any liabilities, costs, losses
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and expenses directly or indirectly caused by or contributed to by orarising out of any event, accident or occurrence within the ports, places,zones or areas or during such period as may be specified from time totime.
2.2 At any time or times before, or at the commencement of, or during thePolicy Year, the Club may by notice to the Member change, vary, extend,add to or otherwise alter the ports, places, countries, zones and periodsspecified in Clause 2.1 from a date and time specified by the Club notbeing less than 24 hours from midnight on the day the notice is given tothe Member.
3 Cancellation
Cover hereunder may by notice to the Member be cancelled by the Clubfrom a date and time specified by the Club, not being less than 24 hoursfrom midnight on the day notice of cancellation is given to the Member.
4 Limit of Liability
4.1 Subject to Clause 4.2 the limit of the liability of the Club under thisextension of cover in respect of all claims shall be in the aggregateU.S. $30 million each ship any one accident or occurrence or seriesthereof arising from any one event.
4.2 In the event that there is more than one entry by any person forBio-Chemical risks cover as provided herein in respect of the same shipwith the Club and/or any other insurer which participates in the PoolingAgreement or General Excess Loss Reinsurance Contract, the aggregaterecovery in respect of all liabilities, costs, losses and expenses arising undersuch entries shall not exceed the amount stipulated in Clause 4.1 and theliability of the Club under each such entry shall be limited to suchproportion of that amount as the claims arising under that entry bear tothe aggregate of all such claims recoverable from the Club and any suchother insurer.
5 Deductible
The deductible shall be the deductible applicable to the relevant cover setout in the Certificate of Entry.
6 Law and Practice
This clause is subject to English law and practice.
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United States Oil Pollution Inclusion Clause 2005
It is hereby agreed that this entry includes cover in accordance with theClub’s rules for oil pollution claims arising out of any incident to whichthe United States Oil Pollution Act 1990 is applicable, on the followingterms and conditions and subject to the limit of liability provided in Rule20.14 and the note thereto.
1 The Member shall make a declaration quarterly in arrears at the end ofeach quarter ending 20th May, 20th August, 20th November and 20thFebruary, as soon as practicable and in no event later than two calendarmonths after the end of each quarter, stating, as appropriate:
either
(a) that the ship has not performed a U.S. voyage during the relevant quarter
or
(b) that the ship has performed one or more U.S. voyages during the relevantperiod and, in that event, the number of such voyages, the nature of thecargo(es), the port(s) or place(s) of loading, discharge or transfer and thedate(s) of such loading, discharge or transfer.
For the purposes of declarations under this Clause (1):
“U.S. voyage” is any cargo voyage involving loading or dischargingpersistent oil as cargo at any port or place in the United States ofAmerica or within the Exclusive Economic Zone of the United States ofAmerica as defined in the United States Oil Pollution Act, 1990.
“Persistent Oil” is all persistent Hydro-Carbon Mineral Oils other thanthose falling within the definition of “Non-Persistent Oils” set out below.
“Non-Persistent Oil” is oil which consists of Hydro-Carbon fractions:
(a) at least 50% of which, by volume, distils at a temperature of 340 degreesC and
(b) at least 95% of which distils at a temperature of 370 degrees C whentested by the ASTM Method D 86/78 or any subsequent revisionthereof.
2 The Member shall pay a fixed additional premium in respect of each U.S.voyage, calculated at the following rate:
(a) U.S. $0.126 per entered ton, each U.S. voyage
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or
(b) U.S. $0.063 per entered ton, each U.S. voyage in respect of cargoesexclusively loaded or discharged at LOOP or cargoes exclusivelytransferred to or from another ship at a place (other than a port) approvedby the United States Coast Guard within the Exclusive Economic Zoneof the United States of America.
However, in respect of ships equipped with segregated ballast tanks inaccordance with the requirements of Regulation 13 of Annex 1 toMarpol 73/78 (Marpol Tankers) the following rates are to apply:
(a) U.S. $0.110 per entered ton, each U.S. voyage
or
(b) U.S. $0.055 per entered ton, each U.S. voyage in respect of cargoesexclusively loaded or discharged at LOOP or cargoes exclusivelytransferred to or from another ship at a place (other than a port) approvedby the United States Coast Guard within the Exclusive Economic Zoneof the United States of America.
Provided always that the maximum number of voyages in any one policyyear in respect of which an additional premium is payable shall be twentyvoyages, irrespective of the number of voyages actually performed.
In respect of ships of 1,000 gt or less the Member may opt to pay either afixed rate of U.S. $2,515 per annum or U.S. $126 per voyage and U.S.$2,219 or U.S. $111 respectively for Marpol Tankers.The Member will becharged on a per voyage basis unless a request is made to the Managers,prior to 20th February 2005, to be charged on a fixed rate basis. No lay-up returns will be allowed.
In respect of parcel tankers carrying no more than 5,000 metric tonnes ofpersistent oil as cargo the Member shall pay U.S. $376 per voyage or U.S.$332 per voyage for Marpol Tankers. If such tankers carry between 5,001and 10,000 metric tonnes of persistent oil as cargo the Member shall payU.S. $946 per voyage or U.S. $828 per voyage for Marpol Tankers.
3 The Member shall pay such additional premium on or before the datespecified in the debit note issued by the Managers in accordance with thedeclarations made under (1) above.
4 In the event that the Member fails for any reason to make a declaration(whether or not any U.S. voyage has been performed) within twocalendar months of the quarter dates specified in (1) above, the terms ofentry in respect of all tankers entered in this Club by him or on hisbehalf shall be amended with effect from the expiry of the said period of
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two months to incorporate the following exclusion:“Excluding any andall claims in respect of oil pollution arising out of any incident to whichthe United States Oil Pollution Act 1990 is applicable” and the Membershall remain liable to pay any additional premium in respect of any U.S.voyage performed prior to the incorporation of the above exclusion inthe terms of entry.
5 In the event that any declaration made by the Member or on his behalfpursuant to (1) above is in any material respect inaccurate, the insuranceof the Member in respect of any and all ships entered in the Club by himor on his behalf shall be cancelled with effect from the date of theinaccurate declaration.The Member shall be and remain liable to payPremiums, in respect of such ship or ships on a pro rata basis, namely theproportion of such Premiums applicable to the period beginning at thecommencement of the policy year (or in the case of a ship enteredduring the policy year, the date of entry) and ending at noon on the dateof cessation and the provisions of Rule 12.1 shall apply. For this purposethe date of cessation shall be the date of the inaccurate declaration.
Provided always that the Board may in its discretion and upon such termsas it thinks fit either (i) reinstate the entry of any or all ships for whichthe insurance has been cancelled pursuant to this Clause 5, or (ii) admitin whole or in part any claim in respect of any ship entered by theMember for which the Club is under no liability by reason of acancellation of the insurance in accordance with this Clause 5.
6 In the event that the Member fails to pay either in whole or in part anyadditional premium debited in accordance with Clause 3 above, theprovisions of Rule 11.3 and Rule 12.2 shall apply.
7 The additional fixed premium payable in accordance with Clause 3 aboveshall be deemed to be a fixed premium within the terms of Rule 5.1.3and, save as expressly agreed otherwise in these terms and conditions, theRules of the Club shall apply accordingly in all respects.
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Paperless Trading Clause 2005
1 There shall be no recovery from the Club in respect of any liability, costor expense whatsoever or howsoever arising, whether directly orindirectly, out of or in consequence of:
(a) the Member’s participation in or use of any system or contractualarrangement the predominant purpose of which is to replace paper-baseddocumentation in shipping and/or international trade with electronicmessages, including, without limitation, the Bolero system (any system orarrangement being referred to in this endorsement as a ‘paperlesssystem’), or
(b) a document which is created or transmitted under a paperless systemwhich document contains or evidences a contract of carriage; or
(c) the carriage of goods pursuant to such a contract of carriage,
save to the extent that the Club in its sole discretion may determine thatsuch liability, cost or expense would have arisen and would have beencovered by the Club if the Member had not participated in or used apaperless system and any contract of carriage had been contained in orevidenced by a paper document.
2 For the purpose of this endorsement a ‘document’ shall mean anything inwhich information of any description is recorded, including, but notlimited to, computer or other electronically generated information.
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6 Rules of the Defence Class
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Introductory
Definitions
1 In these Rules the words and phrases hereinafter set out shall have thefollowing meanings or effects if not inconsistent with the subject orcontext:
These Rules means these Rules (including regulations under Rule 28)as originally framed or as from time to time altered, abrogated or addedto and for the time being in force.
The Act means The Standard Steamship Owners’ Protection andIndemnity Association (Bermuda) Limited Consolidation andAmendment Act 1994 and every modification thereof for the time beingin force.
The Bye-Laws means the Bye-Laws for the time being of the Club.
The Club means The Standard Steamship Owners’ Protection andIndemnity Association (Bermuda) Limited.
Applicant means any person seeking to enter a ship on his own oranother’s behalf or on whose behalf an application is made.
Board means the Directors for the time being of the Club or, as thecontext may require, a quorum of Directors present at a duly convenedmeeting of the Board.
Contribution includes Estimated Total Premium, SupplementaryPremium and any other Calls or Premiums which may be due froma Member.
Demise Charterer means a charterer who has sole possession of theship and sole control of its management and crew.
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Entered Ship means a ship which has been entered in the Club for anyof the risks enumerated herein in the manner provided under theseRules.
Group Rating Agreement means any agreement whereby thecontributions of an entered ship are assessed by reference to the record ofany other ships which are or were entered through the group in theClub, whether the ships are in the same registered or beneficialownership or not.
Hull Policies means the Policies effected on the hull and machinery ofthe ship, including excess liability policies.
Managers means the Managers for the time being of the Club.
Member means every owner or other person who becomes and is forthe time being a Member of the Club, and more particularly of theDefence Class of the Club, as hereinafter provided and as provided in theBye-Laws.
Owner includes an owner, owners in partnership, owners holdingseparate shares in severalty, a part owner, and a trustee, mortgagee,charterer, operator or manager, builder, insurer or reinsurer who enters aship in the Club or who is a Principal Assured, Joint Entrant or a Co-assured.
Policy Year means the year from noon G.M.T. on the 20th February tonoon G.M.T. on the 20th February next ensuing.
Premium Rating means in relation to an entered ship (not being a shipentered under Rule 5 on terms where a fixed premium is payable) therate per entered ton determined in accordance with Rule 14.
Ship means any ship, boat, hydrofoil, hovercraft or other description ofvessel, whether completed or under construction, (including a lighter, bargeor similar vessel howsoever propelled but excluding a fixed platform or afixed rig) used or intended to be used for any purpose whatsoever innavigation or otherwise on, under, over or in water or any part of such ship,boat, hydrofoil, hovercraft or other description of vessel or any part thereofor any proportion of the tonnage thereof or any share therein.
Tonnage means the gross tonnage of a ship as certified or stated in theCertificate of Registry or other official document relating to the registryof the ship; and "Ton" refers to the unit of such tonnage.
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Towage means any operation in connection with the holding, pushing,pulling, moving, escorting or guiding of or standing by a ship or object.
Insurance
2.1 These Rules, which are subject to the Act and Bye-Laws, contain theterms upon which the Defence Class of the Club conducts its business.The Defence insurance given by the Club shall be in accordance withthese Rules.
Governing Law
2.2 These Rules and any contract of insurance between the Club and aMember or any other person claiming under these Rules shall begoverned by and construed in accordance with English Law. In particular they are subject to and incorporate the provisions of the MarineInsurance Act, 1906, of the United Kingdom and any statutorymodifications thereof except insofar as such act or modication may havebeen excluded by these Rules or by any term of such contract.
2.3 in the event of any conflict between the English text of these Rulesandany text thereof written in any other language, the English text shallprevail.
Headings
2.4 The headings and notes in these Rules are for information only and arenot to be taken into account in the interpretation or construction ofthese Rules.
Powers of Board and Managers
3.1 Whenever any power, duty or discretion is stated in these Rules to bevested in the Board such power, duty or discretion shall be exercisable bythe Board unless the same shall have been delegated to any sub-committee of the Board or to the Managers in accordance with theprovisions as regards delegation contained in the Bye-Laws, in whichevent the power, duty or discretion may be exercised by any person towhom the same shall have been so delegated.
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3.2 Whenever power, duty or discretion is conferred or imposed upon theManagers by virtue of these Rules, or is delegated to them underparagraph 1 of this Rule, such power, duty or discretion may, subject toany terms, conditions or restrictions contained in these Rules, beexercised by the Managers or by any authorised employee or agent of theManagers.
Application and Entry
Entry
4.1 The Managers may in their discretion, and without giving any reason,refuse any application for the entry of a ship in the Club whether or notthe applicant is already a Member of the Club.
4.2 Each person whose entry has been accepted under the Rules agrees withthe Club for himself, his heirs, executors, administrators, assigns andsuccessors that both he and they and each and all of them are bound byand will observe and perform the obligations under these Rules. Eachsuch person shall furnish the Club with an address for the service ofnotices. In the case of a Member the address shall be deemed to be theaddress appearing in the Register of Members.
4.3 The Managers shall be at liberty to accept entries from those not alreadyMembers. If an application is accepted such person shall become aMember unless the Managers in their discretion decide that he is not tobe a Member.Whenever the Managers accept an entry by way ofreinsurance, they may in their discretion decide that the insurer reinsuredby the Club or person insured by such an insurer or both shall become aMember or that neither of them shall become a Member and theManagers may accept the application on either such basis.
4.4 Where a person whose entry has been accepted under the Rules has notbecome a Member of the Club, he shall have the same rights andobligations under these Rules (but not under the Bye-Laws) as though hewere a Member, and all such rights and obligations shall apply to him.
4.5 The Managers shall be at liberty to enter into contracts of reinsurance onbehalf of the Club whereby the Club agrees to reinsure the risks arisingin connection with any one or more ships insured by another insurer orelse agrees to reinsure the whole or part or proportion of the insurancebusiness of any other insurer.The consideration payable to the Club and
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the terms and conditions on which the reinsurance is accepted by theClub shall be such as are agreed between the Managers and such otherinsurer. Save where otherwise agreed in writing the other insurer shall bein every respect subject to and bound by the provisions of these Rulesand his contract with the Club shall for all purposes take effect as thoughhe were the Owner of any ship or ships in connection with which therelevant risks may arise and had as owner entered the ship or ships in theClub for insurance.
Terms of entry, assignment and special entries
Terms of entry
5.1.1 The standard terms of entry upon which ships will be accepted by theManagers are those set out in the Rules.
5.1.2.1 The standard risks against which a Member is insured are those set out inRule 20.
5.1.2.2 The rights of recoveries set out in these Rules may be excluded, limited,modified or otherwise altered by any special terms which have beenagreed in writing between the applicant and the Managers.
5.1.2.3 The terms of entry and the insurance provided by the Club shall not, noris intended to, confer any right or benefit on any third party under theContracts (Rights of Third Parties) Act 1999 save to the extent providedin Rule 8.
5.1.3 The Managers may, subject to the directions of the Board, accept entrieson terms as to contribution other than those set out in the Rules. Inparticular an entry may be accepted on the basis that a fixed premium isto be paid instead of Calls.
Assignment
5.1.4.1 No insurance given by the Club and no interest under these Rules orunder any contract between the Club and any Member may be assignedwithout the written consent of the Managers who shall have the right intheir discretion to give or refuse such consent without stating any reasonor to give such consent upon any terms or conditions as they may thinkfit.Any purported assignment made without such consent or withoutthere being due compliance with any such terms and conditions as the
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Managers may impose shall, unless the Managers in their discretionotherwise determine, be void and of no effect.
5.1.4.2 Whether or not the Managers shall expressly so stipulate as a conditionfor giving their consent to any assignment, the Club shall be entitled insettling any claim presented by the assignee to deduct or retain suchamount as the Managers may then estimate to be sufficient to dischargeany liabilities of the assignor to the Club whether existing at the time ofthe assignment or having accrued or being likely to accrue thereafter.
Special entries
5.2 A Member may be insured in respect of special risks including risks otherthan those set out in Rule 20, where such special risks have been agreedin writing between the Member and the Managers. Unless otherwiseexpressly agreed, such insurance shall be subject to the warranties,conditions, exceptions, limitations and other terms set out in these Rules.The nature and extent of the risks and the terms of the cover, and inparticular the extent of the recovery that a Member may make from theClub shall be as agreed in writing between the Member and theManagers and endorsed upon the Certificate of Entry.
PROVIDED ALWAYS THAT the Managers shall be at liberty to reinsurein whole or in part the risk or risks of the Club against any of the costs,liabilities or expenses insured by a Member under this Rule and in theevent that such reinsurance is arranged such a Member shall be entitledto recover from the funds of the Club only the net amount actuallyrecovered under such reinsurance arrangements together with thatportion (if any) of the risk or risks retained by the Club.
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Application for entry
6.1 Every applicant shall apply for an entry in such manner and form as theManagers may from time to time require.
6.2 The applicant must furnish to the Managers:
(i) all material particulars and information; and
(ii) all such additional particulars and information as the Managers mayrequire.
6.3 An applicant warrants on his own behalf and on behalf of any otherperson entitled under these Rules that he has furnished all materialparticulars and information and that all such particulars and informationare, so far as he knew or could with reasonable diligence ascertain, trueand complete, and will remain so throughout the period of insurance.Theparticulars and information so furnished shall, if the entry of the relevantship be accepted, be deemed to form the basis of the contract ofinsurance between the Member or applicant and the Club.
6.4 Before any application for entry is accepted by the Managers, theManagers shall agree in writing the terms and conditions that will applyto the entry if the application is accepted, including (without prejudice tothe generality of the foregoing) the contribution to be paid to the Club,the date of the commencement of cover, and the terms and conditions onwhich the ship is to be accepted.
6.5 The provisions of this Rule apply throughout the period of entry of theship in the Club and the Member is obliged to disclose any change orchanges in any material particulars relating to such entry, such as, but notlimited to, change of management, the entered ship’s flag, nationality ofcrew, tonnage, trading area and nature of trade.
6.6 Failure to comply with any obligation contained in this Rule or toprovide complete information or the provision of inaccurate informationdeprives an applicant, and any other person otherwise entitled to claimfor recovery under these Rules, of any right to recovery whether or notthe omission or inaccuracy was material to the recovery in question.
Certificates of entry
7.1 As soon as reasonably practicable after the acceptance of an applicationfor entry of a ship for insurance in the Club, the Managers shall issue tothe Member in respect of such a ship a Certificate of Entry in such form
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as they may from time to time determine but so that such Certificate ofEntry shall state the date of the commencement of the period ofinsurance and the terms and conditions (other than the sums payable tothe Club) on which the vessel has been accepted for insurance.
7.2 If at any time there shall be a variation in the terms of entry relating toan entered ship, the Managers shall, as soon as reasonably practicablethereafter, issue to the Member in respect of such a ship an endorsementslip, in such form as they may from time to time determine, stating theterms of such variation and the date from which such variation is to beeffective.
7.3 Every Certificate of Entry and every endorsement slip issued as aforesaidshall be conclusive evidence and binding for all purposes as to thecommencement of the period of insurance, as to the terms andconditions on which the ship has been entered for insurance, and as tothe terms of any variation and the date from which such variation is tobe effective; provided that in the event that any Certificate of Entry orany endorsement slip shall in the opinion of the Managers contain anyerror or omission the Managers may in their discretion issue a newCertificate of Entry or a new endorsement slip which shall be conclusiveevidence and binding as aforesaid.
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Joint Entrants, Co-assureds, Group Entries, and Affiliated andAssociated Companies
Joint Entrants
8.1.1 The Managers may accept an application from a Member for anotherperson or persons to become Joint Entrants in respect of that Member’sentry. In such a case, the Managers may agree that none, one or moresuch persons may become Members of the Club. Each Joint Entrant shallhave an independent right of recovery from the Club in respect of anyliabilities, costs or expenses arising out of a particular casualty or event.
8.1.2 In the event that this application is accepted by the Managers, theMember who has made the application shall be designated the PrincipalAssured and shall be the person who is deemed irrevocably to have fullpower and authority to act in the name of and/or on behalf of all theJoint Entrants, and neither the Club nor the Managers, their servants oragents, shall be liable in any other manner whatsoever to any JointEntrant in the event that the Member did not, in fact, have such powerand authority.
8.1.3 Unless otherwise agreed in writing with the Managers, the Member andall Joint Entrants shall be jointly and severally liable to pay all amountsdue to the Club in respect of such entry.
8.1.4 Any Member who is designated a Principal Assured warrants that he is, inrelation to the entered ship, either the owner, owner in partnership,owner holding separate shares in severalty, part owner, trustee, charterer(whether bareboat, demise or otherwise) of the entered ship, a manager oroperator having control of the operation and employment of the enteredship (being such control as is customarily exercised by a shipowner), orany other person in possession and control of the entered ship.
8.1.5 In relation to any such application from a Member for any person orpersons to become a Joint Entrant the Member and each Joint Entrantwarrants that the Joint Entrant is, in relation to the entered ship, either:-
(i) interested in the operation, management or manning of an insuredvessel; or
(ii) the holding company or the beneficial owner of the person identified inthe Certificate of Entry as the Principal Assured or of any personinterested in the operation, management or manning of the entered ship;or
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(iii) a mortgagee of the entered ship; or
(iv) the charterer of the entered ship.
Co-assureds
8.2.1 The Managers may accept an application from a Member for anotherperson or persons to become Co-assureds in respect of that Member’sentry.
8.2.2 The liability of the Club to all Co-assureds shall only extend insofar asthey may be found liable to pay in the first instance for liabilities whichare properly the responsibility of the Member, and nothing hereincontained shall be construed as extending cover in respect of any amountwhich would not have been recoverable from the Club by the Memberhad the claim been made or enforced against him. Once the Club hasmade indemnification to such Co-assureds it shall not be under anyfurther liability and shall not make any further payment to any person orcompany whatsoever, including the Member, in respect of that claim.
PROVIDED ALWAYS THAT in relation to Rules 8.1 and/or 8.2:
(i) the receipt by the Member or any one Joint Entrant or Co-assured of anysums paid by the Club in respect of such an entry shall be sufficientdischarge by the Club for the same;
(ii) any provision of these Rules by which a Member or Joint Entrant or Co-assured ceases to be insured or ceases to be entitled to recover from theClub in respect of any liability, loss or damage to which he might beentitled under these Rules shall be deemed to apply to all Members andall Joint Entrants and all Co-assureds. Failure by the Members or any oneof the Joint Entrants or Co-assureds to comply with any of theobligations under these Rules is deemed to be the failure of the Membersand all the Joint Entrants and all the Co-assureds. Conduct of a memberor any one Joint Entrant or Co-assured which would have entitled theClub to decline to indemnify it shall be deemed to be the conduct of allmembers and all Joint Entrants and Co-assureds;
(iii) the contents of any communication between the Member or any JointEntrant or Co-assureds and the Club or the Managers, their servants oragents, shall be deemed to be within the knowledge of the Member andall Joint Entrants or Co-assureds;
(iv) the Member and all Joint Entrants and all Co-assureds agree that nodisputes of whatsoever nature or howsoever arising amongst themselves
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shall be the subject of any insurance or recovery from the Club and JointEntrants and Co-assureds shall only be accepted on this basis;
(v) no member or Joint Entrant or Co-assured shall recover any amountsfrom the Club save for those liabilities arising out of operations and/oractivities customarily carried on by or at the risk of or responsibility ofshipowners and which are within the scope of the Member’s operationsas a Member insured hereunder.
Group Entries
8.3.1 The Managers may accept any entry on the basis that the ship is part of aGroup Rating Agreement and assess contributions accordingly.
8.3.2 One person shall be designated Group Principal and any communicationfrom or on behalf of the Club to the Group Principal shall be deemed tobe within the knowledge of all Members, Joint Entrants and Co-assuredsin the group, and any communication from and action taken by the GroupPrincipal shall be deemed conclusively to be made with the full approvalof any and all Members, Joint Entrants and Co-assureds within thatgroup.
8.3.3 All persons entering ships under a Group Rating Agreement and theGroup Principal will remain jointly and severally liable to pay all amountsdue to the Club in respect of any and all ships in the same group.
Affiliated and Associated Companies
8.4 In the case of a claim which would be recoverable from the Club beingenforced through or against an affiliated or associated company of aMember but not of a joint entrant or a co-assured, such company shall, ifthe member so requires in writing, be entitled to recover such sum fromthe Club but only to the extent to which the Member would have beenentitled to recover if the claim had been enforced against him. In theevent that the Club makes such a payment then the Club shall not beunder any further liability and shall not make any further payment to anyperson or company, whatsoever, including that member, in respect of sucha claim.
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Period of Insurance
Period of insurance, period of contribution, laid-up return, cessation,
cancellation and releases
Period of insurance
9.1 Unless otherwise agreed at the time of entry or unless otherwise providedby these Rules, the insurance afforded by the Club shall begin at the timestated in the Certificate of Entry for the commencement of the cover,and shall continue until noon G.M.T. on the 20th February nextfollowing, and thereafter from Policy Year to Policy Year.
9.2.1 If a Member does not desire to continue the insurance in respect of anentered ship he shall give notice in writing to that effect to the Managersnot later than 30 days prior to the expiry of the period of insurance.
9.2.2 The Managers may in respect of an entered ship at any time and withoutgiving any reason:
(i) give to a Member 7 days notice that he shall not be entitled to anyrecovery from the Club in respect of any claim arising during the periodfrom the expiry of that notice until such further time as the Managersshall specify and notify to the Member, or
(ii) terminate the entry on 30 days’ notice in writing given not later than 30days prior to the expiry of the period of insurance.
9.2.3 in either event the insurance in respect of such ship shall cease at noonG.M.T. on that day, save that, if the ship be then at sea, the insurance may,if the Member so requires by notice in writing to the Managers, becontinued until the ship has arrived in berth or at anchorage at her nextport.
9.3 An entered ship shall not be withdrawn from the Club at any other timeor in any other manner except with the consent of the Managers.
Period of contribution and laid-up returns
10.1 A Member shall (provided that he gives notice in writing to and submits hisclaim to the Managers within one month after the happening of any of theevents specified below) be liable for contribution in respect of an enteredship to the Premiums and Calls levied by the Club for the current PolicyYear pro rata only to the period beginning with that Policy Year and ending:
(i) at noon G.M.T. of the day upon which the ship was legally transferred by
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bill of sale or other formal document whereby the ownership was legallytransferred;
(ii) at noon G.M.T. of the day upon which the ship became an actual orconstructive total loss or was accepted by hull underwriters as being aconstructive or compromised total loss; or such later date as the Boardmay in its absolute discretion determine;
(iii) ten days from the date of the ship being last heard of or from her beingposted at Lloyd’s as missing.
10.2 If a ship shall be and remain in any safe port without any cargo on boardfor a period of thirty or more consecutive days after finally mooring there(such period being computed from the day of arrival to the day ofdeparture, one only being included), the Member shall be allowed areturn of Premiums or Calls at a rate of no more than 75%;
PROVIDED ALWAYS THAT unless otherwise agreed in writing by theManagers, there shall be no return if there are crew members on boardthe ship other than for security or for maintenance necessary for thesafety of the ship during lay-up or if repairs are carried out other than forthe safety of the ship during lay-up.
Such returns shall be calculated pro rata per consecutive day for the totalperiod during which the ship so remains. If the ship once finally mooredshall thereafter shift its position within port limits, the Managers mayallow the return subject to a deduction therefrom for the time taken toshift position; the deduction shall be reckoned by the number of daysoccupied, in whole or in part, by such shifting.
Note: For example, if the ship shall be moored for 30 days and takes 6 hours toshift position during the 30 days, the return may be allowed for 29 days and ifthe ship takes 27 hours to shift position, the return may be allowed for 28 days.
However insofar as any risk or part of any risk in respect of which thecalls or premium have been paid is reinsured, the Club shall only make areturn to the same extent that the reinsuring underwriters have made areturn of premium to the Club.
10.3 If a Member does not notify and submit his claim to the Managerswithin one month under paragraph 10.1 or within three months of theend of the Policy Year under paragraph 10.2, no pro rata allowance orlaid-up return shall be made unless the Board in its sole discretionotherwise determines.
10.4 Where the entry of a ship in the Club is in the name of or on behalf of a
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time charterer the Member shall be under an obligation to notify theClub of the date of redelivery of the ship or other termination of thetime charter.The Member will remain liable for the payment ofPremiums or Calls in respect of each ship entered until the date ofredelivery or other termination provided always that if the saidnotification to the Club is more than one month after the redelivery ortermination then the Member shall be liable to pay Premiums and Calls up tothe date of notification unless the Board in its discretion otherwise decides.
Cessation of insurance and cancellation
11.1 A Member shall cease to be insured by the Club in respect of any and allships entered by him upon the happening of any of the following events:
(i) if, being an individual, upon his death or if a receiving order is madeagainst him or if he shall become bankrupt or make any composition orarrangement with his creditors generally or if he shall become incapableby reason of mental disorder of managing and administering his propertyand affairs;
(ii) if, being a company, upon the passing of any resolution for voluntarywinding-up upon an order being made for compulsory winding-up orupon dissolution or upon the appointment of an administrator oradministration receiver or receiver over all or any part of the company’sbusiness or undertaking or upon possession being taken by or on behalfof the holders of the debentures secured by a floating charge on anyproperty comprised in or subject to the charge;
(iii) if he ceases to have any ship entered for insurance in the Club.
11.2 A Member shall cease to be insured by the Club in respect of any shipentered by him upon the happening of any of the following events inrelation to such ship:
(i) if the Member shall part with or assign the whole or any part of hisinterest in the entered ship whether by bill of sale or other formaldocument or otherwise, or shall cease to have an interest in the enteredship, unless the Managers shall have consented to such parting with orassignment or cessation of interest and to an assignment of the relevantinsurance by the Club pursuant to Rule 5.1.4.1 hereof;
(ii) if the entered ship shall become an actual or constructive total loss orshall be accepted by hull underwriters as an actual or constructive total
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loss or if there shall be any compromise with hull underwriters on thebasis of the ship being considered or deemed to be an actual orconstructive total loss, except as regards liabilities flowing directly fromthe casualty which gave rise to the actual or constructive loss of the shipor such later date as the Board in its discretion may determine;
(iii) if the entered ship shall be missing for ten days from the date she was lastheard of or from her being posted at Lloyd’s as missing, whichever shallbe the earlier;
(iv) if the managers of the entered ship shall be changed by the appointmentof new managers, unless the Board shall otherwise determine;
(v) if notice is given under Rule 9.2 and the notice is not withdrawn byagreement before the expiry of the period of insurance;
(vi) if the entry is terminated or ceases under the provisions of Rule 9.2.2 orRule 21.
11.3 If a Member fails to pay when due and demanded by the Managers anysum owing from him to the Club (including any sum of which he isjointly and severally liable under Rule 8.3.1)
(i) unless and to the extent the Board otherwise decides, a Member shall notbe entitled to any recovery from the Club in respect of any claim arisingfrom the date of such failure until the date such sum owing to the Clubis paid in full and
(ii) a Member’s insurance shall be cancelled (whether or not such insurancemay already have ceased for some other reason) if after service on him ofa notice by or on behalf of the Managers or the Club requiring him topay such sum on or before any date which may be specified in suchnotice a Member fails to pay such sum in full on or before the date sospecified.
Effect of cessation of insurance and cancellation
12.1 When a Member ceases to be insured by virtue of sub-paragraphs i, ii oriii of Rule 11.1 or when a Member ceases to be insured in respect of anyship by virtue of Rule 11.2 or Rule 21.1.v or for any other reason (all ofwhich times are hereinafter in this Rule 12.1 referred to as "the date ofcessation") then:
(i) such Member and his successors shall be and remain liable for allcontributions in respect of the whole of the Policy Year in which the date
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of cessation occurs and in respect of previous Policy Years unless and tothe extent that Rule 10 is applicable or such liability may have beenotherwise agreed or assessed under Rule 13; and
(ii) the Club shall remain liable in respect of any ship entered by suchMember or in the case of such entered ship (as the case may be) for allclaims under these Rules arising by reason of any event which hadoccurred prior to the date of cessation, but shall be under no liabilitywhatsoever by reason of anything occurring after the date of cessation.
PROVIDED ALWAYS THAT when a Member ceases to be insured byreason of termination under Rule 9.2.2 other than upon the expiry ofthe period of insurance, the Member shall be liable for contributions forthe Policy Year in which the cessation occurs pro-rata only from theperiod beginning with the date of entry and ending with the date oftermination.
12.2 When a Member’s insurance is cancelled by virtue of Rule 11.3 then:
(i) if the cancellation occurs while the Member is, but for the cancellation,insured, such Member and his successor shall be and remain liable for allcontributions in respect of the Policy Year during which the datespecified in the notice given in accordance with Rule 11.3 ("the date ofcancellation") occurs pro rata only for the period beginning at thecommencement of the Policy Year (or in the case of a ship enteredduring that Policy Year, the date of entry) and ending with the date ofcancellation and in respect of previous Policy Years irrespective ofwhether or not notice has been given under that Rule;
PROVIDED ALWAYS THAT the Managers in their discretion mayselect a date earlier than the date of cancellation and may require theMember or his successors to pay contributions on a pro rata basis for theperiod beginning as specified above and ending with the date so selected.
(ii) if the cancellation occurs after the Member has ceased to be insured forsome other reason, such Member and his successor shall remain liable forall contributions as provided for in Rule 12.1.i above.
(iii) the Club shall thereupon cease to be liable for all and any claims underthese Rules in respect of all and any ships entered by such Member:
(iii.a) which may arise by reason of any event occurring after the date ofcancellation;
(iii.b) which have accrued or arisen during the Policy Year for which
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sums remained owing but unpaid by the Member in full or in part at thedate of cancellation;
(iii.c) which may have accrued or arisen in any year other than thosereferred to in iii.b above;
irrespective of whether the Club may have admitted liability for orappointed lawyers, surveyors or any other persons to deal with suchclaims; and irrespective of whether at the date of cancellation the claimswere likely to accrue or the events giving rise thereto were or were notknown to the Club; but as from the date of cancellation any liability forsuch claims shall retrospectively terminate and the Club shall be under noliability to such Member on any account whatsoever.
PROVIDED ALWAYS THAT the Board may, in its discretion and uponsuch terms as to payment of contributions or otherwise as it thinks fit,admit either wholly or partly any claim in respect of any ship entered bya Member for which the Club is under no liability under eitherparagraph 1 or paragraph 2 of this Rule, whether arising before or afterany date of cancellation as hereinbefore referred to, or remit wholly orpartly any payment of contributions due under either such paragraph.
Releases
13.1 Upon the cessation of insurance of any ship, the Managers may release aMember from all further liability for contributions to the Club, and insuch case shall prepare a Release which shall be calculated by reference tosuch percentage of the Premium Rating as the Board may at its discretionfrom time to time decide.
13.2 The Member shall pay the Release prepared in accordance withparagraph 1 of this Rule within such time as may be specified by theManagers, unless within such time he gives notice in writing to theManagers that he will pay all further contributions as they fall due.
13.3 If in accordance with paragraph 2 of this Rule the Member elects to payfurther contributions as they fall due, he shall, unless he has other shipsremaining entered in the Club, provide at his own expense within suchperiod as may be specified by the Managers, a guarantee acceptable to theManagers in favour of the Club for the full amount of the Release.Should he fail to provide such a guarantee within the period specified,the Release shall automatically become payable. If, during the period thatthe Member is still liable to pay further contributions to the Club, hesubsequently withdraws all his ships, or has no other ships remainingentered for insurance in the Club, then the Member shall provide
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forthwith a guarantee acceptable to the Managers in favour of the Clubfor the full amount of all Releases, or amended Releases, prepared by theManagers in respect of all his ships.
13.4 If after the original Release is prepared the Board shall amend theRelease percentage, the Managers may prepare an amended Release; andin such case, if the Member has not elected to pay further contributionsas they fall due and has not paid the original Release within such time asmay be specified by the Managers in paragraph 2 above, the amendedRelease shall supersede the original Release and shall be immediatelypayable. If the Member has elected to pay further contributions as theyfall due, the Member shall provide within such time as may be specifiedby the Managers an amended guarantee acceptable to the Managers forthe full amount of the amended Release, and should the Member fail toprovide such amended guarantee within the period specified then hisright to pay further contributions shall be withdrawn and the full amountof the amended Release shall become immediately payable.
13.5 In all such cases the Managers may impose such other terms andconditions as they think fit.
13.6 A Member or former Member who has paid a Release shall be under noliability for any contributions in respect of any ship which is the subjectof the Release assessed after the date of the Release, and shall have noright to share in any return of contributions or other receipts which theBoard may thereafter decide to make.
Contributions
Basis of contribution, calls, Managers’ remuneration, payment, closing policyyears, reserves, investment and reinsurance
Basis of contribution
14.1 Before any application for the entry of a ship for insurance in the Club isaccepted by the Managers, the applicant and the Managers shall, unless theship is to be entered on the terms that a fixed premium is payable to theClub, agree the Premium Rating on the basis of which contributions arepayable to the Club in respect of that ship.
14.2.1 The Managers may agree with a Member to vary the Premium Ratingduring a Policy Year. If no variation agreement is agreed, the Premium
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Rating will remain effective until the end of the Policy Year in question.
14.2.2 Prior to the start of a Policy Year the Board shall decide the percentage bywhich there is to be a general change in the Premium Ratings of allMembers which are to be levied upon entered ships, and, unless otherwiseagreed between the Managers and the Member, the Premium Ratings sochanged shall apply in respect of such Policy Year.
Mutual contributions
15.1 Members who have ships entered for insurance in the Club in respect ofany Policy Year (not being a closed Policy Year), otherwise than on termsthat a fixed premium shall be payable, shall severally and not jointly, buteach in his own name only, mutually insure each other in accordance withthe provisions of these Rules against all claims, liabilities, costs andexpenses for which all or any of them may become liable in respect of anyentered ship in any Policy Year and for this purpose the Members shallcontribute to the funds or other obligations of the Club required to meet:
(i) all such costs, expenses and other outgoings (actual or anticipated) as, inthe opinion of the Board, necessarily and properly fall on the Club;
(ii) all such transfers to reserves or provisions as the Board in its discretionmay deem it expedient to make, including transfers to reserves andprovisions in respect of any deficiency, (actual or anticipated), in respect ofany closed Policy Year;
(iii) all such sums as the Club may by any governmental or other similarlegislation or regulation be required to set aside in order to establishand/or maintain an adequate solvency margin and/or guarantee fund inrespect of any Policy Year.Without in any way limiting the obligations ofMembers to pay such sums, the Board may, in its discretion and at anytime or times, require any or all Members to guarantee specifically thepayment of such sums in such terms and with such security as the Boardmay from time to time decide.
Estimated Total Premium
15.2.1 Prior to or at the beginning of each policy, the Club shall levy uponMembers an Estimated Total Premium calculated on the basis of thePremium Rating per entered ton. The Board shall decide the number ofinstalments in which payment is to be made and may authorise theManagers to allow a variation in the number of instalments.
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15.2.2 If at any time before any instalment of Estimated Total Premium due inrespect of the Policy Year becomes payable the Board determines thatthe whole of the Estimated Total Premium (including any transfers fromreserves) is not required to meet the obligations of the Club underRule 15.1;
(i) the Board may decide to reduce the Estimated Total Premium in respect of the policy year and declare an Estimated Total Premium discount of such percentage of the Estimated Total Premium or any instalment thereof as it shall think fit, and
(ii) the liability to the Member to pay Estimated Total Premium under Rule 15.2.1 shall be reduced accordingly.
15.2.3 If a Member ceases to be insured in respect of any ship before anyinstalment of Estimated Total Premium due in respect of a Policy Yearbecomes payable, any such instalment or balance thereof, after anyprorating in accordance with Rule 12.2(i), shall be paid at such timeand in such manner as may be specified by the Managers providedalways that such instalments or any remaining balance thereof shall beimmediately payable if the Member has no other ships entered forinsurance in the Club or subsequently withdraws all his ships.
Supplementary Premium
15.3.1 At any time or times during or after the end of each Policy Year (but notafter such Policy Year has been closed) the Board may decide to levy fromthe Members who have or had ships entered for insurance in respect ofthat year (other than fixed premium entries) one or more SupplementaryPremiums. Such Supplementary Premium or Premiums shall be calculatedby reference to such percentage of the Estimated Total Premium as theBoard may in its discretion decide.
15.3.2 Notwithstanding the provisions of paragraph 3.1 above, the Managers mayagree with a Member for the payment of an estimated SupplementaryPremium to be paid with the Estimated Total Premium but such agreementshall not relieve that Member from the obligation to pay the balance, if any,of any Supplementary Premium as may be levied by the Board.
Managers’ remuneration
15.4 The Managers shall be remunerated by the Club on such basis as may befixed by the Board.
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Payment
15.5.1 The Estimated Total Premium and every Supplementary Premium andRelease due under Rule 13, shall be designated in U.S.$ or such othercurrency as the Managers shall agree and shall be payable in suchinstalments, in such manner and on such dates as the Board shall specifyand without prejudice to the rights and remedies of the Club under theseRules. If any Premium or instalment or part thereof or any other sum ofwhatsoever nature due from a Member is not paid on the specified date(time being of the essence) such Member shall pay interest on theamount outstanding from and including the date so specified down to thedate of payment at such rate or rates as the Board shall from time to timedetermine whether during the currency of the Policy Year to which theamount outstanding relates or otherwise; provided always that the Boardmay waive payment of such interest in whole or in part.
15.5.2 The Club shall be entitled to, and the Member hereby grants, a lien on theentered ship in respect of any amount whatsoever owed by the Memberto the Club.
15.6 If any Member defaults in payment of any sum due from him such sumshall be paid by all other Members rateably in proportion to the aggregatecontributions due from them in respect of the Policy Year(s) concerned;provided that the Board may make any Supplementary Premium orPremiums on Members by reference to their estimated liability under thisRule 15.6 and where any Member defaults in respect of that Premium orPremiums then the other Members shall be liable for any deficiency inaccordance with the provisions of this paragraph 15.6 and payment maybe enforced by the Club. Each Member who may for the time being beentitled to receive from the Club any payment in respect of any loss, claimor demand shall bear and contribute the proportion thereof due in respectof any ship or ships entered by him, including the ship in respect of whichthe loss, claim or demand arises.
Closing of Policy Years
15.7.1 The Board may decide that any Policy Year shall be closed at such time asit may deem expedient.
15.7.2 If the contributions obtained in respect of such Policy Year should exceedthe costs, expenses and other outgoings falling upon the Club for thatyear, the Board may either carry that surplus to such reserve or reserves asthe Board may think proper or may return it in whole or in part to the
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persons who made such contributions in proportion to the aggregatecontributions made by them in such Policy Year.
15.7.3 If at any time or times after the Policy Year has been closed it shall appearto the Board that the costs, expenses and outgoings arising in respect of aPolicy Year exceed or are likely to exceed the liability of the Premium andCalls and other receipts in respect of such Policy Year (and of all transfersfrom reserves and provisions made for the credit of or in respect of suchPolicy Year) then the Board may decide to provide for such deficiency inany one or more of the following ways:
(i) by transferring funds from the reserves of the Club;
(ii) by transferring funds standing to the credit of any different closed PolicyYear;
(iii) by levying Estimated Total Premium or Supplementary Premium inrespect of an open Policy Year with the intention of applying a partthereof to meet any such deficiency.
Reserves
15.8.1 The Board may establish and maintain such reserve fund or other accountsas it thinks fit.
15.8.2 The Board may apply the sums standing to the credit of any reserve forany of the purposes for which the reserve was maintained even though thesum be paid in respect of a different Policy Year or years from that fromwhich the funds originated.The Board may also apply the sums standingto the credit of any reserve for any other or different purposes wheneverthe Board considers this to be in the interests of the Club or its Members.The Board may also at any time transfer sums from one reserve to another.
15.8.3 The funds required to establish such reserves or accounts may be raised inany of the following ways:
(i) the Board, when considering the amount of the Estimated Total Premiumor any Supplementary Premium for any Policy Year, may resolve that anyspecified amount in proportion of such Call shall be transferred to andapplied for the purposes of any reserve or account;
(ii) the Board may on the closing of any Policy Year resolve that any specifiedamount standing to the credit of that Policy Year shall be transferred toand applied for the purposes of any such reserve or account;
(iii) the Board may in reviewing the funds available for the settlement of costs,expenses and other outgoings arising in respect of all closed Policy Yearsresolve that any specified amount standing to the credit of the closed
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Policy Years shall be transferred to and applied for the purposes of suchreserve or account.
Investment
15.9.1 The funds of the Club may be invested by the Board by means of thepurchase of such stocks, shares, bonds, debentures or other securities or thepurchase of such currencies, commodities, or other real or personalproperty, or by means of being deposited in such accounts as the Boardmay think fit.The funds of the Club may also be invested in any otherway the Board may approve.
15.9.2 Unless the Board otherwise decides, all the funds standing to the credit ofany Policy Year or of any reserve or account shall be pooled and investedas one fund.
15.9.3 When funds are pooled as provided in paragraph 15.9.2 above, theinvestment income arising on the pooled funds (taking into account anycapital gains or losses) shall be apportioned among and between thedifferent Policy Years, reserves and accounts from which the fund or funds,so invested, originated, in such manner as to ensure so far as possible thateach is credited with a proportion of such income corresponding to theproportion which the amount standing to the credit of the Policy Year,reserve or account over the period during which the income arose bearsto the total of the pooled funds over the same period.
15.9.4 Without prejudice to paragraph 15.9.3 of this Rule, the Board may directthat after the closing of any Policy Year that year shall not be credited withany share of the apportionments made under that paragraph and that itsshare shall instead be credited to any open Policy Year, reserve or accountmaintained by the Club.
Reinsurance
15.10 The Managers shall have the right in their discretion to effect on behalf ofthe Club the reinsurance or ceding of any risks insured by the Club withsuch reinsurers and on such terms as the Managers shall considerappropriate.
Right and Extent of Recovery
16.1 Subject always to the provisions of paragraph 16.6 below, if any Membershall incur any costs or expenses as hereinafter set out in Rule 20 of these
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Rules in respect of a ship which was entered in the Club at the time ofthe event or dispute giving rise to such costs or expenses, such Membershall be entitled to recover out of the funds of the Club the amount ofsuch costs or expenses to the extent and upon the terms, conditions andexceptions provided by these Rules including the provisos set out inRule 20 unless otherwise agreed in writing with the Managers.
16.2.1 Unless and to the extent that the Board otherwise determines, under nocircumstances shall the recovery by a Member or any other personexceed:
(i) if less than the full tonnage of the ship was entered in the Club, suchproportion of the amount referred to in paragraph 16.1 above, as theentered tonnage bears to the full tonnage of the ship, unless the entry ofthe ship has been accepted under special terms which otherwise provide;
(ii) any overall limit contained in these Rules in respect of any particular riskor any limit set out in the Members’ terms of entry.
16.2.2 any limits on the cover provided by the Club and set out in a Member’sCertificate of Entry or these Rules shall apply in the aggregate to theMember, and all Joint Entrants, Co-assureds, affiliated or associatedcompanies or other persons, as if the ship had been entered by theMember only.
16.2.3 The Club shall not be liable to any Member or other person in respect ofsuch claims, liabilities, costs and expenses except to the extent of the fundswhich the Club is able to recover from the Members or other personsliable for the same and which are applicable for that purpose.
Amounts owing to the Club
16.3 There shall be deducted from any sum recoverable under these Rules orthe Certificate of Entry any amount owing to the Club in respect of theentered ship or any other ship entered by the Member or entered by anyother owner of a ship or ships entered in the same Group RatingAgreement.
16.4 The entitlement of the Member referred to in paragraph 16.1 above, shallin all cases be subject to the right of the Club to decline to make anypayment in respect of any claim in the event that there are anycontributions due and owing from the Member to the Club, whether suchcontributions are owed in respect of the year in which the Member’sentitlement arises or any other year, provided that nothing herein shallaffect, vary or derogate from the rights of the Club upon Cessation ofInsurance and Cancellation as set out in Rule 12 above.
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Interest
16.5 In no case whatsoever shall interest be paid upon sums due from the Club.
Member to pay claim first
16.6 Unless the Board shall in its discretion otherwise determine, it is acondition precedent of a Member’s right to recover from the funds of theClub in respect of any costs or expenses that he shall first have paid thesame out of funds belonging to him unconditionally and not by way ofloan or otherwise.
Deductibles
16.7.1 Any deductible set out in this paragraph 7 of Rule 16 or in the Certificateof Entry of the entered ship shall be deducted from any sum recoverableunder these Rules or the said Certificate of Entry.
16.7.2 Unless otherwise expressly agreed in writing, all claims shall be subject tosuch deductible as the Board may from time to time determine, whetheror not a Member has received notice of such determination.
Note:The Board has determined that, unless otherwise agreed in writing with theManagers, there will be a deductible of 25% of each claim, with a minimumdeductible of U.S. $5,750 and a maximum of U.S. $33,750.
General Exceptions
Risks covered by Hull P & I War Risks Policies
17.1 The Club shall not cover any Member to any extent whatsoever, againstany of the costs or expenses against which he would be covered if theentered ship were: (i) fully insured for its proper value under hull policieson terms equivalent to those of the Lloyd’s MarinePolicy MAR form 1.1.82 with the Institute Time Clauses (Hulls) 1.10.83(including the 3/4 collision liability clause) attached; (ii) fully insuredagainst War Risks by entry in and under the policies of The StandardSteamship Owners’ Mutual War Risks Association Limited or by someequally wide War Risk Insurance; and (iii) fully entered in The StandardSteamship Owners’ Protection and Indemnity Association (Bermuda)Limited or other Club affording equally wide cover.
Other insurances
17.2 Notwithstanding Rule 17.1 the Club shall cover a Member to the extent
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of any franchise or deductible against costs and expenses which would becovered if the ship were fully insured under hull policies as specifiedtherein, provided always that any franchise or deductible to which anysuch hull policies are subject shall be deemed not to exceed 2% of theinsured value of the entered ship in respect of each incident.
17.3 Where a Member is insured elsewhere in any manner whatsoever againstany of the costs and expenses enumerated which would otherwise havebeen recoverable under these Rules, no contribution shall be made by theClub to such costs or expenses, on the basis of double insurance orotherwise, to the extent to which the Member is so insured; nevertheless,with the approval of the Board, a Member may be insured by specialagreement with the Club made either directly with himself or with otherinsurers upon the terms that certain costs or expenses shall be borne bythe Club notwithstanding such other insurance.
Unlawful and hazardous trades
18 No costs or expenses shall be recoverable from the Club if they arise outof or are consequent upon an entered ship carrying contraband, blockaderunning or being employed in an unlawful trade, or if the Board, havingregard to all the circumstances, shall be of the opinion that the carriage,trade or voyage was imprudent, unsafe, unduly hazardous or improper.
Fault and privity and careless management
19 A Member shall not, unless the Board otherwise decides, be entitled torecovery from the Club in respect of any costs or expenses which in theopinion of the Board have been incurred owing to the fault or privity of aMember or through the absence of reasonable care in the chartering,control or management of a Member’s ship.
Risks Covered
20 The costs and expenses against which Members shall be covered arelimited to costs and expenses duly authorised from time to time by theBoard and incurred for the purpose of ascertaining or protecting aMember’s legal position or in establishing or resisting claims or forattendance or representation at legal or other proceedings, including anysuch costs which the Member may become liable to pay to any otherparty to those proceedings under an order or agreement as to costs, inrespect of the matters set out in the paragraphs below, which occur during
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the period of the ship’s entry in the Club and which arise out of or inrelation to the chartering or operation by the Member of the enteredship;
20.1 Hire, off-hire, set-off, freight or deadfreight arising under any charterparty,bill of lading or other contract and claims for general and particularaverage contributions or charges.
20.2 Demurrage or damages for the detention or loss of use of, or delay to theentered ship.
20.3 Claim in respect of breach of any charterparty, contract of affreightmentor bill of lading or for the breach of any legal duty arising in connectionwith the carriage of goods.
20.4 The loss of or damage to the entered ship.
20.5 Supply of fuel, materials or equipment, or other necessaries.
20.6 Negligent or improper repair of or alteration to the entered ship.
20.7 Improper loading, lightering, stowage, trimming or discharge of cargo.
20.8 Claims or disputes arising in respect of charges, disbursements or accountsraised by or received from agents, brokers, harbour or other authorities, orother persons connected with the operation of the entered ship.
20.9 Amounts due from or to Underwriters and any other persons and/orcompanies conducting the business of marine insurance.
20.10 Salvage and towage services rendered by the entered ship.
20.11 Claims or proceedings by or against passengers, stowaways, officers, crewand other persons on or about the entered ship.
20.12 The levying of excessive or improper taxes, dues or charges on shipownersby any person or governmental, municipal, local or other authority.
20.13 Claims arising in connection with the building, conversion, purchase orsale of the entered ship.
PROVIDED ALWAYS THAT:
(i) There shall be no cover for claims arising out of a contract for thebuilding of a ship, or claims arising out of the contract for the conversionor lengthening of a ship, whether or not the ship shall have been enteredin the Club prior to the date of the contract, or claims arising beforedelivery of a ship to a Member in respect of a contract for the purchase ofa ship, unless (a) such entry is made effective from the date of such
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contract or from such date as the Managers may expressly agree, and (b)such cover has been expressly agreed in writing by the Managers on suchterms as they may determine.
(ii) unless otherwise agreed by the Managers in writing, where a limit hasbeen stipulated in respect of claims arising under this Rule 20.13, suchlimit shall apply in the aggregate to all claims in respect of all ships enteredby the member, and all joint entrants, co-assureds, affiliated or associatedcompanies or other persons, arising out of any one contract or series ofrelated contracts.
20.14 The mortgage of the entered ship.
20.15 Representation of Members at Official investigations, Coroner’s Inquests,or other enquiries in relation to the entered ship.
20.16 Claims by or against Revenue or Customs Authorities in connection withthe entered ship.
20.17 All claims, disputes, actions and other matters in respect of whichMembers should, in the opinion of the Board be supported by the Club.
PROVIDED ALWAYS THAT:
(i) in respect of all claims for costs and expenses arising under Rule 20.1 to20.17 where the probable cost will, in the opinion of the Board, exceed theamount in dispute, the Board may direct that the whole or such portion ofany claim against the Member as may be agreed on between the Board andthe Member concerned shall be paid out of the funds of the Club;
(ii) for the purpose of this Rule 20 a matter shall be considered as havingoccurred at the date when the cause of action accrued, except that in thecase of a claim or dispute arising out of towage or salvage the matter shallbe considered as having occurred at the date when the service began;
(iii) the Board have sole discretion to authorise the reimbursement of costs andexpenses and shall be entitled to exercise that discretion from time totime, as it sees fit and shall be entitled at any time to declinereimbursement in respect of any claim for costs and expenses,notwithstanding that the Board may have previously authorised thereimbursement of costs and expenses in connection with the same claimor matter and it shall be entitled when exercising its discretion to take intoaccount inter alia both the merits of the claim or matter, the interests ofthe other members of the Club and the amount of the costs and expensesincurred or expected to be incurred in respect of any claim and its effecton the financial position of the Club.
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Note:The Board has power to take or promote any steps or measures consideredexpedient for advancing or defending the interests or liabilities of the Members asshipowners whether in the United Kingdom or elsewhere. In exercise of this powerthe Board is able to bring or defend, or join in bringing or defending, test cases.
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General Terms and Conditions
Classification, condition and management of ships
21.1 Unless otherwise agreed in writing between the Member and theManagers, the following conditions are terms of the insurance of everyship entered in the Club:
(i) the ship must be and remain throughout the period of entry fully classedwith a Classification Society approved by the Managers;
(ii) any incident or condition in respect of which the Classification Societymight make recommendations as to repairs or other action to be taken bythe Member must be promptly reported to the Classification Society;
(iii) the Member must comply with all the Rules, recommendations andrequirements of the Classification Society relating to the entered shipwithin the time or times specified by that Society;
(iv) the Member hereby permits the Managers to inspect any documentand/or obtain any information relating to the maintenance of class of theentered ship in the possession of any Classification Society with whichthat ship is or at any time has been classed, and hereby authorises, and willwhere necessary authorise, such Classification Society or Societies todisclose and make available such documents and/or information to theManagers upon request by the Managers and for whatsoever purposes theManagers may consider necessary;
(v) any change of Classification Society must forthwith be notified to theManagers, whereupon the Managers shall have the power to amend thePremium Rating or terminate the entry in respect of such ship from thedate of such change, in which case a return of premium shall be allowedpro rata from the date of termination of the entry.
(vi) The Member must comply with all statutory requirements of the State of theship’s flag relating to the construction, adaptation, condition, fitment,equipment and manning of the entered ship and must at all times maintainthe validity of such statutory certificates as are issued by or on behalf of theState of the ship’s flag in relation thereto.
(vii) The Member must at all times maintain the validity of such statutorycertificates as are issued by or on behalf of the ship’s flag state in respect of theInternational Safety Management Code and the International Ship and PortFacility Security Code.
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Unless and to the extent that the Board otherwise decides, a Member shallnot be entitled to any recovery from the Club in respect of any costs orexpenses arising out of a matter occurring during a period when theMember is not fulfilling or has not fulfilled any conditions referred to inthis Rule 21.1.
PROVIDED ALWAYS THAT:
Where the ship is entered solely by a charterer other than a demise orbareboat charterer entitlement of that charterer to recovery from the Clubshall not be dependent upon fulfilment of conditions (ii) - (vii) of thisRule 21.1.
Obligations with regard to claims
22.1 Notice in writing of every event likely to lead to a claim for recoveryfrom the Club shall be given to the Managers at the earliest possibleopportunity. Failure to give such notice promptly will entitle the Club torefuse reimbursement in respect of any costs or expenses which relate tomatters arising prior to the receipt of such notice.
22.2 Any Member who may seek reimbursement in respect of costs andexpenses from the Club in any matter shall furnish to the Managersand/or to the lawyers or other persons appointed to act on his behalf,without charge to the Club, all such information, statements, plans,documents, and other evidence in his custody and control which isrelevant to the matter as the Club, or the lawyers or other personsappointed, may require.
22.3 No Member who willfully withholds any evidence of any descriptionwhich it is or may be relevant to disclose under this Rule, or knowinglyconceals other evidence, or makes any false statement in relation to a claimor matter shall be entitled to reimbursement of any costs or expenses; andany such Member shall repay to the Club any costs and expenses whichthe Club has incurred or reimbursed.
22.4 No Member who incurs any costs or expenses without the express priorsanction of the Managers in writing or without the claim or matterconcerned being conducted under the superintendence of a lawyer orother person appointed or previously expressly approved by the Managers inwriting shall be entitled to reimbursement of such costs or expenses bythe Club without the approval of the Board.The Managers may at anytime on notice to the Member in writing withdraw their approval of anylawyer or other person appointed to act on behalf of the Memberwhereupon the Member shall have no further entitlement to
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reimbursement of any of the costs or expenses of that lawyer or personunless and to the extent the Board otherwise decides.
22.5 Any Member who may seek reimbursement in respect of costs andexpenses from the Club must keep the Managers closely informed of theprogress of the claim or matter concerned, and in particular of the level ofcosts and expenses being incurred, and of any action proposed in relationto the claim or matter, notwithstanding that the Managers may havepreviously approved of the appointment of a lawyer or other person tosuperintend the claim or matter, and failure to do so will entitle the Clubto refuse reimbursement.
22.6 No Member shall settle or compromise any matter which may have beenundertaken or defended with the agreement of the Club without theexpress sanction of the Managers in writing or without complying withany requirements of the Managers for making provision for any costs orexpenses incurred by the Club. In the event of any Member so settling orcompromising without such sanction, the Member shall be liable to payby way of indemnity to the Club such sum as the Board may fix anddetermine against the costs and expenses it may have been put to relativeto such matter.
22.7 A Member must submit his claim for reimbursement by the Club of anycosts and expenses to the Club within 12 months after settling the same,and shall produce in support of each claim such vouchers, receipts andother documents and information as the Managers may require. Failure todo so will entitle the Club to refuse or reduce reimbursement.
Powers of the Club relating to the handling and settlement of claims
23.1 The Club shall have an unlimited control over any matter in respect ofwhich recovery may be sought and in particular the Club may at any timedirect the Member concerned in any such matter to take whatever coursein connection with that matter the Club may consider expedient,including abandonment or settlement of the claim or of defence of theclaim. If the Member fails to comply with such a direction he will lose hisright to reimbursement of the costs and expenses incurred or payable byhim in respect of such matter.
23.2 Where a Member has made a claim against another party and has becomeentitled by judgement, award, settlement or otherwise to a recovery,whether or not including costs, there shall be credited and paid to theClub from such recovery an amount corresponding with the sum paid bythe Club in respect of costs, or such lesser sum as the Managers may intheir discretion determine.
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Bail
24.1 The Club is under no obligation to provide security for costs, bail or othersecurity on behalf of a Member, but where the same is provided, it shall beon such terms as the Managers may consider appropriate and shall notconstitute any admission or liability by the Club for the claim in respect ofwhich the security is given.
24.2 A Member on whose behalf security for costs, bail or other security hasbeen provided by the Club, whether or not at the Member’s request, shallon demand pay to the Club a sum corresponding to the amount of suchsecurity whether or not such amount may be recoverable in whole or inpart from the Club.
24.3 In no case shall the Club be liable for the detention of an entered ship orfor the other detention or attachment of a Member’s funds or assets, or forany damage whatsoever caused to a Member by reason of the provision ornon-provision of security.
Meetings of the Board
25 The Board shall meet as often as it may consider necessary for thesettlement of claims which shall be paid by the Club as the Board maydetermine in accordance with these Rules; but the Board shall have thepower from time to time to authorise the Managers, without priorreference to the Board, to effect payment of claims of such types and up tosuch sums as the Board may determine. No member of the Board shall actas such in the settlement of any claim in which he is interested.
Forbearance and reimbursement
26.1 No act, omission, course of dealing or forbearance and reimbursement bythe Club of any kind whatsoever, and whensoever occurring, whetherrelating to the same or a different matter, shall be treated as any evidenceof waiver of the Club’s rights under these Rules, and the Club shall at alltimes and without notice be entitled to insist upon the strict applicationthereof.
26.2 Without prejudice to the Club’s rights under Rule 25.2 a Member shallupon demand reimburse the Club such sum or sums as the Club has paid onbehalf of the Member or under bail or other security provided by theClub to the extent that such payment is, in the opinion of the Managers, inrespect of liabilities, costs and expenses not recoverable from the Club.
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Club may subscribe to societies
27 The Board may cause the Club, in respect of such of the Members of theClub as are eligible, or members individually to become a member of, oraffiliated to such societies or organisations as the Board in its solediscretion shall consider appropriate, and for this purpose may authorisethe payment by the Club to those bodies of such subscriptions or grants asthe Board may think fit.
Regulations and recommendations by the Board
28.1 The Board shall have power from time to time to make regulationsprescribing the conditions or forms of contracts for use in connection withany particular trade. Upon the passing of any such regulation, of whichnotice shall be sent by the Managers to all the Members, it shall be deemedto be incorporated in these Rules, and every Member shall conform theretoin so far as the same may apply to the voyages performed by the shipsentered by him or on his behalf in the Club, or to the trades in which theymay be engaged: and, if any Member shall commit a breach of anyregulation, the Board may reject or reduce any claim made by the Memberto the extent to which it would not have arisen if he had complied with theregulation, and may further impose such terms upon him as they may thinkfit as a condition of the continuance of the entry of the Member’s ship orships in the Club.
28.2 The Board may also from time to time recommend the use of anyparticular form of contract in any particular trade. Members whose shipsare engaged in such trades will endeavour to use the appropriate form ofcontract when the circumstances of the fixture or engagement of suchships permit.
Notices
29.1 All notices and documents required by these Rules to be given to theClub or to the Managers shall be in writing (whether by letter, fax,electronic mail or telex) and addressed to the Managers.
29.2 A notice or other document that is required to be served by the Club on aMember or any other person may be served on him personally, or in thecase of a company, by handing it in to a director or officer of suchcompany, or by post, courier, telex, fax or electronic mail, addressed in thecase of a Member to his address or to his telex or fax number or electronicmail address as last recorded by the Managers, in the case of a non-
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Member to the address or telex or fax number or electronic mail addressfurnished by him for the service of notice as his address and in both casesat any place of business of a broker or other intermediary through whoma ship to which the notice relates is or was entered in the Club forinsurance. Subject always as aforesaid, in the case of Joint Entrants allnotices shall be given to the person designated as Principal Assured underRule 8.1.2 and in the case of a ship entered under a Group RatingAgreement all notices shall be given to the person designated as GroupPrincipal under Rule 8.3.2.
29.3.1 Any notice or other document, if served personally, shall be deemedserved on the day it was served.
29.3.2 Any notice or other document, if served by post or courier, shall bedeemed to have been served on the day following the day on which the lettercontaining the same was put in the post or handed to the courier and inproving such service it shall be sufficient to prove that the letter containing thenotice or other document was properly addressed and put into the post as aprepaid letter or handed to the courier.
29.3.3 Any notice or other document, if served by telex, fax or electronic mail, shallbe deemed to have been served on the day on which it was transmitted andin proving such service it shall be sufficient to prove that such telex, fax orelectronic mail was duly transmitted.
29.3.4 Every legal or personal representative, administrative receiver, receiver,curator bonis or other legal curator, trustee in bankruptcy or liquidator ofa Member shall be bound by a notice given in accordance with this Rule29 notwithstanding that the Club may have notice of the death, lunacy,bankruptcy, liquidation, disability or administration of such Member.
Disputes and differences
30.1 The Member hereby submits to the jurisdiction of the High Court ofJustice of England in respect of any action brought by the Club to recoverany sums which the Club may consider to be due to it from a Member.Without prejudice to the foregoing the Club shall be entitled tocommence and maintain any action to recover any sums which the Clubmay consider to be due to it from a Member in any jurisdiction.
30.2 If any other difference or dispute between a member or any other personclaiming under these Rules and the Club shall arise out of or inconnection with these Rules or any regulations made thereunder, or as tothe rights or obligations of the Club or the Member or such person
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thereunder or in connection therewith, such difference or dispute shallfirst be referred to the Board notwithstanding that the Board may havealready considered the matter which has given rise to the difference ordispute, and such reference shall be on written submissions only.
30.3 If, after the difference or dispute has been referred to the Board inaccordance with Rule 30.1 above, the Member or any other personclaiming under these Rules does not accept the decision of the Board thedifference or dispute shall be referred to the arbitration in London of twoArbitrators, one to be appointed by each of the parties, and an Umpire tobe appointed by the two Arbitrators.The submission to arbitration and allthe proceedings therein shall be subject to the provisions of the EnglishArbitration Act, 1996, and Schedules thereto or any statutory modificationor re-enactment thereof.
30.4 No Member or any other person claiming under these Rules shall beentitled to maintain any action, suit or other legal proceedings against theClub upon any such difference or dispute unless and until the same hasbeen submitted to the Board and the Board shall have given its decisionthereon, or shall have made default for six months in so doing; and, if suchdecision be not accepted by the Member or such other person or suchdefault be made, unless or until the difference or dispute shall have beenreferred to arbitration in the manner provided in this Rule, and the awardshall have been published; and then only for such sum as the award maydirect to be paid by the Club.
And the sole obligation of the Club to the Member or such other personunder these Rules or otherwise howsoever in respect of any disputedclaim made by the Member or such other person shall be to pay such sumas may be directed by such an award.
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The Standard Steamship Owners’ Protectionand Indemnity Association (Europe) Ltd
The Standard Steamship Owners’ Protectionand Indemnity Association (Asia) Ltd
Rules of the Defence Class
The Rules of The Standard Steamship Owners’ Protection andIndemnity Association (Europe) Limited and of The Standard SteamshipOwners’ Protection and Indemnity Association (Asia) Limited shall be thesame as the Rules of The Standard Steamship Owners’ Protection andIndemnity Association (Bermuda) Limited amended and varied asfollows:
Save as hereafter provided or the context otherwise so requires ‘the Club’ means The Standard Steamship Owners’ Protection andIndemnity Association (Europe) Limited or The Standard SteamshipOwners’ Protection and Indemnity Association (Asia) Limited as the casemay be and references to ‘the Act’ and/or ‘the Bye-laws’ shall bereferences to the Memorandum and Articles of Association of the Club.
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7 Index to the Defence Rules
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Rule No. Page No.Accounts - overcharges 20.8 139
Actual total loss 10.1.ii 125
11.2.ii 126
Affiliated Companies 8.4 123
Applicant - definition 1 113
Application for entry 6 119
Arbitration Act English 1996 30.3 148
Assignment 5.1.4.1 117
Associated Companies 8.4 123
Bail 24 145
Basis of contribution 14 130
Bill of Lading 20.1 139
breach of 20.3 139
Board - definition 1 113
Board
powers of 3.1 115
meetings of 25 145
recommendations 28 146
regulations 28 146
discretions relating to:
cancellation of insurance 11.2 126
claims settlements 20 138
Proviso iii 140
cover after cessation Proviso to
Rule 12.2iiic 129
Interest 16.5 137
Payment by the Club 16.6 137
Laid-up Returns 10.3 125
Releases 13.1 129
Reserves 15.1.ii 131
15.8 134
Building - ship 20.13 139
Calls - payment of 15.5.1 133
Cancellation 11 126
effect of 12 127
Careless Management 19 138
Certificates of Entry 7 119
Cessation of insurance
effect of 12 127
7 Index to the Defence Rules
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Rule No. Page No.Charges - improper 20.12 139
Charter Party 20.1 139
Claims
obligations with regard to 22 143
notice of 22.1 143
handling and settlement 23 144
Classification 21.1.i,ii,iii,iv,v,vi,vii 142
Closing of Policy Years 15.7 133
Club - definition 1 113
Co-Assured 8.2 122
Constructive total loss 10.1.ii 125
11.2.ii 126
Contract - breach of 20.3 139
Contracts of Carriage 28.1,2 146
Contribution - definition 1 113
basis of 14 130
period of 10 124
mutual 15 131
Coroner’s Inquests 20.15 140
Crew 20.11 139
Customs Authorities 20.16 140
Damages - detention 20.2 139
Dead Freight 20.1 139
Deductibles 16.7.1,2 137
Default 20.3 139
Definitions 1 113
Demise Charterer - definition 1 113
Demurrage - detention 20.2 139
Discharge - improper 20.7 139
Disputes 20.17 140
Disputes and differences 30 147
Dues - improper 20.12 139
Endorsement Slip 7.2 120
English Arbitration Act 1996 30.3 148
Entered Ship - definition 1 114
Entry 4 116
obligations 4.2 116
refusal of 4.1 116
Terms of 5.1.1 117
Equipment - supply of 20.5 139
Estimated Total Premium 15.2 131
Fault and Privity 19 138
Fixed Premium 5.1.3 117
Forbearance 26 145
Freight 20.1 139
Fuel - supply of 20.5 139
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Rule No. Page No.
Group Principal 8.3.2 123
Group Rating Agreement - definition 1 114
Group Entries 8.3 123
Group Rating Agreement 8.3.1 123
Guarantee Fund 15.1.iii 131
Hazardous trades 18 138
Headings to Rules 2.4 115
High Court of Justice of England 30.1 147
Hull Policies - definition 1 114
Hull Policies 17.1 137
Inquests - Coroner’s 20.15 140
Institute Time Clauses (Hulls) 17.1 137
Insurance and governing law 2.1, 2.2 115
Insurance
cessation of 11 126
period of 9 124
Insurances - other 17.2 137
International Safety Management Code 21.1.vii 142
Investigation - official 20.15 140
Investment 15.9 135
Joint Entrants 8.1 121
Laid-up Returns 10.2 125
Legal Duty - breach of 20.3 139
Lightering - improper 20.7 139
Lloyd’s Marine Policy 17.1 137
Loading - improper 20.7 139
Managers - definition 1 113
powers of 3.2 116
remuneration 15.4 132
discretions relating to:
cancellation Proviso to
Rule 12.2.i 128
entry 4.1 116
reinsurance 15.10 135
Management of ships 21.1 142
Member - definition 1 113
Member 4.3 116
Mortgage - ship 20.14 140
Mutual contributions 15 131
Neglect 20.6 139
Notes to Rules 2.4 115
Notices 29 146
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Rule No. Page No.Notice
of claims 22.1 143
of withdrawal 9.2.1 124
Officers 20.11 139
Official investigations 20.15 140
Other insurances 17.2 137
Owner - definition 1 114
Ownership - transfer of 10.1.i 124
Payment of calls 15.5.1 133
Passengers 20.11 139
Period of contribution 10.1 124
Period of insurance 9 124
Policy Year - definition 1 114
Policy Years - closing of 15.7 133
P & I Policies 17.1 137
Premium Rating, definition 14.2.1 130
Purchase - ship 20.13 139
Recommendations - by the Board 28.2 146
Recovery - right and extent of 16 135
Regulations - by the Board 28.1 146
Reinsurance 4.5 116
15.10 135
Releases 13 129
Reserves 15.1.ii 131
15.8 134
Revenue Authorities 20.16 140
Risks covered 20 138
by Hull 17.1 137
Rules - definition 1 113
Sale - ship 20.13 139
Salvage 20.10 139
Settlement of claims 23, 25 144, 145
Ship - definition 1 114
building 20.13 139
mortgage 20.14 140
purchase 20.13 139
sale 20.13 139
Societies - subscription to 27 146
Solvency Margin 15.1.iii 131
Special entries 5.2 118
Stowage - improper 20.7 139
Stowaways 20.11 139
Subscriptions 27 146
Supplementary Premium 15.3 132
Taxes - improper 20.12 139
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Rule No. Page No.Terms of Entry 5 117
variation 7.2 120
Tonnage - definition 1 114Total loss 10.1.ii 125
11.2.ii 126Towage - definition of 1 115Towage 20.10 139Transfer of ownership 10.1.i 124Trimming - improper 20.7 139Unlawful trades 18 138War Risks Policies 17.1 137Withdrawal 9 124
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8 Recommended Charter Party Clauses and Agreements
8
8 Recommended Charter Party Clauses and Agreements
Pollution Charterparty Clauses
In March 1990 the Group circulated a recommended clause for inclusionin charterparties of tankers. In order to reflect the 1992 Protocol toCLC, and the OPA requirements concerning certification which nowapply in the United States, the original clause has been amended, and anew clause for non-tankers is recommended.
Financial Responsibility in Respect of Pollution
(Applicable to all self-propelled tank vessels and to non-self-propelled tankvessels carrying more than 2,000 tons of persistent oil in bulkas cargo)
1 Owners warrant that throughout the currency of this charter they willprovide the vessel with the following certificates:
(a) Certificates issued pursuant to the Civil Liability Convention 1969(“CLC”), and pursuant to the 1992 protocols to the CLC, as and whenin force.
(b) Certificates issued pursuant to Section 1016(a) of the Oil Pollution Act1990, and Section 108(a) of the Comprehensive EnvironmentalResponse, Compensation and Liability Act 1980, as amended inaccordance with Part 138 of Coast Guard Regulations 33 CFR, so longas these can be obtained by the owners from or by (identify theapplicable scheme or schemes).
2 Notwithstanding anything whether printed or typed herein to thecontrary:
(a) save as required for compliance with paragraph (1) hereof, owners shallnot be required to establish or maintain financial security orresponsibility in respect of oil or other pollution damage to enable thevessel lawfully to enter, remain in or leave any port, place, territorial orcontiguous waters of any country, state or territory in performance ofthis charter.
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(b) Charterers shall indemnify owners and hold them harmless in respect ofany loss, damage, liability or expense (including but not limited to thecosts of any delay incurred by the vessel as a result of any failure by thecharterers promptly to give alternative voyage orders) whatsoever andhowsoever arising which owners may sustain by reason of anyrequirement to establish or maintain financial security or responsibility inorder to enter, remain in or leave any port, place or waters, other than tothe extent provided in paragraph (1) hereof.
(c) Owners shall not be liable for any loss, damage or expense whatsoeverand howsoever arising which charterers and/or the holders of any bill oflading issued pursuant to this charter may sustain by reason of anyrequirement to establish or maintain financial security or responsibility inorder to enter, remain in or leave any port, place or waters, other than tothe extent provided in paragraph (1) hereof.
3 Charterers warrant that the terms of this clause will be incorporatedeffectively into any bill of lading issued pursuant to this charter.
Financial Responsibility in Respect of Pollution
(All ships other than self propelled tank vessels and non-self-propelled tank
vessels carrying more than 2,000 tons of persistent oil in bulk
as cargo)
1 Owners warrant that throughout the currency of this charter they willprovide the vessel with the following certificates:
Certificates issued pursuant to Section 1016(a) of the Oil Pollution Act1990, and Section 108(a) of the Comprehensive EnvironmentalResponse, Compensation and Liability Act 1980, as amended inaccordance with Part 138 of Coast Guard Regulations 33 CFR, from(indicate the earliest date upon which the owners may berequired to deliver the vessel into the charter), so long as these canbe obtained by the owners from or by (identify the applicablescheme or schemes).
2 Notwithstanding anything whether printed or typed herein to thecontrary:
(a) save as required for compliance with paragraph (1) hereof, owners shallnot be required to establish or maintain financial security or
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responsibility in respect of oil or other pollution damage to enable thevessel lawfully to enter, remain in or leave any port, place, territorial orcontiguous waters of any country, state or territory in performance ofthis charter.
(b) Charterers shall indemnify owners and hold them harmless in respect ofany loss, damage, liability or expense (including but not limited to thecosts of any delay incurred by the vessel as a result of any failure by thecharterers promptly to give alternative voyage orders) whatsoever andhowsoever arising which owners may sustain by reason of anyrequirement to establish or maintain financial security or responsibility inorder to enter, remain in or leave any port, place or waters, other than tothe extent provided in paragraph (1) hereof.
(c) Owners shall not be liable for any loss, damage, liability or expensewhatsoever and howsoever arising which charterers and/or the holdersof any bill of lading issued pursuant to this charter may sustain by reasonof any requirement to establish or maintain financial security orresponsibility in order to enter, remain in or leave any port, place orwaters, other than to the extent provided in paragraph (1) hereof.
3 Charterers warrant that the terms of this clause will be incorporatedeffectively into any bill of lading issued pursuant to this charter.
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Inter-Club New York Produce ExchangeAgreement 1996
This Agreement is made on the 1st of September 1996 between the P&IClubs being members of The International Group of P&I Associationslisted below (hereafter referred to as “the Clubs”).
This Agreement replaces the Inter-Club Agreement 1984 in respect of allcharterparties specified in clause (1) hereof and shall continue in forceuntil varied or terminated.Any variation to be effective must beapproved in writing by all the Clubs but it is open to any Club towithdraw from the Agreement on giving to all the other Clubs not lessthan three months’ written notice thereof, such withdrawal to take effectat the expiration of that period.After the expiry of such notice theAgreement shall nevertheless continue as between all the Clubs, otherthan the Club giving such notice who shall remain bound by and beentitled to the benefit of this Agreement in respect of all Cargo Claimsarising out of charterparties commenced prior to the expiration of suchnotice.
The Clubs will recommend to their Members without qualification thattheir Members adopt this Agreement for the purpose of apportioningliability for claims in respect of cargo which arise under, out of or inconnection with all charterparties on the New York Produce ExchangeForm 1946 or 1993 or Asbatime Form 1981 (or any subsequentamendment of such Forms), whether or not this Agreement has beenincorporated into such charterparties.
Scope of application
1 This Agreement applies to any charterparty which is entered into afterthe date hereof on the New York Produce Exchange Form 1946 or 1993or Asbatime Form 1981 (or any subsequent amendment of such Forms).
2 The terms of this Agreement shall apply notwithstanding anything to thecontrary in any other provision of the charterparty; in particular theprovisions of clause (6) (time bar) shall apply notwithstanding anyprovision of the charterparty or rule of law to the contrary.
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3 For the purposes of this Agreement, Cargo Claim(s) mean claims for loss,damage, shortage (including slackage, ullage or pilferage), overcarriage ofor delay to cargo including customs dues or fines in respect of such loss,damage, shortage, overcarriage or delay and include:
(a) any legal costs claimed by the original person making any such claim;
(b) any interest claimed by the original person making any such claim;
(c) all legal, Club correspondents’ and experts’ costs reasonably incurred inthe defence of or in the settlement of the claim made by the originalperson, but shall not include any costs of whatsoever nature incurred inmaking a claim under this Agreement or in seeking an indemnity underthe charterparty.
4 Apportionment under this Agreement shall only be applied to CargoClaims where:
(a) the claim was made under a contract of carriage, whatever its form,
(i) which was authorised under the charterparty;
or
(ii) which would have been authorised under the charterparty but for the inclusion in that contract of carriage of Through Transport orCombined Transport provisions,
provided that
(iii) in the case of contracts of carriage containing Through Transport orCombined Transport provisions (whether falling within (i) or (ii) above)the loss, damage, shortage, overcarriage or delay occurred aftercommencement of the loading of the cargo onto the chartered vessel andprior to completion of its discharge from that vessel (the burden of proofbeing on the Charterer to establish that the loss, damage, shortage,overcarriage or delay did or did not so occur); and
(iv) the contract of carriage (or that part of the transit that comprisedcarriage on the chartered vessel) incorporated terms no less favourable tothe carrier than the Hague or Hague/Visby Rules, or, whencompulsorily applicable by operation of law to the contract of carriage,the Hamburg Rules or any national law giving effect thereto; and
(b) the cargo responsibility clauses in the charterparty have not been materially amended.A material amendment is one which makesthe liability, as between Owners and Charterers, for Cargo Claims clear.
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In particular, it is agreed solely for the purposes of this Agreement:
(i) that the addition of the words “and responsibility” in clause 8 of theNew York Produce Exchange Form 1946 or 1993 or clause 8 of theAsbatime Form 1981, or any similar amendment of the charterpartymaking the Master responsible for cargo handling, is not a materialamendment; and
(ii) that if the words “cargo claims” are added to the second sentence ofclause 26 of the New York Produce Exchange Form 1946 or 1993 orclause 25 of the Asbatime Form 1981, apportionmentunder this Agreement shall not be applied under any circumstances evenif the charterparty is made subject to the terms of this Agreement;
and
(c) the claim has been properly settled or compromised and paid.
5 This Agreement applies regardless of legal forum or place of arbitrationspecified in the charterparty and regardless of any incorporation of theHague, Hague/Visby Rules or Hamburg Rules therein.
Time Bar
6 Recovery under this Agreement by an Owner or Charterer shall bedeemed to be waived and absolutely barred unless written notification ofthe Cargo Claim has been given to the other party to the charterpartywithin 24 months of the date of delivery of the cargo or the date thecargo should have been delivered, save that, where the Hamburg Rulesor any national legislation giving effect thereto are compulsorilyapplicable by operation of law to the contract of carriage or to that partof the transit that comprised carriage on the chartered vessel, the periodshall be 36 months. Such notification shall if possible include details ofthe contract of carriage, the nature of the claim and the amount claimed.
The apportionment
7 The amount of any Cargo Claim to be apportioned under thisAgreement shall be the amount in fact borne by the party to thecharterparty seeking apportionment, regardless of whether that claimmay be or has been apportioned by application of this Agreement toanother charterparty.
8 Cargo Claims shall be apportioned as follows:
(a) Claims in fact arising out of unseaworthiness and/or error or fault innavigation or management of the vessel:
100% Owners
save where the Owner proves that the unseaworthiness was caused by theloading, stowage, lashing, discharge or other handling ofthe cargo, in which case the claim shall be apportioned under sub-clause(b).
(b) Claims in fact arising out of the loading, stowage, lashing, discharge,storage or other handling of cargo:
100% Charterers
unless the words “and responsibility” are added in clause 8 or there is asimilar amendment making the Master responsible for cargo handling inwhich case:
50% Charterers50% Owners
save where the Charterer proves that the failure properly to load, stow,lash, discharge or handle the cargo was caused by the unseaworthiness ofthe vessel in which case:
100% Owners
(c) Subject to (a) and (b) above, claims for shortage or overcarriage:
50% Charterers50% Owners
unless there is clear and irrefutable evidence that the claim arose out of pilferage or act or neglect by one or the other (including their servantsor sub-contractors) in which case that party shall then bear 100% of theclaim.
(d) All other cargo claims whatsoever (including claims for delay to cargo):
50% Charterers50% Owners
unless there is clear and irrefutable evidence that the claim arose out ofthe act or neglect of the one or the other (including their servants orsub-contractors) in which case that party shall then bear 100% of theclaim.
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Governing Law
9 This Agreement shall be subject to English Law and Jurisdiction, unless itis incorporated into the charterparty (or the settlement of claims inrespect of cargo under the charterparty is made subject to thisAgreement), in which case it shall be subject to the law and jurisdictionprovisions governing the charterparty.
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9 Selected Circulars
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9 Selected Circulars
Managing Safety – Minimum Operating Standards
The requirement for members to have formal operating procedures forkey shipboard operations was first reported to members in CircularNo. 1993/5 entitled “Minimum Standards” in March 1993. During the1993/94 policy year, the Managers visited all members to discuss therequirements and to determine if members’ operating procedures satisfiedthe Club’s requirements. Compliance with the spirit and intent of MOShas been a requirement for Club membership since renewal on20th February 1994.
The International Safety Management (ISM) Code entered into force forall ships on 1st July 2002.Although many of the Club’s MOSrequirements are covered in the ISM Code, MOS includes requirementson officer and crew recruitment and employment which are not dealtwith in the ISM Code.
In light of the ISM Code requirements, the Club’s Safety and LossAdvisory Committee has reviewed the Club’s MOS and has concludedthat the Managers should continue meeting members and prospectivemembers to discuss operational procedures, safety management andMOS. Emphasis will be on the application, rather than just the existence,of procedures for ship management which impact on P&I claims.
Circular No. 1993/5 March 1993
Minimum Standards
We refer to our circular of the 26th October, 1992, headed “Procedures”.The circular reported that the Board was considering a proposal that allmembers should be expected to have operating procedures which dealwith a number of matters set out in the circular; a safety policy for theircrews; a maintenance schedule for their ships; a policy for the continuityof employment of at least the four senior officers; formal contingencyprocedures to respond to a major casualty and that each ship should
carry certain listed publications.The proposals are an attempt to reducethe large number of claims caused by human error either of the crew orof shore based staff.The proposals are also intended to allow all membersto feel confident that their fellow members are operating to some basicminimum standards – the essence of mutuality.The circular asked allmembers for their comments on the idea in principle and on the detailsby the end of November.
We are pleased to report that the great majority of comments on thisproposal have been positive and we have found considerable support forthis initiative.Accordingly the Board has endorsed the proposals whichare set out in the appendix to this circular.We must make it clear againthat the club is not setting down procedures with which all membersmust comply, but is merely requiring members to develop their ownprocedures which deal with the points set out in the appendix.The clubis convinced that the crews who have procedures which set out howthey should do their work safely make fewer mistakes than those who donot.The Club is also convinced that continuity of employment is a vitalfactor in reducing claims.
Members will be expected during the 1993/94 policy year to ensure thatthey comply with these minimum standards. If any member feels that hecannot, he should discuss the matter with the Managers as soon aspossible. Failure to comply with the standards will not prejudice cover.The purpose of the proposals is to show that the Club sees the need forcertain minimum qualifications in order for an owner to be a member ofthe Club. Compliance with the spirit and intent will be a requirement ofcontinued membership after 20th February, 1994.
A Procedures
All members should have written company procedures in a languagewhich can be understood by the officers and the ratings, which governboth deck and engine room and which in general define how the shipshall be managed and operated setting out the company’s expectationsabout the performance of the officers and the crew.These proceduresshould be signed by each officer at the beginning of his tour of duty.The members should establish a system for checking that the proceduresare followed.The procedures should define the responsibility of eachofficer for particular tasks and should at least deal with the followingaspects:-
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1 Bridge and Navigation
Members are recommended to base their procedures on the ICS BridgeProcedures Guide, but anyway the procedures should deal with:-
(a) Manning and watchkeeping:(i) Daily routines at sea and in port;
(ii) Specific routines for manning during harbour stand-by periods,congested waters and poor visibility and machinery/control malfunctions;
(b) Keeping a proper look out under all circumstances and whatever the distraction;
(c) Position fixing, frequency and method;(d) Routeing for heavy weather avoidance;(e) Navigation in congested and coastal waters including collision avoidance;(f) Master’s responsibility when the ship is under pilotage:
(i) Information exchange with pilots (Part A, Section 3.10.2 of the ICS Bridge Procedures Guide)
(g) Maintenance and performance monitoring of electronic navigation equipment;
(h) Updating of navigational charts and nautical publications (reporting back to head office);
(i) Testing of navigation, control and propulsion systems prior to departure to sea and before arrival at port;
(j) The completion of the ship’s log and rough bridge note book if used;(k) Emergency procedures for man overboard.(l) Compliance with traffic separation schemes and deep water routes where
appropriate;(m) Passage planning in accordance with Part A, Section 2 of the ICS Bridge
Procedures Guide;(n) Navigation in reduced visibility(o) Procedures for ensuring that bridge watchkeepers are familiar with the
vessel’s navigation and control equipment including bridge control of main engines where applicable.
II Engine Room Procedures
(a) Engine room manning and watchkeeping:(i) daily routines at sea and in port;(ii) specific routines for manning during stand-by periods, congested
waters, poor visibility and machinery/control malfunctions;(b) Monitoring of machinery performance with respect to temperature and
pressure, instrument malfunction/failure;
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(c) testing of all alarms (high level alarm, temperature alarm, lube oil pressurealarm etc), logging all alarm settings;
(d) Storage, heating and purification of fuel oil;(e) Routine maintenance procedures and checks to be carried out per
watch;(f) Criteria and company standards for overhaul of main or auxiliary
machinery. Cleaning of coolers, replacement criteria for liners and bearings etc.
(g) Requirements for cleanliness inside the machinery space with particular reference to engine room bilges and fuel oil processing areas;
(h) Requirements for spare parts and the level of spare parts to be carried on the ship, (both classification society minimum and owner’s minimum);
(i) Procedures for the testing of steering gear to departure from and entry into port. Routine testing of main engine, bow thrusters (in port/prior to arrival at port) with particular reference to pitch selection (where CPP is fitted);
(j) Bunkering and oil transfer procedures including oil spill response measures;
(k) Engine start and shut-down procedures, procedures for emergency operation;
(l) Recording of information, temperature, pressure, equipment tests, alarm setting maintenance and malfunction in log books;
(m) Familiarisation procedures for engine room watchkeepers with particular reference to all engine room systems and machinery operation;
(n) Regular testing and back-up systems such as power systems generator,emergency fire pump, emergency steering systems, lifeboat engines etc;
(o) Procedures for safe and efficient operation under UMS conditions whereappropriate.
III Ship Operations
(a) General ProvisionsThe following procedures should be dealt with whatever the type of ship:-
(i) noting of protests and complaints to the agents/charterers/stevedores.(ii) entry into closed spaces.(iii) daily recording of soundings
(b) General Cargo Ships(i) Examination and testing cargo hatch covers and sealing
arrangements prior to loading;
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(ii) Pumping and cleaning of bilge spaces and general cleaning of cargo spaces;
(iii) Checking and condition of lashing materials and dunnage;(iv) Maintenance of lifting appliances and testing of their automatic
stops;(v) Supervision by ship’s staff during the loading and discharge of
cargo, with specific instructions for recalling location and number oftally clerks, measurements of drafts, estimation of amount of cargo loaded or discharged, noting and reporting of any damaged cargo,noting and reporting of any cargo badly stowed or roughly handled and noting of any accidents or mishaps with the stevedores or damage to the ship;
(c) Tankers(i) Tank cleaning and removal of oil sludges, measurement of R.O.B.’s;(ii) Commencement of loading and topping off procedures, ullage
monitoring;(iii) Requirements for cargo segregation when separate grades are
carried.(iv) The testing of the integrity of bulkheads, pipeline systems, valves
and heating coils/cargo heaters;(v) Crude oil washing procedures (noting that this will be covered by a
separate manual);(vi) Operation and monitoring of inert gas system;(vii) Discharge of dirty ballast. (This will be covered by a separate
manual and MARPOL 73/78.Annexe 1);(viii)General guide-lines concerning checks and double checks prior to
opening and closing of valves and the starting of cargo pumps;(ix) Provision of oil spill contingency plan;(x) Entry into enclosed spaces re: tanker safety;(xi) Permit to work system for hot work repairs at sea.
(d) Reefers(i) Checking of cargo space sealing arrangements;(ii) Checking and monitoring of ventilation system;(iii) Checking and monitoring of refrigeration equipment system;(iii) Testing and monitoring of temperature control systems including
all sensor points and remote read-out facilities.
(e) Container Ships(i) Regular maintenance of all container securing points;
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(ii) Regular inspection and maintenance of all container lashing systems;
(iii) Inspection and maintenance of all reefer container plug-in connection systems;
(iv) Monitoring of reefer container temperatures whilst on passage;(v) Monitoring of container stowage plans for ship’s stability and safety;(vi) Review of safest stowage position of potentially hazardous cargoes;
(f) Bulk Carriers(i) Examination and testing of ballast tanks, associated pipeline systems
and valves on a regular basis, particularly before loading cargo;(ii) Testing of bilge system prior to loading;(iii) Cleaning of cargo spaces for various cargoes;(iv) Entry into enclosed spaces;(v) Deck watch procedures during cargo operations with particular
reference to loading rate and accidental overloading;(vi) Calculation of detailed loading/discharge plan with particular
reference to the following:(a) sheer forces/bending moments always maintained with
acceptable limits;(b) tank top weight limitation observed;(c) draft and trim within any applicable criteria;(d) plan to be submitted to stevedores and deck officers;
(vii) Examination of shell side frames, brackets and plating, transverse bulkheads, hopper slope and tank tops, hold ladders, hatch coamings, cover and sealing arrangements for stevedore damage on completion of discharge and prior to proceeding to sea.Recording/notification to stevedores of any such damage sustained,approval of stevedores’ repairs with reference to Classification Society requirements;
(viii) Carriage and monitoring procedures for coal and other hazardous cargoes in accordance with IMO Bulk Cargo Code;
(ix) Permit to work system for hot work repairs at sea.
(g) Passenger Ship Safety
(i) Safety information to passengers which details muster points and escape procedures;
(ii) Safety information to passengers with respect to movement around the ship re: slips and falls;
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(iii) Supervision of passenger activities such as pool area;(iv) An alcohol policy for the crew and for passengers with particular
reference to action which should be taken if a passenger becomes drunk and unruly;
(v) A system of security to prevent unauthorised personnel boarding the ship with particular reference to drug smuggling or pilferage;
(vi) Information to passengers with respect to restricted areas;(vii) Master’s inspection of passengers and crew;(viii) Investigation of passenger injuries and/or potential injuries;(ix) A clear policy with respect to socialising of crew with passengers
during off duty hours;(x) The reporting of defects in passenger areas and service areas.
(h) Ferries
(i) Information and lashing instructions for cargo;(ii) Information and instructions on how to deal with dangerous
cargoes;(iii) Procedures for calculation of ship’s stability;
(iv) Fire surveillance/detection in car deck;(v) Loading vessel for safe distribution of cargo;(vi) Ventilation of garage spaces;(vii) Testing of fire detection system. Regular testing routines;(viii) Procedures for closing of watertight doors and routine checking of
watertight doors during navigation;(ix) Fire fighting information with respect of location of draught stops
and sprinkler isolation valves;(x) Routine maintenance and checking of hoisting appliances and
hinged platforms with particular reference to wire ropes, pulleys and hydraulic machinery.
(xi) The method of establishing the number of passengers on board.(xii) Passenger access to restricted areas when ship at sea.
B Crew Safety
To promote safe working practices: a safety policy should be issued bythe chief executive; a safety officer should be appointed on each ship;and, where feasible, a safety committee. Regular meetings of the safetycommittee should take place when all reported accidents and incidentsare considered and appropriate action taken.An accident reportingsystem should be in operation and clear instructions given for its properuse.
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Instructions and guide-lines must be issued dealing with procedures forthe normal crew duties based on a recognised code of safe workingpractice (e.g. the UK DTp Code of Safe Working Practices for MerchantSeamen).The Company should have a policy towards drugs and alcoholwith particular reference to the national regulations of ports to bevisited.
A safety manual should be on board giving directions and instructioncovering the following:-
(1) Protective clothing and equipment;(2) Accident prevention;(3) Fire prevention;(4) Fire fighting;(5) Emergency procedures such as:
(a) Man overboard (this should already be enclosed in the bridge procedures);
(b) Rescue from enclosed space;(c) Search and rescue;(d) Abandon ship;
(6) Permit to working systems covering:-(a) Enclosed space entry;(b) Hot work;(c) Working aloft;
(7) Personal hygiene and hygiene in galleys and provisions store rooms.
(8) Training and Drills. On board training and instruction in the use of life saving appliances and fire fighting equipment must be held on a regular basis. Particular emphasis must be placed on carrying out realistic drills utilising the ship’s safety equipment, including breathing apparatus and portable fire fighting equipment.These drills should be designed to familiarise the ship’s company with emergency procedures and equipment and to ensure that they are able to respond positively and effectively in the event of emergency.
C. General Ship Maintenance
A maintenance schedule should be devised for each ship to ensureuniform standards and should address the following:-
(i) General appearance and painting of the ship;(ii) Frequency and detail of structural examination to be carried out by
the ship’s staff;
(iii) Reporting of any matter thought likely to affect the ship’s classification status;
(iv) General level of maintenance required on closing appliances including hatch covers and watertight doors;
(v) Frequency of ships superintendent’s visits.(vi) Regular reporting of ship’s condition to head office.
D. Managing and Training
Members should have a policy for the continuity of employment ofsenior officer, e.g. - master, chief officer, chief engineer and secondengineer. Random mixing of different nationalities of crew should beavoided if possible.Where practical the members should establish a policyof meeting with the four senior officers at regular intervals.
A proper system for the payment of allotments, for reliefs at end of tour,and for the forwarding of crew mail should be in place, regardless of thenationality of the crew or the wage structure.
Owners and managers are reminded that, regardless of their manningarrangements, total responsibility for the safe and efficient operation ofthe vessel rests with them and that this responsibility may not bedelegated to any other party. Owners and managers are further remindedof their obligations with respect to the minimum standards of manningand training under the IMO Convention for Standards of Training,Certification and Watchkeeping (the STCW Convention).
E. Contingency Plan
Members should have formal procedures to cover any major casualtyincluding collisions, groundings, pollution, cargo damage or any otherincident, and which set out at least:-
• Who the ship should contact at head office and/or the ship managers’and/or a superintendent;
• Who the ship manager should alert - hull brokers, P & I club,classification society, average adjuster, charterers, lawyers;
• Telephone numbers of all important people;• In addition members should:-• Designate and prepare a company crisis team, and decide who the
company spokesman should be;
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F. A Standard Publication List
It is recommended that ships should carry the following publications orequivalent where relevant:(f)
All Ships
MARINER’S HANDBOOK - HMSOINTERNATIONAL REGULATIONS FOR PREVENTION OFCOLLISIONS AT SEA - IMOCONSOLIDATED TEXT OF SOLAS 1974 CONVENTION - IMOCONSOLIDATED EDITION OF MARPOL 73/78 - IMOINTERNATIONAL CONVENTION ON LOAD LINE +Supplement - IMOMERCHANT SHIP SEARCH & RESCUE MANUAL (MERSAR) -IMO 1986MEDICAL FIRST AID GUIDE FOR USE IN ACCIDENTSINVOLVING DANGEROUS GOODS - IMO 1985RECOMMENDATIONS ON THE SAFE USE OF PESTICIDES INSHIPS - IMO 1981CODE OF SAFE WORKING PRACTICES FOR MERCHANTSEAMEN - HMSOBRIDGE PROCEDURES GUIDE - ICSBASIC PRINCIPLES & OPERATIONAL GUIDANCE RELATINGTO NAVIGATIONAL WATCHKEEPING - IMO (STCW) 1978GUIDE TO HELICOPTER/SHIP OPERATIONS - ICS“PERIL AT SEA & SALVAGE” - A Guide for Masters - ICSAMVER INSTRUCTIONS - USCGSHIPS’ ROUTEING + AMENDMENTS - IMOMALACCA STRAITS GUIDE FOR DRAUGHT RESTRICTEDSHIPS - ICS (if appropriate)INTERNATIONAL MARITIME DANGEROUS GOODS CODE -IMOTHE MARINER’S ROLE IN COLLECTING EVIDENCE -NAUTICAL INSTITUTE (NI)GUIDELINES AND RECOMMENDATIONS FOR THE SAFEMOORING OF LARGE SHIPS AT PIERS AND SEA ISLANDS -OCIMFBRIDGE WATCHKEEPING - A PRACTICAL GUIDE -NAUTICAL INSTITUTE.BRIDGE TEAM MANAGEMENT - NAUTICAL INSTITUTE
Additional for all Oil Tankers including Combination CarriersCLEAN SEAS GUIDE FOR OIL TANKERS - ICS
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INTERNATIONAL SAFETY GUIDE FOR OIL TANKERS ANDTERMINALS - ICSSHIP TO SHIP TRANSFER GUIDE (PETROLEUM) - ICSINERT GAS SYSTEMS - IMO
Additional for all Chemical TankersINTERNATIONAL SAFETY GUIDE FOR OIL TANKERS ANDTERMINALS -ICSTANKER SAFETY GUIDE (CHEMICALS) - Vols - 4INDEX OF DANGEROUS CHEMICALS CARRIED IN BULK -IMO
Additional for Bulk CarriersCODE FOR SAFE PRACTICE FOR SOLID BULK CARGOES -IMOCODE FOR SAFE PRACTICE FOR SHIPS CARRYING TIMBERDECK CARGOES + AMENDMENTS - IMO
Additional for Supply VesselsTHE OIL AND GAS DICTIONARY - Editor: Paul Stevens, Publisher:McMillanTHE OIL RIG MOORING HANDBOOK - Author: J.Vendrell,Publisher: Brown, Son and Ferguson.TUGS TOWBOATS AND TOWING - Author: Edward Brady,Publisher: Cornell Maritime Press.
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Circular No. 2001/4 March 2001
Bills of Lading - Delivery of Cargo
Standard forms of letters of indemnity to be given in return for:
(A) Delivery of cargo without production of the original bill of lading
(B) Delivery of cargo at a port other than that stated in the bill of lading
(C) Delivery of cargo at a port other than that stated in the bill of lading and without production of the original bill of lading
In December 1998, the clubs in the International Group issued a circularto members recommending revised wordings of the standard formLetters of Indemnity for use by members in circumstances where theyare requested to deliver cargo without production of the original bill oflading and/or to deliver cargo at a port other than that stated in the billof lading.
As a result of comment from shipowners and shipowners’ organisations, afurther review of the wordings has been undertaken and furthermodifications to the standard wordings have now been made. Moreover,discussions have taken place between the International Group and theBritish Bankers Association (BBA) and a separate standard wording hasbeen agreed on the basis of which banks members of the BBA will nowbe prepared, in principle, to join in the Letters of Indemnity while,through the auspices of the International Chamber of Commerce, theBBA will endeavour to promote this agreed standard wording within theinternational business community. The BBA has also given its generalapproval to this circular.
In consequence of the agreement reached with the BBA, the threerecommended standard form Letters of Indemnity are now issued in twoversions: INT GROUP A (for delivery of cargo without production ofthe original bill of lading), INT GROUP B (for delivery of cargo at aport other than that stated in the bill of lading against production of atleast one original bill of lading), and INT GROUP C (for delivery ofcargo at a port other than that stated in the bill of lading and withoutproduction of the original bill of lading) for use when the commercial
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party requesting delivery (the "Requestor") will alone be signing theLetter of Indemnity, and INT GROUP AA, INT GROUP BB and INTGROUP CC for use when a bank will be joining in the Letter ofIndemnity and which forms incorporate, in addition to the sameindemnities given by the Requestor under INT GROUP A, B and C,the separate standard wording agreed with the banks.
The principal features of the new wordings are explained below.
Financial Limit
The liability of the Requestor should generally not be limited.However, where a bank is to join in the Letter of Indemnity it willgenerally insist upon a fixed monetary limit. The amount of the limitmust be a matter for negotiation in order that it properly reflects thepotential exposure in the particular circumstances, taking into account,inter alia, the sound market value of the cargo at the time of delivery, butit is recommended that the limit should be a minimum of 200% of thesound market value of the cargo at the time of delivery.
Duration of security
Under INT GROUP A and AA, the liability of the Requestor (and,hence, the bank under AA) terminates upon the delivery of all originalbills of lading to the shipowner. If the original bills of lading are notdelivered to the shipowner, the Requestor’s liability under the Letter ofIndemnity continues.
Subject to delivery of all original bills of lading as stated, and to the twoexceptions described below, the bank’s liability under INT GROUP AAis for an initial period of six years, but which is automatically renewablefrom time to time for further periods of two years at the request of theshipowner.The exceptions are (1) that, rather than agree to an extensionof its liability, the bank has the option of discharging its liability bypaying the maximum amount payable under its indemnity and (2) that,in the event of a demand being made by the shipowner to the bank forpayment under the indemnity before the termination date, or in theevent of the bank being notified by the shipowner of thecommencement of legal proceedings against the shipowner before thetermination date, the liability of the bank will continue until the demandhas been paid or the legal proceedings have been concluded, the bank, ifcalled upon so to do, paying the amount of any judgment or settlementpayable by the shipowner if the Requestor has failed to do so.
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Under INT GROUP B, C, BB and CC, since it is possible for aclaim to be pursued against a shipowner for delivering cargo at a portother than that stated in the bill of lading despite cargo being deliveredagainst production of the original bill of lading, or all original bills oflading being subsequently delivered to the shipowner (in particular, incircumstances where a charterer may require a cargo owner to receive hiscargo at such other port against his wishes and request the shipowner toaccommodate his request), the liability of the Requestor will continueuntil it can be established to the satisfaction of the shipowner that nosuch claim will be made.
Accordingly, unless the shipowner is satisfied that no claim of this naturewill be made, the liability of the bank under INT GROUP BB and CCwill be as described under INT GROUP AA above.
Scope of security
The Requestor is obliged to provide bail or other security not only toprevent or lift the arrest of the ship the subject matter of the indemnity,but also any other ship in the same or associated ownership, managementor control. In addition, the Requestor is obliged to provide bail or othersecurity to prevent interference in the use or trading of the ship, such asa caveat being entered on the ship’s registry to prevent the sale of theship the subject matter of the indemnity.
Where a bank joins in the Letter of Indemnity it will generally not agreeto provide bail or other security. However, the bank will pay any amountup to the limit of its liability under the Letter of Indemnity in order toenable the shipowner to arrange the provision of security if theRequestor fails to provide bail or other security.
Tankers
A provision designed to give greater security to tankers has beenincorporated, whereby requested delivery of a bulk liquid or gas cargo toa terminal or facility, or to another ship, lighter or barge is to be deemedto be delivery to the party to whom delivery has been requested.
Members are again reminded that, unless the Board otherwisedetermines, there is no cover in respect of liabilities arising out of thedelivery of cargo without production of the original bill of lading and/ordelivery at a port other than that stated in the bill of lading and that, insuch circumstances, members are strongly advised to ensure that they are
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fully satisfied with the financial standing and authority of those who areto issue and sign these indemnities.
The standard form Letters of Indemnity are designed to cover a broadrange of trades and operations, and members may wish to modify thestandard forms to suit particular requirements. However, in this event, itmust be appreciated that if a bank is to join in the Letter of Indemnitythere may be limited scope for amendment, and that the Requestor’sbank will have to be consulted if any material change is contemplated.The Managers will be pleased to advise members regarding any proposedmodification.
Finally, it is not uncommon for members to be requested by charterers toagree clauses in charter parties which expressly provide for the deliveryof cargo without production of bills of lading and/or at ports other thanthose stated in the bills of lading against Letters of Indemnity. Membersare strongly advised not to accept such clauses and it is recommendedthat members seek advice from the Managers before responding to suchrequests.
INT GROUP A
Standard form letter of indemnity to be given in return for delivering cargo without production of the original bill of lading
To : … … … … … …[insert name of Owners] [insert date]
The Owners of the [insert name of ship]
[insert address]
Dear Sirs
Ship: … … … … … … … … … … … …[insert name of ship]
Voyage:[insert load and discharge ports as stated in the bill of lading]
Cargo: … … … …[insert description of cargo]
Bill of lading: [insert identification numbers, date and place of issue]
The above cargo was shipped on the above ship by [insert name ofshipper] and consigned to [insert name of consignee or party to whoseorder the bill of lading is made out, as appropriate] for delivery at theport of [insert name of discharge port stated in the bill of lading] but thebill of lading has not arrived and we, [insert name of party requestingdelivery], hereby request you to deliver the said cargo to [insert name ofparty to whom delivery is to be made] at [insert place where delivery isto be made] without production of the original bill of lading.
In consideration of your complying with our above request, we hereby agree as follows :-
1. To indemnify you, your servants and agents and to hold all of you harmless in respect of any liability, loss, damage or expense of whatsoevernature which you may sustain by reason of delivering the cargo in accordance with our request.
2. In the event of any proceedings being commenced against you or any of your servants or agents in connection with the delivery of the cargo as aforesaid, to provide you or them on demand with sufficient funds to defend the same.
3. If, in connection with the delivery of the cargo as aforesaid, the ship, or any other ship or property in the same or associated ownership,management or control, should be arrested or detained or should the
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arrest or detention thereof be threatened, or should there be any interference in the use or trading of the vessel (whether by virtue of a caveat being entered on the ship’s registry or otherwise howsoever), to provide on demand such bail or other security as may be required to prevent such arrest or detention or to secure the release of such ship or property or to remove such interference and to indemnify you in respectof any liability, loss, damage or expense caused by such arrest or detention or threatened arrest or detention or such interference ,whether or not such arrest or detention or threatened arrest or detentionor such interference may be justified.
4. If the place at which we have asked you to make delivery is a bulk liquidor gas terminal or facility, or another ship, lighter or barge, then delivery to such terminal, facility, ship, lighter or barge shall be deemed to be delivery to the party to whom we have requested you to make such delivery.
5. As soon as all original bills of lading for the above cargo shall have come into our possession, to deliver the same to you, or otherwise to cause all original bills of lading to be delivered to you, whereupon our liability hereunder shall cease.
6. The liability of each and every person under this indemnity shall be jointand several and shall not be conditional upon your proceeding first against any person, whether or not such person is party to or liable underthis indemnity.
7. This indemnity shall be governed by and construed in accordance with English law and each and every person liable under this indemnity shall at your request submit to the jurisdiction of the High Court of Justice ofEngland.
Yours faithfullyFor and on behalf of[insert name of Requestor]The Requestor
…………………………………Signature
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INT GROUP AA
Standard form letter of indemnity to be given in return for delivering cargo without production of the original bill of lading incorporating abank’s agreement to join in the letter of indemnity
To : … … … … … …[insert name of Owners] [insert date]
The Owners of the [insert name of ship]
[insert address]
Dear Sirs
Ship: … … … … … … … … … … … …[insert name of ship]
Voyage:[insert load and discharge ports as stated in the bill of lading]
Cargo: … … … …[insert description of cargo]
Bill of lading: [insert identification numbers, date and place of issue]
The above cargo was shipped on the above ship by [insert name ofshipper] and consigned to [insert name of consignee or party to whoseorder the bill of lading is made out, as appropriate] for delivery at theport of [insert name of discharge port stated in the bill of lading] but thebill of lading has not arrived and we, [insert name of party requestingdelivery], hereby request you to deliver the said cargo to [insert name ofparty to whom delivery is to be made] at [insert place where delivery isto be made] without production of the original bill of lading.
In consideration of your complying with our above request, we herebyagree as follows:-
1. To indemnify you, your servants and agents and to hold all of you harmless in respect of any liability, loss, damage or expense of whatsoevernature which you may sustain by reason of delivering the cargo in accordance with our request.
2. In the event of any proceedings being commenced against you or any of your servants or agents in connection with the delivery of the cargo as aforesaid, to provide you or them on demand with sufficient funds to defend the same.
3. If, in connection with the delivery of the cargo as aforesaid, the ship, or any other ship or property in the same or associated ownership,
management or control, should be arrested or detained or should the arrest or detention thereof be threatened, or should there be any interference in the use or trading of the vessel (whether by virtue of a caveat being entered on the ship’s registry or otherwise howsoever), to provide on demand such bail or other security as may be required to prevent such arrest or detention or to secure the release of such ship or property or to remove such interference and to indemnify you in respectof any liability, loss, damage or expense caused by such arrest or detention or threatened arrest or detention or such interference ,whether or not such arrest or detention or threatened arrest or detentionor such interference may be justified.
4. If the place at which we have asked you to make delivery is a bulk liquidor gas terminal or facility, or another ship, lighter or barge, then delivery to such terminal, facility, ship, lighter or barge shall be deemed to be delivery to the party to whom we have requested you to make such delivery.
5. As soon as all original bills of lading for the above cargo shall have come into our possession, to deliver the same to you, or otherwise to cause all original bills of lading to be delivered to you, whereupon our liability hereunder shall cease.
6. The liability of each and every person under this indemnity shall be joint and several and shall not be conditional upon your proceeding first against any person, whether or not such person is party to or liable underthis indemnity.
7. This indemnity shall be governed by and construed in accordance with English law and each and every person liable under this indemnity shall at your request submit to the jurisdiction of the High Court of Justice ofEngland.
Yours faithfullyFor and on behalf of[insert name of Requestor]The Requestor
…………………………………Signature
We, [insert name of the Bank], hereby agree to join in this Indemnityproviding always that the Bank’s liability:-
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1. shall be restricted to payment of specified sums of money demanded in relation to the Indemnity (and shall not extend to the provision of bail or other security)
2. shall be to make payment to you forthwith on your written demand in the form of a signed letter certifying that the amount demanded is a sumdue to be paid to you under the terms of the Indemnity and has not been paid to you by the Requestor or is a sum which represents monetary compensation due to you in respect of the failure by the Requestor to fulfil its obligations to you under the Indemnity. For the avoidance of doubt the Bank hereby confirms that:-
(a) such compensation shall include, but not be limited to, payment of anyamount up to the amount stated in proviso 3 below in order to enableyou to arrange the provision of security to release the ship (or any othership in the same or associated ownership, management or control) fromarrest or to prevent any such arrest or to prevent any interference in theuse or trading of the ship, or other ship as aforesaid, and
(b) in the event that the amount of compensation so paid is less than theamount stated in proviso 3 below, the liability of the Bank hereundershall continue but shall be reduced by the amount of compensation paid.
3. shall be limited to a sum or sums not exceeding in aggregate [insertcurrency and amount in figures and words]
4. subject to proviso 5 below, shall terminate on [date six years from thedate of the Indemnity) (the ‘Termination Date’), except in respect of anydemands for payment received by the Bank hereunder at the addressindicated below on or before that date.
5. shall be extended at your request from time to time for a period of twocalendar years at a time provided that:-
a) the Bank shall receive a written notice signed by you and stating that theIndemnity is required by you to remain in force for a further period oftwo years, and
b) such notice is received by the Bank at the address indicated below on orbefore the then current Termination Date.
Any such extension shall be for a period of two years from the thencurrent Termination Date and, should the Bank for any reason beunwilling to extend the Termination Date, the Bank shall discharge itsliability by the payment to you of the maximum sum payable hereunder(or such lesser sum as you may require).
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However, in the event of the Bank receiving a written notice signed byyou, on or before the then current Termination Date, stating that legalproceedings have been commenced against you as a result of your havingdelivered the said cargo as specified in the Indemnity, the Bank agreesthat its liability hereunder will not terminate until receipt by the Bank ofyour signed written notice stating that all legal proceedings have beenconcluded and that any sum or sums payable to you by the Requestorand/or the Bank in connection therewith have been paid and received infull and final settlement of all liabilities arising under the Indemnity.
6. shall be governed by and construed in accordance with the lawgoverning the Indemnity and the Bank agrees to submit to thejurisdiction of the court stated within the Indemnity.
It should be understood that, where appropriate, the Bank will onlyproduce and deliver to you all original bills of lading should the samecome into the Bank’s possession, but the Bank agrees that, in that event,it shall do so.
The Bank agrees to promptly notify you in the event of any change inthe full details of the office to which any demand or notice is to beaddressed and which is stated below and it is agreed that you shall alsopromptly notify the Bank in the event of any change in your address asstated above.
Please quote the Bank’s Indemnity Ref ……………………… in allcorrespondence with the Bank and any demands for payment andnotices hereunder.
Yours faithfullyFor and on behalf of[insert name of Bank][insert full details of the office to which any demand or notice is to beaddressed]
…………………………………Signature
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INT GROUP B
Standard form letter of indemnity to be given in return for deliveringcargo at a port other than that stated in the bill of lading
To : … … … … … …[insert name of Owners] [insert date]
The Owners of the [insert name of ship]
[insert address]
Dear Sirs
Ship: … … … … … … … … … … … …[insert name of ship]
Voyage:[insert load and discharge ports as stated in the bill of lading]
Cargo: … … … …[insert description of cargo]
Bill of lading: [insert identification numbers, date and place of issue]
The above cargo was shipped on the above ship by [insert name ofshipper] and consigned to [insert name of consignee or party to whoseorder the bill of lading is made out, as appropriate] for delivery at theport of [insert name of discharge port stated in the bill of lading] but we,[insert name of party requesting substituted delivery], hereby request youto order the ship to proceed to and deliver the said cargo at [insert nameof substitute port or place of delivery] against production of at least oneoriginal bill of lading.
In consideration of your complying with our above request, we herebyagree as follows :-
1. To indemnify you, your servants and agents and to hold all of youharmless in respect of any liability, loss, damage or expense of whatsoevernature which you may sustain by reason of the ship proceeding andgiving delivery of the cargo against production of at least one originalbill of lading in accordance with our request.
2. In the event of any proceedings being commenced against you or any ofyour servants or agents in connection with the ship proceeding andgiving delivery of the cargo as aforesaid, to provide you or them ondemand with sufficient funds to defend the same.
3. If, in connection with the delivery of the cargo as aforesaid, the ship, orany other ship or property in the same or associated ownership,management or control, should be arrested or detained or should the
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arrest or detention thereof be threatened, or should there be anyinterference in the use or trading of the vessel (whether by virtue of acaveat being entered on the ship’s registry or otherwise howsoever), toprovide on demand such bail or other security as may be required toprevent such arrest or detention or to secure the release of such ship orproperty or to remove such interference and to indemnify you in respectof any liability, loss, damage or expense caused by such arrest ordetention or threatened arrest or detention or such interference, whetheror not such arrest or detention or threatened arrest or detention or suchinterference may be justified.
4. The liability of each and every person under this indemnity shall be jointand several and shall not be conditional upon your proceeding firstagainst any person, whether or not such person is party to or liable underthis indemnity.
5. This indemnity shall be governed by and construed in accordance withEnglish law and each and every person liable under this indemnity shallat your request submit to the jurisdiction of the High Court of Justice ofEngland.
Yours faithfullyFor and on behalf of[insert name of Requestor]The Requestor
…………………………………Signature
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INT GROUP BB
Standard form letter of indemnity to be given in return for deliveringcargo at a port other than that stated in the bill of ladingincorporating a bank’s agreement to join in the letter of indemnity
To : … … … … … …[insert name of Owners] [insert date]
The Owners of the [insert name of ship]
[insert address]
Dear Sirs
Ship: … … … … … … … … … … … …[insert name of ship]
Voyage:[insert load and discharge ports as stated in the bill of lading]
Cargo: … … … …[insert description of cargo]
Bill of lading: [insert identification numbers, date and place of issue]
The above cargo was shipped on the above ship by [insert name ofshipper] and consigned to [insert name of consignee or party to whoseorder the bill of lading is made out, as appropriate] for delivery at theport of [insert name of discharge port stated in the bill of lading] but we,[insert name of party requesting substituted delivery], hereby request youto order the ship to proceed to and deliver the said cargo at [insert nameof substitute port or place of delivery] against production of at least oneoriginal bill of lading.
In consideration of your complying with our above request, we herebyagree as follows :-
1. To indemnify you, your servants and agents and to hold all of youharmless in respect of any liability, loss, damage or expense of whatsoevernature which you may sustain by reason of the ship proceeding andgiving delivery of the cargo against production of at least one originalbill of lading in accordance with our request.
2. In the event of any proceedings being commenced against you or any ofyour servants or agents in connection with the ship proceeding andgiving delivery of the cargo as aforesaid, to provide you or them ondemand with sufficient funds to defend the same.
3. If, in connection with the delivery of the cargo as aforesaid, the ship, orany other ship or property in the same or associated ownership,
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management or control, should be arrested or detained or should thearrest or detention thereof be threatened, or should there be anyinterference in the use or trading of the vessel (whether by virtue of acaveat being entered on the ship’s registry or otherwise howsoever), toprovide on demand such bail or other security as may be required toprevent such arrest or detention or to secure the release of such ship orproperty or to remove such interference and to indemnify you in respectof any liability, loss, damage or expense caused by such arrest ordetention or threatened arrest or detention or such interference, whetheror not such arrest or detention or threatened arrest or detention or suchinterference may be justified.
4. The liability of each and every person under this indemnity shall be jointand several and shall not be conditional upon your proceeding firstagainst any person, whether or not such person is party to or liable underthis indemnity.
5. This indemnity shall be governed by and construed in accordance withEnglish law and each and every person liable under this indemnity shallat your request submit to the jurisdiction of the High Court of Justice ofEngland.
Yours faithfullyFor and on behalf of[insert name of Requestor]The Requestor
…………………………………Signature
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We, [insert name of the Bank], hereby agree to join in this Indemnityproviding always that the Bank’s liability:-
1. shall be restricted to payment of specified sums of money demanded inrelation to the Indemnity (and shall not extend to the provision of bailor other security)
2. shall be to make payment to you forthwith on your written demand inthe form of a signed letter certifying that the amount demanded is a sumdue to be paid to you under the terms of the Indemnity and has notbeen paid to you by the Requestor or is a sum which representsmonetary compensation due to you in respect of the failure by theRequestor to fulfil its obligations to you under the Indemnity. For theavoidance of doubt the Bank hereby confirms that:-
(a) such compensation shall include, but not be limited to, payment ofany amount up to the amount stated in proviso 3 below in order toenable you to arrange the provision of security to release the ship (orany other ship in the same or associated ownership, management orcontrol) from arrest or to prevent any such arrest or to prevent anyinterference in the use or trading of the ship, or other ship asaforesaid, and
(b) in the event that the amount of compensation so paid is less than theamount stated in proviso 3 below, the liability of the Bank hereundershall continue but shall be reduced by the amount of compensationpaid.
3. shall be limited to a sum or sums not exceeding in aggregate [insertcurrency and amount in figures and words]
4. subject to proviso 5 below, shall terminate on [date six years from thedate of the Indemnity) (the ‘Termination Date’), except in respect of anydemands for payment received by the Bank hereunder at the addressindicated below on or before that date.
5. shall be extended at your request from time to time for a period of twocalendar years at a time provided that:-
a) the Bank shall receive a written notice signed by you and stating thatthe Indemnity is required by you to remain in force for a furtherperiod of two years, and
b) such notice is received by the Bank at the address indicated below onor before the then current Termination Date.
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Any such extension shall be for a period of two years from the thencurrent Termination Date and, should the Bank for any reason beunwilling to extend the Termination Date, the Bank shall discharge itsliability by the payment to you of the maximum sum payable hereunder(or such lesser sum as you may require).
However, in the event of the Bank receiving a written notice signed byyou, on or before the then current Termination Date, stating that legalproceedings have been commenced against you as a result of your havingdelivered the said cargo as specified in the Indemnity, the Bank agreesthat its liability hereunder will not terminate until receipt by the Bank ofyour signed written notice stating that all legal proceedings have beenconcluded and that any sum or sums payable to you by the Requestorand/or the Bank in connection therewith have been paid and received infull and final settlement of all liabilities arising under the Indemnity.
6. shall be governed by and construed in accordance with the lawgoverning the Indemnity and the Bank agrees to submit to thejurisdiction of the court stated within the Indemnity.
It should be understood that, where appropriate, the Bank will onlyproduce and deliver to you all original bills of lading should the samecome into the Bank’s possession, but the Bank agrees that, in that event,it shall do so.
The Bank agrees to promptly notify you in the event of any change inthe full details of the office to which any demand or notice is to beaddressed and which is stated below and it is agreed that you shall alsopromptly notify the Bank in the event of any change in your address asstated above.
Please quote the Bank’s Indemnity Ref ……………………… in allcorrespondence with the Bank and any demands for payment andnotices hereunder.
Yours faithfullyFor and on behalf of [insert name of bank] [insert full details of the office to which any demand or notice is to be addressed]
…………………………………Signature
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INT GROUP C
Standard form letter of indemnity to be given in return for deliveringcargo at a port other than that stated in the bill of lading and withoutproduction of the original bill of lading
To : … … … … … …[insert name of Owners] [insert date]
The Owners of the [insert name of ship]
[insert address]
Dear Sirs
Ship: … … … … … … … … … … … …[insert name of ship]
Voyage:[insert load and discharge ports as stated in the bill of lading]
Cargo: … … … …[insert description of cargo]
Bill of lading: [insert identification numbers, date and place of issue]
The above cargo was shipped on the above vessel by [insert name ofshipper] and consigned to [insert name of consignee or party to whoseorder the bills of lading are made out, as appropriate] for delivery at theport of [insert name of discharge port stated in the bills of lading] butwe, [insert name of party requesting substituted delivery], hereby requestyou to order the vessel to proceed to and deliver the said cargo at [insertname of substitute port or place of delivery] to [insert name of party towhom delivery is to be made] without production of the original bill oflading.
In consideration of your complying with our above request, we herebyagree as follows :-
1. To indemnify you, your servants and agents and to hold all of youharmless in respect of any liability, loss, damage or expense of whatsoevernature which you may sustain by reason of the ship proceeding andgiving delivery of the cargo in accordance with our request.
2. In the event of any proceedings being commenced against you or any ofyour servants or agents in connection with the ship proceeding andgiving delivery of the cargo as aforesaid, to provide you or them ondemand with sufficient funds to defend the same.
3. If, in connection with the delivery of the cargo as aforesaid, the ship, orany other ship or property in the same or associated ownership,
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management or control, should be arrested or detained or should thearrest or detention thereof be threatened, or should there be anyinterference in the use or trading of the vessel (whether by virtue of acaveat being entered on the ship’s registry or otherwise howsoever), toprovide on demand such bail or other security as may be required toprevent such arrest or detention or to secure the release of such ship orproperty or to remove such interference and to indemnify you in respectof any liability, loss, damage or expense caused by such arrest ordetention or threatened arrest or detention or such interference, whetheror not such arrest or detention or threatened arrest or detention or suchinterference may be justified
4. If the place at which we have asked you to make delivery is a bulk liquidor gas terminal or facility, or another ship, lighter or barge, then deliveryto such terminal, facility, ship, lighter or barge shall be deemed to bedelivery to the party to whom we have requested you to make suchdelivery.
5. As soon as all original bills of lading for the above cargo shall have comeinto our possession, to deliver the same to you, or otherwise to cause alloriginal bills of lading to be delivered to you.
6. The liability of each and every person under this indemnity shall be jointand several and shall not be conditional upon your proceeding firstagainst any person, whether or not such person is party to or liable underthis indemnity.
7. This indemnity shall be governed by and construed in accordance withEnglish law and each and every person liable under this indemnity shallat your request submit to the jurisdiction of the High Court of Justice ofEngland.
Yours faithfullyFor and on behalf of [insert name of Requestor] The Requestor
…………………………………Signature
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INT GROUP CC
Standard form letter of indemnity to be given in return for deliveringcargo at a port other than that stated in the bill of lading and withoutproduction of the original bill of lading incorporating a bank’sagreement to join in the letter of indemnity
To : … … … … … …[insert name of Owners] [insert date]
The Owners of the [insert name of ship]
[insert address]
Dear Sirs
Ship: … … … … … … … … … … … …[insert name of ship]
Voyage:[insert load and discharge ports as stated in the bill of lading]
Cargo: … … … …[insert description of cargo]
Bill of lading: [insert identification numbers, date and place of issue]
The above cargo was shipped on the above vessel by [insert name ofshipper] and consigned to [insert name of consignee or party to whoseorder the bills of lading are made out, as appropriate] for delivery at theport of [insert name of discharge port stated in the bills of lading] butwe, [insert name of party requesting substituted delivery], hereby requestyou to order the vessel to proceed to and deliver the said cargo at [insertname of substitute port or place of delivery] to [insert name of party towhom delivery is to be made] without production of the original bill oflading.
In consideration of your complying with our above request, we herebyagree as follows :-
1. To indemnify you, your servants and agents and to hold all of youharmless in respect of any liability, loss, damage or expense of whatsoevernature which you may sustain by reason of the ship proceeding andgiving delivery of the cargo in accordance with our request.
2. In the event of any proceedings being commenced against you or any ofyour servants or agents in connection with the ship proceeding andgiving delivery of the cargo as aforesaid, to provide you or them ondemand with sufficient funds to defend the same.
3. If, in connection with the delivery of the cargo as aforesaid, the ship, orany other ship or property in the same or associated ownership,
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management or control, should be arrested or detained or should thearrest or detention thereof be threatened, or should there be anyinterference in the use or trading of the vessel (whether by virtue of acaveat being entered on the ship’s registry or otherwise howsoever), toprovide on demand such bail or other security as may be required toprevent such arrest or detention or to secure the release of such ship orproperty or to remove such interference and to indemnify you in respectof any liability, loss, damage or expense caused by such arrest ordetention or threatened arrest or detention or such interference, whetheror not such arrest or detention or threatened arrest or detention or suchinterference may be justified.
4. If the place at which we have asked you to make delivery is a bulk liquidor gas terminal or facility, or another ship, lighter or barge, then deliveryto such terminal, facility, ship, lighter or barge shall be deemed to bedelivery to the party to whom we have requested you to make suchdelivery.
5. As soon as all original bills of lading for the above cargo shall have comeinto our possession, to deliver the same to you, or otherwise to cause alloriginal bills of lading to be delivered to you.
6. The liability of each and every person under this indemnity shall be jointand several and shall not be conditional upon your proceeding firstagainst any person, whether or not such person is party to or liable underthis indemnity.
7. This indemnity shall be governed by and construed in accordance withEnglish law and each and every person liable under this indemnity shallat your request submit to the jurisdiction of the High Court of Justice ofEngland.
Yours faithfullyFor and on behalf of[insert name of Requestor]The Requestor
…………………………………Signature
We, [insert name of the Bank], hereby agree to join in this Indemnityproviding always that the Bank’s liability:-
1. shall be restricted to payment of specified sums of money demanded inrelation to the Indemnity (and shall not extend to the provision of bailor other security)
2. shall be to make payment to you forthwith on your written demand inthe form of a signed letter certifying that the amount demanded is a sumdue to be paid to you under the terms of the Indemnity and has notbeen paid to you by the Requestor or is a sum which representsmonetary compensation due to you in respect of the failure by theRequestor to fulfil its obligations to you under the Indemnity. For theavoidance of doubt the Bank hereby confirms that:-
(a) such compensation shall include, but not be limited to, payment ofany amount up to the amount stated in proviso 3 below in order toenable you to arrange the provision of security to release the ship (orany other ship in the same or associated ownership, management orcontrol) from arrest or to prevent any such arrest or to prevent anyinterference in the use or trading of the ship, or other ship asaforesaid, and
(b) in the event that the amount of compensation so paid is less than theamount stated in proviso 3 below, the liability of the Bank hereundershall continue but shall be reduced by the amount of compensationpaid.
3. shall be limited to a sum or sums not exceeding in aggregate [insertcurrency and amount in figures and words]
4. subject to proviso 5 below, shall terminate on [date six years from thedate of the Indemnity) (the ‘Termination Date’), except in respect of anydemands for payment received by the Bank hereunder at the addressindicated below on or before that date.
5. shall be extended at your request from time to time for a period of twocalendar years at a time provided that:-
a) the Bank shall receive a written notice signed by you and stating thatthe Indemnity is required by you to remain in force for a furtherperiod of two years, and
b) such notice is received by the Bank at the address indicated below onor before the then current Termination Date.
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Any such extension shall be for a period of two years from the thencurrent Termination Date and, should the Bank for any reason beunwilling to extend the Termination Date, the Bank shall discharge itsliability by the payment to you of the maximum sum payable hereunder(or such lesser sum as you may require).
However, in the event of the Bank receiving a written notice signed byyou, on or before the then current Termination Date, stating that legalproceedings have been commenced against you as a result of your havingdelivered the said cargo as specified in the Indemnity, the Bank agreesthat its liability hereunder will not terminate until receipt by the Bank ofyour signed written notice stating that all legal proceedings have beenconcluded and that any sum or sums payable to you by the Requestorand/or the Bank in connection therewith have been paid and received infull and final settlement of all liabilities arising under the Indemnity.
6. shall be governed by and construed in accordance with the lawgoverning the Indemnity and the Bank agrees to submit to thejurisdiction of the court stated within the Indemnity.
It should be understood that, where appropriate, the Bank will onlyproduce and deliver to you all original bills of lading should the samecome into the Bank’s possession, but the Bank agrees that, in that event,it shall do so.
The Bank agrees to promptly notify you in the event of any change inthe full details of the office to which any demand or notice is to beaddressed and which is stated below and it is agreed that you shall alsopromptly notify the Bank in the event of any change in your address asstated above.
Please quote the Bank’s Indemnity Ref ……………………… in allcorrespondence with the Bank and any demands for payment andnotices hereunder.
Yours faithfullyFor and on behalf of [insert name of bank] [insert full details of the office to which any demand or notice is to beaddressed]
…………………………………Signature
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10 Oil Spills in theUnited States- tanker and non-tankermembers
10
10 Oil Spills in the United States - tanker and non-tanker members
Any oil pollution incident in the United States must be reportedimmediately to Paul Barnes at the Managers’New York Office:
Charles Taylor P&I Management40 Exchange PlaceNew YorkNY1 0005-2701
Tel: +1 212 809 8085Fax: +1 212 968 1978
After hours:Paul Barnes +1 917 593 9858 (Mobile)
e-mail: [email protected]
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The Standardwww.standard-club.com