"There is nothing controversial and the changes are mirroring similar provisions in the Rules of other Clubs or are providing greater clarity," says Director Arthur Pilkingon.
Below you will find a list of the changes that has been made, as well as comments to the changes. You can download the entire Charterers' Rules with List of Correspondents from the link up to the right.
CHARTERERS' RULE CHANGES FOR 2011
New Rule 2.4 - CO-ASSUREDS
The total liability of the Association to the Assured and any co-Assureds in respect of any one event shall not exceed such sum as would have been recoverable from the Association only by the Assured.
New Rule 2.5 - CO-ASSUREDS
Any failure by the Assured or any co-Assured to comply with any of the obligations under these Rules shall be deemed to be the failure of the Assured and all co-Assureds.
New Rule 2.6 - CO-ASSUREDS
Any conduct or omission by the Assured or any co-Assured which would have entitled the Association to reject or reduce any claims shall be deemed to have been the failure of the Assured and all co-Assureds.
The above Rule 2 changes are mirroring similar provisions in the Rules of other Clubs.
New Rule 8 - AMENDMENTS TO THE RULES
If, in the sole discretion of the Association, a substantial alteration of risk occurs as a result of new legislation or regulations or for any other reason, the Association may make such amendments to the Rules as the circumstances may require provided at least 1 month's notice of the amendment(s) is given in writing to the Assured.
Other Clubs are empowered to change their Rules during the insurance year if there arise major developments which alter the risk accepted by a Club at the beginning of the insurance year. The Iranian sanctions during 2010 is an example of such a change. This new Rule is designed to give us similar powers.
New Rule 9 - IDENTIFICATION
The Association may invoke against the Assured faults and negligence committed by any organisation or individual to whom the Assured has delegated decision-making authority concerning functions of material significance for the insurance, provided that the fault or negligence occurs in connection with the performance of those functions.
Our Rules are subject to Norwegian law and the above Rule reflects the position under Norwegian law anyway. However, as our policy is to have Rules which are transparent and easy to understand it has been decided to have an express provision. It cannot be invoked, and that was never the intention, for faults or negligence by the master or crew, but would be relevant in relation to the actions of for example a director or other senior executive of the Assured.
New Rule 32.1.9 - EXCLUDED COSTS
The Association shall not cover under a defence entry costs :
where there is no reasonable relationship between the amount in dispute and the costs that are likely to be incurred.
New Rule 32.1.10 - EXCLUDED COSTS
The Association shall not cover under a defence entry costs :
where there is no reasonable relationship between the prospects of successfully obtaining payment( due to the financial position of the other party or otherwise) and the costs which are likely to be incurred.
The above Rule 32 changes are designed to make the position more clear to an Assured and reflect the Association's practice to date anyway albeit that the discretionary provisions of the Rules were relied on until now.
New Rule 41.1.4 - MISCELLANEOUS EXCLUSIONS
The Association shall not cover liabilities, losses or expenses arising from :
carriage of cargoes that are not carried and stowed in conformity with all relevant international, national and local conventions and regulations including, but not limited to the International Maritime Dangerous Goods (IMDG) Code and the international Maritime Solid Bulk Cargoes (IMSBC) Code.
The above provision is already contained in the current Rule 25.1.19 in relation to cargo claims. The intention with inserting this provision in the MISCELLANEOUS EXCLUSIONS Section is to extend its applicability to all claims.
New Rule 52.1.7 - CESSATION OF COVER
Notwithstanding and without prejudice to Rules 52.1,52.1.1, 52.1.2,52.1.3,52.1.4,52.1.5 and 52.1.6 an Assured shall forthwith cease to be insured by the Association, which shall not be liable to pay any claim or provide any benefit where there is a breach of these provisions , in respect of any and all vessels entered by him if any vessel is employed by the Assured in a carriage, trade or voyage which will thereby in any way howsoever expose the Assured, the Association or its reinsurers to the risk of being or becoming subject to any sanction, prohibition or adverse reaction in any form whatsoever under United Nations' resolutions or under the trade or economic sanctions, laws or regulations of the State of the vessel's Flag or the European Union, the United Kingdom, the United States of America, France, the Russian Federation, the People's Republic of China or any state where the Association has its registered office or permanent place of business.
This new Rule is mirroring the provisions of other Clubs and is designed to deal with Iranian or similar sanctions.
New Rule 53.1.5 - TERMINATION OF COVER BY THE ASSOCIATION
Notwithstanding and without prejudice to Rules 53.1, 53.1.1, 53.1.2, 53.1.3, and 53.1.4 the Association may, on such notice in writing at it may decide, terminate the entry in respect of any and all vessels entered by him where the Assured has exposed or may, in the opinion of the Association, expose the Assured, the Association or its reinsurers to the risk of being or becoming subject to any sanction, prohibition or adverse reaction in any form whatsoever under United Nations' resolutions or under the trade or economic sanctions, laws or regulations of the State of the Vessel's Flag or the European Union, the United Kingdom, the United States of America, France, the Russian Federation, the People's Republic of China or any state where the Association has its registered office or permanent place of business.
Likewise with the above Rule.
New Appendix 1 - CONTRACTUAL TERMS
The Association requires the Assured to incorporate :
- the Hague Rules or the Hague - Visby Rules or corresponding provisions in all contracts of carriage where permitted by relevant law;
- the " New Jason Clause" and "Both to Blame Collision Clause" in all contracts of carriage used in international trade.
This new paragraph in Appendix 1 is mirroring similar provisions in the Rules of other Clubs.
