Marine law and insurance : P&I Rule Book (2021 – 2022)

Rule 19 – Risks Covered

Unless otherwise agreed between the Member and the Managers, the Member shall be indemnified by the Association against the following liabilities, costs and expenses arising as a result of his interest in an Entered Ship, out of events occurring during the period of entry of the Ship in the Association and in connection with the operation of the Ship.

Provided always that in Rule 19:

(A) there shall be no recovery in respect of liabilities, costs and expenses incurred as a result of any escape or discharge or threatened escape or discharge of oil or of any other substance other than in accordance with Rule 19(13) and for the avoidance of doubt all such recoveries shall be limited in accordance with the provisions of Rule 22;

(B) unless elsewhere in these Rules expressly provided to the contrary, there shall be no recovery other than under Rule 19(16) in respect of liabilities, costs and expenses which would not have arisen but for the particular terms of contract, indemnity or guarantee;

(C) there shall be no recovery in respect of any liabilities, costs or expenses where the provision of cover, the payment of any claim or the provision of any benefit in respect of those liabilities, costs and expenses would expose the Association to the risk of being or becoming subject to any sanction, prohibition or adverse action in any form whatsoever by any state or international organisation.

19 (1) LIABILITIES IN RESPECT OF SEAMEN

(a) Liabilities to pay damages or compensation for death, personal injury or illness of any Seaman of an Entered Ship and hospital, medical, funeral and other expenses necessarily incurred in relation to such death, personal injury or illness.

(b) Liabilities to pay damages or compensation for loss of or damage to the personal effects of any Seaman of an Entered Ship.

(c) Liabilities to pay compensation to any Seaman of an Entered Ship caused in consequence of the actual or constructive total loss of the Ship.

(d) Repatriation and substitution expenses necessarily incurred as a consequence of the death, personal injury, illness or desertion of any Seaman of an Entered Ship. If such expenses are incurred for any other reason the Managers may in their absolute discretion allow the whole or any part thereof as they deem equitable save that cover under this Rule 19(1)(d) shall not extend to expenses arising as a result of:

(i) the expiry of a Seaman’s period of service on the Entered Ship either in accordance with the terms of a crew agreement or other contract of service or employment or by mutual consent of the parties to it;
(ii) the sale of an Entered Ship.

(e) Where liabilities, costs and expenses of the type covered under this Rule are incurred under the terms of a crew agreement or other contract of service or employment and would not have been incurred but for those terms such liabilities, costs or expenses shall be covered by the Association but only to the extent that those terms shall have been previously approved by the Managers in writing.

Provided always that in Rule 19(1):

(A) the Member shall be entitled to be indemnified in respect of liabilities, costs and expenses otherwise recoverable under this Rule and relating to or arising from death, personal injury or illness but incurred:

(i) prior to the commencement of, or following the cesser of, the period of Entry of the Ship and arising out of the Member’s interest in taking or giving delivery of the Entered Ship under a contract of sale, notwithstanding that at the relevant time the Member cannot comply with Rule 4(1)(b) or Rule 9(1)(d); or
(ii) during a period whilst the Seaman is on leave and the Entered Ship is the last Ship on which the Seaman served prior to his death, personal injury or illness.

(B) where the event giving rise to such liability, costs or expenses occurs prior to the commencement of, or following the cesser of, the period of Entry of the Ship, the event shall be deemed to have occurred on the first or last day of the period of Entry as the case may be.

19 (2) LIABILITIES IN RESPECT OF SUPERNUMERARIES

Liabilities to pay damages or compensation for death, personal injury or illness and loss of or damage to the personal effects of any supernumerary carried on board an Entered Ship and other expenses necessarily incurred in relation to such liabilities.

19 (3) LIABILITIES IN RESPECT OF PASSENGERS

(a) Liabilities to pay damages or compensation for death, personal injury or illness of any Passenger on an Entered Ship and other expenses necessarily incurred in relation to such liabilities.

(b) Liabilities to pay damages or compensation for loss of or damage to the luggage or accompanied vehicles of any Passenger on an Entered Ship and other expenses necessarily incurred in relation to such liabilities, save that there shall be no cover in respect of specie, bullion, precious or rare metals or stones, plate, jewellery, works of art or other objects of a rare or precio

Rule 9 – Joint Members, Co-Assured, Affiliated and Associated Companies

9 (1) JOINT MEMBERS

(a) The Managers may accept an application from a Member for another person or persons to become joint member(s) in respect of that Member’s entry. In such a case, the Managers may agree that none, one or more of such persons may become Members.

(b) In the event that the application is accepted by the Managers, the Member who has made the application (or such other person as may be agreed in writing) shall be designated the Senior Member and shall be the person who is deemed irrevocably to have full power and authority to act in the name of and/or on behalf of all the joint members, and neither the Association nor the Managers, their servants or agents, shall be liable in any other manner whatsoever to any joint member in the event that the Senior Member did not, in fact, have such power and authority.

(c) Unless otherwise agreed in writing with the Managers, the Member and all joint members shall be jointly and severally liable to pay all amounts due to the Association in respect of such entry.

(d) In relation to such application from a Member within Rule 4(1)(b)(i) for any person or persons to become a joint member, the Senior Member and each joint member warrants that the joint member is, in relation to the Entered Ship:

(i) another person within Rule 4(1)(b)(i), or
(ii) interested in the operation, management or manning of the Entered Ship, or
(iii) the holding company or the beneficial owner of the Senior Member or any joint member falling within Rule 9(1)(d)(i) or (ii), or
(iv) the charterer (other than by demise) of the Entered Ship and affiliated to or associated with the Senior Member or any joint member falling within Rule 9(1)(d)(i) and, except where the Senior Member or that joint member is wholly owned by the charterer or where both are under common ownership, that the Senior Member or that joint member either owns at least 50% of the shares in and voting rights of the charterer or can procure that the charterer is managed and operated in accordance with the wishes of the Senior Member or that joint member, or(v) a mortgagee of the Entered Ship.

Rule 2 – Interpretation and Definitions

2 (1) In these Rules:

“Writing” shall include any method of reproducing words in a visible or non-transitory form, including email.

Words importing the singular number only shall include the plural number and vice versa.

Words importing the masculine gender only shall include the feminine gender.

Words importing persons shall include individuals, partnerships, corporations and associations.

The headings hereto shall not affect the construction or interpretation of the Rules.

Reference in these Rules to the “Association”, shall mean North UK and/or North EU (as appropriate); however North UK and North EU shall have the power to act jointly and severally to enforce any rights under the Rules but shall be severally liable and not jointly liable for any obligations owed by the other under the Rules to a Member or any other third party.

In the Rules the following words shall have the following meanings:

ADDITIONAL CALL
Any monies payable to the Association pursuant to Rule 13(2).

ARTICLES OF ASSOCIATION
The articles of association for the time being of North UK.

THE ASSOCIATION
North UK and/or North EU (as appropriate).

CALL
Any monies payable to the Association in respect of an Entered Ship pursuant to Rules 13(2), 13(3) and Rule 16.

CERTIFICATE OF ENTRY
A document and any endorsement thereto issued by the Association in accordance with these Rules and the Articles of Association which records the names of Members interested in, and evidences the contract of insurance in respect of, an Entered Ship.

CHARTERER’S ENTRY
An Entry which insures (inter alia) as a Member a charterer (other than a demise charterer) not being a Charterer Jointly Insured under an Owner’s Entry.

CIRCULAR
A notice in writing to a Member pursuant to Rule 32.

THIS CLASS
Class 1 – Protecting and Indemnity.

CLOSED POLICY YEAR
A Policy Year of the Association which the Directors shall have declared to be closed in accordance with Rule 42.

CONSORTIUM SHIP
A Ship, feeder ship or space thereon, not being the Entered Ship, employed to carry cargo under a consortium agreement.

CONTAINER
Any device or receptacle in or on which cargo is carried including trailer, flat, pallet, tank or similar receptacle which is owned by or leased to a Member, and which is either designed to be, or expected to be, carried in a ship.

CONTRIBUTION
A Mutual Premium, Release Call, Additional Call or Overspill Call levied by the Association pursuant to Rule 12, Rule 13 and Rule 16.

CONVENTION LIMIT
In respect of an Entered Ship, the limit of liability of the shipowner of that Entered Ship for claims (other than claims for loss of life or personal injury) at the Overspill Claim Date, calculated in accordance with Article 6 paragraph 1(b) (but applying 334 Units of Account to each ton up to 500 tons) of the International Convention on Limitation of Liability for Maritime Claims 1976 (the “Convention”) and converted from Special Drawing Rights into United States Dollars at the rate of exchange conclusively certified by the Association as being the rate prevailing on the Overspill Claim Date, provided that,

(a) where an Entered Ship is entered for a proportion (the “relevant proportion”) of its tonnage only, the Convention Limit shall be the relevant proportion of the limit of liability calculated and converted as aforesaid, and

(b) each Entered Ship shall be deemed to be a seagoing ship to which the Convention applies, notwithstanding any provision in the Convention to the contrary, and

(c) where the gross tonnage of the Entered Ship has not been measured in accordance with the Convention, that gross tonnage shall, for the purposes of assessing this Convention Limit, be calculated according to such formula as the Association shall consider appropriate, and

(d) the International Convention on Limitation of Liability for Maritime Claims 1976 shall be that Convention and not any subsequent revisions, amendments or protocols thereto.

DAY
The day of any occurrence means the day as computed according to the Greenwich Mean Time.

DIRECTORS
The directors for the time being of the Association or as the context may require those Directors present at duly convened meetings of the directors of North UK or North EU at which a quorum is present.

ENTERED SHIP
A Ship which has been entered for insurance in this Class of the Association.

ENTERED TONNAGE
The tonnage for which a Ship is entered and upon which Contribution to the funds of the Association is calculated.

ENTRY
The insurance in respect of any one Entered Ship of all parties insured under any one contract of insurance (with one Certificate of Entry) between North UK or North EU and a Member (other than an insurer reinsured by North UK or North EU) or between such reinsured insurer and its member.

FIXED PREMIUM
Any monies payable to the Association pursuant to Rule 8(1).

FLEET ENTRY
The entry of more than one Ship by one or more Members on the basis that those Sh