Class VI – Charterers’ Liability

DEFINITIONS

In these Rules, the following words and phrases shall have the following meanings unless the context otherwise requires.

Association

Maritime Mutual Insurance Association (NZ) Limited, a company incorporated in, New Zealand.

Carrying Unit

Any device or receptacle in or on which cargo is carried including, without prejudice to the generality of the foregoing, any container, trailer, flat, tank or similar receptacle which is owned or leased by a Member and which is either intended to be or is or has been carried on an entered ship or in respect of which the Member has entered into a contract of through carriage.

Chartered Ship

The entered ship named as the chartered ship in the Certificate of Entry, including also property on the entered ship that belongs to the owner of the entered ship.

Container

Containers constructed in accordance with the recommendations of the International Standards Organisation and complying with the requirements of the International Convention for Safe Containers, 1972, as amended.

Customary Towage

Towage for the purpose of entering of leaving port or manoeuvring within the port during the ordinary course of trading and/or the towage of such entered ships (e.g. barges) as are habitually towed in the ordinary course of their trading from port to port or from place to place and have been declared as such in writing to the Managers.

Deviation

A departure from the contractually agreed voyage or adventure which deprives the Member of the right to rely on a defence, exemption to right to limitation which would otherwise have been available to him.

General Rules

The General Rules for the time being of the Association.

The Hague-Visby Rules

The International Convention for the Unification of Certain Rules Relating to Bills of Lading signed at Brussels on 25th August 1924 as amended by the Protocol to that Convention signed at Brussels on 23rd February 1968.

Master

The Master of an entered ship or the substitute for or the replacement of such Master engaged under a written contract of employment or contract of service to serve on board the entered ship concerned.

Member of The Crew

Any person ( including apprentices but excepting the Master and any persons engaged only for nominal pay) engaged under a written contract of employment of contract of service to serve on board the entered ship concerned including a substitute for such person and also such persons whilst proceeding to or from such ship.

Passenger

A person carried on board an entered ship by virtue of holding a passenger ticket.

Personal Effects

Clothes, documents, navigational or other technical instruments and tools but excluding cash, valuables or any articles which in the opinion of the Managers are not an essential requirement for the Master or a member of the crew as the case may be.

The Rules

The General Rules and the Class VI Rules.

Supernumerary

A relative of the Master or of a member of the crew, or any other person whom a Member has agreed to maintain or carry on board an entered ship (except a passenger) including persons engaged under a contract of employment or contract of service for nominal pay.

INTRODUCTORY

1. Insurance in this Class is subject to the Rules and to the Memorandum and Articles of the Association.
2. The contract relating to entry in this Class shall be deemed to be separate from the contract for entry in any other Class.
3. Notes printed in italic script are indicative of current practice, but do not form part of the Rules.

GENERAL

1. Right of Recovery
2. Limitation of Liability
3. Oil Pollution Limitation
4. Want of Due Diligence

1. Right of Recovery

If the Member shall, in respect of risks set out in Rule 4, incur any liability, loss or expense in respect of the chartered ship arising from a casualty or event occurring during the policy period, the Member shall be entitled to recover out of the funds of the Association the amount of such liability, loss or expense in accordance with the Rules and Certificate of Entry in respect of such chartered ship;
PROVIDED ALWAYS THAT:

1. unless the Directors in their discretion otherwise determine, it shall be a condition precedent of a Member’s right to recover from the funds of the Association in respect of any such damages, liability, loss or expense that shall first have unconditionally discharged the same in full by payment out of monies belonging to him absolutely and not by way of loan or otherwise; and
2. the liability of the Association shall be subject to the Certificate of Entry and subject to the Rules;
3. The limit of liability specified in the Certificate of Entry shall be inclusive of legal costs and expenses and, notwithstanding s.78(1) of the New Zealand Marine Insurance Act 1908, inclusive of costs and expenses of suing and labouring.
4. no legal costs or expenses or costs or expenses of suing and labouring shall be recoverable unless either they have been incurred with the prior consent in writing of the Managers or the Managers have determined in their discretion that such costs and expenses were reasonably incurred.
5. In any case the liability of the Association for any and all liabilities, losses, costs and expenses incurred by all Members, Co-assureds and Affiliates under any one entry and which arise out of any one event shall be limited to the sum insured in the terms of entry, provided always that to the extent the Association has reinsured any risk insured, the Association shall be obliged to pay any amount in excess of USD 250,000 per event or series of events as and when such funds are received by the Association from its reinsurer(s) and the Association shall in no circumstances be liable to pay any amount(s) which cannot be recovered from reinsurer(s) regardless of the reason for such non recovery.

2. Limitation of Liability

1. Subject to the Rules and to any special terms and conditions upon which and limits and deductibles subject to which a ship may entered, the liability of the Association shall in no circumstance exceed the liability of the Member ( less any applicable deductible) in respect of a chartered ship as this liability may or would ultimately be determined and fixed by law, including any laws pertaining to limitation of shipowner’s liability. The Association shall in no circumstance be liable for any sum in excess thereof,
2. The Member shall be deemed to be entitled to all the limitations of liability which would apply if he were the registered owner of the ship and were entitled to limit liability. Any amount recoverable from the Association shall be limited accordingly unless the Association shall before entry have agreed to an increase in the Association’s liability and such agreement is recorded in Certificate of Entry.

3. Oil Pollution Limitation

1. Subject to (b) and (c) below, the Association’s liability for any and all claims in respect of damage directly or indirectly caused or threatened by oil pollution shall be limited in the aggregate to such amount as may be stated on the Certificate of Entry. The Directors may, in their discretion, impose special terms and conditions on the insurance of damage caused or threatened by oil pollution,
2. unless the Directors shall in their discretion otherwise decide, the limit of the Association’s liability shall apply irrespective of whether the accident or occurrence involves the actual or threatened escape of oil from one or more ships and to all claims brought by the Member or joint Members in respect of the chartered ship in respect of such accident or occurrence. If the aggregate of such claims exceeds that limit, the liability of the Association for each claim shall be such proportion of the oil pollution limit as each such claim bears to the aggregate of all such claims.
3. Unless the Directors shall in their discretion otherwise decide, if the chartered ship provides salvage or other assistance to another ship following a casualty, a claim by the Member who entered the entered ship in respect of oil pollution arising out of the salvage, the assistance or the casualty shall be aggregated with any liability or cost incurred in respect of oil pollution by any other entered ship similarly engaged in connection with the same casualty when such other ships are insured by the Association in respect of oil pollution. In this circumstance the limit of the liability of the Association to the Member who entered the chartered ship shall be such proportion of the greater oil pollution limit as the claim of that Members bears to the aggregate of all such claims insured by the Association which arise directly or indirectly out of the casualty.

4. Want of Due Diligence

1. If liabilities, losses or expenses are incurred as a result of want of due diligence by the Member, his managers, superintendents or onshore management, then the Directors may, in their discretion, reject or reduce the liability of the Association to the Member to the extent that such want of due diligence has, in their opinion, caused the liabilities, losses or expenses concerned.
2. In exercising their discretion under paragraph 4(1) of this Rule the Directors may take into account any failure by the Member, his managers, superintendents or onshore management to comply with recommendation(s) in connection with the operation of the entered ship which may have been made in any Circular or Risk Bulletin issued by the Association and published on its website the burden being upon the Member to show that the liability, loss or expense could not have been avoided by compliance with such recommendation(s).

RISKS COVERED

Subject to the Rules and to the Certificate of Entry, the risks covered by the Association are the risks set out in sub rules 1 to 27 of this Rule, in respect of the liability, loss or expenses (as the case may be ) and legal costs of the Member relating thereto by reason of his interest in the chartered ship;
PROVIDED ALWAYS that:

1. the Member is only insured to the extent that he has paid and discharged the liability or paid the loss or expense concerned, except to the extent that the Directors in their discretion shall decide otherwise; and
2. the Member is only insured to the extent that he:
   
   1. is liable under the terms of the charterparty under which he chartered in or chartered out the chartered ship, and
   2. would also be liable under the terms of the corresponding unamended form of charterparty currently approved by the Baltic and International Maritime Conference (BIMCO).

1. Loss of Life, Personal Injury and Illness
2. Ancillary Expenses
3. Passengers
4. Supernumeraries
5. Repatriation
6. Substitutes
7. Shipwreck Unemployment Indemnity
8. Loss of Personal Effects
9. Distressed Seamen
10. Life Salvage
11. Collision Liability
12. Damage to Property
13. Non-contact Damage
14. Removal of Wreck
15. Towage of a Chartered Ship
16. Towage by a Chartered Ship
17. Contracts of Indemnity
18. Quarantine
19. Loss of or Damage to Cargo
20. Collision Liability to Cargo Carried in a Chartered Ship
21. Unrecoverable General Average Contributions
22. Charterer’s Proportion of General Average
23. Fines
24. Pollution
25. Legal Costs of Enquiries
26. Risk Incidental to Shipchartering
27. Loss of or Damage to the Chartered Ship

1. Loss of Life, Personal Injury and Illness

Damages, compensation, wages, maintenance, hospital, medical and funeral expenses for which a Member may be liable arising out of loss life, personal injury or illness of:

1. the Master or a member of the crew,
2. a supernumerary employed by the Member
3. any person on board any other ship,
4. any other person;

PROVIDED ALWAYS that:

1. insofar as it relates to a member of the crew or the Master, nothing shall be recoverable if the liability arises pursuant to the terms of a contract of employment or contract of service or crew agreement and would not have arisen but for those terms, unless the said contract or agreement has been previously approved by the Managers in writing;
2. nothing shall be recoverable if the liability relates to a person other than a member of crew or Master unless it arises out of any negligent act or omission on board or in relation to the handling of cargo from the time of receipt of that cargo from the shipper or pre-carrier at the port of shipment until delivery of that cargo to the consignee or onward carrier at the port of discharge;
3. there shall be no recovery under this paragraph arising out of a Member’s liability under a contract of indemnity between the Member and a third party;
4. there shall be no recovery under this sub-rule arising out of a Member’s liability to supernumeraries or to passengers;
5. there shall be no recovery in respect of losses directly or indirectly caused by human immunodeficiency virus or similar diseases or in respect of any sexually transmitted disease.
6. there shall be no recovery in respect of death by natural causes or pre-existing medical conditions.

2. Ancillary Expenses

The cost to a Member of putting in to or remaining in port solely in circumstances which do or would entitle the Member to recovery under sub-rule 1 of this Rule but confined to port charges and the net loss to the Member in respect of bunkers, insurance, wages or crew, stores and provisions necessarily incurred as a result of the change of itinerary while securing medical attention or awaiting a substitute.

3. Passengers

Liability which a Member incurs arising out of:

1. loss of life, personal injury or illness of a passenger ( including medical, hospital, repatriation and funeral expenses) which also arises out of any act, neglect, or default of the Master and/or crew on board or in relation to the chartered ship,
2. loss of or damage to passengers’ baggage and personal possessions,
3. ancillary expenses as specified in Rule 4.2 necessarily incurred in landing an injured or sick passenger;

PROVIDED ALWAYS that:

1. the passenger ticket or the contract of passage shall relieve the Member of liability to the maximum extent permitted by the appropriate law;N.B. Members are required, prior to inception, to submit specimen copies of their passenger conditions to the Managers to ensure that Members are properly protected and to permit the latter to impose any additional calls or premium if less protective terms are accepted by the Association.
2. save at the discretion of the Managers no liability shall attach to the Association for any payments made by the Member in excess of his legal liability; and on demand by the Managers the Member shall be bound to prosecute and enforce any right of recovery he may have against the passenger;
3. there shall be no recovery from the Association in respect of claims relating to cash, negotiable instruments, precious or rare metals or stones, valuables or objects of a rare or precious nature;
4. there shall be no recovery in relation to any liabilities whatsoever incurred by the Member arising out of travel by air;
5. no cover shall be provided by the Association in respect of any breach of immigration or health regulations whether such breach arises from the fault of the passenger or otherwise.

4. Supernumeraries

Liability which a Member incurs to or in respect of a supernumerary under any of the sub-rules of these Rules as if such supernumerary was a member of the crew;

PROVIDED ALWAYS that in all cases, including in respect of relatives of the Master or of a member of the crew, the Managers shall have given their prior written approval of the presence on board of a supernumerary and the terms and conditions on which he is carried and the Member has paid or had agreed to pay such additional class or premium as may be required by the Association.

5. Repatriation

1. Repatriation expenses which are not recoverable under sub-rule 1 of this Rule and are incurred under statutory obligation or contract of employment or contract of service or crew agreement approved by the Managers in respect of the Master or a member of the crew, and
2. expenses which are necessarily incurred by a Member in discharging his statutory obligations towards or making necessary arrangement for stowaways or refugees or for the Master or members of the crew who desert or go on strike;

PROVIDED ALWAYS that:

1. there shall be recovery when the expenses result from the termination of a contract of employment or contract of service following the expiry of notice given in accordance with the terms of the relevant contract or termination as result of discharge by mutual consent or breach by the Member of any such contract or from any other discretionary act of the Member or from the sale of the chartered ship;
2. the Member shall take or has taken all appropriate steps permitted by law to recover such expenses from the Master, member of the crew, deserter, stowaway, refugee or from any other person, insurer or from any national or international bodies or organisations concerned with such persons.

6. Substitutes

Expenses necessarily incurred in sending a substitute or engaging and subsequently repatriating a substitute to replace the Master , supernumerary employed by the Member, or a member of the crew who shall have died or been left behind in consequence of illness, injury, desertion or any other cause where in the sole discretion of the Managers liability for such expenses could not reasonably have been avoided;

PROVIDED ALWAYS that:

1. there shall be no recovery when the engagement of the substitute is necessitated by the termination of a contract of employment or contract of service following the expiry of notice given in accordance with that contract or by mutual consent or by breach by the Member or resulting from any other discretionary act of the Member;
2. wages shall be only recoverable as part of the said expenses when payable to a substitute engaged abroad awhile awaiting or during repatriation.

7. Shipwreck Unemployment Indemnity

Liability to indemnify the Owner or Disponent Owner of the chartered ship in respect of wages payable to the Master or a member of the crew during unemployment in consequence of the wreck or total loss of an chartered ship, and other payments made to or in respect of such persons in consequences of the wreck or total loss, under statutory obligation.

8. Loss of Personal Effects

Compensation for which the Member is liable in respect of loss of or damage to personal effects of the Master, a supernumerary employed by the Member or a member of the crew, on board an chartered ship;

PROVIDED ALWAYS that no payment shall be made for theft or pilferage of crew’s personal effects.

9. Distressed Seamen

Compensation that the Member is liable to pay in respect of distressed seamen where such expenses are not recoverable under any other sub-rule of this Rule except those ensuing upon the termination of a contract of employment or contract of service in accordance with the terms thereof or by mutual consent or by breach by the Member or resulting from any other discretionary act of the Member or from sale of the chartered ship.

10. Life Salvage

Not covered.

11. Collision Liability

Liability that the member incurs to pay to any other person by way of damages for loss of or damage to any other ship or to cargo or other property on board such ship, or delay or loss of use of such ship or to cargo on such ship caused by collision with the chartered ship.

12. Damage to Property

Liability which a Member incurs for loss of or damage (including infringement of rights) caused to any harbour, dock, pier, jetty, land, or anything whatsoever moveable or immovable not being another ship or cargo or other property therein or cargo carried in an chartered ship;

PROVIDED ALWAYS that:

1. there shall be no recovery under this sub-rule of expenditure arising out of a Member’s liability under a contract of indemnity between a Member and a third party;N.B: see sub-rule 17 of this Rule
2. if the loss, damage or expense relates to any property belonging to the Member, such Member shall be entitled to recover from the Association, and the Association shall have the same rights as if such property belonged to a third party, but only to the extent that such loss, damage or expense is not recoverable under any other insurance upon the said property.

13. Non-contact Damage

Liability which a Member incurs:

1. for loss of or physical damage to any other ship or cargo or other property therein caused by the wash of the chartered ship;PROVIDED ALWAYS that if the loss or damage relates to any ship or cargo or other property therein belonging to the Member, such Member shall be entitled to recover from the Association and the Association shall have the same rights as if such ship or cargo or other property belonged to a third party, but to the extent only that such loss or damage is not recoverable under any other insurance upon the said ship, cargo or other property.
2. for delay caused to any other ship solely by reason of the chartered ship causing an obstruction to a navigable waterway or berth

14. Removal of Wreck

1. Liabilities, losses or expenses relating to the raising, removal, destruction, lighting or marking of the wreck of a chartered ship when such raising, removal, destruction, lighting or marking is compulsory by law or the expenses thereof are legally recoverable from the Member;PROVIDED ALWAYS that:
   
   1. the value of the vessel itself and any stores or materials saved and the value of all cargo or other property saved to which the Member is entitled and salvage remuneration received by the Member and any amounts obtained from third parties shall be deducted from such costs or expenses and only the balance thereof, if any, shall be recoverable,
   2. nothing shall be recoverable from the Association if the Member shall, without the consent in writing of the Directors, have transferred his interest in the wreck (otherwise than by abandonment to Hull Underwriters), prior to the raising, removal, destruction, lighting or marking of the wreck,
   3. nothing shall be recoverable from the Association in respect of lighting or marking of a wreck beyond a maximum period of two years beginning with the date of the event giving rise to wreck,
2. Liability which a Member incurs in respect of the raising, removal, destruction, lighting or marking of the wreck of another ship to the extent that the sinking of that ship is held to be the Member’s fault PROVIDED ALWAYS that nothing shall be recoverable from the Association in respect of lighting or marking the wreck of that ship beyond a maximum period of two years beginning with the date of the event giving rise to the wreck.

15. Towage of a Chartered Ship

Liability which a Member incurs under the terms of a contract for:

1. the customary towage of a chartered ship;PROVIDED ALWAYS that the Managers may reject or reduce a claim arising out of such a contract if they decide, in their discretion, that it was unreasonable having regard to all the circumstances to have arranged for the towage to be performed or to have agreed to the terms of the contract or if in their discretion they decide that the contract of towage ought reasonably have provided that the relevant risks and liabilities did not fall upon the Owner of the towed vessel,
2. any other towage of an chartered ship;PROVIDED ALWAYS that there shall be no recovery unless
   
   1. the terms of the contract have been approved in writing by the Managers prior to the commencement of the tow giving rise to such liability; and
   2. the Member has paid or agreed to pay such additional call or premium as may be required by the Association.

16. Towage by a Chartered Ship

Liability which the Member incurs to pay damages under the terms of contract for the towage of another ship by the chartered ship;

PROVIDED ALWAYS that:

1. a chartered ship specially designed or converted for the purpose of towage has been declared as such to the Managers at the time of entry or conversion for the purpose of towage; and
2. the terms of the towage contract between the Member of the one part and the owners of the towed ship and / or cargo or other property on board the towed ship of the other part provided that each party shall be responsible for any loss or damage to their own ship and / or cargo or other property on board their own ship without any recourse whatsoever against the other party; and
3. subject always to the provisions of sub-rule ii hereof which shall apply in any event the Managers in their discretion and having regard to all the circumstances:
   
   1. consider the terms of the towage contract as reasonable and the liability as coming within the scope of the cover afforded by the Association, and
   2. the Member has paid or agreed to pay such additional call or premium as may be required by the Association, and
4. unless the Managers shall otherwise agree in writing prior to the commencement of the tow giving rise to the liability, a Member shall not be entitled to be reimbursed by the Association in respect of the liability to the owners of the tow or its cargo or other property carried thereon out of loss of, damage to or wreck removal of the tow, its cargo or other property carried thereon.

17. Contractual liabilities and indemnities

Liabilities, costs and expenses, including liability for loss of life or personal injury but excluding liability for any cargo intended to be or being or having been carried in an entered ship, or the payment of compensation or wages, arising:

1. under the terms of a contract to which the Member is a party; or
2. under the terms of an indemnity granted by the Member;

PROVIDED ALWAYS that:

1. the Managers shall have previously approved the terms of the contract or indemnity and agreed the terms of any additional cover in writing; and
2. the Member has paid or agreed to pay such additional call or premium as may be required by the Association.

18. Quarantine

Additional expenses incurred in direct consequence of an outbreak of infectious disease on board, for disinfection of an chartered ship or cargo or persons on board such ship, or in respect of quarantine;

PROVIDED ALWAYS that:

1. such additional expenses shall be in relation to and limited to bunkers, insurances, wages of seamen, victualling, stores and port charges but only to the extent that such additional expenses incurred during any period of detention while in quarantine exceed such expenses as would otherwise have been incurred;
2. in the case of a chartered ship being ordered or sub-chartered to proceed to a port where it is known, or ought reasonably to be known by the Member, his managers, superintendents or onshore management, that such a ship will as a result be subjected to quarantine there or elsewhere, there shall be no recovery of expenses arising out of or in consequence upon her having been at such port.

19. Loss of or Damage to Cargo

Liability which the Member incurs under the charterparty to his disponent owner for damage to or loss or shortage of or responsibility in respect of cargo intended to be or being or having been carried on a chartered ship, arising out of breach by a Member (or by persons for whose acts, neglects or defaults the Member is liable) of the Member’s obligation or duty as a carrier, or as charterer;

PROVIDED ALWAYS that:

1. if a Member enters into a contract of carriage by sea (other than a contract of through carriage) when the Member knows or ought to know it contains exemptions from liability less favourable to the carrier than the provisions of the Hague-Visby Rules or such other Conventions or Rules as the Managers may from time to time approve, the Managers may in their discretion reject any claim or reduce it to the extent that they consider it would have been reduced had the contract of carriage contained exemptions from liability as favourable to the carrier as those contained in the Hague-Visby Rules;
2. if the cargo is intended to be, or has been carried on a chartered ship under a contract of through carriage including transit by land, water or air to or from such ship or storage on land or water, there shall be no recovery unless that contract has first been approved by the Managers and the Member has paid or agreed to pay such additional call or premium as may be required by the Association;
3. no claim shall be allowed in respect of loss or damage to specie, bullion, precious or rare metals or stones, plate, jewellery or other objects of a rare or precious nature, bank notes, bonds or other negotiable instruments, unless the contract of carriage and the spaces, apparatus and means used for the carriage and the instructions given for the safe custody thereof have first been approved by the Managers;
4. where cargo is carried under an ad valorem bill of lading and the value per unit ( as defined in the Hague-Visby Rules), piece or package has been stated to be in excess of USD 1,500 (or equivalent in any other currency) no claim shall be allowed for more than USD 1,500 per unit, piece or package unless the Member has before shipment,
   
   1. given notice of such higher valuation to the Managers, and
   2. agreed to pay such additional premium as the Managers in their discretion may require;
5. with regard to live animals, no Member shall be entitled to recover from the Association any claim in respect of the carriage thereof, unless the form of contract and the bill of lading, waybill or similar document under which they are to be carried has been approved in writing by the Association before the shipment and, further, unless the spaces, equipment and means used for the carriage and custody of such animals comply with the regulations of the country of the flag of the entered vessel and of the countries of each loading, discharging and intermediate port concerning the safe carriage of such animals;
6. the Managers may at any time require to be satisfied as to the suitability of spaces, plant and apparatus used and instructions given for the carriage of cargo in insulated or refrigerated containers owned or leased by the Member in which such cargo is to be carried and the Member shall, upon request and at his own expense, supply the relevant information to the Managers. The Managers may in their discretion withhold or withdraw their approval. If the Managers withhold or withdraw their approval and so notify the Member, such Member shall not be entitled to recover from the Association, in respect of any loss of or damage to such cargo the carriage of which began after the service of such notice;
7. where the cargo in a chartered ship in respect of which a claim arises belongs to the Member, such Member shall be entitled to recover from the Association and the Association shall have the same rights as if such cargo belonged to a third party but to the extent only that such loss or damage is not recoverable under any other insurance upon the said cargo which in any event shall be deemed to be insured for its full value at the time of shipment on the current form of Lloyd’s policy with the Institute Cargo Clauses (C) 1.1.82.
8. no claim shall be allowed where a Member has become liable in consequences of deviation unless;
   
   1. in the case of a deviation authorized by the Member, prior written notice of the intended deviation has been given to the Managers, or
   2. in the case of deviation without the Member’s authority the earliest possible notice has been given to the Managers upon the Member receiving information thereof; and

   in either case the Managers have in their discretion confirmed to the Member that his cover under this Rule continues unprejudiced.
   Nevertheless, the Managers may allow such a claim either in part or in whole notwithstanding the failure of the Member to give such notice as aforesaid if, in their discretion, they consider that the Member had reasonable grounds for believing that no deviation was to be or had been made.

   NB: If, upon receiving information of the deviation, the Managers advise the Member that his cover under this sub-rule is prejudiced, and if the Member then requests the Managers to arrange a special insurance to cover his liabilities arising out of the deviation and the Managers do obtain such coverage, the cost of such insurance shall be borne entirely by the Member.

9. unless the Managers shall in their discretion otherwise determine, there shall be no recovery in respect of a Member’s liability;
   
   1. for liability, cost or expense arising out of discharge of cargo at a port or place other than the port of place provided in the contract of carriage,
   2. for liability, cost or expense arising out of the failure to arrive or late arrival of the entered ship at a port of loading of the failure to load any particular cargo or cargoes in a chartered ship,
   3. for liability, cost or expense arising out of the delivery of cargo without the production by the person to whom delivery is made of the relevant negotiable bills of lading, waybills or other negotiable documents duly endorsed to such person,
   4. for liability, cost or expense arising out of or in respect of issue of a bill of lading, waybill or other negotiable documents recording the shipment or receipt for shipment on a date prior to or subsequent to the date on which the cargo was in fact loaded, shipped or received as the case may be,
   5. liabilities, costs or expenses in respect of a bill of lading, waybill or other similar document containing or evidencing the contract of carriage, issued with a description of the cargo or its condition, marks, numbers, weight or measurement which the Master of the entered ship or the Member knew or ought to have known was not correct,
   6. liabilities, costs or expenses in respect of delivery of cargo against only one of a set of original negotiable bills of lading, waybills or other negotiable documents carried on the chartered ship during all or part of the transport of that cargo on board that ship,
   7. liabilities, costs or expenses in respect of any deck cargo unless the bill of lading, waybill or other negotiable document states that the cargo is carried on deck and that the Member is free from liability for all loss or damage or that the liability of the Member is the minimum required by law. This exclusion does not apply to cargo carried in containers which are fully enclosed in steel or aluminum,
      NB: as to containers, see proviso (xiii).
10. if the liability of the Member arises from the terms of a contract of indemnity between the Member and the owners or operators of cranes or other appliances or craft used during the operations of loading or discharging a chartered ship, or persons responsible for the custody of cargo to be loaded in or having been discharged from a chartered ship, the Member shall only be entitled to recover if the terms of the contract of indemnity shall first have been approved by the Managers;
11. the Member shall be entitled to recover the extra cost (in excess of the cost which would otherwise have been incurred by him under the contact of carriage) of discharging or disposing of damaged or worthless cargo in respect of which the Member may be liable, but only to the extent that such Member is unable to recover in respect thereof against any other party;
12. Steel products
    the Association will not be liable for claims arising out of the carriage of steel products unless a preloading survey has been carried out at the Member’s expense by a surveyor approved by the Association, bills of lading claused in accordance with surveyor’s findings and any recommendations of the surveyor complied with;
13. Containers not carried under deck
    unless previously otherwise agreed in writing by the Managers, the Association will not be liable for claims arising out of the carriage of any container not carried under deck unless such container is fully enclosed in steel or aluminum and is carried in accordance both with the applicable regulations of the International Maritime Organisation and with a lashing plan approved by the Classification Society with which the vessel is classed or by a surveyor appointed by the Association but paid for by the Member;
14. Perishable Cargoes
    the Association will not be liable for claims arising out of the carriage of perishable cargoes unless;
    1. a pre-shipment survey carried out at the Member’s expense by a surveyor approved by the Association has determined that cargo is fit for the intended voyage, and
    2. the surveyor has confirmed in writing that the cargo space, ventilation equipment and stowage are fit for the intended carriage, and
    3. the Member complies with all recommendations made by the surveyor in connection with the carriage.

20. Collision Liability to Cargo Carried in a Chartered Ship

Liability for loss of or damage to cargo carried in chartered ship arising out of a collision between the chartered ship and another ship caused by the fault both of the chartered ship and the other ship for which a Member is liable to indemnity the owner of charterer of such other ship, solely by reason of responsibility for such loss or damage being determined in a country where the liability for such loss or damage is joint and several and the ‘Both to Blame’ Collision Clause is held invalid;

PROVIDED ALWAYS that where such cargo belongs to the Member, such Member shall be entitled to recover from the Association and the Association shall have the same rights as if such cargo belonged to a third party but to the extent only that such loss or damage is not recoverable under any other insurance upon the said cargo which in any event shall be deemed to be insured for its full value at the time of the shipment on the current form of Lloyd’s marine policy with the Institute Cargo Clauses (c) 1.1.82.

21. Unrecoverable General Average Contributions

The proportion of general average expenditure (including salvage) and special charges which the Member is entitled to claim from cargo or from some other party to the maritime adventure but which are not legally recoverable solely by reason of a breach of the contract of carriage;

PROVIDED ALWAYS that:

1. if such proportion and special charges are not recoverable by reason of deviation, the terms of proviso(viii) of sub-rule 19 of this Rule shall likewise apply to this sub-rule;
2. the Managers may in their discretion reject any claim or reduce it to the extent by which they consider it would have been reduced had the contract of carriage contained exemptions from liability as favourable to the carrier as those contained in the Hague-Visby Rules;
3. unless previously otherwise agreed in writing by the Managers there shall be no recovery under this rule if the chartered ship was at the time of the general average incident more than 10 years old.

22. Charterer’s Proportion of General Average

Liability for Charterers’ proportion of general average expenditure, special charges or salvage in respect of bunkers and freight at risk to the extent that such liability is not otherwise covered by insurance.

23. Fines

Fines for other penalties in respect of the chartered ship imposed by any court, tribunal or authority of competent jurisdiction for:

1. short or overlanding or over delivery of cargo or for failure to comply with regulations relating to declaration of goods or documentation of the cargo, or of the chartered ship relating to the cargo, provided that the Member is insured by the Association for cargo liability under Rule 4 sub-rule 19.
2. smuggling or for any infringement of customs laws or regulations other than in relation to cargo carried on the chartered ship.
3. breach of immigration laws or regulations.
4. The accidental escape or discharge of oil or any other substance or the threat thereof provided that the Member is insured for pollution liability by the Association under sub-rule 24 of Rule 4, and subject to the applicable limit of liability in respect of oil pollution claims,
5. Any other act, neglect or default of the Master or member of the crew or other servant or agent of the Member where, in the discretion of the Managers, the liability comes within the scope of the cover afforded by the Association;

PROVIDED ALWAYS that:

1. there shall be no recovery from the Association of a fine imposed upon a Member for the overloading of a chartered ship or for illegal fishing or for the legal costs and expenses in relation thereto;
2. there shall be no recovery from the Association under (c) above unless the Member can satisfy the Managers that proper steps were taken to guard against desertions and landing without the permission of the proper authority and in the case of men who are refused permission to land by the United States authorities, unless sufficient watchmen approved by the Association’s local representatives have been employed or the men concerned have been taken ashore into police care for safe custody;
3. there shall be no recovery under this sub-rule arising out of a Member’s liability in respect of supernumeraries;
4. there shall be no recovery in respect of infringement or violations of or non-compliance with provisions regarding construction, adaptation, equipment and documentation of ships contained in the International Convention for the Prevention of Pollution from Ships 1973 as modified by the Protocol of 1987 as modified or amended by any subsequent legislation, including any modifications or amendments thereto, of any state giving effect to that Convention;
5. there shall be no recovery from the Association of fines or penalties of whatsoever nature for which a Member may be liable if the Managers consider in their discretion that the Member knew or should reasonably have known that he would become liable or if the Managers in their discretion consider that such fines or penalties arise out of default of the Member, his managers, superintendents or onshore management.

24. Pollution

The liabilities, losses, damages, costs and expenses set our in paragraphs (a) to (e) below when and to the extent that they are caused by or incurred in consequence of the discharge or escape from the chartered ship of oil or any hazardous substance, or the threat of such discharge or escape:

1. liability for loss, damage or contamination,
2. any loss, damage or expense which the Member incurs, or for which he is liable, as a party to the International Tanker Owner’s Pollution Federation (ITOPF) or any other agreement approved by the Directors, including the cost and expenses incurred by the Member in performing his obligation under such agreements,
3. the cost of any measures reasonably taken for the purpose of avoiding or minimising pollution or any resulting loss or damage together with any liability for loss of or damage to property caused by the measures so taken,
4. the cost of any measures reasonably taken to prevent an imminent danger of the discharge or escape from the insured ship of oil or any hazardous substance,
5. the cost or liabilities incurred as a result of compliance with any order or direction given by any government or authority for the purpose of preventing or reducing pollution or the risk of pollution, provided always that such costs or liabilities are not recoverable under the Hull policies of the chartered ship;

PROVIDED ALWAYS that:

1. if the discharge or escape from the chartered ship causes loss, damage or contamination to property belonging wholly or in part to the Member, he shall have the same rights of recovery from the Association as if such property belonged wholly to different owners;
2. any claim under this Rule shall without prejudice to any other exception or limitation herein, be subject to the limitation of cover set out in Rule 3.3.

25. Legal Costs of Enquiries

Legal costs and expense which a Member incurs in respect of a formal enquiry into a casualty involving the chartered ship, but only to the extent that the Managers may in their discretion determine.

26. Risks Incidental to Shipchartering

Liability, loss or expense incidental to the business of chartering ships which, in the discretion of the Directors, comes within the scope of the cover afforded by the Association. Claims under this paragraph shall be recoverable to such extent only as the Directors may in their discretion determine; however the Directors may not, except by unanimous decision, decide that a claim falling within an exception is within the cover.

27. Loss of or Damage to the Chartered Ship 

Loss that the Member incurs to the registered or disponent owner of the chartered ship for loss of or damage to that ship and for financial loss arising as a direct consequence of loss of or damage to that ship.

EXCLUSION OF RISKS COVERED BY OTHER POLICIES, ETC

The Association shall not insure the Member to any extent whatsoever against any of the risks and liabilities, costs or expenses against which he would be insured if at the time of the incident giving rise to the said risks, liabilities, costs or expenses the chartered ship had been: fully covered against the risks insured by the Association’s Class II – Freight, Demurrage and Defence – or by some equally wide insurance.

If the Member has the benefit of other insurances covering the risks insured under this entry, the insurance provided by this entry shall be excess of the coverage available under such other insurances.

OTHER RISKS EXCLUDED

1. The Association shall not insure a Member in respect of a ship entered by him against:
   1. loss of freight or hire relating to such ship (except where this forms part of the measure of damages payable by the Member and recoverable under sub-rule 19 or 27 of Rule 4)
   2. salvage of such ship (except life salvage or where salvage forms part of general average expenditure recoverable respectively under sub-rules 21, 22 or 27 of Rule 4).
   3. loss arising out of the cancellation of a charter or other engagement of such ship,
   4. bad debts or the direct or indirect consequences of insolvency or fraud or financial default of any person whatsoever including agents,
   5. demurrage on or detention of or delay to such ship, except where it forms part of a claim under Rule 4.27,
   6. the cost of forwarding passengers to their destination or returning them to their port of embarkation or of their maintenance ashore consequent upon a casualty to such ship,
   7. notwithstanding sub-rule 4.23 punitive, exemplary or aggravated damages.
   8. any liabilities, losses, damages or expenses directly or indirectly caused by or contributed to be acts of piracy.
2. Unless special cover shall have been agreed in writing between a Member and the Managers, the Association shall be under no liability for any claim relating to liability, loss or expense in respect of:
   1. a chartered ship which is a salvage tug, fire-fighting ship or other ship used or designed or intended to be used for salvage operations, when the claim arises as a result of or during any salvage operations or attempted salvage operation,
   2. a chartered ship which is used for operations of drilling, core sampling, oil production or gas production, when the claim arises as a result of or during this operation,
   3. a chartered ship which is a dredger, when the claim arises as a result of or during dredging operations,
   4. a chartered ship which is used for the operations of pile driving, pipe or cable laying or blasting, when a claim arises as a result of or during those operations,
   5. a chartered ship which is designed for or involved in operations below the surface of the sea.

Notwithstanding any other provisions in these rules a Limit of Liability of US$ 250,000 any one accident or occurrence or series of accidents or occurrences shall be applicable to any and all liabilities, costs, claims, fines, penalties, compensation, losses, damages or expenses arising from any of the following:

1. The transmission or alleged transmission of:
   1. Coronavirus disease (COVID-19); or
   2. Severe Acute Respiratory Syndrome Coronavirus 2 (SARS CoV-2); or
   3. Any mutation or variation of COVID-19 or SARS CoV-2; or
   4. Any fear or threat of (a), (b) or (c) above.
2. Any liability for, cost or expense to identify, clean up, detoxify, disinfect, remove, monitor or test for (a), (b) or (c) above;
3. Any liability for, or loss, cost or expense arising out of any loss of revenue, loss of hire, business interruption, loss of market, delay or any indirect financial loss, howsoever described, resulting from (a), (b), (c) or (d) above, or any quarantine, which would otherwise be recoverable under these rules.
4. For the purpose of this rule an outbreak of (a), (b) or (c) on board an entered vessel shall be treated as a single occurrence regardless of the number of persons affected.