Rules Class I - Protection and Indemnity (26-30)

26 Classification and Condition Surveys

Classification

i

The Member shall ensure that from the time when a ship is entered in the Club and throughout the period of the ship’s entry that:

a

The ship is and remains classed with a Classification Society approved by the Managers in respect of the entered ship;

b

Any incident or condition in respect of which that Classification Society might make recommendations as to repairs or other action to be taken is promptly reported to that Classification Society;

c

All rules, recommendations and requirements of the Classification Society relating to the entered ship are complied with within the time or times specified by the Society;

d

If requested by the Managers, any overdue recommendations or conditions are immediately notified to them, together with any extensions granted by the Classification Society and certified by the Society;

e

The Managers are authorised to inspect any documents and obtain any information relating to the maintenance of Class of the entered ship in the possession of any Classification Society with which the ship is or has at any time been classed and such Classification Society or Societies are where necessary authorised to disclose and make available such documents and information to the Managers upon request by them and for whatsoever purpose the Managers may consider necessary;

f

If at any time after acceptance for entry or during the period of entry, the Classification Society with which the ship is classed is proposed to be changed, the Managers are to be given not less than 14 days notice in advance, and in any event as much notice in advance as is possible of the proposed change of Classification Society, stating the identity of the Classification Society to which the ship is to be transferred, and all outstanding recommendations of the ship’s existing Classification Society;

g

The Member and the ship shall comply with all statutory requirements of the state of the ship’s flag relating to the construction, adaptation, condition, fitment, equipment, manning, security and safety management of the entered ship;

h

The Member shall at all times maintain the validity of such statutory certificates as are issued by or on behalf of the state of the ship’s flag in relation to such requirements and in relation to the International Safety Management (ISM) Code and the International Ship and Port Facility Security (ISPS) Code.

Condition and other Surveys

ii

a

The Managers may at any time require an entered ship, or a ship for which application for entry has been made, to be made available for survey by a surveyor or other person nominated by the Managers, within such period as may be specified by them. The Member or prospective member shall make the ship available within the time specified at a port or place accessible to any such nominated person, giving not less than seven days prior notice of the ship’s estimated arrival, and afford such facilities as may be required, including but not limited to, provision of all information and documentation requested. Unless otherwise agreed in writing by the Managers, the costs and expenses of any such surveys shall be paid by the Member or prospective member as and when incurred.

b

Where a surveyor or other person surveying or inspecting an entered ship (whether or not such surveyor or person has been appointed under sub-paragraph a of this Rule 26 ii), makes adverse findings as to the condition of the ship, or any recommendations as to repair or maintenance or otherwise, 

the Managers shall be entitled in their absolute discretion to

(i) exercise any of their rights under Rule 26 iii b;

and/or

(ii) require such recommendations, or any part of them, to be carried out forthwith, or within such time as may be specified by the Managers and the Managers shall be notified immediately on completion of such works as are required to fulfil any such recommendations; and

c

The Managers may require the Member to provide such evidence of compliance with such recommendations as they deem fit and/or require the ship to be made available for re-survey within such period as may be specified by them. Where re-survey is required Rule 26 ii a shall apply to that survey and Rule 26 ii b and c to any recommendations made thereon;

d

the Managers may at any time and in their absolute discretion:

(i) appoint representatives to visit the offices of the entity or entities having operational control of the ship and/or attend on board within the time specified by the Managers to audit the Member’s management systems, including interviewing all relevant personnel and reviewing all relevant documentation. The Member shall ensure full co-operation with such representatives, making all requested personnel, information and documentation available, and, unless otherwise agreed in writing by the Managers, shall pay for the reasonable costs of such audit; and

(ii) make recommendations as to the remedying of any deficiencies identified which must be carried out forthwith, or within such time as may be specified by the Managers.

e

The Managers must be notified immediately on completion of the implementation of such recommendations and provided with such evidence as they deem fit as to the remedying of such deficiencies and shall have the right to carry out re-audits to verify the same.

(i) Terminate the entry of the ship and/or any other ships entered by the same Member forthwith or from a time and date specified by a notice in writing to the Member;

(ii) Determine that there shall be no right to recover from the Club in respect of any liability, cost or expense during a period commencing from the time and date at which the ship ceased to comply or such other date as is specified in writing by the Managers until the Managers are satisfied that compliance has been achieved or their requirements have been fulfilled;

(iii) Exclude cover for claims arising out of or contributed to by such non­compliance, or defects or any other deficiencies found in any such survey or audit;

(iv) Reduce any recovery from the Club to the extent that a claim has been contributed to by such non-compliance, or defects or any other deficiencies found in any such survey or audit;

(v) Vary the terms and conditions of entry, including premium rating and/or exclusion or limitation of the risks covered, save that where the Member does not accept any such variation, it may withdraw the ship from the Club forthwith on giving written notice no later than 7 days following the date of notification of the variation by the Managers.

(i) Nothing in this Rule, or any action taken by the Club hereunder shall relieve the Member of its obligations with regard to the classification of the ship and/or the statutory requirements applicable to that ship or the Member howsoever arising or to the maintenance and/or condition of the ship generally.

(ii) Nor shall the Club or the Managers be under any liability whatsoever or howsoever arising in respect of any recommendations or advice given by any surveyor or any other person nominated or appointed by the Managers under Rule 26 ii..

27 Prudent Uninsured

i

The Member shall take such proper steps as in the opinion of the Directors are appropriate to protect its interests from the time when a ship is entered in the Club and throughout the period of the ship’s entry as it should or would have done if not protected by the Club. Compliance with this provision shall be a condition precedent to a Member’s right of recovery from the Club, provided that the Directors shall have power in their absolute discretion to admit in whole or in part a claim, notwithstanding a breach of such condition. The exercise of their discretion by the Directors shall be final and conclusive for all purposes.

Wilful Misconduct

ii

There shall be no recovery in respect of any liabilities, costs or expenses arising out of or constituted by wilful misconduct on the part of the Member (being an act intentionally done, or a deliberate omission by the Member, with knowledge that the performance or omission will probably result in injury, or an act done or omitted in such a way as to allow an inference of a reckless disregard of the probable consequences).

28 General Terms and Conditions

 i

a

Notice in writing of every casualty, claim or other event likely to lead to a claim upon the Club, of any survey or any reasonable opportunity for survey in connection with any loss or damage in respect of liability for which a Member may be insured by the Club, and/or of any enquiry into any such event relating to an entered vessel, including any loss or casualty, must forthwith be given to the Managers as soon as the Member or its agents is/are, or ought reasonably to be, aware of the casualty, loss, damage, claim or other event;

b

Without prejudice to the Member’s obligations under sub-paragraph a above the Club shall be under no liability whatsoever in respect of any claim, liability or expense which has been notified to it later than 12 months after the Member or its agents is/are, or ought reasonably to be aware, that the claim, liability or expense is or may be made against the Member or incurred by it.

c

In the absence of contrary agreement in writing, any notification required in accordance with the provisions of this Rule shall be given directly to the Manager’s London representative.

ii

No claim shall be settled or any liability be admitted or any other material step taken whatsoever which may affect any claim upon the Club by or on behalf of a Member without the prior consent in writing of the Club;

iii

Where a Member may have a right of recourse in respect of a claim, whether by way of contribution, indemnity or otherwise against any other party, including its servants, agents and independent contractors, the Member shall notify the Club as soon as it becomes aware that such right may be available, take any such steps as may be necessary to preserve the same whether requested or not and comply with any directions given by the Managers in respect thereof;

iv

If a Member has obtained the approval of the Club to settle a claim, the Member shall present his claim for recovery from the Club within 12 months of receiving the Club’s approval to the settlement;

v

Compliance with the provisions of this Rule shall be a condition precedent to a Member’s right of recovery from the Club, provided that the Directors shall have power in their absolute discretion to admit in whole or in part a claim, notwithstanding a breach of such condition. The exercise of their discretion by the Directors shall be final and conclusive for all purposes.

29 Forbearance

Any steps taken by, or on behalf of, the Club in circumstances where the Club would otherwise have the right to repudiate liability for a claim, whether with or without knowledge of such circumstances, shall not constitute a waiver of the Club’s rights under these Rules to repudiate liability for such claim, and no act, omission or conduct whatsoever by the Club, its officers, managers, servants, agents or independent contractors will disentitle it from relying on its rights, howsoever arising, whether under the Rules, terms of the entry or otherwise. Nor shall any actual waiver or exercise of discretion in favour of a Member in respect of a breach of these Rules disentitle the Club from relying on any rights hereunder in respect of any subsequent breach. Where payments have been made by the Club to the Member which the Managers thereafter consider should not have been paid, the Managers shall have the right to give written notice requiring the Member to reimburse the same, which reimbursement shall be made by the Member within 14 days of receipt of the notice requiring them to do so.

30 Directors’ Power to Pass Claims

The Directors shall meet as often as may be required for the settlement of claims which shall be paid by the Club as the Directors may determine in accordance with these Rules, but the Directors shall have power from time to time to authorise the Managers to effect payment of claims, without prior reference to the Directors. Where claims are settled by the Managers they shall be deemed to have the Directors’ authority. No Director shall act as such in the settlement of any claim in which he is interested.

Notwithstanding any neglect and/or non-compliance with and/or breach of any Rules, warranties, conditions precedent, instructions, orders or directions of the Club, the Directors may pass and pay in full or in part any claim and/or impose such terms on any such payment as in their sole and absolute discretion they think fit and waive any penalties.