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Rules Class II - Freight, Demurrage and Defence (6-10) |
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Rules Class II - Freight, Demurrage and Defence:
1-5 11-15 |
6
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In all cases claims shall be considered to arise as follows:
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i
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claims arising out of contract, in tort, or under statute: when the cause of action accrues;
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ii
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claims for salvage or towage: when the services are commenced;
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7
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Notice in writing of every event likely to lead to a claim for the protection of the Club shall forthwith be given to the Managers. A Member shall not in any case admit liability except with the consent of the Directors, testified by writing under the hand of the Managers; otherwise, unless the Directors so determine, the Club shall not be responsible for costs and expenses relating to the claim.
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8
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i
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Subject to sub Rules 8 ii, iii and iv below, the Directors shall have sole and entire discretion as to what cases may be undertaken and what limit upon costs and expenses, and terms relating to payment and reimbursement thereof, may be imposed by the Club in any particular case or cases and as to the initiation and conduct of all proceedings, legal or otherwise, which may be undertaken by the Club at its cost and expense and may at any time limit the amount of costs and expenses which may be reimbursed or otherwise paid by the Club and may give such directions at any time, and notwithstanding that any financial limit referred to in sub rule 8 ii has not been reached, as to compromise, continuation or discontinuation, costs and expenses as in their absolute discretion they may deem desirable. If the Member declines to act in accordance with such directions he shall then take upon himself the entire risk and expense of all future proceedings without any claim whatsoever for reimbursement out of the funds of the Club.
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ii |
The liability of the Club to reimburse or indemnify the Member for costs and expenses covered under this Class 2 shall be limited to such amount as appears in the Certificate of Entry or as may otherwise be agreed by the Managers in writing, but in the absence of any such amount or agreement, and in any case, shall not exceed US$10 million overall, in respect of all costs and expenses arising out of any one claim or series of claims. The Managers may in their absolute discretion determine whether legal and other costs and expenses for the purposes of this Rule and limit have arisen out of one claim or series of claims, irrespective of whether one or several ships is/are involved. |
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iii |
Unless otherwise agreed by the Managers in writing, any costs and expenses recoverable under this Class 2 shall be limited to the excess of stipulated deductibles. |
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iv |
In no circumstances shall the Club be liable for costs awarded in circumstances where the Member has failed to follow the directions of the Club, or when arising directly or indirectly as a result of failure to comply with or breach of any of the Rules of this Class 2 or the Rules of Class 1 Protection and Indemnity as incorporated in this Class 2 by Rule 14 below. |
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Note: the Club will not normally undertake cases which concern a substantial body of shipowners rather than an individual Member unless all or the majority are entered in this Class; nor cases which should properly be the subject of diplomatic action or action by national or international bodies; nor disputes in connection with Liner Conferences; but it may do so if the Directors in their sole discretion decide that such cases should be taken up and the Club may subscribe to such national and international bodies.
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9
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i
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Where the Directors, after examination into the merits of any claim, shall consider the Member to be entitled to the protection of the Club, they may instruct lawyers and/or other experts on the Member's behalf, or authorise the Members to do so, in order to take or continue proceedings. Such proceedings shall be conducted under the superintendence of the Managers.
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ii
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The Club shall pay all costs and expenses properly incurred by the Member in respect of such claims subject to, and to the extent provided in, the Rules and the Certificate of Entry and any terms, conditions and/or exceptions that the Directors in their absolute discretion impose on the Club's cover of any claim, save where
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a
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such costs and expenses become payable by the personal neglect or default of the Member; or
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b
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the Member is required to pay costs and expenses in the first instance prior to seeking recovery from the Club pursuant to a direction given in accordance with Rule 8 i above;
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10
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Where liability is admitted or established in any case after the Club has incurred costs, and the claim is afterwards compounded whether owing to the opposite party’s inability to pay the full amount of the debt and the costs for which he is liable or otherwise, the sum actually recovered shall, subject to the absolute discretion of the Directors to order otherwise, be apportioned rateably between the amount of the claim and costs which would otherwise have been recoverable.
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