Rules Class II - Freight, Demurrage and Defence (6-10)

6

In all cases claims shall be considered to arise as follows:

i

claims arising out of contract, in tort, or under statute: when the cause of action accrues;

ii

claims for salvage or towage: when the services are commenced;

iii

claims arising in connection with the building of a ship: at the date of signing the building contract.

7

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.

8

The Directors shall have sole and entire discretion as to what cases may be undertaken and what limit upon costs and expenses 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 give such directions 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.

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; nor cases where less than US$120 is involved; 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.

9

Where the Directors, after examination into the merits of any claim, shall consider the Member concerned entitled to the protection of the Club, they shall instruct the Solicitors to the Club to take or continue proceedings. Such proceedings shall be conducted under the superintendence of the Directors, and at the expense of the Club, who will keep the Member indemnified against all costs and expenses incurred to the extent and upon the terms, conditions and exceptions which may be provided by these Rules and by the Certificate of Entry, unless such costs and expenses become payable by the personal neglect or default of the Member.

10

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.