Inter Club Agreement Text

For example, if a cargo is found damaged at the port of unloading on the day of the spill, January 1, 2020, the parties have two years from that date to notify the other party in accordance with the terms and conditions of the CIA. If the underlying freight claim is settled later on August 1, 2021 between the owners and the freight interest, the deadline to initiate proceedings against the charterers in connection with the ICA`s claim will not begin before that date and will end on July 31, 2027. Under this new provision, there is a right to a security right on a reciprocal basis once one of the parties has provided a charter party with security in respect of a cargo claim, provided that the time limits set out in clause 6 of the agreement have been complied with. The charterers argued that the wording of Article 35 did not contain the full text of the ICA 2011. The charterers relied on a restrictive interpretation of the words “liability” and “split/regulated” in section 35 to mean that only the parts of the ICA, 2011 relating to the division and settlement of claims were included in the Charter. This would not include security rules. “P&I Club/Cargo claims”. Liability for freight claims between charterers and owners is divided/regulated in accordance with the New York Produce Exchange Interclub Agreement, which came into effect in 1996, and its subsequent amendments. Cargo Interests filed a freight lawsuit against Head Owners seeking $900,000 in damages.

After the threat of arrest, the club ensured the safety of the directors in the form of a letter of commitment. The court agreed with the charterers that Article 35 of the Charter Party, due to the strict interpretation, concerned only the sharing and settlement of freight claims and did not involve the provision of security. The clause did not provide a basis for the application of clause (9) of the ICA 2011, which dealt with the security of claims, and did not contain the full text of the ICA 2011. The Interclub Agreement, also known as the ICA, first entered into force on February 20, 1970. This original version was first revised in 1984 and again in 1996. Currently, the latest version is the ICA 2011. The ICA was originally formulated by the International Group of P&I Clubs (“the IG”) as an agreement between IG clubs, as they will recommend to their members to settle freight claims between owners and charterers registered in IG clubs. Once included in a charter party, the ICA becomes an agreement between the parties, not between their respective clubs. It was designed to provide a simple mechanism for dividing freight claims between owners and charterers, and should be used with the New York Produce Exchange of (NYPE) and Asbatime charter parties.

The Court concluded that prior to the introduction of Article 9 in 2011, Article 35 would have been sufficient to cover the interests of both parties. A major revision of the interclub agreement will enter into force on 1 September this year. Our club, like the other clubs in the group, issues a circular to inform members of this change. The CIA represents a pragmatic approach to the allocation of freight liabilities. However, there are still disputes over scope, application and distribution. Courts tend to maintain a simple and formal interpretation of the CIA without the need for detailed factual investigations or lengthy legal proceedings. It has been reviewed and revised and will continue to be revised to remain appropriate. IG clubs (and their members) are discouraged from collecting technical points against each other and are instead encouraged to follow the spirit of the ICA. As the new agreement will come into effect on September 1, 2011, we recommend that it be included in all NYPE and Asbatime Charter Parties in the future. (a) all legal costs incurred by the original person making such an application; (b) any interest claimed by the original person making such a request; (c) all legal, club correspondent and expert costs reasonably incurred in defending or settling the claim claimed by the original person, but excluding costs of any kind incurred in making a claim under this Agreement or in seeking compensation between the Charter Party. It is to be expected that after this award, if the wording of the Charter clauses is not clear or interpretable, the right to counter-security could become a subject of discussion.

The award emphasizes that parties should exercise caution with respect to their charter party clauses and consider the scope of the CIA`s involvement. All owners and charterers are encouraged to review all clauses of the Charter Party that they adopt on a regular basis to assess whether the inclusion of the ICA in these clauses would include counter-security provisions. The new “Security Provision” can be found in clause 9 of this 2011 Agreement. (10) This Agreement shall be governed by English law and the exclusive jurisdiction of the English courts, unless it is incorporated into the Charter Party (or the settlement of cargo claims between the Charter Party is subject to this Agreement), in which case it shall be subject to the law and jurisdictional provisions, that apply to the charter party. Notes: Although primarily designed for use with these charter parties, the parties may, if they wish, integrate with other forms of charter parties by agreement. However, this should be done with caution, as not all charter party forms are so compatible and inconsistencies may occur. The question arises as to how the ICA`s provisions on the declaration of claims interact with other time limits. It will always be a matter of contractual construction, so there is always room for exceptions to the following general rules. Article 2 of the ICA states that it applies notwithstanding any provision to the contrary in the Charter Party.

These issues were discussed in the club`s article “Protecting Time under the ICA” in the Standard Bulletin, December 2015. Again, this can virtually require an owner to provide a $100,000 guarantee for freight interest and provide the charterer with a $100,000 mutual counter-security, which essentially guarantees the same claim twice, although the claim can only be sued once at a time. Notes: In order for a claim under the ICA to be recovered, the underlying claims must have been made under a contract of carriage approved by the Charter Party, i.e., a bill of lading issued was not issued in violation of the applicable terms of the Charter Party. The term “contract of carriage” is very broad and, therefore, CIA claims can arise from any type of contract of carriage, including bills of lading, sea waybills, charter companies or even sub-charters. Because the CIA is a commercial agreement, courts are often reluctant to conclude that a bill of lading was not issued in accordance with the terms of the P/C and is therefore “unauthorized” for cia purposes – see London Arbitration 3/13. On a previous trip, the charterer gave the order to load a load of rice into bags in Ho Chi Minh City, Vietnam, to unload in Port Harcourt, Nigeria, under the owner`s bills of lading. The cargo was loaded in apparently good condition and the bills of lading were issued on 20 May 2015. The cargo was transported without incident and arrived at the designated port of discharge on June 12, 2015 when unloading work began. During the extinguishing work in progress on the 14th. In June 2015, the captain claimed that there had been damage and bottlenecks in the cargo, mainly due to the brutal handling of the bags by local longshoremen. Shortly before the extinguishing work was completed, cargo interests filed a $60,000 claim for cargo damage or deficiencies and threatened to block the vessel.

They were not willing to accept a LOU club. “The owners guarantee that the vessel is and will remain registered in a P&I association for the duration of this charter. Entry includes, but is not limited to, normal coverage of freight claims. In the event of damage and/or loss of cargo carried on the ship, where the liability of owners and/or charterers could be envisaged under this Charter Party, the owners and/or charterers shall, upon request, grant a reasonable period of time to bring an action in each individual event. Such extensions do not affect the ultimate responsibility of both parties. Liability for freight claims between charterers and owners is divided/regulated in accordance with the New York Produce Exchange Interclub Agreement, which came into effect in 1996, and its subsequent amendments. In the present case, the question was whether the charterer`s right of appeal was prescribed by the provisions of clause (6) of the ICA after 24 months after delivery of the cargo. For the award provisions of the ICA to apply, the claim must meet the definition of a freight claim and meet other criteria concerning: (i) the form of the contract of carriage under which the original claimant asserts the claim against the owner or charterer; (ii) the terms of this contract of carriage; and (iii) Settlement of the freight claim. (c) Subject to points (a) and (b) above for default or over-chair: Section (c) has also been the subject of much debate and litigation over the years.

Much of the ICA dispute concerned whether a party seeking reimbursement under the ICA had adequately resolved the underlying freight claim. Whether the settlement amount was reasonable or not is irrelevant, and courts will generally not consider these issues, but will instead focus on whether the claim has been properly settled or compromised and paid. Proof of billing is a prerequisite for reimbursement under the CIA. The main case is “The Strathnewton” [1991] 1 Lloyd`s Rep. . . .