The Inter-Club Agreement (ICA) first came into force on 20 February It was revised in , in. and again in See 24 August , Standard. Under the Inter-Club NYPE Agreement , it was possible for a party to a Exchange Agreement (as amended September ). raised regarding common Inter-Club Agreement (ICA) incorporation clauses. The recent decision of the Commercial Court in the “Genius Star 1” .
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Please contact customerservices lexology. The above recent arbitration decision calls for caution on the wording of clauses which owners and charterers include in their charterparties when they aim to incorporate the provisions of the Inter Club Agreement ICA.
The tribunal found that a commonly used clause in charterparties which provided that liability in respect of cargo claims was to be apportioned as specified by the ICA was not sufficient to also incorporate the provisions of the ICA relating to the provision of security and counter-security. Permission to appeal was refused by the High Court. The relevant facts were quite straightforward. Head owners chartered their vessel to the claimant disponent owners who, in turn, chartered to the respondent charterers.
Both charterparties included the following wording:. In turn, the disponent owners provided counter security to the head owners on the basis of Clause 9 of the ICA which provides a reciprocal obligation for provision of security by a party to a charterparty once security in respect of a cargo claim is provided by its counter-party.
When the disponent owners sought counter-security from their own charterers, this was denied on the basis that the charterparty clause was not apt to also incorporate the provisions of the ICA relating to the provision of security. The disponent owners commenced arbitration proceedings against the charterers and made an application under Section 48 5 b of the Arbitration Act asking the tribunal to order the charterers to put up security pursuant to the relevant section of the ICA.
Instead, only the provisions relating to the apportionment of liability were effectively incorporated. On the other hand, the disponent owners argued that the relevant clause made it clear that the full terms of the ICA applied in respect of liability for cargo claims and therefore the entire relevant provisions were incorporated including those relating to provision of security.
The arbitrators arrived to the conclusion that specific words of incorporation would be required to incorporate the entire ICA in the charterparty and that in the absence of such words, certain provisions of the ICA would not be applicable. This is a significant decision perhaps more so because leave to appeal was refused which may have considerable consequences.
This is because the relevant wording is commonly used in fixtures and some parties including their liability insurers may be caught by surprise if they realise that there is a risk that some provisions of the ICA are not applicable.
This may therefore lead to some uncertainty which will however be limited to clauses of the same or similar wording. If the latter, it would be recommended that explicit reference to the relevant provisions is made for the avoidance of confusion and caution is also paid as to the interaction of those provisions with other provisions of the charterparty relating to liability. If you would like to learn how Lexology can drive your content marketing strategy forward, please email enquiries lexology.
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Thank you for offering it and please continue it indefinitely!! Share Facebook Twitter Linked Ageement. Follow Please login to follow content. My saved default Read later Folders shared with you. Register now for your free, tailored, daily legal newsfeed service. Apportionment of liability under the Inter Club Agreement: United Kingdom August 28 Facts The relevant facts were quite straightforward.
Both charterparties included the following wording: Commentary This is a significant decision perhaps more so because leave to appeal was refused which may have considerable consequences. Popular agreement from this firm Should an employer delay its disciplinary process pending criminal charges?
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