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Hull > Legal And Regulatory > Flashcards

Legal And Regulatory Flashcards

1
Q

What types of systems of law are there?

A

Common law
Civil law

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2
Q

Which countries have marine hull markets

A

London
Norway
Japan
USA
France
Italy
China

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3
Q

What is more important Statute or insuring conditions?

A

Statute always prevails

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4
Q

What are the two main classes of ship insurance?

A

Hull insurance
P&I insurance

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5
Q

What is the institute additional perils clauses - Hulls 1/10/83 and who is it used for?

A

This is used to extend cover for good owners with good vessel records

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6
Q

When would the Institute machinery damage additional deductible clause 1/10/83 be used?

A

If the underwriter is concerned that the vessel may be poorly maintained.

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7
Q

When would a total loss only cover be used?

A

In cases where vessel has a very poor record, maintenance and claims

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8
Q

What does clause 3 allow for under ITC-H 1/10/83?

A

A shipowner may have to breach certain warranties and clause 3 allows this provided immediate notice is given and that the breach is a cause within the category of cargo, trade, locality, to wage services etc.

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9
Q

Clause 4 - what circumstances would terminate the policy under this clause?

A

Change of class
Change of flag
Change of ownership
Bareboat charter
Requisition

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10
Q

What does a Named Perils policy mean?

A

Onus is generally on the insured to establish the operation of a covered peril (unlike All Risks policy).

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11
Q

What is the Inchmaree clause?

A

Policy covers for negligence of the Master, crew or pilots. (6.2.2)
Section 6.2.3 also covers for negligence of repairers or charterers provided repairers or charterers are not an assured.

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12
Q

Under what proviso is the inchmaree clause provided?

A

Provided that such loss or damage has not resulted from want of due diligence by the Assured, Owners, Managers, or Superintendents or any onshore management.

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13
Q

What is the Nukila?

A

That both the cost of repairing or replacing a latent defect and the consequential damage to the vessel are covered if three tests are satisfied. The tests are 1. Was there damage to the subject matter insured? 2. Did that damage occur during the period covered by the policy of the insurance? 3. Was that damage caused by a latent defect in the machinery or hull? If these tests are fulfilled, the cost of repairing or replacing a latent defect are covered in 83 and 95 but not 2003.

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14
Q

Clause 8.2.2 Cap on liability

A

This clause places a cap on liability under 8.1 and 8.2 in the amount of 3/4s of the insured value of the insured vessel in respect to any one collision.

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15
Q

Clause 8.2.1 Principle of cross liabilities

A

Where an insured vessel collides with another vessel and both vessels are to blame, then unless the liability of one of the vessels becomes limited by law, the indemnity shall be in accordance with the principle of cross liabilities.

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16
Q

What is a tramp vessel

A

One that has no scheduled route and plies the ocean of the world taking suitable cargos.

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17
Q

What is a handy size bulk carrier?

A

Handysize is 15000-60000 dwt. They can trade to most ports. Normally have their own cranes onboard.

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18
Q

What is a container vessel?

A

Container vessels only have a single deck with cells into which standard containers are slotted and stacked.

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19
Q

What type of cargo does a container vessel carry normally?

A

Normally they carry goods of fairly high values.

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20
Q

What is a charter party?

A

A form of contract of affreightment whereby the shipowner agrees to make available the entire carrying capacity of a vessel, or part of it, for either a particular voyage or a specific period of time.

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21
Q

What is a voyage charter

A

The shipowner undertakes to carry goods between specified ports. Shipowner retains control of equipping, manning and managing the vessel and agrees to provide a carrying service.

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22
Q

What is a time charter?

A

The shipowner agrees to place the carrying capacity of their vessel at the disposal of the charterer for a specified period of time. Shipowner retains control of the vessel and equips, mans and manages the vessel.

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23
Q

Institute freight clauses

A

Capped at 3/4 of the freight insured, no sweep up.
Franchise - small claims under 3% are not payable other than in relation to GA, unless losses are caused by fire, sinking, stranding or collision with another vessel.

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24
Q

A B Stuart form = Passage money (1/10/83

A

The limit on this policy is on an aggregate basis across the entire policy period (for all cruises on this schedule) and the excess is stated as a percentage of the amount insured, furthermore, there is a warranty that this amount remains uninsured.

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25
What does UNCLOS Nov 94 enacted stand for?
United Nations Convention on the law of the sea (1982)
26
Why is it important that both hull and war come under the same wording?
AIHC excludes piracy as a war risk, but retains barratry as a hull risk. ITCH considers both as hull risks.
27
How does UNCLOS divide the sea up?
Each country’s territorial waters (12 miles) Each country’s exclusive economic zone (EEZ extends to 200 miles from the coast of the sovereign state) High seas
28
What is barratry
It is fraud or negligence of the ships master or crew at the expense of the owner.
29
What is hot pursuit?
This allows a country to pursue a vessel which is believed to have broken the laws of the country, but pursuit must start within the relevant port of the state’s waters in which it has jurisdiction.
30
What are home state control and port state control?
Home state control are checks by the state of registration and port state control are inspections of vessels as they call at port ( Paris memorandum of understanding, the Paris MoU)
31
What is IMDG?
It is the International maritime dangerous goods Class 1 = explosives
32
What is ISM code, Doc and SMC?
International safety management. Document of compliance for the owner and safety management certificate for vessel. These incorporate that they have a designated person/s ashore that has direct access to the highest level of management.
33
What does VDR stand for?
Voyage data records
34
What is the ISPS code?
The International ship and port security code. Chapter XI of SOLAS. It deals with vessels being a target of terrorism themselves and in being a vehicle for delivering a terrorist attack on a port or other shoreside facility.
35
Oil pollution from vessels can give rise to both civil and criminal liability. What convention forms the basis for criminal liability for certain discharges of oil from a vessel?
The international convention for the prevention of pollution from ships (MARPOL)
36
What does AIS stand for?
Automatic identification system
37
What does VTS stand for?
Vessel traffic services
38
Name 4 navigational matters addressed in the 1996 collision regulations.
Lights and shapes Fog signals Safe speed in restricted visibility Rules of the road governing which vessel has priority in various meeting situations Manoeuvring and distress signals
39
What are traffic separation schemes?
Traffic separation schemes are designed to order traffic flow in areas of congested navigation.
40
Under the Hong Kong recycling convention, what does a ship recycling plan have to specify?
A ship recycling plan is a plan that has been put forward proposing that a ship recycling yard must in the future have to specify the manner in which each ship will be recycled, depending on its particulars and inventory.
41
What is the nature of the salvors lien for its salvage remuneration?
The salvor has a maritime lien over the property salved for its salvage remuneration fees. The salvor also has a lien for special compensation over the vessel for its remuneration, although it is not clear whether it is a maritime lien or a statutory lien.
42
What is Article 14 of the international convention on salvage 1989?
Article 14 provides that a salvor is entitled to special compensation from the owner of the vessel where the vessel or its cargo threatens damage to the environment. This is only paid by the owner of the vessel and can normally be recovered from P&I.
43
Who is a special casualty representative?
They work with the salvor, they either endorse the salvor or issue a dissenting report.
44
Name the 5 rules required for General Average
The sacrifice or expenditure must be extraordinary The act must be intentional or voluntary There must be peril The action must be for the common safety and not merely for the safety of one of the interests involved. The action must be reasonable.
45
What are the 2 types of contratual salvage?
Lloyds standard form of salvage agreement (LOF) Contract that provides a daily rate, a fixed price if the operation is successful
46
What are the requirements for salvage?
Property must be in danger Service must be voluntary
47
What does ‘no cure, no pay’ mean?
Success is a requirement for a salvor to obtain a salvage reward. Each party to the maritime adventure contributes to the salvage award in proportion to their value after the salvage operation is complete.
48
What is Article 14 of the salvage convention?
Art 14 provides an exception to the principle of ‘no cure, no pay’, in providing the salvor with special compensation where nothing has been salved (no salvage award earned), or where the award earned is small relative to the salvor’s efforts to prevent or minimise damage to the environment.
49
What can replace special compensation for salvage?
SCOPIC clause. The salvor and master are able to replace special compensation with a fixed and detailed schedule of remuneration which is payable in circumstances where otherwise the salvor would receive an Art 14 award. Special compensation or SCOPIC contributions are payable by P&I Salvage by hull.
50
Which insurance policy would pay for GA sacrifices/expenditure and contributions?
Hull and cargo policies
51
What does ‘Res ipsa loquitur’ mean?
The thing that speaks for itself.
52
International convention on civil liability for oil pollution damage 1992 (part of merchant shipping act 1995 (vi)
Any owner of an oil carrier is strictly liable for damage caused. Also for pollution prevention costs to minimize damage.
53
How can an owner be exempt from liability from the convention on civil liability for oil pollution damage 1992?
-act of war -act or omission of a third party done with intent to cause damage -negligence of a government or authority with navigational aids.
54
What does NRDA mean?
Natural resource damage assessment and it’s part of OPA ( US Oil pollution 1990) mathematical formulae based on missed enjoyment of environment.
55
What is the ranking of claims?
Possessory lien (lien holder still has possession. Maritime lien Registered mortgage Statutory lien Unsecured creditors/claimants
56
What is the difference between the UK standard conditions for towage and other services 1986 and TOWCON and TOWHIRE in terms of damage liability on the part of the tug?
UK standard conditions 1986 provides complete exemption from liability for the tug. TOWCON/HIRE are far less weighted in favour of the tug, it’s more ‘knock for knock’.
57
What reasons might the international oil pollution compensation fund have for paying a compensation claim?
The fund pays compensation when the claimant is unable to obtain full compensation from the owner/insurer. 1.Due to owner exempt from liability under CLC. 2.The owner/insurer cannot pay or claim exceeds CLC limits.
58
What does HNS stand for?
Hazardous and noxious substances by sea. This will govern vessels liability for damage caused by chemicals or other hazardous substances (not yet ratified)
59
Who is SOSREP and what do they do?
Secretary of states representative for maritime salvage. They make non political decisions to bring an end to a dangerous maritime incident. Including taking control over the response measures.
60
What does TOPIA and STOPIA stand for?
Tanker oil pollution indemnification agreement and small tanker oil pollution indemnification agreement.
61
Who does the CLC apply to?
Only applies to spills of oil from tankers or combination carriers.
62
What is demurrage?
If the permitted number of lay days (loading/unloading days in port) is exceeded the voyage charterer will normally become liable for demurrage, which is an agreed amount.
63
What are Incoterms?
They are internationally accepted commercial terms defining the respective roles of the buyer and seller in the arrangement of transportation and other responsibilities.
64
What 3 elements must an insured prove in order to have an indemnifiable claim under a marine insurance policy?
1. That one of the causes is the proximate cause and determine whether proximate cause is covered by the policy. 2. Where 2 or more concurrent and inter-dependent causes bring about a loss equally. 1 which is covered and 1 is excluded, the exclusion prevails. 3.Where 2 or more concurrent and inter-dependent causes bring about a loss equally, 1 which is covered and 1 which is not covered ( but not excluded), the insurer is liable to indemnify the insured.
65
Briefly explain how the liability for payment of premium effected through a broker differs between marine and non-marine insurance policies
Under marine policies the insured is not the one liable to the insurer to pay the premium, the broker is. Under non-marine policies, the insured rather than the broker is liable to the insurer for payment of the premium.
66
What is a valued policy?
It’s a policy which specifies the agreed value of the subject matter insured. Generally the value fixed by the policy is, as between the insurer and insured, conclusive of the incurable value of the subject matter.
67
What is an unvalued policy?
An unvalued policy is a policy which does not specify the value of the subject matter insured, but subject to the limit of the sum insured, leaves the insurable value to be subsequently ascertained. Unvalued policies are rare other than for freight insurance.
68
What is a total loss?
An actual total loss occurs where the subject matter insured is destroyed, where it is ‘so damaged as to cease to be a thing of the kind insured’. Where the insured is irretrievably deprived of the subject matter insured, or where the ship concerned in the adventure is missing and after the lapse of a reasonable time no news has been received of the ship.
69
What is a constructive total loss?
The loss occurs where the subject matter insured is reasonably abandoned on account of its actual total loss appearing to be unavoidable or where the subject matter insured could not be preserved from an actual total loss without an expense which exceeds the value of the subject matter insured after the expense has been incurred.
70
What is sue and labour?
The insured may recover its expenses properly incurred to avert a peril or minimise damage caused by a peril insured against. The insured may recover such costs in addition to the agreed value or sum insured. GA loss and contribution and salvage charges are not recoverable under the sue and labour clause.
71
The Enterprise Act 2016
It introduced an implied term for the provision of damages for late payment of claims. It amends the Insurance Act 2015 and applies to contracts signed after 04 May 2017. The implied term states that insurers are obliged to pay claims in a reasonable time. Breach of this implied term may result in an award of damages.
72
What is meant by insurable interest?
In order to have an insurable interest , the insured must have something to gain from the adventure or something to lose from its failure.
73
When should interest attach?
At the time of the loss there must be a legal or equitable interest and not merely an expectation thereof.
74
Distinguish between the effect of a change of voyage and a deviation.
As soon as an intention to change the voyage is manifested the insurer is discharged from liability, whereas an intention to deviate is immaterial and there must be an actual deviation to discharge the insurer from their liability under the contract.
75
What do you understand by assignment of policy?
Assignment means the handing over of all rights and benefits to another party.
76
What is a general average loss and what is a particular average loss?
A general average loss is a loss voluntarily incurred for the common safety, whereas a particular loss is a partial loss, fortuitously caused by a maritime peril.
77
List 4 types of vessel and their vessel specific risk characteristics applicable to each type.
Crude oil tanker - risk of explosion of cargo destroying the vessel. LNG tanker ( liquified natural gas) - significant explosion risk Bulk carrier - large holds create potential stresses on steel frame with risk of ship breaking apart. Container ship - cargoes maybe mis declared resulting in dangerous cargoes causing risk to other cargoes and ship. Car carrier - large open decks without bulkhead create instability of seawater enters hull. Cruise ship breaking apart- very high values.
78
What are the largest flags of convenience
Liberia and Panama.
79
List 3 reasons why a flag of convenience might be used
Reduce operating costs Avoid regulations Allow shipowners to be legally anonymous Increase ability to hire international employees
80
Can a shipowner limit their liability under statute and in negligence?
Yes in both
81
When a vessel collides with another vessel, what is the limit of the insurers liability under the ITC-H 1/10/83?
The hull value for property damage plus three-fourths for collision liability.
82
What main benefit does a shipowner obtain by having a general average absorption clause in his hull policy?
He can recover the total general average sacrifice subject to an agreed limit.
83
Four-fourths cover is provided as standard in which hull policy?
London Marine Construction All Risks 2007
84
Freight, demurrage and defense cover can be purchased from?
P&I clubs and dedicated mutual insurers
85
When a shipowners vessel is under threat of arrest, the P&I club in which it is entered may issue a
Letter of undertaking
86
Following a collision claim between 2 vessels, which claims would not be paid by insurers under ITC-H 1/10/83?
Pollution or contamination of any real or personal property or thing whatsoever.

Hull (1 decks)

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