The Inter-Club Agreement (ICA) was formulated in in order to promote amicable and equitable settlements for cargo claims under the. The Inter-Club Agreement (ICA) first came into force on 20 February It was revised in , in. and again in See 24 August , Standard. CIRCULAR REF: / CIRCULATED TO ALL MEMBERS, BROKERS AND DIRECTORS. The Inter-Club New York Produce Exchange Agreement, which.
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From time to time the Agreement has been amended in order to keep it in line with legal developments. For the last 12 gareement the version ICA has been in operation. The ICA appears to have become somewhat standard in the trade, since it is now often expressly incorporated into charterparties in the NYPE form.
Inter-Club New York Produce Exchange (N.Y.P.E.) Agreement
In one important decision of the English Commercial Court 3 interlub with the application of the Agreement when expressly incorporated as a term of the charterparty, against the practical background of container operations and through and multimodal transport bills of lading. The Agreement has now been amended once again in order to overcome some of the effects of the above-mentioned decision, as well as to adapt it to the carriage of containerised cargo, and to deal with other issues which have given rise to disputes over the years.
The new version is also an attempt to arrange the Agreement in a more logically structured way, to make it more “user-friendly”. The full text of the Agreement is printed on pages 17 and The ICA does not contain the sentence “The Agreement is not binding on Members”, which appeared in the version. However, these words are superfluous because the Agreement is between the Clubs, who do not have authority to bind their Members to it, so the Agreement is not binding on the Members in any event.
Still, the omission of this sentence may serve to avoid confusion when the ICA is expressly incorporated into charterparties and thereby binding on charterers and owners. The new form also makes clear that the Clubs have a duty to recommend application of the Agreement to their Members whether or not the Agreement is incorporated into the relevant charterparty. This was implied in the form. 1969 form makes gareement that the Xgreement applies between Clubs despite any provision to the contrary in the charterparty.
In particular, the time bar in the Agreement contained in Clause 6, which will be discussed in detail later should prevail over any contractual or statutory time bar. As a result, between Clubs, application of the Agreement to existing charterparty forms will be as set out in Table I. This seemed to conflict with the intention behind the Agreement.
Accordingly, it became necessary to introduce a clear definition of “cargo claims”. These are now defined in the ICA as claims relating agreemwnt the following: Costs Although the version of the ICA did not contain a definition of cargo claims, it made clear that the apportionment should also apply to “legal costs incurred” on cargo claims. Interrclub of the purposes of the Clubs in drafting the ICA was to change that point. The version continues to include “costs” in the apportionment, and clarifies that “costs” means the following: The ICA expressly excludes from the apportionment costs incurred in making a claim under the Agreement or in seeking an indemnity under the charterparty.
Interest Agreemnt ICA expressly interlub the apportionment of interest “claimed” by the original cargo claimant. Qgreement, the above-mentioned items would be considered as set out in Table II.
Under the form the Agreement will continue to apply where the cargo claim is brought under a bill or bills of lading, and the wording has been amended to reflect the fact that the claim must be brought under such document s.
However, the Agreement will also apply where the claim is made under a document other than a bill of lading. Application has been extended to claims made under contracts of carriage of whatever form 10provided such contracts are authorised under the charterparty.
In addition, although the relevant contract of carriage must still incorporate the Hague or Hague-Visby Rules or terms no less favourable, the Agreement will also be applicable where the contract incorporates the Hamburg Rules or any national law giving effect thereto, where these Rules are compulsorily applicable by operation of law to the contract of carriage.
This involves cases in which the contract would have been authorised except for the inclusion of through or combined multimodal transport provisions. This means that the simple fact that the underlying contract of carriage is a contract for through or multimodal transport is not a reason in itself to avoid application of the Agreement, even if this type of contract is not authorised under the charterparty.
In that case it was decided that the ICA would only apply where the relevant bill of lading had been issued in strict compliance with the terms of the charterparty in question. Accordingly, claims settled under through or multimodal bills of lading will be outside the scope of the version of the Agreement, unless expressly allowed under the charterparty.
It also makes clear the fact that the charterers have the burden of proving that the cargo claim did or did not so arise. Accordingly, application of the two forms of the Agreement to claims brought underdifferent types of documents will be as shown in Table III. Some of these amendments may introduce changes to the manner in which liability for cargo claims is apportioned between owners and charterers.
A material amendment is defined in both forms as one which makes liability for cargo claims clear. The ICA gives one example of such a material amendment: The ICA then provides, in a quite contradictory manner, that the addition of the words “and responsibility” in Clause 8 is in itself a material amendment, but that this does not render the Agreement inoperative.
Instead, an alternative apportionment formula is to be applied. The ICA endeavours to remove the contradiction contained in the formula. In addition, it was thought that the provision of two apportionment formulae was quite confusing, so there were attempts to amalgamate them into one, without affecting the division of liability as established in the form.
As a result, the new form says clearly that the addition of the words “and responsibility” in Clause 8 is not a material amendment even though the inclusion of such words will affect the manner in which liability is apportioned – see comments to “Apportionments” belowbut that the addition of the words “cargo claims” to Clause 26 renders the Agreement inoperative even if it is expressly incorporated into the charterparty.
In practice the result should be the same as under the form. It went on to provide that ex-gratia payments made for commercial or other reasons, where no legal liability existed, were to be borne by the party by whom the payment was made. The Agreement also provides that apportionment under the ICA may only be made if the claim has been properly settled or compromised. In addition, there is now a new requirement that the cargo claim must also be paid. However, the reference to ex-gratia payments has been dropped since it was considered that the words were superfluous.
An ex-gratia payment made where no legal liability exists cannot be a claim properly settled or compromised.
Under the Agreement, written notification of a claim must be given to the other party within 24 months of the date of delivery of the cargo or the date the cargo should have been delivered, except for where the Hamburg Rules are compulsorily applicable, in which case the time limit is 36 months from the date of delivery.
The apparent more generous time bar for Hamburg Rules cases is necessary due to the fact that under the Hamburg Rules there is a two year limitation period 14 compared to the one year under the Hague and Hague-Visby Rules.
One will also note that “delivery” has been substituted for “discharge”. In fact the change is more subtle than mere semantics.
Inter-Club New York Produce Exchange (N.Y.P.E.) Agreement 1996
The distinction between discharge and delivery may be of vital importance if discharge is completed several days after the hatches are opened. In cases of through interxlub combined transport, “delivery” will be delivery by the relevant contractual carrier under the through bill of lading which may be some distance in time and place from the vessel.
This provision although worded differently gives the same effect as its counterpart in the Agreement. One for claims where Clause 8 of the charterparty contained no material amendments and one for claims where the only material amendment was the inclusion of the ageement “and responsibility” or similar words, by which the Master was made responsible for cargo handling. Now under the Agreement the inclusion of interxlub words “and responsibility” in Clause 8 is no longer regarded as a material amendment and there is just one apportionment formula.
Inter-Club New York Produce Exchange Agreement 1996 (As Amended September 2011)
However, as we describe below, for claims arising from cargo handling the apportionment formula maintains a distinction between cases in which Clause 8 has been amended to include the words “and responsibility” or has otherwise been amended to make the Master responsible for cargo handling and those cases in which Clause 8 has no such amendment.
Claims in fact arising out of error or fault in navigation or management of the vessel, are to be apportioned per cent to owners. The rationale behind this is that many charterparties incorporate the Hague or Hague-Visby Rules thus giving owners a complete defence to claims of this kind.
However, if under such a charterparty, charterers have issued bills of lading to which the Hamburg Rules apply as a matter of law, there will be no defence to a claim for negligent navigation or management of the vessel under the bill of lading but charterers will be unable to pass on the claim to owners due to the negligent navigation or management of the vessel defence in the charterparty. Since charterers have no control over the navigation or management of the vessel, such a result would seem inequitable.
The new apportionment provision should only be of relevance in cases where the Hamburg Rules are compulsorily applicable. In a claim to which Hague or Hague-Visby Rules apply, cargo claimants should be defeated by the contractual carrier under the contract of carriage, if the claim arises by virtue of negligent navigation or management and so there should be no claim to pass on under the ICA.
If the contractual carrier pays the claim in any event, the claim will not have been properly settled and therefore no recovery can be made under the ICA. However, this is now subject to the express proviso that where owners can prove that the unseaworthiness was caused by the loading, stowage etc.
Whilst the words of the proviso may be new, it is believed that they merely state expressly what was implicit in the Agreement and therefore it is anticipated that, in practical terms, there will be no change in apportionment of claims under this heading.
However, this is subject to the proviso that where charterers can prove that the failure to properly load, stow or handle etc.
As with the proviso in Clause 8 ait is considered that the new words merely state expressly what was implicit in the Agreement. Since the ICA extends to claims arising under through or combined transport bills of lading, a question arises as to how “stowage” should be interpreted in respect of containerised cargo: It would seem that the phrase means stowage of the container on board the chartered vessel.
As explained above, by virtue of Clause 4 a iiithe ICA only applies where charterers can show the loss, damage, shortage, overcarriage or delay occurred after commencement of the loading of the cargo onto the chartered vessel and prior to completion of discharge from that vessel.
Since stowage of the cargo inside the container takes place ashore, the cause of the loss or damage will have taken place prior to the container being loaded onto the vessel and therefore any claim arising therefrom should fall outside the ambit of the ICA. These clauses seem to have fallen into disuse and therefore it is believed that the minor change will be of little or no practical significance.
Under the ICA such claims were dealt with in two ways. If the condensation damage resulted solely from improper ventilation, owners were per cent liable. However, if condensation resulted otherwise than from improper ventilation, liability was apportioned equally between owners and charterers, unless the condensation arose from poor stowage. Under the Agreement, it is envisaged that condensation claims will be dealt with as follows: Liability for condensation arising out of improper ventilation will be apportioned per cent to owners by one of two separate routes: As can be seen, despite the absence of any express reference to condensation claims, it is believed that these claims will continue to be treated in the same way as before.
The apportionment of liability under the two versions of the ICA will be very similar, with some minor exceptions where no provision for apportionment existed in the version and the inclusion of the “catch-all” provision.
Apportionment under each form should be as per Table IV, based on English law. As stated above this was 1st September It is understood that no Club has ever withdrawn from the ICA.
However, in order to ensure that no conflict arises between the main body of the charterparty and the settlement of claims under the ICA, the law and jurisdiction of the charterparty under which an apportionment is sought shall apply in the following situations: Since many charterparties are subject to English law and jurisdiction, it is likely that English law will be relevant in the majority of cases.
See article in Gard News of December See clause 4 c of the ICA In such cases it is recommended that prior to settlement of a cargo claim the other party to the charterparty and its Club are asked to approve the settlement and confirm that they will contribute to it in accordance with the ICA.
Loss of cargo; damage to cargo; shortage of cargo incl. Costs incurred in making a claim under the Agreement or in seeking an indemnity under the charterparty. Bills of Lading authorised under the charterparty and incorporating the Hague or Hague-Visby Rules or containing terms no less favourable. Waybills authorised under the charterparty and incorporating the Hague or Hague-Visby Rules or containing terms no less favourable.
Charterparties authorised under the charterparty and incorporating the Hague or Hague-Visby Rules or containing terms no less favourable. Any other document authorised under the charterparty incorporating the Hague or Hague-Visby Rules or containing terms no less favourable. Documents not authorised under the charterparty whether or not incorporating the Hague or Hague-Visby Rules or containing terms no less favourable. Documents which would have been authorised under the charterparty except for the inclusion of through or combined multimodal transport provisions, incorporating the Hague or Hague-Visby Rules or containing terms no less favourable.
Any form of document authorised under the charterparty or which would have been authorised under the charterparty except for the inclusion of through or combined multimodal transport provisions, incorporating the Hamburg Rules or any national law giving effect thereto, where these Rules are compulsorily applicable by operation of law to the contract of carriage.
Condensation resulting from bad stowage where the words “and responsibility” have been added to Clause 8.