Amendments to the Statutes and Rules (December 1999)

Circular No. 18/99 December 1999

TO THE MEMBERS

Dear Sirs,

AMENDMENTS TO THE STATUTES AND THE RULES

The Association?s Statutes and Rules for Ships for the 2000 policy year which commences on 20 February 2000, contain some alterations to those applying for the 1999 policy year.

The Statutes

The Annual General Meeting held on 20 August 1999 decided to harmonise the terminology used in the English version of the Statutes with the words and expressions used by other Clubs and in the Pooling Agreement. In short, it involved the words "Contribution", "Release Contribution" and "Catastrophe Contribution" to be replaced with "Supplementary Call", "Release Call" and "Overspill Call".

Rules for Ships

A similar change in terminology is also made in the Rules for Ships. The terms "Contribution", "Catastrophe Contribution", "Catastrophe Claim", "Catastrophe Claim Date" and "Release Contribution" will now throughout the Rules be replaced with the words "Supplementary Call", "Overspill Call", Overspill Claim", "Overspill Claim Date" and "Release Call".

Rule 8.1.f

Rule 8.1.f was amended with effect from 20 February 1998 in order to comply with the agreed policy within the International Group with regard to the validity of statutory required certificates issued by or on behalf of the state of the Ship?s flag. This means for example that it is a condition of cover that the Member maintains in respect of the Ship valid ISM Code certificates. The wording is now changed to mirror the wording which subsequently has been included in the Pooling Agreement. The new wording represents no material change.

The new Rule 8.1.f shall read:

Rule 38 Pollution

The cover for fines and penalties has been reviewed and changes are made in Rule 47. See below. The changes mean that fines and penalties imposed upon a Member as a result of pollution hereafter shall be recoverable pursuant to the new Rule 47 in contrast to Rule 38. Thus, the reference to fines in the bracket in Rule 38 (a) has been deleted.

The new Rule 38 (a) shall read (amendment underlined):

Rule 42 Salvage/SCOPIC

Negotiations between the salvors and the International Group, and subsequently also property underwriters, with a view to create a simplified framework for assessing special compensation as defined in the International Convention on Salvage 1989 resulted in the so-called Special Compensation P&I Clubs clause ("SCOPIC clause"). The SCOPIC remuneration shall be covered by the P&I insurer and an amendment to reflect the change in practice has been made in Rule 42 dealing with salvage. Some minor editorial changes in order to harmonise the wording with the text in the Pooling Agreement have also been made.

The new Rule 42 shall read as follows:

Rule 47 Fines

The cover for fines has been reviewed. The conclusion is that four categories of fines shall fall within the cover. Those four are as follows:

The fines and penalties which are listed in (i) to (iv) above shall all be covered in the normal way, i.e. the cover is not subject to discretion of the Club but would of course be subject to ordinary policy defences such as wilful misconduct, class warranties etc.

On the other hand, all fines other than those listed in the four categories above shall only be covered subject to the individual Club?s discretion provided the Member has satisfied the Association that he has taken reasonable steps to avoid the event giving rise to the fine, and, secondly, that the amount claimed in respect of such fines shall be recoverable only to such extent as determined by the Club.

The new Rule 47 shall read:

Rule 55 Terms of Contract and Appendix IV to the Rules for Ships

The inclusion of the Both to Blame Collision Clause and the New Jason Clause shall cease to be a mandatory requirement in Gard?s Rules for Ships. However, the Association still recommends that Members include these two clauses in bills of lading, charter parties and other contracts of carriage.

Rule 63 Excluded losses

To further adjust the Rules for Ships after the inclusion of the new Rule 42 (see above), the wording in Rule 63.1 (e) has been amended to mirror the new title on Rule 42.

The new Rule 63.1 (e) shall read as follows:

Rule 78 - Co-Assureds

A new Rule 78.5 is recommended included in order to codify the agreed practice with regard to so-called "protective co-insurance" which can be made available for contractors/charterers provided acceptable "knock for knock" terms have been agreed. The existing Rules 78. 5, 78.6 and 78.7 will be renumbered to Rules 78.6, 78.7 and 78.8 respectively. Furthermore, a reference to the new Rule 78.5 will be included in the new Rule 78.6 dealing with so-called misdirected arrow cover.

The new Rule 78.5 shall read:

The new Rule 78.6 shall read (amendments underlined):

A separate circular will be sent to Members with Mobile Offshore Unites (MOU) entered in the Association regarding changes in the Rules for P&I cover for Mobile Offshore Units.

Yours faithfully, ASSURANCEFORENINGEN GARD -gjensidig-

John G. Bernander Managing Director