Decision ID: 001079

In October 1999 the 1971 Fund Executive Committee and the 1992 Fund Executive Committee, in private sessions pursuant to Rule 12 of the Rules of Procedure at which only the delegations of Member States of the 1971 Fund and the 1992 Fund were present, considered whether the 1971 Fund and 1992 Fund respectively should take recovery actions against the shipowner’s insurer, the United Kingdom Mutual Steamship Assurance Association (Bermuda) Ltd (UK Club). It was noted that the vessel was probably covered for its legal liabilities for pollution damage up to an amount of US$500 million, which was normally the case for oil tankers. The two Committees took note of the ‘pay to be paid’ clause in the UK Club’s Rules (ie that the Club was under an obligation to indemnify the shipowner only for compensation actually paid by the shipowner to third parties), which had been upheld by the United Kingdom courts. The Committees noted, however, that the legal advice given to the Director had indicated that the ‘pay to be paid’ clause might not be upheld in Japan. In the light of this advice, the two Committees decided that the 1971 Fund and the 1992 Fund should both take recovery actions against the UK Club.

Date: 30.09.1999
Category: Legal actions
Subject: Direct action against insurers