Decision ID: 001378
In July 2002 the 1971 Fund Administrative Council recalled that the 1971 Fund had purchased insurance covering any liabilities of the 1971 Fund for compensation and indemnification up to 60 million SDR per incident minus the amount actually paid by the shipowner/insurer under the 1969 Civil Liability Convention as well as legal and other expert’s fees in respect of all incidents occurring between 25 October 2000 and 24 May 2002, the date when the 1971 Fund Convention ceased to be in force. The Council also recalled that under the terms of the insurance policy the 1971 Fund had to cover a deductible of 250,000 SDR for each incident. The Council noted that the insurance contract stipulated that the conversion of SDR into pounds sterling should be calculated by the Fund in accordance with its normal operating procedures or by a competent court and that it did not deal with the conversion of the SDR into any other national currency. The Council endorsed the Director’s proposal (as had the insurer) that the 1971 Fund should follow the procedure in the 1971 Fund’s Internal Regulation 3.5 relating to the conversion of the maximum amount payable from the General Fund (1 million SDR) into pounds sterling, namely that the relevant date for conversion should be the date of the incident in question, which in the case of the Zeinab was 14 April 2001. The Council noted that the SDR:pound sterling exchange rate on 12 April 2001 (13, 14, 15 & 16 April being non-banking days) was 1 SDR = £0.88130 giving a deductible of £220,325.