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YORK-ANTWERP RULES AND PLACES OF REFUGE FOLLOWING THE CMI CONFERENCE 2004 By Ben Browne Shaw and Croft
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MARINE INSURANCE ACT 1906 s.66 “1. A G.A. loss is a loss caused by or directly consequential on a G.A. act. It includes a G.A. expenditure as well as a G.A. sacrifice. 2. There is a G.A. act where any extraordinary sacrifice or expenditure is voluntarily and reasonably made or incurred in time of peril for the purpose of preserving the property imperilled in the common adventure.”
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Matthew Marshall’s Research G.A. is too expensive – US$300 million p.a. G.A. Takes too long to adjust – 66% of adjustments are published in 2 years covering 33% of money shifted G.A. is inequitable – 80% of G.A.s caused by the fault of owners/crews. But 60% of G.A. is charged to innocent cargo.
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INGREDIENTS OF A G.A. CLAIM Salvage 40% Interest and Commission11% Adjusters’ fees and expenses11% Crew wages and maintenance 4% Fuel and stores at a place of refuge 1% Cargo expenses 8% Ship and Cargo Sacrifices19% Others 6%
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THE YORK-ANTWERP RULES 2004 - Removal of Salvage from G.A. - Crew wages at a Port of Refuge disallowed - Temporary Repairs curtailed - Interest at market rates - Commission abolished - Time Bar - Housekeeping
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SALVAGE – YAR Rule VI -Salvage lies where it falls unless one party pays another’s proportion -Second casualty affecting values -Uneven settlements will not be readjusted -Carried in plenary by 21 to 9 -Saving for Underwriters: 8%
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CREW WAGES AT PORTS OF REFUGE – YAR RULE XI -Crew wages and maintenance while detained at a Port of Refuge will not be allowed in G.A. BUT -Crew wages and maintenance during the prolongation of the voyage will be allowed -Saving to Underwriters could be 3-4%.
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TEMPORARY REPAIRS YAR RULE XIV -Temporary Repairs caused by damage suffered for common safety or a G.A. sacrifice will be allowed. -Temporary Repairs of accidental damage only allowed to the extent that [Temporary Repairs and Permanent Repairs] > Permanent Repairs at Port of Refuge -Baily method -Saving to Underwriters: 1%
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INTEREST – YAR RULE XX1 -Interest charged at 7% under YAR ’74 and ’94. -Under YAR 2004 the rate will be fixed annually by CMI. -CMI’s Guidelines: - 1 year US$ loans and £, € and Yen will be “taken into account”. -Saving about 3%
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COMMISSION – YAR RULE XX -2% on disbursements except crew wages, maintenance and fuel & stores. -Commission duplicates interest. -Under YAR 2004 commission is not charged.
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TIME BAR – YAR RULE XXIII -One year after Adjustment is published or 6 years after termination of voyage (whichever is less). -Extensions may be agreed. -Does not apply as between insurers and assureds. -May not be enforceable everywhere.
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YORK-ANTWERP RULES 2004 - SUMMARY -Enter into force 1 st January 2005. -Aim to speed up adjustments and save underwriters money -Savings to underwriters overall about 15% -Both Hull and Cargo underwriters gain -Effect on shipowners is minimal (crew wages being main downside) -Important YAR 2004 are utilised. -Policy wordings require only minor changes.
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PLACES OF REFUGE -Refusal of access to vessels in distress to Places of refuge. -Historical right of access partly supported by: UNCLOS Article 11 Salvage Convention. OPRC 1990. Intervention Convention 1969. Dumping Conventions. SOLAS.
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GOVERNMENTAL POWERS TO REFUSE ACCESS -Right to protect coastline (UNCLOS). -Bilateral treaties. -Contingency plans. -Dangerous Vessels Act 1985. -SOSREP. -The “TOLEDO” (1995). -The “LONG LYN” (1995).
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EUROPEAN TRAFFIC MONITORING DIRECTIVE 2002 -“Ports” must be available for ships in distress. -Contingency plans to be drawn up and published. -Problems of publicising PORs.
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IMO GUIDELINES -2 sets of Guidelines – one for Master and one for Coastal State. -Adopted 5 th December 2003. -2 step analysis: Event – specific assessment Expert Analysis -Security as a condition of entering a POR. -Not legally binding.
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PLACES OF SAFETY - CMI Topics discussed: (a)Obligation to offer POR (b)Penal liability (c)Reception facilities (d)Coastal States and Casualty ships in International Law (e)Designation of PORs and the mechanism of decision making (f)Domestic law, Guidelines or a Convention
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CMI’S PROPOSALS (1) Convention or amendment to a convention or Guidelines on (a) Rights and obligations of States. (b) State immunity when providing access to a POR. (c) Consequences for States who wrongly refuse access. (d) Financial security as a condition of entering a POR. (e) Liability compensation regimes for pollution damage (f) Objectivity/technical expertise when deciding on access requests.
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CMI’S PROPOSALS (2) (g) Written reasons for refusal. (h) PORs to be designated in advance/publicity? (i) Criminal penalties. (j) Compulsory liability insurance. (k) Direct action against insurer. (l) Should shipowner waive right to limit liability when requesting access to a POR. (m) Establishment of a Fund to meet excess liabilities outside current regimes.
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PLACES OF REFUGE – THE FUTURE -CMI’s proposals to be considered by IMO Legal Committee. -Growth of SOSREP type systems. -Short term – rely on existing Conventions (UNCLOS, Intervention Convention, OPRC etc.). -Long term – A Convention or Guidelines?
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YORK-ANTWERP RULES AND PLACES OF REFUGE FOLLOWING THE CMI CONFERENCE 2004 By Ben Browne Shaw and Croft.
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