CASES FOR CONSIDERATION
Two claims were referred to the Directors for a decision regarding cover. Both were presented under Section 24 of Rule 2, the “Omnibus Rule”. In the first of these cases the Directors decided that the Member should recover running costs during a period of delay whilst security negotiations were undertaken. The period of delay enabled the Club to post security in a jurisdiction where favourable rights of limitation prevailed. In the second
case, the Directors also decided that the Member should recover running costs, but on this occasion in respect of a period of diversion to avoid a threatened arrest of the ship. The arrest was sought in respect of a covered risk where the Member’s liability was several months later to be proved unfounded. In both of these cases the Directors’ decisions reflected the advantage to the Club of the period of delay and diversion respectively.
JAPANESE EARTHQUAKE AND TSUNAMI
Shipping is an unpredictable business operating in a volatile world. No greater demonstration of unpredictability came with the Japanese earthquake and tsunami.
INDUSTRY MATTERS
In August, the European Commission announced a formal investigation into certain aspects of the Group’s claims sharing and reinsurance arrangements, focussing on release call practices, the quotation procedures under the IGA, and access to reinsurance facilities provided by the commercial markets. A position paper has been used to assist Members in understanding the background, the issues raised and the IG’s response. Commission requests for information have provided a useful opportunity to substantiate theory with empirical data. It remains to be seen whether the concerns of the Commission can be alleviated, but in the meantime shipowners’ organisations have expressed their own concerns that the benefits of the Group arrangements should not be jeopardised.
Directors highly value the international nature of the Club and its Board, and the opportunities provided thereby to discuss shipping matters without regard to the divisions of politics. The ban under the
16
EC sanctions regulations on provision of insurance to Iranian entities - even where engaged entirely in legal trades - brought an untimely end to a relationship with a long standing Member and was much regretted. Sanctions regimes are blunt tools and it was necessary to make a number of Rule changes to protect the Club from the sanctions risks that could arise from activities of Members, or from gaps in Pooling or reinsurance coverage.
Meanwhile, the problems of piracy have remained a constant theme for Board attention. A number of entered ships were hijacked and in some cases were used by pirates as mother ships, as pirate tactics evolved to overcome limitations of poor weather and to extend their range of attacks to areas distant from naval forces. Although claims on the Club have been largely restricted to crew injury and, fortunately, for the most part have not been serious, the risks to crew have grown substantially with longer hijack periods and increased use of violence to overcome defences.
The Club’s website is regularly updated
The impact of these tragic circumstances on the Club will in all likelihood be minor, with property insurers bearing the majority of the losses involved.
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