New Inter-Club Agreement streamlines cargo claims
An important revision to the 'Inter-Club Agreement
' takes effect from the 1st September this year. Our Club, in common with the other Group clubs is issuing a circular to inform Members of this change.
The agreement, which is a means of apportioning cargo liability claims between owners and charterers without costly and protracted litigation, will now incorporate a new provision creating entitlement to security on the basis of reciprocity rather than requiring a cargo claim to have been paid.
The aim of this revision is to enhance co-operation between Group clubs and reduce time and costs incurred in cargo claim disputes between owner and charterer interests
The Inter-Club New York Produce Exchange Agreement, generally referred to as the Inter-Club Agreement (ICA), has provided a relatively simple mechanism for swiftly and fairly apportioning liability for cargo claims arising under New York Produce Exchange Form (NYPE) or Asbatime charterparties. It can also apply to contracts of carriage authorised under such charterparties.
The agreement is widely adopted by the maritime industry. However, the Group clubs have recently expressed concern about the time and costs associated with dealing with questions of security between owners and charterers under the agreement, which is unchanged since1996.
Under this new provision once one of the parties to a charterparty has put up security in respect of a cargo claim, provided the time limits set out in clause 6 of the agreement have been complied with, there is an entitlement to security on the basis of reciprocity.
The Club's circular will detail this revision and include the full text of the new version of the Inter-Club Agreement for reference. The new agreement is available for download from the Knowledge and Developments section of our website. The new 'Security Provision' is found in clause 9 of this 2011 agreement.
As the new agreement takes effect from 1st September 2011, we recommend its incorporation into all NYPE and Asbatime charterparties going forward
Members requiring further information on the operation of this agreement should contact Graham Daines (+44 20 7204 2160, Email:firstname.lastname@example.org
) or Alan Mackinnon (+44 20 7204 2408, Email:email@example.com
You may also be interested in:
QCR Autumn 2018: Whether the ICA 2011 had been incorporated in full into charterparty so as to require charterers to provide counter-security
London Arbitration 18/18 (2018) 1010 LMLN 2
The ICA, or to give it its full name The Inter-Club New York Produce Exchange Agreement, is an IG approved clause for the apportionment of cargo claims. It aims to provide a mechanism by which claims can be quickly apportioned between owners and charterers without the need for costly or extensive litigation. It also contains provisions for security and time bars for notification of claims.
The purpose of the ICA is to avoid lengthy and costly litigation on matters of liability and apportionment, and instead seeks to provide a ‘rough and ready’ split of liability between the parties. The Clubs recommend to their Members that they adopt the Agreement for the purpose of apportioning liability for claims in respect of cargo which arise under, out of or in connection with all charterparties on the NYPE Form 1946 or Asbatime Form 1981, whether or not this Agreement has been incorporated into such charterparties. However, unless the ICA is specifically incorporated into the charterparty, it may not be enforceable.