Rule 31

Cancellation of Insurance and its Effects

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Rule 31

Cancellation of Insurance and its Effects

A. Where an Owner has failed to pay, either in whole or in part, any amount due from it to the Association, the Managers may give it notice in writing requiring it to pay such amount by any date specified in such notice, not being less than seven days from the date on which such notice is given.

(i) Unless the Members’ Committee otherwise decides, an Owner shall not be entitled to recover from the Association any liabilities, cost and expenses in respect of any claim arising from the date of such failure until the date such sum owing to the Association is paid in full;
(ii) If the Owner fails to make such a payment in full on or before the date so specified, the insurance of the Owner (whether the insurance is current on such date or has ceased by virtue of paragraphs (A), (B), or (C) of Rule 29 or in accordance with any other provisions of these Rules) in respect of any and all ships referred to in such notice and entered in the Association by it or on its behalf shall be cancelled forthwith without further notice or other formality.

B. When the insurance of an Owner is cancelled in accordance with paragraph (A) of this Rule (which time is hereinafter in this Rule 31 referred to as “the date of cancellation’’) then:

i. Unless and to the extent that in the case of Call Entries the Owner’s liability may have been otherwise assessed under Rule 33 (Release Calls upon Cancellation), such Owner and its successors shall be and remain liable in relation to any Overspill Calls for the whole amount payable by it in accordance with Rule 22, and in relation to all other contributions, premiums and other sums payable:

a) in respect of the policy year in which the date of cancellation falls, on a pro rata basis, namely for the proportion of such sums applicable to the period beginning at the commencement of that policy year (or, in the case of a ship entered during that policy year, the date of entry) and ending on the date of cancellation or such earlier date as the Managers in their discretion decide and agree in writing, and
b) in respect of previous policy years, for the whole of those policy years, and

ii. The Association shall with effect from the date of cancellation cease to be liable for any claims of whatsoever kind under these Rules in respect of any and all ships in relation to which the insurance of the Owner has been cancelled.

a) irrespective whether such claims have occurred or arisen or may arise by reason of any event which has occurred at any time prior to the date of cancellation, including during previous years;
b) irrespective whether such claims arise by reason of any event occurring after the date of cancellation;
c) irrespective whether the Association may have admitted liability for or appointed lawyers, surveyors or any other person to deal with such claims;
d) irrespective whether the Association at the date of or prior to the date of cancellation knew that such claims might or would arise, and as from the date of cancellation any liability of the Association for such claims shall terminate retrospectively and the Association shall be under no liability to such Owner for any such claims or on any account whatsoever;

The Directors may in their discretion and upon such terms as they think fit, including but not restricted to terms as to payment of contributions, premiums or other sums, admit either in whole or in part any claim in respect of any ship entered by an Owner for which the Association is under no liability by virtue of paragraph (A) or (B) of this Rule, whether such claim has arisen before or arises after the date of cessation or the date of cancellation as the case may be, or remit wholly or partly any payment of contribution, premiums or other sums due to the Association.