Mastershandbook 131006183211 Phpapp02 PDF

MASTER'S HANDBOOK
The Japan Ship Owners' Mutual

Protection & Indemnity Association
This Handbook is intended for Masters and officers as a help in emergency
and/or facing typical P&I claims. For more information about P&I insurance
or contact details of our correspondents, please refer to our Rules & List of
Correspondents.
Acknowledgement
Special thanks to Mr. Tetsuro Nakamura and Capt. Takayuki Akiba of
Yoshida & Partners for their invaluable assistance to develop this Handbook.
The Japan Ship Owners' Mutual
MASTER'S HANDBOOK
i
The Japan Ship Owners Mutual

Principal Office

Address :
2-15-14, Nihonbashi-Ningyocho,
Chuoh-ku, Tokyo 103-0013,
Japan

Telephone :
Claims Dept.
[Claims Administration Group]
+81 3 3662 7219
[Group I ] +81 3 3662 7220
[Group II ] +81 3 3662 7221
[Group III ] +81 3 3662 7222
[Group IV ] +81 3 3662 7226

Facsimile :
Claims Dept.
[Group I, II] +81 3 3662 7107
[Claims Administration Group, Group III, IV]
+81 3 3662 7400

E-mail :
Claims Dept.
[email protected]

http://www.piclub.or.jp

ii
Kobe Branch

Address :
Shosen-Mitsui Building,
5, Kaigandori, Chuoh-ku,
Kobe, Hyogo 650-0024,
Japan
Telephone : +81 78 321 6886
Facsimile : +81 78 332 6519
E-mail : [email protected]

Fukuoka Branch

Address :
Hakata Tokio Marine Nichido Building
1-1, Shimokawabata-machi,
Hakata-ku, Fukuoka 812-0027,
Japan
Telephone : +81 92 272 1215
Facsimile : +81 92 281 3317

Imabari Branch

Address :
2-2-1, Kitahourai-cho,
Imabari, Ehime 794-0028,
Japan
Telephone : +81 898 33 1117
Facsimile : +81 898 33 1251

London Liaison Office

Address :
150-152 Fenchurch Street
London EC3M 6BB
U. K.
Telephone : +44 20 7929 4844
Facsimile : +44 20 7929 7557
(English Only)
1

MASTER'S HANDBOOK

2
Contents

MASTER'S HANDBOOK

Chapter 1 Crew Claims
I. Major crew claims and insurance coverage.......................................... 6
II. The causes of injury and illness .......................................................... 6
III. Steps to be taken after the accident.................................................... 8
IV. Cautions in investigations ................................................................... 9
V. Cautions in writing Master's Report .................................................... 9
VI. Important points............................................................................... 10
VII. Necessary documents ....................................................................... 10
VIII. Flow chart ........................................................................................ 11

Chapter 2 Stowaways and Refugees
I. Stowaways ....................................................................................... 18
II. P&I Insurance.................................................................................... 18
III. Actions to be taken .......................................................................... 18
IV. Points to be noted............................................................................ 20
V. Refugee............................................................................................ 22
VI. Flow chart ........................................................................................ 23
VII. Sample forms ................................................................................... 24

Chapter 3 Personal Injury
I. Personal injury .................................................................................. 30
II. P&I Insurance.................................................................................... 31
III. Notification ...................................................................................... 31
IV. Actions to be taken .......................................................................... 32
V. Cautions........................................................................................... 32
VI. Advices............................................................................................. 33
VII. Flow chart ........................................................................................ 34
VIII. Sample forms ................................................................................... 35

Chapter 4 Cargo Claims
I. Cargo claims .................................................................................... 40
II. P&I Insurance .................................................................................. 41
III. Actions to be taken in case of cargo damage.................................... 42
IV. Cautions in survey ............................................................................ 42
V. Duty of carriers................................................................................. 43
VI. Points to notice in carriage of goods ................................................. 44
VII. Check List for prevention of cargo damage....................................... 46
VIII. Necessary documents to be prepared in case of cargo damage.......... 47
IX. Flowchart ......................................................................................... 48
X. Sample forms ................................................................................... 49

3
Chapter 5 Salvage Agreement and SCOPIC
I. Salvage Agreement ...........................................................................54
II. Recent Development of LOF ..............................................................54
III. Special Compensation and SCOPIC Clause ........................................55
IV. P&I Insurance ....................................................................................56
V. Steps to be taken when the SCOPIC clause is invoked ......................57
VI. Remarks about Salvage .....................................................................58
VII. Flow chart.........................................................................................59
VIII. Reference form ................................................................................59

Chapter 6 Loss of or Damage to Property
I. Loss of or damage to property...........................................................66
II. P&I Insurance ....................................................................................66
III. Notification of the accident ...............................................................67
IV. Actions after accidents ......................................................................67
V. Points to be noted when the vessel has caused damage to property ..68
VI. Flow chart.........................................................................................70
VII. Sample forms....................................................................................71

Chapter 7 Collision
I. Cause of a collision accident..............................................................76
II. P&I Insurance ....................................................................................76
III. Notification of the collision accident ..................................................77
IV. What to do in a collision accident......................................................78
V. Various investigations........................................................................80
VI. Important points on a collision accident.............................................81
VII. Conclusion........................................................................................81
VIII. Flow chart.........................................................................................82
IX. Sample forms ..................................................................................83

Chapter 8 Oil Pollution
I. Oil Pollution Incidents........................................................................90
II. P&I Insurance ....................................................................................91
III. Reporting of Incidents .......................................................................91
IV. Steps to be taken following incident..................................................92
V. How to cope with various investigations ............................................94
VI. Points to be noted.............................................................................94
VII. Summary ..........................................................................................95
VIII. Flow chart.........................................................................................96
IX. Sample form and Key maps...............................................................97

Appendix

MASTERS CHECK LIST ...........................................................................102
Standard Form Letter of Indemmity
Form AA ................................................................................................107
Form BB .................................................................................................111
Form CC ................................................................................................115

Crew Claims

Chapter 1
6

I. Major crew claims and insurance coverage
Major crew claims are divided into five categories, i.e., injury, illness, loss of life,
missing, and jump ship. Payment for crew claims occupies more than 30% of the
total amount covered by the Association. Even after the implementation of the ISM
Code and members efforts to keep a high standard of safety, the number of crew
claims is still high and claims of this type are one of the most concern for the
Association. The scope of the coverage of crew claims is stated in our Rule 19. Main
items covered are as follows:

- Medical expenses
- Repatriation expenses
- Substitution expenses
- Sickness allowance
- Disability allowance
- Death compensation and funeral expenses
- Search and rescue expenses
- Loss of personal effects
- Deviation expenses during search and rescue, and bringing crew to unscheduled
port for hospitalization

*The amount of coverage is decided in accordance with the conditions of the respective
employment contract and/or the applicable laws.

II. The causes of injury and illness
A. Major causes of injury are as follows:
- Slipping and falling
- Losing balance and falling from high place
- Falling from a step during painting work
- Squashed by collapsed cargo
- Hit by cargo fallen from crane
- Hit by wire or rope
Crew Claims
7

- Stuck in a door, pontoon and cargo
- Bumped, stuck, hit and cut by objects
- Foreign objects stuck in eyes during grinding or chipping
- Pinched and wounded by machinery in operation
- Exposed to steam, fuel, poisonous liquid cargo
- Low back injury by lifting heavy materials
- Explosion in an engine room or cargo tanks
- Fire
- Falling with a life boat during drill
- Collision

In order to prevent injuries, it is essential to keep daily education and training in
respect of a safety of working environment and maintenance of the vessel and
equipment.

Recently, several unfortunate losses of lives have been reported as caused by
explosion of chemical tankers during tank cleaning. It is highly recommended to
take steps of gas freeing and gas detection using gas detectors before entering
tanks. Fire works adjacent to chemical cargo tanks should be prohibited.

B. Major diseases of crew are as follows:
- Appendicitis
- Ureteral calculus
- Hypertension
- Gastritis
- Heart disease
- Gallstone
- Hemorrhoids
- Diabetes mellitus
- Cerebral infarction
- Liver dysfunction
- Mental disease

It is submitted that many of the above illness come from unhealthy lifestyle such
as overdrinking, overeating, smoking, unbalanced diet and lack of exercise.
Lifestyle related diseases can be prevented by improving lifestyle such as
8

controlling diet (eating less between meals, doing healthy diet, avoiding one-side
diet), regular exercise and lessen intake of alcohol and smoking. Health control
on board is the must.

C. Other accidental injuries
- Unconsciousness due to a shortage of oxygen caused by insufficient gas freeing
of cargo tanks or cofferdam
- Trapped in a concealed place
- Food poisoning
- Quarrel, suicide, assaulted by ruffians or pirates
- Traffic accident ashore

III. Steps to be taken after the accident
A. Injury and Illness cases
Minor injuries will be curable with first aid on board or medical attention ashore
at the next port. In a serious case, however, an immediate medical procedure has
to be taken. If the vessel is in port, the injured or diseased crew member can be
ferried to a hospital by an ambulance but if it happens at sea, medical procedure
has to be taken on board. Proper and prompt care is vital. The following steps
should be considered and taken:

- First aid
- Notice to the owners and managers to seek advices
- Consultation with rescue center through INMARSAT or the radio
- Alteration of course to the nearest port
- Request for a paramedic or rescue helicopter
- Request for assistance of P&I correspondents

In an injury case, the time, date, place and cause of injury should be recorded.
The evidence should be preserved and a witness statement should be taken.
These documents will be helpful in investigation by authorities.
In an illness case, proper aid and medical care should be provided, getting the
detailed symptoms from the sick crew member.

B. Missing cases
- Check with other crew members when and where the missing crew member
9

was last seen on board
- Check in the missing crew members cabin to find any sign for missing
- Search on board (especially concealed places)
- Sea search extend to the area where the crew member was last seen on board
- Notice to the owners, managers, agents and relevant authorities
- Notice to the nearest P&I correspondents

C. Jump ship cases
- Investigation of the crew members belongings (passport, valuables, any sign for
jump ship)
- Interviews with fellow crew members
- Notice to the owners, managers, agents and relevant authorities
- Notice to the nearest P&I correspondents

For prevention of jump ship, it is advisable for the Master to keep passport,
seamens book and license of all the crew members.

IV. Cautions in investigations
In an injury, loss of life, missing or jump ship case, police and/or immigration officers
come on board for investigation. In a loss of life case, an inquest will be conducted.
Full cooperation should be given to formal inquiries by relevant authorities, but
before answering questions, identity of the investigators should be confirmed.
Answers to the questions should be truthful. When signing statement, the Master
should carefully check its contents.

In a jump ship case, a fine or penalty might be levied by the immigration office, and
security (letter of guarantee or cash guarantee) is required in some countries. In a
suspected jump ship case, the Master should report to the owners, managers, agents
and P&I correspondents.

V. Cautions in writing Masters Report
Masters Report is an important evidence to judge whether the injury, illness or death
is work related or not. Accordingly, the report has to be a truthful and objective
based on the incident. If there are witnesses, their statements should also be
obtained. Photos of the site and other evidence should be preserved.

10

VI. Important points
- Loss prevention by daily education, training and health control
- Stock of necessary medical kit and first aid training
- Careful decision in treatment and proper first aid
- Notice to owners, managers, agents, authorities and P&I correspondents
- Recording and writing statement of the fact and preservation of evidence

VII. Necessary documents
- Masters Statement of Fact
- Witness report
- Communications with the owners, managers, medical advisors and authorities
- Deviation report
- Photos of the place of incident
11

VIII. Flow chart

N

Y

N

Y
Injury/Illness
In the port
First aid on board
Medical procedure on shore
Serious
Emergency treatment
Notice to the owners
Documentation
Hospitalization
Repatriation
SeeA
Notice to the agents
12

Resuscitated?
Surviving?
Documentation
SeeC

A
Serious
First aid on board
Obtain medical advice
from a rescue center
Medical treatment at the
next port
First aid
Emergency treatment and obtaining medical
advice from a rescue center
Emergency port
call
SeeD
SeeB
N
Y
N
N
Y
Y
13

B
Deviation to the nearest port
Preparation of necessary documents
Notice to
Agents
P&I correspondents
at the nearest port
Enter into the port
Transportation to the hospital
Repatriation
14

C
Confirm the crews demise based on
doctors instructions
Cardio-respiratory arrest
Dilation of the pupil
etc.
Notice to the owners and
parties concerned
Maintain a corpse
Notice to agents and
P&I correspondents at the destination
Entry into the port
Return the remain and mementos
15

Continue the voyage to the destination
D
Notice to
Agents
P&I correspondents
at the destination
Entry into the port
Transportation to the hospital
Repatriation

Stowaways and
Refugees

Chapter 2
18

I. Stowaways
According to the IMO statistics, the number of vessels related to stowaways reported
is 265 cases (574 stowaways) in the year of 2002 and 185 cases (481 stowaways) in
2003. High risk areas are East Africa and Caribbean ports. Stowaways are mainly
from Morocco, Nigeria, Liberia, Congo, Algeria, Cameroon, Tanzania and Dominica.
As to our members vessels, about 60 cases out of about 2,000 ocean going vessels
have been reported per year for the past 5 years.

Once a vessel sails from a port with stowaways on board, the vessel will incur
considerable time, labor and expenses in removing them. Most of the countries are
not willing to accept disembarkation of unidentified stowaways and therefore
repatriation of stowaways through those countries is very difficult. Vigilant watch
during port stay is encouraged not to allow their boarding and thorough search
should be made before sailing from the port especially at high risk areas in respect of
stowaways.

Following the amendments to SOLAS, the ISPS Code came into effect on 1st July
2004. It requires owners and vessels to enhance maritime security through several
security plans including designating restricted areas on the vessel, conducting
security patrol and controlling access of outsiders. Please observe the security plan
and pay most attentions to avoid boarding of stowaways.

II. P&I Insurance
Expenses to disembark and repatriate stowaways are covered by the Association.
Main expenses are necessary costs to obtain their identification, food provided to
them while on board, air fares and other transportation costs for repatriation, escort
costs, agency fees and extra costs by deviation of the vessel for disembarkation.

III. Actions to be taken
A. Identification
Once stowaways are found on board, their identity should be clarified through
Stowaways and Refugees
19

interviews and investigation of their belongings. The following actions are
recommended:

1. to check passports or ID cards, if any
2. to ask name, address and other relevant information (Please see the sample
questionnaires: Information on Stowaways)
3. to ask where they came from and where they got on board
4. to check the purpose of the attempted stowing away and obtain their
agreement to return to their home countries
5. to take photos and fingerprints of both hands
6. to confine stowaways to a secure area

B. Disembarkation
1. Decision on the place of disembarkation
Earliest removal of the stowaways is desirable. The best way is to return to the
port of embarkation. If several days have passed since the departure of the last
port where the stowaways boarded, it is harsh for owners to return. In such case,
the vessel needs to try to disembark them at subsequent ports of call. Usually it
takes a considerable time and energy to succeed in the attempt. If the vessel is
engaged in a regular trade, she can disembark them when she returns to the
boarding port. The Association will advise Masters and members what options
are available and how best the stowaway matters can be handled.

2. Appointment of P&I correspondents
Once the details of the stowaways are identified and the port to disembark them
is decided, the Association will instruct its correspondents to take appropriate
steps to disembark them.

C. Repatriation
Once disembarkation and repatriation is accepted at a port, flight and other
transportation should be arranged. For the repatriation, travel documents are
necessary, and if required, escorts should be arranged. Agents and P&I
correspondents will assist Masters in such arrangements

20

IV. Points to be noted
A. Difficulty in identifying stowaways
Stowaways rarely possess their ID cards. They are usually not cooperative in
interviews and try to deceive the crew in an attempt to delay their
disembarkation and repatriation. Their answers about their nationalities and
addresses may be untrue because they usually do not wish to be sent back to
their home countries. In order to check if they speak the truth, interviews by
interpreters or embassy clerks who speak the same first language are effective.

B. Fine or Penalty
Some countries impose fines or penalty if a vessel enters any of their ports with
stowaways on board or fails to give an advance notice to the authorities about
the presence of the stowaways. Many countries require security guards whilst the
vessel stays in their ports. Some countries impose hefty penalties if the vessel fails
to keep the stowaways on board during the port stay.

C. Countries which are unlikely to accept entry of stowaways
In our experience, the following countries are unlikely to accept disembarkation
of stowaways:

Algeria, Belgium, France, Gambia, Haiti, Hong Kong, Italy, Japan, Kuwait, Mexico,
New Caledonia, Norway, Saudi Arabia, Senegal, Singapore, South Korea, Taiwan,
U.A.E. and U.K. etc.

If disembarkation is not accepted at the port, another attempt shall be made at
the next calling port. If there is no chance to disembark the stowaways at
scheduled ports, the vessel must consider the option of proceeding to an
unscheduled port which accepts disembarkation.

D. Formalities
Even though it seems possible to disembark stowaways under laws or regulations,
sometimes it is difficult in practice because it takes a considerable time to obtain
permission. Special attentions should be paid to formalities, since there might be
some restrictions and requirements, such as limited duration of stowaways port
stay, arrangements of security guards, vaccination, quarantine and doctors
health check.
21

E. Drug smuggling
If the stowaways boarded from a high risk area of drug smuggling, they should
be suspected of carrying drugs. Thorough search of the vessel is necessary. If
drugs are found on board, the relevant authorities will commence intensive
investigations which may result in delay of the vessels departure. If drug
smuggling is suspected, Masters are recommended to report the fact to the
relevant authorities at the destination as soon as possible.

F. Recovery from stowaways
Owners are entitled to recover costs incurred from the stowaways, but it is almost
impossible to do so from them.

G. Treat stowaways humanly
Stowaways are nuisance but should be treated humanly. Handcuffs or binding
should be prohibited, forced labor on board should not be given, and foods
should be provided properly. If stowaways are not treated humanly, the crew
and/or officers will be punished in some countries such as Brazil.

H. Best protection
Best protection from stowaways is to make every effort to prevent boarding of
stowaways. In a high risk area, the following efforts are recommended in
addition to usual ISPS requirements:

1. raising of security level
2. strengthening of monitoring weather deck and seas around the vessel
3. careful watch of loading cargo and provisions
4. careful check of boarding labors and their belongings
5. vigilant patrol on board
6. thorough search of stowaways before and after sailing from the port

Stowaways often hide in the following places:
1. concealed place on upper deck
2. cargo hold and car deck
3. crane compartment
4. rudder trunk
22

5. life boat
6. container
7. funnel

As to the above 4, it is difficult to check before and after departure. To prevent
hiding in the rudder trunk, it is advisable to place gratings on the opening of the
rudder trunk.

V. Refugee
Once a vessel has saved refugees and taken them on board, the vessel usually
proceeds to the destination and seeks for protection by UNHCR (United Nations High
Commissioner for Refugees). It depends on the government of the respective
countries whether or not the country accepts landing of the refugees. Therefore, the
assistance of the vessels agents, P&I correspondents and UNHCR are necessary.

A. Actions when the vessel rescued refugees
1. to give a notice to the agent (Please see the sample form Information on
Refugees attached)
2. to request the agent to report to Port Authorities, Immigration Offices, UNHCR
and Embassy of the flag state

B. Reimbursement from UNHCR
The following expenses can be recovered from UNHCR:
1. Daily expenses to keep refugees
2. Expenses incurred by rescue

The Association will assist members in making claims for a refund from the
UNHCR. For recovery process, Masters are requested to keep all the necessary
receipts and vouchers of the expenditure, and forward them to the Association
through owners or managers.
23

VI. Flow chart

Next calling port
Return
Stowaways
Identification
Where to disembark
Return or
Proceed
Notice to Agents and
Immigration Office
Appointment of Agents and
P&I Correspondents
Entry application to Authorities
Emergency travel documents
Disembarkation and repatriation
Disembarkation
and
repatriation
24

VII. Sample Forms
A. Information on Stowaways
B. Information on Refugees

25

Information on Stowaways

A The Vessel's Information

1 Name of vessel
2 Inmarsat Number (Phone, Fax, Telex)
3 Callsign / IMO Number
4 Registry
5 Name of Master
6 Name of the owners
7 Address of the owners
8 Last port & departure date
9 Next port & ETA
10 Agent in next port
11 Contact details of agent

B Description

1 Height(cm)
2 Weight(kg)
3 Gender (Sex)
4 Complexion
5 Colour of eyes
6 Colour of hair
7 Form of face
8 Marks/Characteristics

C Personal Details

1 Surname
2 Name
3 Christian Name
4 African Name
5 Date of Birth
6 Place of Birth
7 Nationality
8 Religion
9 Tribe
Photograph
26

10 Home address
11 Languages (spoken & written)
12 Passport Number
When issued
Where issued
Date of expiry
Issued by
13 ID card Number
When issued
Where issued
Date of expiry
Issued by
14 Other document (e.g. Seaman's Book)
Kind of Document
Number of Document
When issued
Where issued
Date of expiry
Issued by
15 Father's Name & address
16 Mother's Name & address
17 Marital status
18 Name of spouse & address
19 Details of children
Full name
Address

D Boarding information

1 When on board
2 Where on board
3 Intended destination
4 Reason for boarding
5 Method of boarding
6 Date/time found on board
7 Hiding place
8 Place of discovery
27

E
T
h
u
m
b
T
h
u
m
b
F
i
n
g
e
r

P
r
i
n
t
R
i
g
h
t
H
a
n
d
L
e

f

t
H
a
n
d
M
i
d
d
l
e

F
i
n
g
e
r
M
i
d
d
l
e

F
i
n
g
e
r
F
o
r
e
f
i
n
g
e
r
F
o
r
e
f
i
n
g
e
r
L
i
t
t
l
e

F
i
n
g
e
r
L
i
t
t
l
e

F
i
n
g
e
r
R
i
n
g

F
i
n
g
e
r
R
i
n
g

F
i
n
g
e
r
28

Information on Refugees

A The Vessel's Information

1 Name of vessel
2 Inmarsat Number (Phone, Fax, Telex)
3 Call Sign / IMO Number
4 Registry
5 Name of Master
6 Name of the owners
7 Address of the owners
8 Last port & departure date
9 Next port & ETA
10 Agent in next port
11 Contact details of agent

B The Refugees' Information

1 Number of Refugees on board
Male
Female
2 Nationality
3 The reasons of refuge
4 The date/time of rescue
5 The place of the rescue
6 The situation of the rescue
7 The condition of the refugees' health
8 The necessity of Emergency Medical Procedure (if any)

Personal Injury

Chapter 3
30

I. Personal injury
In this chapter, we will focus on personal injury claims caused on board and/or near
vessels other than those caused by collisions. Injury incidents often occur at the time
of boarding or disembarking vessels or on shore in the vicinity of vessels. The proper
maintenance of the safe working conditions of a vessel and its equipment would be
indispensable in order to avoid possible risks of injuries. In this regard, crew should
be trained and acquainted with the rules for safe working procedures.

During a vessels stay in a port, various types of personnel such as pilots, agents
clerks, officers of relevant authorities, ship chandlers and longshoremen visit on
board the vessel. There are also many shore workers who work for vessels such as
mooring line handlers, longshoremen and terminal operators. Every measure should
be taken to avoid injuries to such workers. If such workers sustain injuries due to
unsafe conditions of the vessel, its equipment or crews negligence in operation,
owners of the vessel would be held liable for such injury and, if so, have to pay
compensation and extra expenses.

We will pick up examples of personal injury claims:-

- A longshoreman slipped on deck which resulted in low back injury. He alleged
that he slipped due to oily substances on deck.
- An authority officer fell into the sea while climbing up a gangway ladder and got
injured. He alleged that he fell due to poor maintenance of the ladder.
- A sandlead of heaving line thrown by a crew hit a line man on shore and injured
him. He asserted that the cause of the incident was careless handling of the
sandlead by the crew.
- During mooring operation of a vessel, a mooring line was parted and hit a shore
worker, which resulted in a severe injury to him. The injured asserted that the
mooring line was parted due to poor maintenance of the line.
- A longshoreman fell into a hold as a result of a broken step of the hold ladder. He
complained about the poor maintenance of the steps of the hold ladder.
Personal Injury
31

- A pilot fell into the sea at the time of his transfer from a pilot boat to the vessel
and died. His bereaved family alleged that the fatal incident was caused by the
ships change of the course and speed when he was stepping onto the vessels
pilot ladder.
- A female visitor putting high heeled shoes stumbled on the non-slip metal of
ships stairs and fell to the floor. Her compensation from the shipowners was
reduced to one-half because of her contributory negligence of putting on high
heeled shoes when visiting high risk area such as vessels.

Usually, the injured party alleges that the vessel was unsafe and/or the crews
negligence and claim compensation from the owners of the vessel in tort. Their
demand includes loss and damage such as medical expenses, loss of income during
medication and pain and suffering. Sometimes their settlement demand would be
unexpectedly high.

II. P&I Insurance
Members liabilities for the injury to third parties are covered by the Association. In an
injury case, medical expenses, loss of income and pain and suffering are main items
of the claim. Funeral expenses would be added in a fatal injury case.

III. Notification
If an injury accident happens on board or on shore in relation to the vessels
operation, please notify the situations as quickly as possible to a local P&I
correspondent, owners, managers, agents, police and authorities as necessary. If a
case appears to be serious, lawyers advice and assistance would be necessary for
preparation of a possible legal action.

Necessary information to P&I correspondents would be:

- The name of the vessel
- The time and place of the incident occurred
- Involvement of personal injury
- The extent of the injury
- Circumstances and surrounding conditions of the injury
- Possible cause of the injury
- Contact details of the vessels agent
32

- ETA/ETD of the vessel

IV. Actions to be taken
Initial actions to be taken by Masters and crews are:
1. Rescue and first aid
2. Investigation of the situations leading to the incident
3. Investigation of the scene of the incident and the cause of the incident
4. Investigation of possible contributory negligence of the injured or the third
parties
5. Preparation and preservation of the evidence, such as
a. Masters statement of fact, which includes the information suggested in the
above III.
b. Statements of witnesses
c. Photos
d. Condition of the place of the incident
e. Record of weather condition, sea condition, maintenance of equipments
involved
f. (In case of injury on the sea) Record of the place of injury, the vessels
manoeuvring and engine motion (such as charts in use, bell book, course
recorder, quarter masters log)

If a claim goes to court, depositions of crew and officers might be required. Thus,
correspondence procedures with them should be arranged in case of summons.

6. Obtaining acknowledgement from the responsible third parties
If an incident happens due to other parties faults, the Master should try to
obtain a written acknowledgement from such parties as evidence, stating that
the incident happened by their fault and that the vessel is not liable to the injury.

On the other hand, if the Master is requested by the injured for his signature on their
statement, he should carefully read its contents. If the statement appears incorrect
and harmful to the vessels interests, please refrain from signing. If it is difficult to
resist, please sign with the remark Without prejudice and Receipt only.

V. Cautions
When a vessel is at a berth, it is not usual that injury accidents are witnessed by any
33

of the crew. Not all injury cases are reported to the Master at the port. A claim might
be lodged against owners long time after the incident. In such a case, officers and
crew have little knowledge or recollection about the case and the vessel has little
evidence, which supports that the vessel is not liable. If an injury is reported on board
or on shore, it is advisable to obtain all available information and record the
occurrence of the injury on the log book. If the injury is serious, please contact a local
P&I correspondent and request surveyors attendance.

VI. Advices
If there is any injury incident at a port,
- obtain all available information immediately after the incident and record it,
- obtain acknowledgement from other responsible parties, and
- keep the officers and crews contactable even after they are signed off.

It is advisable for the Master to make it a rule to obtain No injury report from a
foreman of the stevedores after their completion of cargo work.

34

VII. Flow chart

Injury
Notice/report
Investigation
P&I
Correspondents/Owners/Managers/
Agents
Rescue and first aid
Record
Obtaining acknowledgment of
responsible parties
35

VIII. Sample forms
A. Acknowledgement
B. No injury report

36

TO WHOM IT MAY CONCERN M/V:
VOY. NO.:
PORT:
DATE:

ACKNOWLEDGEMENT

I, name , got injured in the part of injured due to
reason at TT:MM, DD/MM/YY, at
place .

I hereby confirm the accident arose only due to my carelessness and the vessel has no
responsibility for the above.

Name:
Stevedore Company:

Signature/Date:

Sample Form A
37

TO WHOM IT MAY CONCERN M/V:
VOY. NO.:
PORT:
DATE:

NO INJURY REPORT

We the undersigned hereby confirm and certify that no accident occurred and no
injury was sustained by any longshoreman and/or any other person of the stevedore
company, while this vessel was alongside the berth from
to undergoing cargo loading and/or discharge
operation.

We hereby certify that the above is true and correct.

Stevedore Company: Master of M/V

Agent: C/Officer:

Sample Form B

Cargo Claims

Chapter 4
40

I. Cargo claims
Due to its frequency and the amounts involved, P&I Clubs are much concerned about
the cargo claims. Our record shows, the reported cargo claims in 2005 policy year
is counted approx. 1,900, whilst the total number of all kinds of claims reported in
the same policy year is approx. 4,500. The cargo claims occupy about 42.2% of the
all claims.

Most of the cargo loss or damage resulting cargo claims can be prevented by a
proper maintenance of vessels and proper care of cargo. If a vessel causes loss or
damage to her cargo and if carriers are held liable, carriers would have to
compensate cargo interests for their damages. Furthermore, extra time and costs will
be incurred in discharging the damaged cargo. In the worst case, cargo receivers
might refuse to take delivery of the damaged cargo, that results in delay in the
vessel's departure. Moreover, carriers reputation may be deteriorated, which might
result in loss of business. Accordingly, carriers are required to take proper care of
cargo throughout their loading, navigating, discharging and delivering operations.

Major types of cargo claims and their typical causes are as follows:

A. Wet damage
- Insufficient water tightness of hatch covers
- Bilge water remained in holds
- Rain during loading/discharging
- Dew condensation
- Ingress of ballast water into holds
- Crack of shell plate

B. Physical damage
- Cargo collapse
- Insufficient or improper lashing

Cargo Claims
41

C. Shortage
- Different methods for measures
- Adhesion of cargo to holds/tanks
- Spillage during loading/discharging
- Cheating by stevedores

D. Contamination
- Contamination with previous cargo
- Contamination with cleaning water
- Contamination with tank/hold rust
- Ingress of sea water
- Cross contamination with cargo stowed in adjacent tanks due to cracks/
pinholes on the bulkhead
- Defects in or mishandling of valves of pipelines

E. Heat damage
- Fuel overheating
- Nature of cargo
- Insufficient ventilation

F. Over-ripen or cold damage to reefer cargo, and defrost damage to frozen cargo
- Insufficient pre-cooling of holds
- Improper temperature management
- Malfunction of reefer unit
- Rise of hold temperature during loading/discharging
- Nature of cargo
- Insufficient ventilation
- Error in defrosting of reefer unit

II. P&I Insurance
Liabilities and costs arising out of a breach of the contract of carriage by Members to
load, handle, stow, carry, keep, care for, discharge or deliver the cargo shall be
covered by the Association. Extra expenses of discharging and disposing of or
re-stowing the damaged cargo shall be covered by the Association insofar as these
costs cannot be recovered from cargo owners or other parties.

42

III. Actions to be taken in case of cargo damage
A. Arrangement of survey
If cargo damage is found, please contact P&I correspondents to ask for
arrangement of a survey.

Necessary information to be given to correspondents would be as follows:

- Name of the vessel
- Date of the incident
- Place of the incident
- Particulars of the cargo (commodity description, quantity of damaged cargo,
extent of the damage, location of stowage, B/L No.)
- Loading port, loaded quantity
- Suspected cause of the damage
- Contact details of the agent
- ETA/ETD of the vessel

B. Mitigation of damage
All possible measures for mitigation of damage should be attempted unless such
would involve a risk to the vessel's safety navigation or operation or further risk
of damage to cargo.

C. Recording
1. Photos
It is advisable to take photos of the damaged cargo and the suspected causes.
These photos will be helpful to support Members defense.
2. Log book entries
In addition to the aforementioned information (-A.), sea conditions, weather
and wind force should be recorded in the Log book.
3. Sea Protest
Sea Protest should be filed at next calling port, if the damage was caused by
rough seas.

IV. Cautions in survey
The vessel may receive several visitors including surveyors who represent cargo
interests or charterers at the port. The Master has to identify each visitor and deal
43

with them properly. Following are cautions in survey:

A. Identify on whose behalf the surveyor has come on board.
B. Fully cooperate with your P&I surveyor
C. Investigation by cargo interests or charterers surveyors should not be allowed
until your P&I surveyor finishes his investigation. Your P&I surveyor should
attend opposing surveyors investigation.
D. No access of cargo interests or charterers surveyors should be allowed to the
vessels documents or the place where damage of cargo or its cause was
suspected to occur unless it is approved by the owners or courts. Please consult
with your P&I surveyor as necessary.
E. In case you are requested by cargo interests or charterers surveyors to sign
some document, please carefully read it before signing. If it states about
liability, please resist signing. If it states only about the fact of damage, just sign
with the remarks Without prejudice, receipt only.

V. Duty of carriers
Most of the cargo damage can be prevented by a proper maintenance of the vessel
and suitable care and handling of the cargo. The Hague/Hague-Visby Rules stipulate
the following obligation of carriers:

A. Maintenance of seaworthiness
Before and at the beginning of the voyage the carriers shall be bound to exercise
due diligence to:
1. Make the ship seaworthy.
2. Properly man, equip and supply the ship.
3. Make the holds, reefer chambers, and all other parts of the ship where goods
are carried, fit and safe for their receipt, carriage and preservation.

B. Cargo care
The carrier shall properly and carefully load, handle, stow, carry, keep, care for,
and discharge the goods carried.

If carriers have fulfilled the above obligation, most of the cargo damage can be
prevented and even though damage occurs, carriers can be exempted from
liability for the damage by virtue of the Hague/Hague-Visby Rules.
44

VI. Points to notice in carriage of goods
A. At loading port
The cargo might have been damaged before loading. If a clean B/L has been
issued without putting proper remarks, carriers may confront with unexpected
cargo claims from receivers/charterers. Accordingly, it is necessary to check
pre-loading conditions of cargo. If pre-loading damage is found, the Master
should give notice to owners, and other parties concerned and try to avoid
loading the damaged cargo. If damaged cargo has already been loaded on the
vessel, it is advisable to ship back the cargo and reship sound cargo as far as
practically possible. If it is mutually agreed to load the damaged cargo, proper
remarks should be made on Mates Receipt and B/L.

Cargo damages might happen during loading by a sudden rain or stevedores
rough handling of cargo. If rain is anticipated and the cargo is subject to damage
by rain, a duty officer of the vessel should watch the weather carefully and in
case it is likely to rain, loading work should be suspended and hatch covers
should be closed until the weather gets better.

Customarily, the quantity of cargo is stated on the B/L in accordance with
shippers declaration. The vessel should check the accuracy of the declared
quantity as far as possible. If there is a discrepancy between the figures, the
Master should notify to the parties concerned and should appoint a surveyor to
verify figures.

- Steel Products
Steel products are one of the cargo which are subject to damage. In a carriage
of finished steel products, it is advisable to take photos of pre-loading
condition of the cargo. If rust is visible, pre-loading survey is helpful for defense
from possible cargo claims. The Association will cover necessary pre-loading
survey fees for finished products. However, surveys for semi-products would
not be necessary.

B. During voyage
1. Cargo care
Manner of cargo care differs from each kind of cargoes. The vessel should comply
with instructions from shippers and charterers. If any damage is found in the
45

cargo, the vessel should notify to owners, managers and charterers so as to
discuss mitigation of damage.

2. Lashing check
Periodical lashing check is encouraged.

3. Ventilation
Weather conditions and difference of temperature/humidity between inside and
outside of holds should be carefully checked together with ventilating system.

C. Discharge and delivery
Pre-discharge conference should be held as necessary with receivers, stevedores,
agents, customs, quarantine and other parties concerned. While raining or when
rain is anticipated, discharge work should be suspended and hatch covers should
be closed as a matter of urgency, especially if the cargo is moisture sensitive. If
cargo is damaged by stevedores rough handling, the Master should issue a Letter
of Protest to stevedores and obtain their acknowledgement of liability. Such
incident should be recorded on the log book and reported to receivers and
charterers as well as owners.

If cargo damage (such as wet damage and physical damage) is found upon
opening hatch covers, the Master should notify to P&I correspondents and
request arrangement of prompt surveys.

D. Summary of points
1. At loading port
- Due diligence to make the vessel seaworthy
- Inspections of conditions of cargo holds or tanks
- Inspection of pre-loading conditions of cargo and sampling of cargo
- Cautions for probability of rain
- Prevention of stevedores rough handling
- Tallying and/or sounding of cargo quantity
- Prevention of pilferage
- Verification of cargo documents, such as Mates Receipt and B/L

2. During voyage
46

- Ventilation and temperature management of holds, and periodical sounding
of hold bilge (sounding)
- Recording on log book about conditions of cargo, weather and seas
- Taking safe navigation course and changing course avoiding rough seas
- Inspection of lashing
- Prevention of fuel overheating

3. At discharging port
- Inspection of pre-discharging conditions of cargo and sampling of cargo
- Tallying and/or sounding of cargo quantity
- Cautions for possible rain
- Receipt of Dry Certificate

VII. Check List for prevention of cargo damage
A. Seaworthiness
- Hatch covers and other openings on deck
- Holds and tanks
- Shell plates, bulkheads and tanktops
- Cargo pumps
- Reefer units

B. Loading/discharging
- Pre-loading condition of cargo
- Quantity of cargo
- Loading plan
- Stowage and lashing
- Complete loading of cargo
- Sufficient stock of well-maintained lashing materials on board
- Proper maintenance of derricks and wire ropes
- Cargo pumps
- Readiness of closing a hatch in case of rain
- Prevention of short/over landing
47

C. During the voyage
- Ensuring tight lashing
- Prevention of ingress of seawater
- Prevention of fuel overheating
- Temperature management and proper ventilation
- Checking on appropriate bilge level

VIII. Necessary documents to be prepared in case of cargo
damage
In case of cargo damage, the Master is requested to prepare his statement, cargo
documents, related ISM manual check list and other relevant documents. The
following is a list of necessary documents which are usually required to prepare.

A. Damage by rough seas
- Sea Protest
- Deck log book
- Masters report on navigation to avoid rough seas

B. Shortage
- Letter of Protest
- Draft survey report
- Ullage report
- Dry certificate

C. Contamination
- Pre-loading tank inspection certificate
- Stowage plan
- Report on method of tank cleaning

D. Heat damage
- Chief engineers report on heating of fuel oil
- Stowage plan

E. Over-ripen of or cold damage to refrigerated cargo and defrost damage to
frozen cargo
- Report on pre-loading condition of cargo
48

- Temperature record during the voyage
- Ventilation record during the voyage

IX. Flowchart
A. Cargo damage at load port (e.g. Damage by stevedores rough handling)

Owners, Managers, Charterers, Agents
and P&I correspondents
Cause and extent of damage

Stevedores and Shippers
*Obtain signature from stevedores.
(Log book, Masters Statement of Fact)

B. Cargo damage during the voyage
(e.g. Cargo collapse and/or water ingress during rough seas)

Safe Navigation, Tightening of lashing

Cause and extent of damage

Masters Statement of Fact, Sea Protest

Cargo Damage
Claim Notice
Survey
Letter of Protest
Record and Report
Cargo damages
Claim notice
Survey
Mitigation of Damage
Record and Report
49

C. Off-spec of cargo and receivers refusal of taking delivery and demand of
security

Cause and extent of the damage

P&I Club

Masters Statement of Fact, Sea Protest

X. Sample Forms
A. Letter of Protest to stevedores
B. Letter of Protest to shippers regarding short loading

Claim Notice from receivers and demand of Security
Claims Notice
Survey
Sampling
Study how to dispose cargo
Letter of Undertaking
Record and Report
50

Date:
Messrs.
Dear Sirs,

LETTER OF PROTEST

M.V. Voy.
Port

This is to advise you that the following cargo was damaged by rough and/or
improper handling by you as stevedores:

B/L No.:
Description of Cargo:
Stowage:
Damaged Condition:

We hereby hold you fully responsible for the damage to the subject cargo and we
shall not be responsible for any and all consequences and/or liabilities of any kind
whatsoever directly or indirectly arising from or relating to the said damage.

Kindly acknowledge receipt of this letter by signing at the space below.

Yours faithfully,

Master:
We hereby confirm receipt of this
letter and accept the above.

Stevedore Company:
Sample Form A
51

Date:
Messrs.
Dear Sirs,

LETTER OF PROTEST

M.V. Voy.
Port

This is to advise you that the quantity of the cargo loaded on the vessel at this port is
as follows:

Description of Cargo:
Destination of Cargo:
Stowage Tank:

Shore figures given by Shippers (A) : M/T
Ships figures by ullaging/draft survey i(B) I : M/T
Discrepancy between both figures (A-B) : M/T

Whereas the said discrepancy being beyond vessels control, the Owners, the Master,
the Vessel and the Crew are not responsible for any dispute and all consequences
and/or liabilities of any kind whatsoever directly or indirectly arising from or relating
to the said discrepancy.

Kindly acknowledge receipt of this letter by signing at the space below.

Yours faithfully,

We hereby confirm receipt of this
letter and accept the above. Master:

Stevedore Company:
Sample Form B

Salvage Agreement
and SCOPIC

Chapter 5

54

I. Salvage Agreement
In case a vessel has experienced problems or has been involved in casualties that
require salvors assistance, a Master usually notifies the situation to owners and asks
them to arrange salvors to attend. Then, the owners consult with their Hull &
Machinery (hereinafter H&M) Underwriters to appoint the salvors. Upon making a
salvage agreement, the salvors commence a salvage operation. Whilst there are
following three types of salvage agreement, the major one is No cure-No pay basis,
especially the LOF (Lloyds Open Form) of Salvage Agreement:

A. Lump sum: (The amount of salvage charge is fixed in advance.)
B. Daily hire: (The amount of salvage charge will be calculated on a daily hire
basis.)
C. No cure-No pay: (The amount of salvage remuneration will be decided after the
salvage operation based on the salved value (value of the vessel,
cargo and other property salved), etc.)

This chapter illustrates the salvage agreement by the LOF. The LOF is usually signed
by a Salvage Master and the vessels Master. The salvage remuneration under the LOF
is decided after the salvage operation, taking account of many factors. For instance,
salved value of the vessel and other property, the skill and efforts of the salvors in
preventing or minimizing damage to the environment, the nature and degree of the
danger, the skill and efforts of the salvors in saving the vessel, other property and life,
the time used and expenses and losses incurred by the salvors and so forth (See the
Article 13 of the International Convention on Salvage 1989). The salvage
remuneration will be covered by Property (H&M and Cargo) Underwriters, not by P&I
Club.

II. Recent Development of LOF
LOF was established in 1908 by Committee of Lloyds as an international standard
salvage agreement. The characteristic of LOF is so called No cure-No pay. However,
to meet with increasing attention to the environmental protection, radical changes
Salvage Agreement and SCOPIC

55

have been made to the principle of No cure-No pay by the introduction of Safety
Net and Special Compensation since the 1980s. Then, in LOF2000 which came into
use on 1 September 2000, the SCOPIC Clause was incorporated.

LOF 1980 : Introduction of Safety Net
LOF 1990 : Incorporation of International Convention on Salvage 1989
Introduction of Special Compensation
LOF 1995 : Revision following the changes of UK Maritime Shipping Act
LOF 2000 : Introduction of SCOPIC Clause

III. Special Compensation and SCOPIC Clause
The upper ceiling of the salvage remuneration will be the salved value (value of the
vessel, cargo and other properties salved). If the salvors save high value vessel and
cargo, they will be entitled to a fair amount salvage remuneration. However, if the
salved value is less than the salvors costs, they will incur loss. Accordingly, if the
salvors are not confident in receiving a sufficient salvage remuneration, they will
hesitate to conclude a salvage agreement, which might result in delay of salvage
operation and increased risks of environmental damages. Obviously, such situation is
not the interest of ship owners, cargo owners, Property Underwriters and P&I Club.

The solution is so called Special Compensation, which was incorporated in LOF 1990.
(See Article 14 of International Convention on Salvage 1989) Under LOF 1990, whilst
the salvors have an obligation to make a best endeavour to prevent the
environmental damages, they are entitled to receive a fair amount of salvage costs as
Special Compensation in case the salvors are unable to receive a sufficient salvage
remuneration due to an unsuccessful salvage operation or small value of salved
properties in spite of the fact that the salvors prevented or minimized the
environmental damages. This is an exception to the principle of No cure-No pay.

Whilst the system of Special Compensation was welcomed and supported by the
maritime community, disputes have arisen in calculation of the fair amount of the
salvors costs to be allowed as Special Compensation. As a comprehensive solution,
the SCOPIC (Special Compensation of P&I Club) clause was established in 1999 and
has been incorporated into LOF 2000.

56

The main idea of the SCOPIC clause is as follows:

1. A fair amount of salvors costs is calculated by the agreed tariff (SCOPIC
tariff).
2. SCOPIC remuneration means the total of the salvors costs calculated by the
SCOPIC tariff rates plus a standard uplift of 25%.
3. SCOPIC remuneration is calculated after the salvors invoke the SCOPIC clause.
4. If the salvage remuneration is less than the SCOPIC remuneration, the salvors
will be entitled to receive the balance from owners.
5. If the salvage remuneration is more than the SCOPIC remuneration, the
salvage remuneration in excess of the SCOPIC remuneration will be
discounted by 25% as a penalty.
6. Once the salvors invoke the SCOPIC clause, the owners shall provide security
(a bank guarantee or P&I Club letter) for US$3,000,000 to the salvors within
two working days.
7. SCOPIC remuneration will be assessed by the SCR (Special Casualty
Representative) nominated by owners.

The primary duty of the SCR is the same as the salvors, namely to use his best
endeavours to assist in the salvage operation preventing and minimizing damage to
the environment. Other duties and responsibilities are:

- to report, observe and consult with the Salvage Master.
- to endorse, if appropriate, the Daily Salvage Report of the Salvage Master and
transmit its copy to Lloyds, the owners, Property Underwriters and the owners
P&I Club.
- to produce a dissenting report, if necessary, setting out any objection or
contrary view and deliver it to the Salvage Master and transmit it to Lloyds, the
owners, Property Underwriters and the P&I Club.
- to produce the Final Salvage Report setting out a calculation of the SCOPIC
remuneration.

IV. P&I Insurance
P&I Club shall not cover the salvage remuneration but it will be covered by Property
Underwriters. On the other hand, the Special Compensation and payment to the
salvors under the SCOPIC clause (the SCOPIC remuneration which exceeds the

57

salvage remuneration) shall be covered by the P&I Club. If the SCOPIC remuneration
is less than the salvage remuneration, there will be no payment of the SCOPIC
remuneration to the salvors.

- Salvage remuneration: Covered by Property Underwriters
- Special Compensation: Covered by the P&I Club
- SCOPIC remuneration in excess of the salvage remuneration: Covered by the
P&I Club

V. Steps to be taken when the SCOPIC clause is invoked
(Please see VII. Flow chart)
1. Occurrence of marine casualty
- The Master notifies the owners of the incidents.
- The owners consult with H&M Underwriters and appoint salvors.
2. Conclusion of salvage agreement with LOF 2000 incorporating the SCOPIC
clause
- Box 7 of LOF 2000 asks Is the SCOPIC Clause incorporated into this
agreement? State alternative: Yes/No. If the word No in Box 7 has been
deleted the SCOPIC clause is incorporated.
- If No in Box 7 has not been deleted, the SCOPIC clause is not incorporated
in the agreement and does not consist of the agreement.
3. SCOPIC clause is invoked by the salvors
- If the SCOPIC clause has been incorporated in the agreement, the salvors can
invoke the SCOPIC clause at any time by notifying the owners in writing.
4. Submission of security
- After receiving the written notice from the salvors invoking the SCOPIC
clause, the owners shall provide security (a bank guarantee or P&I Club letter)
in the sum of US$3,000,000 as security for SCOPIC remuneration payable to
salvors within two working days.
- Unless the security is provided within the two working days, the salvors may
give notice to the owners to be entitled to withdraw from all the provisions of
the SCOPIC clause and revert to their rights of Special Compensation.
- The amount of the letter of guarantee can be increased or decreased to a
reasonable level.
5. Appointment of SCR
- Once the SCOPIC clause has been invoked, the owners will consult with their

58

P&I Club and consider appointing an SCR to attend the salvage operation.
6. Appointment of Special Representative
- Property Underwriters have a right to appoint Special Representative to
observe and report upon the salvage operation.
7. Completion of the salvage operation and redelivery of the vessel and cargo
- Upon completion of the salvage operation the vessel and cargo will be
redelivered at a safe place in exchange for Salvage Security issued by the
H&M and Cargo Underwriters.
8. Payment of remunerations
- Salvage remuneration will be paid by the H&M and Cargo Underwriters.
- SCOPIC remuneration payable to the salvors will be paid by the P&I Club.

VI. Remarks about Salvage
A. Review of the contents of the salvage agreement
- In marine casualties such as stranding, collision fire and engine trouble which
require the salvors assistance, there are some occasions where the salvors who
have caught information first come to the scene, and offer their help to the
Master. In case of emergency, the Master may decide to ask the first available
salvors to assist. In that case, however, it is necessary for the Master to review
the contents of the salvage agreement carefully before signing it.
- Once the salvage agreement is signed, please send its copy to the owners.
- The verbal request for salvors assistance demands a lot of attention. Though
the Master might have thought that the work ordered was simple towage,
salvors might allege that it was salvage. There are reported cases in which
salvors demanded payment of unreasonable amount of salvage charges after
the vessel was towed to the safe place and that the vessel had been arrested
by the salvors when the Master refused to pay such amount.
B. Collection and preservation of records and evidences
- Time and circumstances of the accident, sea and weather conditions, the
vessels condition and remedies taken should be recorded and all the evidences
should be preserved.
- The cause of the accident should not be disclosed to those other than owners,
their lawyers, P&I correspondents and P&I surveyors.
C. Cooperation with local authorities
- Statement should be honest and limited to facts.
- Report to the owners about the details of the authorities questions and your

59

answers.
D. Cooperation with the SCR
- The SCR is a representative for the owners, cargo owners, Property
Underwriters and P&I Club. He is in a position to assist the Salvage Master so as
to save the vessel and property on board. Please cooperate with SCR. If you
have comments and advices on the salvage operation, please advise the SCR
on your ideas.
E. Cautions for interviews
- If you are requested to be interviewed, please check the identity of the
interviewers.
- If the interviewers represent the owners side (lawyers, P&I correspondents and
P&I surveyors), please cooperate with them. If they represent other side, on the
other hand, you should not accept their interview unless it is approved by the
court.

60

VII. Flow chart

Salvage Case
Conclusion of LOF
Incorporation of SCOPIC Clause
No application of Article 14 of
International Convention on Salvage
Application of Article 14 of
International Convention on Salvage
Invoking SCOPIC Clause
Assessment of SCOPIC remuneration
Appointment of SCR
No SCOPIC remuneration
Submission of Initial Security (within 2 working days)
Issuance of P&I Club letter
for US$3M
Salvors can cancel SCOPIC Clause and
recover the entitlement of Special
Compensation
Review of Initial
Completion of work
Submission of Salvage Security
Calculation of SCOPIC
remuneration
Determination of Article 13
Award
Payment
Completion of work
Submission of Salvage Security

Determination of Article 13 Award
and Special Compensation
Payment

61

VIII. Reference form
LOF Salvage Agreement

LOF 2000
LLOYD'S

STANDARD FORM OF

SALVAGE AGREEMENT

(APPROVED AND PUBLISHED BY THE COUNCIL OF LLOYD'S)

NO CURE - NO PAY

1. Name of the salvage Contractors :

(referred to in this agreement as the
Contractors)

2. Property to be salved :

The vessel

her cargo freight bunkers stores and any
other property thereon but excluding the
personal effects or baggage of passengers
master or crew

(referred to in this agreement as the property)

3. Agreed place of safety:

4. Agreed currency of any arbitral award and
security
(if other than United States dollars)

5. Date of this agreement :

6. Place of agreement :

7. Is the Scopic Clause incorporated into this
agreement?
State alternative: Yes/No

Reproduced with the kind permission of Lloyd's

62

8. Person signing for and on behalf of the
Contractors

Signature :

9. Captain
or other person signing for and on behalf
of the property

Signature :

A. Contractors basic obligation: The Contractors identified in Box 1 hereby agree to
use their best endeavours to salve the property specified in Box 2 and to take the
property to the place stated in Box 3 or to such other place as may hereafter be agreed.
If no place is inserted in Box 3 and in the absence of any subsequent agreement as to
the place where the property is to be taken the Contractors shall take the property to a
place of safety.
B. Environmental protection: While performing the salvage services the Contractors
shall also use their best endeavours to prevent or minimise damage to the
environment.
C. Scopic Clause: Unless the word "No" in Box 7 has been deleted this agreement shall
be deemed to have been made on the basis that the Scopic Clause is not incorporated
and forms no part of this agreement. If the word No is deleted in Box 7 this shall
not of itself be construed as a notice invoking the Scopic Clause within the meaning
of sub-clause 2 thereof.
D. Effect of other remedies: Subject to the provisions of the International Convention
on Salvage 1989 as incorporated into English law (the Convention) relating to
special compensation and to the Scopic Clause if incorporated the
[continued on the reverse side]
Contractors services shall be rendered and accepted as salvage services upon the principle
of "no cure no pay" and any salvage remuneration to which the Contractors become
entitled shall not be diminished by reason of the exception to the principle of "no cure
no pay" in the form of special compensation or remuneration payable to the Contractors
under a Scopic Clause.
E. Prior services: Any salvage services rendered by the Contractors to the property
before and up to the date of this agreement shall be deemed to be covered by this
agreement.
F. Duties of property owners: Each of the owners of the property shall cooperate fully
with the Contractors. In particular:

63

(i) the Contractors may make reasonable use of the vessels machinery gear and
equipment free of expense provided that the Contractors shall not unnecessarily
damage abandon or sacrifice any property on board;
(ii) the Contractors shall be entitled to all such information as they may reasonably
require relating to the vessel or the remainder of the property provided such
information is relevant to the performance of the services and is capable of being
provided without undue difficulty or delay;
(iii) the owners of the property shall co-operate fully with the Contractors in
obtaining entry to the place of safety stated in Box 3 or agreed or determined in
accordance with Clause A.
G. Rights of termination: When there is no longer any reasonable prospect of a useful
result leading to a salvage reward in accordance with Convention Articles 12 and/or
13 either the owners of the vessel or the Contractors shall be entitled to terminate the
services hereunder by giving reasonable prior written notice to the other.
H. Deemed performance: The Contractors' services shall be deemed to have been
performed when the property is in a safe condition in the place of safety stated in Box
3 or agreed or determined in accordance with clause A. For the purpose of this
provision the property shall be regarded as being in safe condition notwithstanding
that the property (or part thereof) is damaged or in need of maintenance if(i) the
Contractors are not obliged to remain in attendance to satisfy the requirements of any
port or harbour authority, governmental agency or similar authority and (ii) the
continuation of skilled salvage services from the Contractors or other salvors is no
longer necessary to avoid the property becoming lost or significantly further
damaged or delayed.
I. Arbitration and the LSSA Clauses: The Contractors remuneration and/or special
compensation shall be determined by arbitration in London in the manner prescribed
by Lloyds Standard Salvage and Arbitration Clauses ("the LSSA Clauses") and
Lloyds Procedural Rules. The provisions of the LSSA Clauses and Lloyds
Procedural Rules are deemed to be incorporated in this agreement and form an
integral part hereof. Any other difference arising out of this agreement or the
operations hereunder shall be referred to arbitration in the same way.
J. Governing law: This agreement and any arbitration hereunder shall be governed by
English law.
K. Scope of authority: The Master or other person signing this agreement on behalf of
the property identified in Box 2 enters into this agreement as agent for the respective
owners thereof and binds each (but not the one for the other or himself personally) to

64

the due performance thereof.
L. Inducements prohibited: No person signing this agreement or any party on whose
behalf it is signed shall at any time or in any manner whatsoever offer provide make
give or promise to provide or demand or take any form of inducement for entering
into this agreement.

IMPORTANT NOTICES :
1. Salvage security. As soon as possible the owners of the vessel should notify the
owners of other property on board that this agreement has been made. If the
Contractors are successful the owners of such property should note that it will
become necessary to provide the Contractors with salvage security promptly in
accordance with Clause 4 of the LSSA Clauses referred to in Clause I. The
provision of General Average security does not relieve the salved interests of their
separate obligation to provide salvage security to the Contractors.

2. Incorporated provisions. Copies of the Scopic Clause; the LSSA Clauses and Lloyd's
Procedural Rules may be obtained from (i) the Contractors or (ii) Lloyd's Salvage
Arbitration Branch at Lloyd's, One Lime Street, London EC3M 7HA.
Tel.No. + 44(0)207 327 5408
Fax No. +44(0)207 327 6827
E-mail: [email protected].

Loss of or Damage
to Property

Chapter 6

66

I. Loss of or damage to property
A. Loss of or damage to property of a third party
During berthing/unberthing operation of a vessel, it sometimes causes damage to
jetty or quay itself or to facilities such as fenders, stoppers, bitts, cranes,
unloaders, loading arms on quays, etc. due to mis-maneuvering, excessive speed,
insufficient look out, and so on. In other cases, the vessel may cause damage to
port facilities such as break waters, navigational facilities (buoys or beacons),
structures (underwater cables, underwater pipelines, aerial cables or drilling rigs),
or fishing facilities (fixed nets, fish preservers or fishing beds), etc. due to
dragging anchors or mis-maneuvering. These are risks covered by P & I insurance.

B. Loss of or damage to the other vessel without contact
Liabilities arising from collisions in respect of the damages to the other vessel as
well as its cargo are covered by Running Down Clause (RDC, the collision
liability clause mainly provided by Hull & Machinery Underwriters). Sometimes,
however, even without physical contacts between vessels, the vessel causes loss
of or damage to the other vessel, etc. For example, at the moment of near-miss,
the other vessel takes evasive actions to avoid a collision and consequently it may
run aground and suffer damage. In other cases, during navigation in narrow
passages, the vessels surge can cause damage to adjacent vessels, jetties to
which they are moored and facilities on the jetties. These situations that there are
no direct contacts between vessels are not categorized as collisions. Therefore,
such liabilities which the vessel should assume to the other vessel are not covered
by RDC, but covered by P & I insurance.

II. P&I Insurance
Members liabilities for loss of or damage to properties due to contact or without
contact of vessels shall be covered by P & I insurance. On the contrary, damage to the
other vessel arising from direct contact shall be handled under RDC as mentioned in
the above I.B.

Loss of or Damage to Property

67

III. Notification of the accident
When a vessel causes damage to properties such as port facilities due to contact etc.,
Masters are requested to promptly notify the vessel owners, managers and the
nearest P & I correspondents of the correct information of the accident.

IV. Actions after accidents
A. Initial actions
Immediately after the accident occurs, quick but deliberate actions are required in
order to secure safety of life, vessel and cargoes. The initial actions which the
Master should take are as follows:

1. Emergency measures
i) investigate the damaged areas of the vessel
ii) check/confirm any ingress of water, fire, oil spills, and injury to crew
iii) prevention of water ingress, fire and oil spills
2. Investigation of scope and extent of loss of or damage to property
3. Notice to the vessel owners
4. Notice to the parties concerned
5. Notice to P & I correspondents including arrangement of survey

B. Grasping and notifying situation
When you serve a notice to the owners/P & I correspondent, please act promptly
and try to include the following information:

1. When and where?
2. Vessels data
- who were in the bridge
- vessels course, speed, engine movement, angle of the rudder, draft
- whether tugs assisted or not
- whether or not a pilot on board
- vessels handling
3. Sea and weather conditions (weather, direction of wind, wind force, sea
conditions,
tide, visibility, daytime or night-time)
4. Address/name/contact of witnesses (including crewmembers) as many as
possible

68

5. Conditions of property which suffered loss or damage
- scope and extent of loss or damage
- date of installation
- indirect or old damages if any
- photos and sketches

V. Points to be noted when the vessel has caused damage to
property
A. Scope of compensation for damage
In almost all cases, it is difficult to find/prove faults of the opponent, since the
damaged objects are fixed and stand still. It should be, however, noted that a
fault of a third party sometimes contributed to accidents especially when the
damage has occurred without physical contact of the vessel. If the fault of the
opponent or a third party is found, the compensation for damage shall be based
on the apportionment of liability.

The followings should also be noted:
1. New for old
When an old property (e.g. a fender) is damaged and it is replaced by a new one
due to difficulty of substitution by repair or a used one, in many cases the new
one will bring an additional value comparing with the previous one. It should be
insisted that such added value should be undoubtedly deducted from the
amount of the compensation.

2. Limitation of Liability
In many countries, owners are entitled to limit their liability for maritime claims
lodged by third parties under laws. There are different of limitation regimes. For
instance, under 1976 LLMC (Convention on Limitation of Liability for Maritime
Claims, 1976) or its amendment 1996 LLMC, limitation amount is calculated by a
sliding scale depending on the vessels tonnage. In some countries, such as U.S.A.,
limitation amount is calculated by the vessels value and freight earned.
Accordingly, Masters should not sign any letters which accept liability and
approve a full compensation.

B. Letter of Acknowledgement
The owner of the damaged property sometimes demands Masters signature on a

69

letter of acknowledgement. In such cases, please restrict your statement only to
acknowledgement of the accident and avoid statement regarding liability. You
should be deliberate in dealing with letters of acknowledgement, since in many
cases the opponent demands what states the vessels side admits liability for the
accident and compensation for any and all damage.

70

VI. Flow chart

Accident
Emergency measures Investigation of scope and extent of
loss of or damage to properties
Notice to owners/parties concerned
Notice to P&I correspondents
Investigation of
conditions of the
vessel

71

VII. Sample forms
A. Letter of acknowledgement
B. Report form for damaging to proparty

72

LETTER OF ACKNOWLEDGEMENT (Damage to Jetty)

Date:

To: (Name of owner/manager of property)

At around hours on th 200 , during operation for
berthing to the jetty at (place), the vessel contacted the fenders installed on the jetty
and (the number of the damaged fenders) sets of fenders got damaged.

I acknowledge the above fact.

(signature)
Taro Nippon
Master of PI Maru
Owned by PI Maritime Co., Ltd.
2-15-14, Nihonbashi-Ningyocho, Chuoh-ku, Tokyo

Notes
1. The purpose of making out a letter of acknowledgement is to confirm the fact
each other between the vessel and the parties concerned with the accident such as
the owner of the jetty in order to avoid misunderstandings in the future regarding
the damage. In other words, it is a letter confirming the fact. Therefore, it should be
written plainly upon confirming the conditions of the property precisely, that is, what
items got damaged into what conditions.

2. A letter of acknowledgement shall be submitted to the opponent, who suffered
damage, only in case the opponent strongly demands its submission. It is not a
document which the Master shall submit voluntarily.
Sample Form A

73

Report form for damaging to proparty

Ship's Name
Date
Place
Cargo KindQuantity
The damage to Hull
Contacted position
Damege Condition
The need of repairer
Oil spill (or not)
Casualties (or not)
Fire (or not)
Flood (or not)
Weather and sea condition
Wather
Wind force/direction
Sea
Visibility
Tide
others
Ship's state
At bridge Captain or Officer
Able sea man
other
Ship Heading
Speed/Engine PRM
Draft
Tug boart
Pilot
Progress of maneuver

Sample Form B

74

Witness
Address
Name
Address
Name
Address
Name
Address
Name
Address
Name
Condition of damaged property
The extent of the damage
The level of the damage
Placed date
Photograph
Sketch

Others

Collision

Chapter 7

76

I. Cause of a collision accident
Collision with another vessel is in most cases caused by negligence of the Master,
crew, pilot or others. According to statistics by the Japanese Marine Accident Inquiry
Agency (MAIA), the major causes of the collision accident are as follows:

- Improper Look out
- Breach of the Steering and Sailing Rules
- Breach of Rules on Sound and Light Signals
- Improper command/supervision regarding service regulations at the bridge
- Doze
- Excessive vessel speed
- Non display of the navigational lights/shapes/flags

Statistically, it has been revealed that the collision accident occurred overwhelmingly
due to the Improper Look out (54%) and the Breach of Steering and Sailing Rules
(19%). Over half of the Breach of Steering and Sailing Rules is composed by
improper vessels maneuvering under crossing and navigating in restricted visibility
situations, crews negligence and violation of regulations.

II. P&I Insurance
Various claims may arise from a collision accident. Loss and damage arising from a
collision accident will be shouldered by the owners of two colliding vessels in
accordance with apportionment of liability between them. Amongst the losses of
your own vessel, damage to the hull and machinery will be covered by your Hull and
Machinery Underwriters (hereinafter referred to as H&M), while personal injury, oil
spill and wreck removal will be covered by your P&I Club. As for the opposing
vessels losses, damage to the hull and machinery and its onboard cargo/property, as
well as loss of earnings, are usually covered by your H&M under their Running Down
Clause (RDC), or by your P&I Clubs RDC. Furthermore, the opponents personal injury,
oil spill and wreck removal will be covered by P&I Club, but again, all of those
compensations are settled in accordance with apportionment of liability. In general,
Collision

77

Japanese H&M usually provide 4/4
ths
RDC, but H&M in Lloyds market historically
provide 3/4
ths
RDC coverage, based on the Institute Time Clauses-Hulls and the
remaining 1/4
th
coverage is provided by P&I Club.

For your quick reference, the scopes of the coverage by H&M, Cargo Underwriters
and P&I Club are as below :

Categories of Claims Insurance
Hull Damage (Own Vessel) H&M Underwriters
Cargo Damage (Own Vessel) Cargo Underwriters
Personal Injury/ Pollution/Wreck removal
(Own Vessel)
P&I Club
Hull/Cargo Damage and Loss of Earning
(Opponent)
H&M Underwriters
Personal Injury/Pollution/Wreck removal
(Opponent)
P&I Club

III. Notification of the collision accident
If a vessel is involved in a collision accident, it is important for the Master to report
immediately the accurate information in brief, calm and orderly manner to the
owners and other concerned parties. Even if no RDC risks are covered by the Club,
a P&I claim can arise from the accident. Therefore, at the occurrence of the collision
accident, the Master is always requested to notify the P&I Club or its local
correspondents. Upon receipt of such notification, the Club or its correspondents
will assist the Master in protecting the vessels interest by means of conducting
investigation, giving necessary advice and collecting relevant evidence.
If the vessel is entered with the Association under the policy including our Rule
23-1-(1) (Liabilities Arising Out of Collision with Other Ships Liabilities Arising from
Collisions), that is to say, the 1/4th RDC, the Association, in collaboration with the
vessels H&M, will arrange survey on the opponents vessel to investigate the extent
of damage on hull, cargo and other properties onboard. This survey is known as a
Without Prejudice Survey. Please note that in any event, survey on your own
vessels hull damage would not be conducted by P&I Club, but it would be
conducted by the H&M insurer. This survey is known as Straight Survey.

78

A sample form of Notice of Claim is as annexed for your reference.

IV. What to do in a collision accident
After securing the safety of the vessel, the Master needs to check the situation
leading up to the collision and reports the fact to the owners. It is important to
prepare a report before the concerned parties memories fade away. In every
collision case, precise and detailed reports are always helpful to ascertain the cause
of the collision or for negotiations with the opponent to determine apportionment of
liability.

A. Securing the safety
Immediately after a collision has occurred, the Master needs to secure the safety
of human lives, the vessel, and the laden cargoes in a prompt and calm manner.
The following initial response should be taken by the Master.

1. Immediate investigation of the damage (extent of the damage to vessel,
occurrence of any water ingress/fire/oil pollution/personal injury, etc., and if any,
preventive measures to water ingress/fire /oil pollution)
2. Collection of the contact details of the opponents vessel (name, owners,
registry, course, cargo, insurer, extent of damage)
3. Notice to the owners (name of the vessel, time/date and position of collision,
personal injury, extent of hull damage, oil pollution, etc.)
4. Urgent message to the local authorities (name of the vessel, time, date and
position of collision, personal injury, extent of hull damage, oil pollution and,
possibility of sinking, etc.)
5. Notice to P&I Club or its local correspondents

B. Checking information leading up to the collision
1. Vessels headings
2. Vessels speed
3. How the vessel was maneuvered
4. Engine movement
5. Watch/Look out condition
6. Usage of any signals/shapes
7. Condition of the opponents vessel
8. How the opponent vessels headings were checked and with what intervals

79

C. Checking information at the time of the collision
1. Time of the collision (ensuring consistency of time at the collision among
bridge, engine room, telegraph logger and course recorder)
2. Position of the collision (lat./long., headings/distance from the notable object)
3. Situation of the vessel (speed, engine RPM, headings, hull damage part, usage
information on navigational equipments, information on look out and angle of
the collision)
4. Situation of the opponents vessel (time first observed, headings and speed)
5. Weather and sea condition (visibility, weather, and wind direction/force)

D. Checking information on damage to the owners vessel
1. Colliding part of the vessel and the extent of damage
2. Voyage (Ports of departure and destination)
3. Kind of cargo onboard, its quantity and loading and discharging ports
4. Whether there is any damage to cargo
5. Name of the cargo owners and their cargo insurers

E. Checking information on damage to the opponents vessel
1. Colliding part on the vessel and the extent of damage
2. Voyage (Ports of departure and destination)
3. Kind of cargo onboard, its quantity and loading and discharging ports
4. Whether there is any damage to cargo
5. Name of the cargo owners and their cargo insurers
6. Name of the vessel owners, their P&I Club, and H&M
7. Contact details of the above interests

F. Collection/preservation of records
In order to ascertain the causation leading up to the collision, periodical daily
records could be considered as important evidence. The following records are of
particular importance.

1.Navigational Chart: periodic marking of the vessels position to the chart, not
only when the vessel is under the command of the Master, but also when she is
under the pilots guidance.
2. Course recorder: marking the collision time

80

3. Telegraph logger
4. Log book
5. Bell book
6. Engine log book
7. Statement of fact: by a pilot if on board

G. Consistent fact-findings shared by all personnel onboard
Crew members memories are vivid right after the collision accident, but they will
fade away as time goes by. The Master, along with collecting the aforementioned
information, should convene a meeting to collect all types of information from all
crew members to grasp the fact on the collision which should be consistent with
the evidential records/documents onboard.

H. Obtaining a signature of the opponents Master on the Notice of Claim
In preparation for claims from the opponents vessel in the future, it is necessary
for the Master to obtain a signature of the opponents Master on the Notice of
Claim. The sample of the Notice of Claim is annexed hereto for the Masters
usage. The opponent vessels Master likewise would tender the same Notice and
request the Masters signature thereon. The Master should only sign the Notice
with the remark without prejudice, receipt only.

V. Various investigations
After the collision accident, many parties concerned will come onboard for
investigations of their own. In such occasion, the Master should check who they are
and what their purposes are, and upon clarifying those, should determine whether
they ought to be permitted to be onboard or should their questions be answered by
the Master.

- Please render full cooperation in the investigations by lawyers, surveyors, P&I
correspondents who are appointed for own vessel.
- Please reject interviews or inquiries made by lawyers appointed by the opponent
party unless permitted to do so by the owners.
- The Master should also reject investigation by the opponent surveyor unless
permitted by owners. Normally, surveys on the hull and the cargo (known as
W.P survey) are permitted, but even such surveys are limited to check the
extent of damages itself, any access to the vessels other parts or records

81

should be rejected.
- The Master should fully cooperate with interviews of the Marine Authority by
giving them honest and accurate answers, and if he needs to sign on his
interview statement, he must make sure before he sings that the contents are
accurate. Subsequently, the Master needs to report to the owners as to the
Marine Authoritys interview. In some countries, a fine could be imposed
upon the vessel or the Master because of the collision itself or oil spill resulting
from it. In such occasion, Marine Authority can demand a cash deposit or a
security. Should it occur, the Master immediately needs to notify such
situation to the owners or the local P&I correspondents.

VI. Important points on a collision accident
- Prioritize safety of human life
- Obtain the opponent Masters signature on the Notice of Claim
- If the Masters signature is requested for the opponent vessels Notice of Claim,
the Master should sign with the remark Without prejudice and Receipt only
- Do not admit any liability at the collision site
- Do not allow the opponent vessels interest (their lawyers, surveyors and etc.) to
interview the crews or take records of the vessel

VII.Conclusion
- Evaluate the extent of damage to the own vessel and take necessary preventive
measures to secure safeties of human life, vessel, cargo onboard and
environment
- As the need arises, cooperate with the opponents vessel in their securing the
safety of human life, their vessel and cargo onboard
- Determine the information leading up to the collision
- Report collision accident to the owners, P&I/H&M and to the relevant Marine
Authority.
- Collect relevant records/information
- Preserve evidence

82

VIII. Flow chart

Collision
Notice to all crew
Investigation of damage
Emergency
response
Obtaining information
of other vessel
Report to owners
Notice to the relevant
authorities and P&I
Correspondents
Collecting records/evidences
Fire/water ingress
Oil Pollution

83

IXSample forms
A. Notice of Claim
B. Form of the Report of Collision Incident

84

Notice of Claim

Dated:
To the Master of M/V opponent vessel name

Dear Sirs,

On behalf of the owners of the own vessel name, I hereby hold you and the
owners of the opponent vessel name fully responsible for any loss and damage
of whatsoever nature and howsoever arising from the collision between the own
vessel name and the opponent vessel name which occurred on (Date) at
(Place).

Please acknowledge receipt of this notice with your signature at the end where
indicated.

Yours faithfully,

Master of the own vessel name

Acknowledge receipt of this notice of claim on this day of

Master of the opponent vessel name

Sample Form A

85

Form of the Report of Collision Incident

Name of Vessel
Date/Time
Place Place Objection's Name Bearing/Distance
(Lat./Long.) (N or S) (E or W)
Voyage Route (Sailing/Destination
Port)

Cargo
Situation at the time of collision
Time
Confirmed Person/Time
Officer
Q/M
Duty
Officer/Ratings
Others
Own Vessel Heading
Speed/RPM
Rudder Angle
Change of Draft
Angle of Collision
Rader/ARPA No.1 Range
No.2 Range

Navigation
Supporting Devices
Usage
Condition

Navigation
Lights/Shapes

Signals
Heading
Speed
Opponent
Vessel
Way of Determination
for above

Angle of Collision
Separation of Both Vessels
Weather Weather
Wind Direction/Force
Sea State
Current
Stream
Visibility
Moonlight
Sample Form B

86

Both Vessels' Damaged Condition and Others
Own Vessel Damaged Parts
Extent of Damage
Opponent
Vessel
Damaged Parts
Extent of Damage
Personal Injury/Emerfency Response
Oil Pollution/Emergency Response
Cargo Damage/Emergency Response
Opponent Vessel

Name of Vessel/Kind of
Vessel

Registered Port/Flag
State/Gross Ton.

Built of Year/Class

Name of Owner
(Contact Detail)

Hull Insurerer (Contact
Detail)

P&I Club (Contact
Detail)

Primarly Company of
Contact

Sailing Port
Destination Port
Kind/Quantity of Cargo

Cargo
Interests/Insurerer

Situation before collision
Course
Speed
Maneuvering
Look Out
Engine Motion
Signals

87

First observation of opponent vessel
Time of First Observation
Bearing/Distance
Way of Observation
Person who observe
Course&Speed of Opponent/Way of
Determination

Lights/Shapes
Existence of Third Vessel
Course/Speed of Own Vessel
Position of Own Vessel
Details of Course of Collision
Actions of Own Vessel/Oppnent
Vessel
Time Remark
Course/Speed of Opponent Vessel
Altering Course
Engine Motion
Signals (Own/Opponent Vessel)
Transmission between Own/
Opponent Vessel

Actions of Both Vessels just before
Collision

Records
Chart * Put the vessel's positions until the time of collision
Deck/Engine Log Book * Write the factual events and time accurately
Bell Book Ditto Above
Recording
Sheets
Course Recorder * Mark the collsiion Time
Tlegraph Logger

Memory of Electric
Chart

Notice Of Claim
* Obtain the signature of the opponents vessel's
Master

Oil Pollution

Chapter 8

90

I. Oil Pollution Incidents
A. Public concern about environmental pollution has been growing year by year
and oil pollution incidents caused by vessels are, particularly recently, sensational
on the media. Oil pollution leads to very expensive clean-up operations and,
often, large compensation payments to third parties (especially for fishery
damage). This often has deteriorating effects on the corporate image of the
owners, managers, operators and other related parties. Also, owners, Masters,
Chief Engineers or other officers/crews can be penalized or even imprisoned.
Therefore, utmost care should be taken to prevent oil pollution incidents. The
typical causes of pollution are:
1. Damage to cargo oil tanks or fuel oil tanks due to collision, sinking,
grounding or explosion
2. Overflow of fuel tanks through the air vent while bunkering and/or shifting
3. Overflow of cargo tanks due to mishandling of valves or etc.

B. Liability and compensation scheme
1. Under the International Convention on Civil Liability for Oil Pollution Damage
(CLC), the owners of dirty tankers [vessels carrying oil in bulk as cargo],
which cause oil pollution are held liable for the pollution damage whether or
not the Masters or crew are at fault. This is referred to as the strict liability
principle. On the other hand, the owners are entitled to limit their liability in
accordance with the provisions of this Convention. For more details, please
refer to the text of the Convention.
2. Parties suffering damage due to oil pollution caused by tankers which fall
within the CLC may not be able to receive satisfactory compensation
because of the limitation under CLC. This may be because the owners are
exempted from liability because of force majeure (acontractual exclusion
based on certain incidents, also often referred to as acts of God), or may
not have sufficient insurance for oil pollution or may not have capacity to pay.
In such cases, the victims are entitled to be indemnified directly by the
international fund under the International Convention on the Establishment
Oil Pollution

91

of an International Fund for Compensation for Oil Pollution Damage (FC).
For details, please refer to the text of the Convention.

C. In the event of an oil pollution incident caused by non-CLC vessels, the owners
liability to third parties may be limited under a limitation regime such as the
Convention on Limitation of Liability for Maritime Claims (LLMC Convention).
Other conventions may also be availale: the International Convention on Liability
and Compensation for Damage in Connection with the Carriage of Hazardous
and Noxious Substances by Sea (HNS Convention) which covers pollution
caused by spillage of harmful hazardous substances from non-CLC vessels has
been adopted and, at the time of writing, is waiting to go into effect. The
International Convention on Civil Liability for Bunker Oil Pollution Damage
(Bunker Convention) which targets at oil pollution occurring as a result of
bunker oil spill from non-CLC and/or non-HNS vessels was adopted in March,
2001. In addition, a new law became effective in Japan in March, 2005
imposing strict liability for oil pollution caused by bunker fuel discharge from
non-CLC vessels. The limitation of liability of such owners of the non-CLC
vessels is subject to the provisions of the LLMC Convention.
D. Attention should be paid to the relevant regime of liability and compensation
for oil pollution that may apply from country to country.

II. P&I Insurance
P&I insurance covers damages caused to third parties due to oil pollution and/or
costs and expenses incurred by the owners for preventing and/or mitigating the
damage and/or cleaning the oil spilled. Insurance coverage shall also be provided
when damage is caused by pollutants other than oil, such as cargo, paint, soot or
etc.

III. Reporting of Incidents
As soon as appropriate steps are taken to prevent the oil from spilling, please
promptly report the incident to the owners, the local authorities concerned and the
local P&I correspondents. It is also important to ascertain the type of the pollutant,
the cause of the spill and the quantity spilled. In the case of incident in the U.S.
waters, the Master should notify the Qualified Individual (QI) first.

92

IV. Steps to be taken following incident
The Master should ensure that appropriate steps are taken in accordance with the oil
pollution incident response manual (oil pollution emergency plan) prepared by the
owners or the managers. In the case of incident in the U.S. waters, the Master
should take appropriate steps in accordance with the Vessel Response Plan (VRP).
A. Emergency actions
1. Immediate deployment of Oil Pollution Prevention Station.
2. Prevention and mitigation of further spill:
- Closing up the leaks
- Depressurizing the leaking tanks/pipelines and shutting down the relating
valves (shutting down the valves of the gas vent pipes if applicable)
- Transfer of oil remaining in the leaking tanks into available tanks or spaces
- Control of the vessels stability by trimming
3. Prevention of secondary incidents such as personal injuries, fire and explosion:
- Having a place on the windward side of the incident site
- Preventing invasion of toxic or flammable gas into the engine room and
accommodation area
- Removing source of fire, thorough control of fire and detection of gas
4. Clean-up and/or removal of spilled oil (collection of spilled oil with
absorbents). The use of oil dispersants requires prior permission from the
authorities and/or fisheries association concerned. This is especially true
within United States waters where the use of unauthorized dispersants is
strictly prohibited.
5. Extending oil booms.

B. Ascertaining the situation and reporting the status
Please refer to the attached sample form of a report on pollution incidents.
1. Date, time and place where the pollution incident occurred
2. Presence of imminent danger of personal injuries and listing / drifting /
flooding of the vessel
3. The vessels details such as the name, type, flag and gross tonnage
4. The names and contact numbers of the owners/managers
5. Draft
6. Last port/Next port
7. Direct cause of the spill (collision, grounding, overflowing of fuel tanks
during bunkering, etc.) and accounts of the event (how the oil spill

93

occurred)
8. The type of the spilled oil (fuel oil, lub oil, cargo oil, dirty oil (heavy oil),
clean oil (light oil))
9. Location of the leaking hole/crack and its size
10. The quantity of the fuel/cargo oil before/after the spillage
11. The extent of the spill (length/width/direction of the oil spilled)
12. The weather and sea conditions (wind speed/wave height/swell/tidal
current)
13. Environment (presence of fishery facilities or resort areas in the vicinity)
14. Oil spill prevention measures taken
15 Necessity for expert help

C. Records to be retained
1. Deck log book, engine log book, oil record book and a record of conditions
of the tanks before the incident
2. Sea protest
3. Statements of Master/crewmember
4. Photographs and video films
5. Samples of the oil spilled
6. All relevant communications/correspondence in respect of oil spill

D. Typical actions of oil spill response
1. In the event of a spill of clean oil such as gasoline, jet fuel, kerosene and gas
oil:
No particular clean-up work is performed for volatile oil such as gasoline
and jet fuel which easily vaporizes. Thus, necessary action must be taken to
alert ships to avoid the area of the oil spill.
When kerosene or gas oil spills, the oil can be churned by the propellers of
workboats or by the sprinkling of sea water to control fires.
2. In the event of a spill of dirty oil, such as crude oil and banker fuel:
Oil spill response plan is established depending on the quantity of the oil
spilled, the weather conditions, sea conditions, tidal current and land
formation. Deploying oil booms, collecting the oil with absorbents,
sprinkling oil dispersants, operating oil-spill clean-up by workboats at sea
and/or on the shore will be carried out, as appropriate, to clean the oil so as
to prevent further pollution damage.

94

If a large quantity of oil has been spilled or there is a risk of serious damage
to fishery or residents in the vicinity, a spill control GHQ may be set up by
owners in consultation with the relevant local authorities.
3. Others:
In the event a vessels sinking, or grounding and an oil spill continuing,
salvors can be engaged to contain the spill or remove the oil remaining in
the vessel.

V. How to cope with various investigations
A. Maintain close contact and cooperation with the vessels interests (P&I
correspondents, surveyors, QI, lawyers and others)
Following the oil pollution incident, various parties, including the relevant local
authorities, will contact the vessel or come on board. The Master should first
check their identities, the parties which they represent and their purposes before
deciding whether or not to disclose information / permit for investigations. If the
Master feels anxious, the Master should seek advice of the lawyers appointed by
the owners or P&I correspondents before making a decision alone.
If the authorities wish to conduct interviews with the Master or crew, the Master
should immediately check with P&I correspondents whether legal representatives
are allowed to attend. If affirmative, the Master should have lawyers attend. Such
attendance of lawyers is allowed in some countries.
The Master should cooperate fully with the lawyers and surveyors appointed by
the owners or P&I correspondents during their investigations.
1. Following directions of the authorities
It is important to answer questions honestly when interviewed by the
authorities and ensure the accuracy of their investigation record when signing
it. The Master should report to the owners the questions asked and answers
given during the interview.
In some countries, a fine may be imposed or a cash deposit or security for the
fine may be demanded. In either case the Master should urgently contact the
owners, managers and/or P&I correspondents.

VI. Points to be noted
A. Accurate and prompt report of the oil pollution incident
It is imperative to take immediate and appropriate actions at the initial stage in
order to minimize damage. With this view, accurate information has to be

95

provided quickly.
B. Report of accurate quantity of the oil spilled
Appropriate cleaning and prevention measures depend on the circumstances of
the incident and the quantity of the oil which has been spilled. An
underestimation of the quantity may result not only a delay in taking necessary
steps but also to an expansion of damage.
In order to prevent or mitigate damage, it is vital to report the cause of the
incident and the type and quantity of the oil spilled as prompt and accurate as
possible.
C. Application of oil dispersants with the prior consent of the relevant
authorities
Use of oil dispersants may be prohibited in certain areas of the world because of
local fishermens objections. Therefore, the Master should ensure that before
using oil dispersants the prior consent of the authorities is obtained.
D. Preventing secondary incidents such as personal injuries, fire and
explosion
Volatile oil such as gasoline and jet fuel can generate flammable gas and results
in a danger of fire or explosion. In the case of spill of this kind of oil, use of fire
should immediately be prohibited. The incident should be notified to the
relevant authorities and other ships navigating in the vicinity so that they are
advised to keep away from the area of the spill.
The crew should be careful not to breathe toxic gas which can be detrimental to
health or life.

VII. Summary
- Appropriate perception of the situation
- Taking necessary steps to prevent further spill and secondary accidents
- Report to the owners, managers, P&I correspondents and the relevant
authorities
- Gathering relevant records and preserving evidence

96

VIII. Flow chart

Pollution incident
Temporary
measures
Appoint Spill Manager
and Oil Response Team
Discuss with Authorities
Formal enquiry
from the relevant Authorities
Notice to P & I
Correspondents
Recording
and
keeping evidence
Clean-up
Assessment of
third party damage
Investigation
Cause/Extent
Report to owners,
the relevant
Authorities and QI

97

IX. Sample form and Key maps
A. Report form for oil pollution
B. Disastrous oil pollution response plan
C. Oil pollution response plan (Malacca Straits)

Notes:

In the event of an oil pollution incident in Malacca Straits, the relevant authorities
take the initiative to effect oil cleaning and prevention measures in liaison with the
vessel, her P&I club and the local P&I correspondents.

Please also note the following;
Singapore: The Maritime and Port Authority take charge of the pollution incident.
Malaysia: While the Marine Department is in charge of maritime affairs, pollution
incidents are controlled by the Department of Environment.
Indonesia: The Navy, local police and local governments take the initiative.
Thailand: All cleaning and prevention measures are to be effected exclusively by the
Royal Thai Navy without any intervention of third parties.

98

REPORT FORM FOR OIL POLLUTION
Ship's NameRegistry
Kind of ShipGross ton
Owner's nameContact Details
AgentContact Details
Accident Date
Accident Place Landmark BearingDistance
Position N or S E or W
Pressing MattersLifeHull
Draft
Departed portDestination
The cause of Oil pollution CollisionGroundOver Flow of bunker
Is the oil overboard ? YesNo Continue Yes No
The progress of the accident

Kind of the oilFuelCargo
Quantity of the overboarded oil
Where is the outflow of oil
The outflow rate
Dimension of the bore

Kind of the cargo and
on-hand quantity before
accident

Kind of the fuel and
on-hand quantity before
accident

The conditions Condition of weather
/ sea
Wind force
direction
Wave
Swell

Length of oil slick
Width of oil slick
Direction
Strength of oil slick
Tide
The surroundings
Fishing facility of lee side
The taken action on
the accident

Do you need an assistance ? YesNo
Others Did you report to Coast Gard ?
Shipper
Charterer
Cargo underwiter
Hull underwiter

99

D
I
S
A
S
T
R
O
U
S

O
I
L

P
O
L
L
U
T
I
O
N

R
E
S
P
O
N
S
E

P
L
A
N
R
e
p
o
r
t

R
e
p
o
r
t
R
e
p
o
r
t

R
e
q
u
e
s
t

f
o
r

O
i
l

R
e
s
p
o
n
s
e
O
i
l

R
e
s
p
o
n
s
e

R
e
q
u
e
s
t

f
o
r

S
a
l
v
a
g
e
R
e
p
o
r
t
C
o
m
m
u
n
i
c
a
t
e
R
e
p
o
r
t

C
o
m
m
u
n
i
c
a
t
e
I
n
v
e
s
t
i
g
a
t
i
o
n
C
o
m
m
u
n
i
c
a
t
e
R
e
g
i
o
n
a
l

J
.
C
.
G
.
H
e
a
d
q
u
a
r
t
e
r
s
L
o
c
a
l

A
u
t
h
o
r
i
t
y

J
a
p
a
n
e
s
e

S
h
i
p
o
w
n
e
r
s

A
s
s
.

R
e
p
a
i
r

C
o
n
t
r
a
c
t
o
r
C
r
e
w
s

r
e
l
a
t
i
v
e

M
e
d
i
a

P
r
i
n
c
i
p
a
l

(
H
e
a
d
q
u
a
r
t
e
r
s
f
o
r

t
h
e

I
n
c
i
d
e
n
t
)
R
e
p
o
r
t
C
o
n
t
r
a
c
t
R
e
q
u
e
s
t

f
o
r

c
l
a
s
s

e
x
a
m
i
n
a
t
i
o
n
E
x
a
m
i
n
a
t
i
o
n

P

&

I
C
L
U
B
H
u
l
l

U
n
d
e
r
w
r
i
t
e
r
T
e
r
m
i
n
a
l
C
h
a
r
t
e
r
e
r
A
g
e
n
t
I
n
v
e
s
t
i
g
a
t
i
o
n

I
n
s
t
r
u
c
t
i
o
n
S
a
l
v
o
r
R
e
s
c
u
e
T
o
w
i
n
g

M
a
r
i
t
i
m
e

D
i
s
a
s
t
e
r
P
r
e
v
e
n
t
i
o
n

C
e
n
t
r
e
I
n
s
t
r
u
c
t
i
o
n
J
a
p
a
n

C
o
a
s
t

G
u
a
r
d

(
J
.
C
.
G
.
)
I
n
s
t
r
u
c
t
i
o
n
G
o
v
e
r
n
m
e
n
t

(
C
o
n
t
r
o
l

C
e
n
t
r
e
)
I
n
v
e
s
t
i
g
a
t
i
o
n
R
e
q
u
e
s
t

f
o
r

r
e
s
c
u
e
R
e
q
u
e
s
t

f
o
r

S
a
l
v
a
g
e
C
o
n
t
r
a
c
t
V
e
s
s
e
l
E
x
a
m
i
n
a
t
i
o
n
C
l
a
s
s
R
e
p
a
i
r
C
o
m
m
u
n
i
c
a
t
e
K
e
y

M
a
p

100

S
h
i
p

S
a
l
v
o
r
s

I
T
O
P
F

M
e
d
i
c
a
l

C
l
e
a
n
i
n
g
C
o
n
t
r
a
c
t
o
r
s
S
u
p
p
o
r
t
i
n
g
C
r
a
f
t
L
a
n
d
S
u
r
v
e
y
O
i
l

S
p
i
l
l
R
e
s
p
o
n
s
e

C
e
n
t
e
r
C
l
u
b

O
w
n
e
r
s

/
A
g
e
n
t

S
P
I
C
A
(
S
i
n
g
a
p
o
r
e
)
C
o
n
t
r
o
l

C
e
n
t
e
r
P
o
l
l
u
t
i
o
n
M
o
n
i
t
o
r
i
n
g
A
i
r
S
u
r
v
e
y
C
o
n
s
u
l
t
a
n
t
s
M
P
A
I
n
d
o
n
e
s
i
a
n
A
u
t
h
o
r
i
t
y
S
P
I
C
A
I
n
d
o
n
e
s
i
a
M
a
l
a
y
s
i
a
n
A
u
t
h
o
r
i
t
y
S
P
I
C
A
S
h
a
h

A
l
a
m

J
o
h
o
r
M
a
r
i
n
e

D
e
p
t
.
J
o
h
o
r

D
e
p
t
.

o
f
E
n
v
i
r
o
n
m
e
n
t
J
o
h
o
r
F
i
s
h
e
r
y
M
a
l
a
y
s
i
a

O
i
l
S
p
i
l
l

R
e
s
p
o
n
s
e

C
e
n
t
e
r
O
I
L

P
O
L
L
U
T
I
O
N

R
E
S
P
O
N
S
E

P
L
A
N

K
e
y

M
a
p

(
M
a
l
a
c
c
a

S
t
r
a
i
t
s
)

Appendix

1.MASTER'S CHECK LIST
2.LOI Sample Forms (AA, BB, CC)
(Cargo delivery without production of B/L)
102

MASTERS CHECK LIST

Masters are required to inspect the ship before commencement of the voyage or
entering the port or in case of necessity, in accordance with the following check list
and take corrective actions if necessary to improve the state of the ship for the
purpose of the safety of the voyage.

1. DOCUMENTS AND COMMUNICATIONS

1. Are standing instructions, procedure manuals for accidents, regulations,
plans, certificates, sailing instructions, company code and such available?

2. Are sufficient communications exchanged in time between the company
and the Master?

3. Was the necessary information made known to all crew?

4. Were the points to be paid attention to next voyage or cargo works in case
of entering the port made known to all crew?

2. BRIDGE AND RADIO OFFICE

1. Are navigational equipments such as radars, GPS, echo-sounder,
gyro/magnetic compass, steering gear and such in full working order?

2. Are navigation and bridge organization manuals available?

3. Is compass error constantly checked and recorded, and is deviation table
posted?

4. Are standing orders and night orders clearly defined?

5. Are charts and other nautical publications updated with the latest Notice to
Mariners or other media?

6. Are all charts in use appropriate for the area?

7. Are VHF, weather facsimile and radio apparatus in full working order?

103

3. ENGINE ROOM AND STEERING GEAR

1. Are main engine and all auxiliary machinery in full working order?

2. Are engine room emergency shut-off devices and alarm systems operational
and clearly marked?

3. Are condition of emergency generator and batteries satisfactory?

4. Is emergency steering system tested regularly?

5. Are spare parts sufficiently supplied?

4. LIFE-SAVING AND FIRE-FIGHTING

1. Are life boats, life rafts and other life-saving equipments maintained in good
condition?

2. Are fire pumps, emergency fire pump, fire detector and CO
2
fire
extinguishing system ready to use?

3. Are portable fire extinguishers in a term of validity?

4. Are fire hoses / nozzles / lines and CO
2
lines maintained in good condition?

5. Are firemans outfits, emergency doors and FO tanks shut-off device ready
to use?

6. Are lifeboat drill including engine test and fire drill held regularly?

7. Are all the crew familiar with their own duties in case of emergency?

104

5. MOORING EQUIPMENT

1. Are windlasses, anchors and cables in good condition?

2. Are mooring winches, ropes (including messenger and stopper rope), wires,
fairleaders and rollers in good condition?

3. Are steam / hydraulic pipes connecting to windlasses or mooring winches in
good condition?

4. Are spare mooring ropes and wires available?

6. CARGO GEARS

1. Is safe working load clearly marked on all equipment?

2. Are necessary certificates available?

3. Are wires in good condition?

4. Are interconnection valves between tanks or between pipe lines properly
maintained?

5. Are cargo pumps, crude oil washing machine and inert gas system in good
condition?

6. Are pressure / vacuum valves, hydraulic valves and sounding system of
tanker in good condition?

7. Are container lashing gears correctly supplied and maintained?

105

7. OIL POLLUTION

1. Are written procedures for loading and discharging cargo oil and loading
bunker oil provided?

2. Is there a contingency plan to limit pollution effects?

3. Are suitable spill containers available around the vents of fuel / diesel oil
tanks?

4. Can all scuppers be plugged effectively?

5. Are hydraulic lines and machinery free of oil leakage?

6. Is the vessel ready for dealing with small oil spill?

7. Is engine room bilge separator in good condition?

8. Are oil record books updated, and signed properly?

8. SEAWORTHINESS

1. Are cargo hatch covers and accessories maintained satisfactorily, and is
water-tightness secured?

2. Are other deck openings water-tight and properly protected?

3. Are cargo holds / tanks (including connecting lines) maintained and cleaned
satisfactorily?
(shell plate, frame, bulkhead, tanktop, sounding pipe, coating, ladder, bilge,
heating pipe, etc.)

4. Are ballast tanks maintained satisfactorily?

5. Is cargo hold refrigerating system in full working condition?

6. Is proper GM maintained through the voyage?

7. Is special attention paid to loading, stowing and securing of cargo in order
to prevent shifting or collapse of cargo which directly affect the stability of
the ship?
106

8. Is enough bunker possessed for the voyage?

9. GENERAL SAFETY

1. Are fire control plan, safety signs and other cautions prominently
displayed?

2. Are dangerous projections marked with precautionary paint?

3. Are safety suits, helmets, shoes, eye protectors, safety torches, safety
instruments, oxygen meters and such supplied sufficiently?

4. Is lighting adequate and its wiring in good condition?

5. Are decks and gangway free from slippery substances?

6. Is safety net rigged properly on gangway?

7. With respect to safety checking of working place before commencement
of work;
a) Are a look-out man and life buoy arranged during work outside the
bulwark?
b) Are plates and ropes of boatswains chair, etc in good condition?
c) Are safety belts in good condition?
d) Are tank / void entry procedures laid down?

107

Form AA

STANDARD FORM LETTER OF INDEMNITY TO BE GIVEN IN
RETURN FOR DELIVERING CARGO WITHOUT PRODUCTION OF
THE ORIGINAL BILL OF LADING INCORPORATING A BANKS
AGREEMENT TO JOIN IN THE LETTER OF INDEMNITY

[insert date]
To : [insert name of Owners]
The Owners of the [insert name of ship]
[insert address]

Dear Sirs

Ship: [insert name of ship]
Voyage: [insert load and discharge ports as stated in the bill of lading]
Cargo: [insert description of cargo]
Bill of lading: [insert identification numbers, date and place of issue]

The above cargo was shipped on the above ship by [insert name of shipper] and
consigned to [insert name of consignee or party to whose order the bill of lading is
made out, as appropriate] for delivery at the port of [insert name of discharge port
stated in the bill of lading] but the bill of lading has not arrived and we, [insert name
of party requesting delivery], hereby request you to deliver the said cargo to [insert
name of party to whom delivery is to be made] at [insert place where delivery is to be
made] without production of the original bill of lading.

In consideration of your complying with our above request, we hereby agree as
follows :-

1. To indemnify you, your servants and agents and to hold all of you harmless in
respect of any liability, loss, damage or expense of whatsoever nature which you
may sustain by reason of delivering the cargo in accordance with our request.

2. In the event of any proceedings being commenced against you or any of your
servants or agents in connection with the delivery of the cargo as aforesaid, to
provide you or them on demand with sufficient funds to defend the same.
108

3. If, in connection with the delivery of the cargo as aforesaid, the ship, or any
other ship or property in the same or associated ownership, management or
control, should be arrested or detained or should the arrest or detention thereof
be threatened, or should there be any interference in the use or trading of the
vessel (whether by virtue of a caveat being entered on the ships registry or
otherwise howsoever), to provide on demand such bail or other security as may
be required to prevent such arrest or detention or to secure the release of such
ship or property or to remove such interference and to indemnify you in respect
of any liability, loss, damage or expense caused by such arrest or detention or
threatened arrest or detention or such interference, whether or not such arrest
or detention or threatened arrest or detention or such interference may be
justified.

4. If the place at which we have asked you to make delivery is a bulk liquid or gas
terminal or facility, or another ship, lighter or barge, then delivery to such
terminal, facility, ship, lighter or barge shall be deemed to be delivery to the
party to whom we have requested you to make such delivery.

5. As soon as all original bills of lading for the above cargo shall have come into our
possession, to deliver the same to you, or otherwise to cause all original bills of
lading to be delivered to you, whereupon our liability hereunder shall cease.

6. The liability of each and every person under this indemnity shall be joint and
several and shall not be conditional upon your proceeding first against any
person, whether or not such person is party to or liable under this indemnity.

7. This indemnity shall be governed by and construed in accordance with [English
law] and each and every person liable under this indemnity shall at your request
submit to the jurisdiction of [the High Court of Justice of England].

Yours faithfully
For and on behalf of
[insert name of Requestor]
The Requestor

Signature

We, [insert name of the Bank], hereby agree to join in this Indemnity providing
always that the Banks liability:-
109

1. shall be restricted to payment of specified sums of money demanded in relation
to the Indemnity (and shall not extend to the provision of bail or other security)

2. shall be to make payment to you forthwith on your written demand in the form
of a signed letter certifying that the amount demanded is a sum due to be paid
to you under the terms of the Indemnity and has not been paid to you by the
Requestor or is a sum which represents monetary compensation due to you in
respect of the failure by the Requestor to fulfil its obligations to you under the
Indemnity. For the avoidance of doubt the Bank hereby confirms that:-

(a) such compensation shall include, but not be limited to, payment of any
amount up to the amount stated in proviso 3 below in order to enable you
to arrange the provision of security to release the ship (or any other ship in
the same or associated ownership, management or control) from arrest or
to prevent any such arrest or to prevent any interference in the use or
trading of the ship, or other ship as aforesaid, and

(b) in the event that the amount of compensation so paid is less than the
amount stated in proviso 3 below, the liability of the Bank hereunder shall
continue but shall be reduced by the amount of compensation paid.

3. shall be limited to a sum or sums not exceeding in aggregate [insert currency and
amount in figures and words]

4. subject to proviso 5 below, shall terminate on [date six years from the date of
the Indemnity (the Termination Date)], except in respect of any demands for
payment received by the Bank hereunder at the address indicated below on or
before that date.

5. shall be extended at your request from time to time for a period of two calendar
years at a time provided that:-

a) the Bank shall receive a written notice signed by you and stating that the
Indemnity is required by you to remain in force for a further period of two
years, and

b) such notice is received by the Bank at the address indicated below on or
before the then current Termination Date.

Any such extension shall be for a period of two years from the then current
Termination Date and, should the Bank for any reason be unwilling to extend
110

the Termination Date, the Bank shall discharge its liability by the payment to
you of the maximum sum payable hereunder (or such lesser sum as you may
require).

However, in the event of the Bank receiving a written notice signed by you, on
or before the then current Termination Date, stating that legal proceedings
have been commenced against you as a result of your having delivered the said
cargo as specified in the Indemnity, the Bank agrees that its liability hereunder
will not terminate until receipt by the Bank of your signed written notice stating
that all legal proceedings have been concluded and that any sum or sums
payable to you by the Requestor and/or the Bank in connection therewith have
been paid and received in full and final settlement of all liabilities arising under
the Indemnity.

6. shall be governed by and construed in accordance with the law governing the
Indemnity and the Bank agrees to submit to the jurisdiction of the court stated
within the Indemnity.

It should be understood that, where appropriate, the Bank will only produce and
deliver to you all original bills of lading should the same come into the Banks
possession, but the Bank agrees that, in that event, it shall do so.

The Bank agrees to promptly notify you in the event of any change in the full details
of the office to which any demand or notice is to be addressed and which is stated
below and it is agreed that you shall also promptly notify the Bank in the event of any
change in your address as stated above.

Please quote the Banks Indemnity Ref in all correspondence
with the Bank and any demands for payment and notices hereunder.

Yours faithfully
[insert name of bank]
[insert full details of the office to which any demand or notice is to be addressed]

.
Signature
111

Form BB

RETURN FOR DELIVERING CARGO AT A PORT OTHER THAN
THAT STATED IN THE BILL OF LADING INCORPORATING A
BANKS AGREEMENT TO JOIN IN THE LETTER OF INDEMNITY

[insert date]
[insert address]

Dear Sirs

Bill of lading: [insert identification number, date and place of issue]

consigned to [insert name of consignee or party to whose order the bill of lading is
stated in the bill of lading] but we, [insert name of party requesting substituted
delivery], hereby request you to order the ship to proceed to and deliver the said
cargo at [insert name of substitute port or place of delivery] against production of at
least one original bill of lading.

follows :-

may sustain by reason of the ship proceeding and giving delivery of the cargo
against production of at least one original bill of lading in accordance with our
request.

112

servants or agents in connection with the ship proceeding and giving delivery of
the cargo as aforesaid, to provide you or them on demand with sufficient funds
to defend the same.

justified.



Yours faithfully
The Requestor

Signature



113




3. shall be limited to a sum or sums not exceeding in aggregate [insert currency and
amount in figures and words]

4. subject to proviso 5 below, shall terminate on [date six years from the date of the
Indemnity (the Termination Date)], except in respect of any demands for
before that date.


years, and


114

the Termination Date, the Bank shall discharge its liability by the payment to you
of the maximum sum payable hereunder (or such lesser sum as you may require).

or before the then current Termination Date, stating that legal proceedings have
been commenced against you as a result of your having delivered the said cargo
as specified in the Indemnity, the Bank agrees that its liability hereunder will not
terminate until receipt by the Bank of your signed written notice stating that all
legal proceedings have been concluded and that any sum or sums payable to
you by the Requestor and/or the Bank in connection therewith have been paid
and received in full and final settlement of all liabilities arising under the
Indemnity.





Yours faithfully

.
Signature
115

Form CC

RETURN FOR DELIVERING CARGO AT A PORT OTHER THAN
THAT STATED IN THE BILL OF LADING AND WITHOUT
PRODUCTION OF THE ORIGINAL BILL OF LADING
INCORPORATING A BANKS AGREEMENT TO JOIN IN THE
LETTER OF INDEMNITY

[insert date]
[insert address]

Dear Sirs

Bill of lading: [insert identification number, date and place of issue]

consigned to [insert name of consignee or party to whose order the bills of lading are
stated in the bills of lading] but we, [insert name of party requesting substituted
delivery], hereby request you to order the vessel to proceed to and deliver the said
cargo at [insert name of substitute port or place of delivery] to [insert name of party
to whom delivery is to be made] without production of the original bill of lading.

follows :-

may sustain by reason of the ship proceeding and giving delivery of the cargo in
accordance with our request.

116

servants or agents in connection with the ship proceeding and giving delivery of
the cargo as aforesaid, to provide you or them on demand with sufficient funds
to defend the same.

justified.

4. If the place at which we have asked you to make delivery is a bulk liquid or gas
terminal or facility, or another ship, lighter or barge, then delivery to such
terminal, facility, ship, lighter or barge shall be deemed to be delivery to the
party to whom we have requested you to make such delivery.

5. As soon as all original bills of lading for the above cargo shall have come into our
possession, to deliver the same to you, or otherwise to cause all original bills of
lading to be delivered to you.



Yours faithfully
The Requestor

Signature
117






3. shall be limited to a sum or sums not exceeding in aggregate [insert currency
and amount in figures and words]

4. subject to proviso 5 below, shall terminate on [date six years from the date of
the Indemnity (the Termination Date)], except in respect of any demands for
before that date.
years, and

118


the Termination Date, the Bank shall discharge its liability by the payment to you
of the maximum sum payable hereunder (or such lesser sum as you may require).

or before the then current Termination Date, stating that legal proceedings have
been commenced against you as a result of your having delivered the said cargo
as specified in the Indemnity, the Bank agrees that its liability hereunder will not
terminate until receipt by the Bank of your signed written notice stating that all
legal proceedings have been concluded and that any sum or sums payable to
you by the Requestor and/or the Bank in connection therewith have been paid
and received in full and final settlement of all liabilities arising under the
Indemnity.





Yours faithfully

119

.
Signature

Mastershandbook 131006183211 Phpapp02 PDF

Uploaded by

Copyright:

Available Formats

Mastershandbook 131006183211 Phpapp02 PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Mastershandbook 131006183211 Phpapp02 PDF

Uploaded by

Copyright:

Available Formats

MASTER'S HANDBOOK

The Japan Ship Owners' Mutual

You might also like