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Rule 46 Measures to avert or minimise loss

The Association shall cover:

a extraordinary costs and expenses reasonably incurred on or after the occurrence of a casualty or event, including liability for such extraordinary expenses incurred by a third party, for the purpose of avoiding or minimising any liability on the Association, other than:

i costs and expenses claimable in general average;

ii costs and expenses relating to the Ship being overloaded or the cargo being incorrectly stowed;

iii costs and expenses resulting from measures that have been or could have been accomplished by the Crew or by reasonable use of the Ship or its equipment;

iv costs and expenses resulting from making the Ship seaworthy for receiving cargo;

b losses, costs and expenses incurred at the direction of the Association.

 

Guidance

Members share liabilities on a mutual basis through the medium of the Association on the presumption that each Member will seek to operate his Ships prudently and, thereby, avoid, to the best of his ability, casualties or other events that may result in claims being made on the Association.1 However, a Member is also expected to act prudently as and when such casualties and other events arise, which means that he must take, and continue to take, all such steps as may be reasonably required to avert or minimise any liability, loss, cost or expense in respect of which he is insured by the Association.2 

Rule 46 determines the basis upon which the Member will be compensated in such circumstances. The Rule is a reflection of the principles that underpin the concept of mutuality in that, a Member who, on or after the occurrence of a casualty or event, has incurred extraordinary costs and expenses or liability to third parties for such extraordinary costs and expenses for the purpose of avoiding or minimising liabilities, losses, costs and expenses that would otherwise have been recoverable from the Association, ought to be compensated in that regard by the Association. This is a fundamental principle of marine insurance,3 but is even more important in the context of mutual insurance. Consequently, since the provisions of Rule 46 are similar in nature to those that are normally found in other marine insurance policies, Rule 46 is sometimes referred to as the ‘sue and labour’ provision. 

Rule 46 should be read in the light of Rule 63 (Excluded losses) which provides that cover is not available for claims that relate to the various damages, liabilities, losses, costs or expenses that are itemised in that Rule ‘except where, and to the extent that, they form part of a claim for expenses under Rule 46’. Therefore, claims that appear to be excluded under Rule 63 may, nevertheless, qualify for cover under Rule 46, provided that the relevant extraordinary cost or expense or liability to third parties for such extraordinary cost or expense, has been incurred in order to minimise or avoid a liability that is otherwise covered under the Rules. 

It is important to note that Rule 46 does not purport to make cover generally available for extra costs and expenses that a Member or a third party for whose conduct the Member is liable may incur in connection with the operation of the Ship, even if such extra costs and expenses are necessitated by unusual and/or unforeseeable circumstances. Cover is available if, and to the extent that, the costs and expenses that are incurred by the Member or by a third party for those conduct the Member is liable are ‘extraordinary’, are ‘reasonably incurred,’ and are incurred as a direct result of measures that are taken by the Member or the third party in order to avoid or minimise the liability of the Association. Therefore, cover is available only if all three inter-linking requirements are satisfied. 

(A) …extraordinary costs and expenses reasonably incurred… (Rule 46.a)

Cover is available only if the costs and expenses are ‘extraordinary’ costs and expenses that have been ‘reasonably incurred’ by the Member  or by a third party for whose conduct the Member is liable. In the majority of cases, the relevant costs and expenses will have been incurred by the Member itself or by third parties at the request of the Member. However, cover is also available if a third party such as a local authority acting within its statutory rights, or the owners of property that is at risk acting within the rights that are given to them by local law, take independent steps to protect the property that is at risk and claim the costs of such action from the Member. If the Member is legally liable to indemnify such third parties for the costs and expenses that have been incurred by them in taking such action, cover is available to the Member under Rule 46 provided that the steps taken by the third party have avoided or minimised any liability on the Association. See the example given in (C) below.

The question of whether such costs and expenses are ‘extraordinary’ and ‘reasonably incurred’ depends on the facts of each particular case.

In order to determine whether ‘extraordinary’ costs or expenses have been ‘reasonably incurred’ in order to avoid or minimise the liability of the Association, a comparison needs to be made, between, on the one hand, the nature of the measures that are taken and the quantum of the ‘extraordinary’ costs and expenses, and, on the other hand, the potential liability of the Association that the Member or third party has tried to avoid or minimise. In making the comparison, due regard must be given to the circumstances as they appeared to the Member or third party at the time that the relevant decisions were taken and carried out by him, and the information that was available to them at that time. Whilst it may subsequently transpire, with the benefit of hindsight, that better or more cost-effective measures could have been taken, this does not mean that ‘extraordinary’ costs and expenses were not ‘reasonably incurred’ at the time in question. 

For example, if a container vessel were to suffer a failure of the generators that provide power to reefer containers containing perishable cargo, cover is not available for a claim for damage to the Ship or to any part of its equipment since such a claim is recoverable under a standard Hull Policy and is excluded under Rules 63.1.a and b and/or Rule 71.a. Furthermore, cover is not available under Rule 46 for the cost of repairing the generators or the procurement of replacement parts, since such cost is not an ‘extraordinary’ cost. However, if there is an urgent need to avoid incurring a liability for cargo deterioration, and/or delay in the delivery of the perishable cargo, but replacement parts cannot be procured without considerable delay, cover may be available under Rule 46 for the cost of hiring a portable power plant to supply temporary power, for the cost of delivering the required parts to the Ship by air, and for the cost of any extra repairers and overtime that may be needed in order to minimise the damage. Cover is likely to be available in such circumstances since such costs and expenses would not have been incurred but for the need to minimise the risk of cargo damage, and can, consequently, be considered to be ‘extraordinary costs and expenses’ that have been ‘reasonably incurred’ to the extent that the estimated quantum of such extra costs is less than the estimated quantum of the claims for cargo damage that would otherwise have been recoverable from the Association if such costs had not been incurred. 

Alternatively, if it had been decided that, in all the circumstances, it was better to tranship all the cargo on board (including non-reefer containers) onto another container vessel in the same fleet that happened to be conveniently close by, the costs of discharging, handling and re-loading the containers that contained perishable cargo might well be considered to be measures that were reasonably taken in order to avert or minimise potential liability for cargo damage and, therefore, to qualify for cover under Rule 46. However, the same cannot necessarily be said in relation to the costs that were incurred for the transhipment of the non-reefer containers since the lack of generator power is not likely to cause damage to the contents of such containers. In such circumstances, the Association would face exposure only if it could be said that the Member faced other potential liability to the cargo owners, such as liability for delay in the delivery of such containers if they were not transhipped. Such a potential liability would depend to a large extent on the terms of the contract of carriage under which the non-reefer containers were being carried. If such contracts were subject to the Hague or Hague-Visby Rules (which have no provisions that expressly govern claims for delay) and clauses that excluded liability for delay then, it is unlikely that the Member would incur liability for delayed delivery with the result that cover would not be available for the transhipment costs under Rule 46. However, if the contract of carriage were subject to the Hamburg Rules which do impose liability on the carrier for delay in the carriage of the cargo, the situation might be different. In order to decide whether cover is available, the Association would need to consider all relevant factors including the potential length of delay and any legal advice that may have been obtained for, or on behalf of, the Member. 

(B) …on or after the occurrence of a casualty or event… (Rule 46.a)
Cover is available under Rule 46 only if the extraordinary costs and expenses have been incurred as a result of a casualty or other event. For the purposes of Rule 46.a, a ‘casualty’ is an incident that has been caused by a marine peril, such as a collision, stranding, explosion, fire or other cause that renders the ship incapable of navigation to its intended destination.4 The term ‘event’ is not defined, but need not be as serious as a casualty and can include other unexpected and accidental incidents that affect the Ship and/or its Crew and which may cause the Association to incur a liability to the Member. Therefore, the event must be ‘insurable’ in the sense that it is a fortuitous event that is outside the control of the Member. 

For example, cover is not available for costs and expenses that have been incurred in order to comply with the Member's contractual obligation to carry cargo to the agreed destination, even if such costs and expenses are much higher than had originally been anticipated at the time that the contract of carriage was concluded. However, if, as a result of a casualty or other event, the Ship cannot continue to carry the cargo to the agreed destination, but, due to the nature of the cargo, the Member risks incurring liability for cargo damage caused by the delay in the delivery of the cargo, cover is available for ‘extraordinary,’ i.e. additional transhipment and on-carriage costs,5 that are reasonably incurred by the Member or by a third party for whose conduct the Member is liable in order to ensure that the cargo is delivered to the agreed destination without deterioration to its condition. However, cover is not available for any costs and expenses that would have been incurred in any event had the on-carriage been performed by the Ship as originally contemplated.6 

Cover is available for extraordinary costs and expenses that are reasonably incurred either at the time of the casualty or event or after it has occurred. Cover does not cease to be available at any specific time after the casualty or event, but, for cover to be available, the Member must be able to demonstrate that the relevant costs and expenses were incurred in direct connection with the casualty or event and for the purpose of avoiding any liability on the Association. In this regard, measures that are taken promptly at the time of, or shortly after, the casualty or incident in order to avoid or minimise liability, are likely to be considered to be more effective than measures that are taken later in time. However, the question will ultimately depend on the facts of the particular case. 

For example, if a Ship is stranded, there may initially be no time pressure for delivering the cargo to its destination. However, if the Member is subsequently informed that the on-sale market price of the cargo is expected to fall significantly if the cargo is not delivered promptly and that the Member may consequently be exposed to liability for claims for delay, this may increase the liability exposure of the Member and the Association if the cargo is not delivered promptly. Cover is available for extraordinary costs and expenses that are incurred by the Member or by a third party for whose conduct the Member is liable at that stage in order to minimise the potential liability of the Association for loss or damage caused by further delay in the delivery of the cargo. 

(C) …for the purpose of avoiding or minimising any liability on the Association… (Rule 46.a)
The occurrence of a casualty or other event may cause the Member to incur extraordinary costs and expenses or liability to a third party for such extraordinary costs and expenses for various reasons. However, cover is available pursuant to Rule 46 only where those costs and expenses are incurred for the purpose of avoiding or minimising the liability of the Association. Therefore, cover is not available for ‘extraordinary’ costs and expenses that are incurred by the Member or by a third party for whose acts the Member is liable for reasons that do not serve this purpose, e.g. in order to comply with orders that are given by local, national or flag state authorities otherwise than as a result of a casualty or other event that is likely to result in any liability on the Association. 

Cover is made available in the circumstances outlined in Rule 46 since such costs and expenses are considered by the Association to be an ‘investment’ that is made in order to avoid or minimise liabilities, losses, costs and expenses that would otherwise be incurred by the membership as a whole. By way of contrast, costs and expenses that are incurred for other reasons do not benefit the membership as a whole even if it can be said that they have been reasonably incurred in order to protect the Member’s private interests or the similar interests of any third party for whose conduct the Member is liable. 

For example, if a Ship were to drift as a result of the malfunctioning of its engine, and there is a risk that it may come into contact with an oil platform, cover is available for extraordinary costs and expenses that are incurred by the Member or by a third party such as a local authority or the owners of the platform in order to tow the Ship away from the platform if the Member is legally obliged to reimburse the third party in such circumstances and the terms of entry for the Ship include liability for damage to fixed and floating objects, since such action will have served to avoid or minimise the liability of the Association. However, if the Member’s liability to fixed and floating objects is insured under the Hull Policies,7 cover is not available for the cost of the towage since such action has not avoided or minimised the liability of the Association. In such circumstances, the Member’s remedy is to seek recovery of the costs from the hull underwriters. For similar reasons, cover is not available if the liability that is avoided or minimised is excluded under the Rules. For example, if a charterer were to become insolvent during the course of a cargo carrying voyage and the shipowner Member was, consequently, legally obliged to pay for the bunkers and other voyage expenses that were necessary to complete the voyage and thereby fulfil the Member’s obligations to a third party bill of lading holder, it can be truthfully said that the costs and expenses that are thereby incurred are extraordinary and serve the purpose of avoiding or minimising the Member’s liability. However, since cover for liability that arises out of the insolvency of the charterers is excluded under Rule 77, cover is not available for such costs and expenses under Rule 46 since such costs and expenses have not avoided any liability on the Association. 

The phrase ‘…for the purpose of…’ indicates that the measures that cause the Member or third party to incur the extraordinary costs and expenses need not be successful in achieving the aim of avoiding or minimising the liability of the Association. It suffices if the Member can demonstrate that such costs and expenses were incurred for that purpose, even if they did not in fact achieve the desired result. For example, if the Ship to which reference is made in the last example is insured by the Association against liability for damage to fixed and floating objects, cover is available for the cost of the towage even if, during the course of the towage, the towline were to break and the Ship were to come into contact with, and cause damage to, the oil platform. 

Cover is available even if the Member or third party has not intentionally or consciously incurred the ‘extraordinary’ costs and expenses in order to avoid or minimise the liability of the Association. It suffices if the Member can demonstrate that such costs and expenses did in fact serve that purpose even if that was not the original aim of the Member or third party. For example, if, before the engineers that are employed on board the ship to which reference is made in the last example are able to resolve the engine problem, the master is ordered by the local authorities to employ towage vessels in order to avoid the risk that the Ship may come into contact with the oil platform, cover is available in principle for the cost of the towage provided that the Member can demonstrate that such action did in fact avoid or minimise the liability of the Association. However, before confirming cover, the Association would need to take account of all the relevant factors including the availability or otherwise of any other relevant insurances including, in particular, the Member’s hull and machinery cover. In many cases, the relevant costs and expenses may be apportioned between those insurers that have benefited as a result of the fact that the casualty or event has been avoided. However, if the liability that has been minimised or avoided is a liability that clearly falls outside the Rules, cover is not normally available under Rule 46. 

(D) …other than… (Rule 46.a.i – iv)
The cover for ‘extraordinary’ costs and expenses is not available in certain circumstances. The precise circumstances are itemised in provisos i to iv of Rule 46.a. but they can be categorised as follows:

  • where the Member should seek recovery of the ‘extraordinary costs and expenses in general average [proviso i];
  • where the Member has caused or contributed to the casualty or event that has necessitated the incurring of ‘extraordinary’ costs and expenses, either by acts that should not have been done by a reasonably prudent Member or by acts that should have been done but which were not done by a reasonably prudent Member and, who should, therefore, bear those costs and expenses himself [provisos ii and iv];
  • where extraordinary costs and expenses have been incurred as a result of measures that a prudent Member would be expected to take without the benefit of reimbursement from the Association [proviso iii]. 

…costs and expenses claimable in general average (Rule 46.a.i)
The Member may have the right on the occurrence of a casualty or other event to declare general average,8 and to claim contributions from the other parties to the adventure for costs and expenses that he or a third party for whose conduct the Member is liable has incurred for the common safety and/or common benefit of those other parties. The Member has the obligation to take, and to continue to take, such steps as may reasonably be necessary in order to avert or minimise any claim that may be made on the Association, including the obligation to preserve rights of recourse against third parties9 including those from whom he may be entitled to receive contributions in general average, or the hull underwriters who insure him against general average sacrifices and expenditure under the Hull Policy. Consequently, cover is not available under Rule 46 for ‘extraordinary’ costs and expenses that the Member is entitled to recover from such other parties. In particular, cover is not available if the costs and expenses that would have been recoverable from other parties under the unamended York-Antwerp Rules had they been incorporated into the charterparty or contract of carriage, even if they were not in fact incorporated.10 

…costs and expenses relating to the Ship being overloaded or the cargo being incorrectly stowed… (Rule 46.a.ii)
The overloading of a Ship, i.e. loading more than the maximum permitted weight of cargo, is a very serious matter. This may cause severe damage to the structure of the Ship whether it is underway or in port and may, therefore, jeopardise the safety of the Ship and its Crew. Consequently, cover is not available for costs and expenses that are incurred by the Member or by a third party for whose conduct the Member is liable as a result of such conduct, e.g. the cost of lightening excess cargo, or of storing it ashore, or the cost of on-carriage by another vessel.11 

For the purposes of this Rule, the Association considers a Ship to be overloaded in circumstances where more cargo has been taken on board than it would be safe to carry on the contemplated voyage, e.g. where the Ship has been loaded to its summer draft for a North Atlantic winter voyage, or where the Ship is loaded with more cargo than that which would allow it to perform the contract of carriage as intended. For example, a Ship that has loaded cargo in Western Canada for European ports under a contract of carriage that requires the Ship to proceed through the Panama Canal is considered to be overloaded if the Ship has loaded more cargo than that which makes it possible for the Ship to transit the Panama Canal, or to call at one or more of the ports specified in the contract of carriage, because its draft exceeds the maximum permitted draft at the Canal or the port(s) in question.

The incorrect stowage of cargo may cause cargo to shift in the holds or on deck during the voyage, which may in turn cause damage to, or the loss of, cargo and/or jeopardise the safety of the Ship and its Crew. Cover is available under Rule 34 for any liability that the Member may have to third parties for such damage or loss but cover is not available under Rule 46 for costs and expenses that are incurred by the Member or by a third party for whose conduct the Member is liablein handling cargo as a result of such incorrect stowage. 

It is necessary in this connection to explain the correlation between Rule 46.a.ii and Rule 35 (Extra handling costs). Rule 35 makes cover available for ‘extra handling costs’ but emphasises that there “…shall be no recovery…of extra costs and expenses which…are excepted from cover under Rule 46.a”. Rule 46.a.ii excludes cover for extra costs and expenses that are incurred by the Member or by a third party for whose conduct the Member is liable specifically as a result of the incorrect stowage of the cargo. Therefore, cover is available under Rule 35 for extra costs and expenses that are necessarily incurred by the Member or by a third party for whose conduct the Member is liable in handling cargo as a result of damage to that cargo, but not necessarily simply in order to avoid or minimise the liability of the Association, e.g. costs that are incurred in removing the burned residues of a cargo from the Ship’s holds. However, cover is not available under Rule 46.a.ii for costs and expenses that are incurred by the Memberor by a third party for whose conduct the Member is liable in order to restow and/or relash cargo that was originally improperly stowed, and has subsequently broken loose, in order to avoid or minimise a loss of, or damage to, that cargo and the consequent exposure of the Association for such loss/damage. However, if unforeseen or unexpected events such as exceptionally bad weather or heavy seas were to arise during the voyage and cause the cargo to shift, the cargo may not be considered to have been incorrectly stowed, in which case, cover may be available either under Rule 35 or otherwise under Rule 46. Therefore, if neither the cargo nor the Ship is damaged (which would be necessary if Rule 35 were to be applicable) and it is necessary to restow and/or relash cargo which, if not restowed or relashed, may give rise to e.g. pollution or wreck removal liabilities that are covered by the Association under the Rules, cover is available under Rule 46 for the costs and expenses that may be reasonably incurred by the Member or by a third party for whose conduct the Member is liable in carrying out those operations. 

Cover is not available under Rule 46.a.ii regardless of whether the stowage has been effected by the shipowner or by a charterer pursuant to FIOS terms, and regardless of whether the claim is made by the shipowner or the charterer. Therefore, cover may not be available to the shipowner for ‘extraordinary’ costs and expenses that are incurred by him as a result of improper stowage that has been effected by the charterer. In such circumstances, the shipowner’s remedy is to claim an indemnity from the charterers for such costs and expenses, and cover may be available to him under the Defence cover (if he has defence cover) for legal and other costs that are incurred by him in this regard. 

The explanation for the exclusion in Rule 46.a.ii is that all ship operators are expected to be diligent and should, therefore, ensure, by, inter alia, employing a competent master and Crew, and by using proper procedures, that overloading or incorrect stowage does not occur prior to the commencement of the voyage. 

…costs and expenses resulting from measures that have been or could have been accomplished by the Crew or by reasonable use of the Ship or its equipment… (Rule 46.a.iii)
This provision reflects the Member’s duty to take, and to continue to take, all such steps that may be reasonably necessary in order to avert or minimise, inter alia, the incurring of costs and expenses for which he may be insured by the Association.12 For reasons that are similar to those that make it desirable for a Member to retain an interest in a claim by bearing a deductible,13 it is desirable that a Member should be required to take his own active steps to avoid or minimise the liability of the membership as a whole. Consequently, cover is not available for ‘extraordinary’ costs and expenses that are incurred by a Member or by a third party for whose conduct the Member is liable after a casualty or other event in circumstances where the necessary measures can be taken by the Crew or by the reasonable use of the Ship or its equipment. 

For example, if the casualty or event makes it necessary to lighten the Ship by discharging cargo into barges, and this can performed in a safe and satisfactory manner by use of the Ship’s own cranes or other equipment, cover is not available for ‘extraordinary’ costs and expenses that the Member chooses to incur by bringing a crane barge alongside to perform the operation. Similarly, cover is not available when ‘extraordinary’ costs and expenses are incurred as a result of employing shore labour to segregate wet and dry bulk cargo when the segregation work can be accomplished by reasonable efforts on the part of the Crew. 

…costs and expenses resulting from making the Ship seaworthy for receiving cargo (Rule 46.a.iv)
The Member has an obligation under the law of most countries, and/or pursuant to the Hague, Hague- Visby and Hamburg Rules, to exercise due diligence before and at the commencement of the voyage to make the Ship seaworthy, including the duty to make the holds, refrigerating and cool chambers and other parts of the Ship that are used for the carriage of cargo, fit and safe to receive cargo. Therefore, costs and expenses that are incurred by the Member or by a third party for whose conduct the Member is liable in order to comply with these obligations are considered to be usual and normal operational costs for the account of the individual Member and not costs that should be shared by the membership as a whole. Therefore, cover is not available for such costs and expenses, even if the Member is able to prove that, in one sense, they are extra costs. For example, cover is not available if a grain cargo is contaminated by the remnants of a prior dirty bulk cargo, and increased costs and expenses are incurred by the Member or by a third party for whose conduct the Member is liable after the discharge of the grain cargo in order to thoroughly clean and, subsequently, inspect the holds, in order to ensure that the next cargo, which is sensitive to such contamination, is not contaminated. 

(E) …losses, costs and expenses incurred at the direction of the Association. (Rule 46.b)
There may be situations in which the Association considers it beneficial to the membership as a whole that the Member should comply with directions that are given by the Association, even if such directions cause financial loss or other inconvenience to the Member. The Association has no legal right to force a Member to comply with its directions,14 but Rule 46.b makes it clear that, if the Member does so, cover is available for losses, costs and expenses that are incurred by him as a result of doing so. However, cover is available only if the Association directs the Member clearly and unequivocably to follow a particular course of conduct. The Association will not do so lightly, since it must take the interests of the membership as a whole into account before doing so. Therefore, such directions will be given only in rare circumstances, and the Member should ensure, before committing himself to any particular course of conduct that may subsequently lead him to make a claim against the Association for losses, costs and expenses incurred as a result of doing so, that the Association has given such directions clearly and in writing. The mere suggestion of a particular course of conduct will not suffice for these purposes as this may simply be an informal view that is offered by the Association as to one out of many possible courses of conduct that may assist the Member. 

For example, if the Member’s Ship is arrested by a third party claimant that is seeking security for a claim for which cover is available from the Association, the Association may, or may not, exercise its discretion to provide security15 to ensure the release of the Ship from arrest. It may decide not to do so if the claimant demands an exorbitant amount of security that is significantly higher than a virtually unbreakable limit of liability that is applicable, and/or demands security terms that are unacceptable in that they do not adequately protect the Ship or the Member’s other Ships against future arrest for the same claim. Alternatively, the Association may decide not to offer security if the claimant is not prepared to accept security otherwise than in a form that constitutes an unacceptable risk, e.g. a cash deposit that may be collected by the claimant even before the matter has been heard by a court or tribunal, or which is payable against a judgement of a court of first instance before appeal to a higher court.

If the Association does not provide security the Ship may remain under arrest for a prolonged period of time, and this may cause financial loss to the Member, e.g. if charterers are not obliged to pay hire whilst the Ship remains under arrest.16 In such circumstances, the Member may decide to offer security himself in a manner that is acceptable to the claimant in order to obtain the release of the Ship from arrest. However, if the Association considers that the provision of security by the Member himself could potentially harm the wider interests of the Association, it may, therefore, consider that it would be justifiable, in the interests of the membership as a whole, to direct the Member clearly and unequivocably not to do so. In such circumstances, cover is available under Rule 46.b for losses, costs and expenses that are incurred by the Member as a consequence. In this context ‘losses’ means both financial losses, such as the loss of hire that would have been payable by the charterers had the Ship been able to resume trading, and losses that arise as a result of any deterioration in the condition of the Ship that may have been caused by the arrest. 

Cover may also be available under Rule 46.b if a Ship were to get into difficulty as a result of a technical problem on board that cannot be rectified immediately and, therefore, threatens to cause damage to nearby property such as an oil or gas platform and/or the environment by running aground and spilling oil. If the shipowner Member were to choose to try and rectify the problem by use of his own on-board resources rather than by obtaining external assistance in the form of a tug or tugs, the Association might take the view that external assistance is required and might direct the Member to obtain it. In such circumstances cover for the costs that would be incurred by the Member in order to obtain such assistance is available under Rule 46.b, regardless of whether the action that is taken is or is not successful.17 

It is important that the Member should, to the best of his ability, provide the Association with as much relevant information as is possible in relation to the impact whether financial or otherwise that he may suffer if the Association were to direct him to act or to refrain from acting in a certain way, in order to enable the Association to make an informed decision as to whether it is beneficial from the Association’s point of view to give directions, and to compensate the Member for his losses pursuant to Rule 46.b.


1 See the Guidance to Rules 72 and 74.
2 See Rule 82.1.b.
3 See, for example, section 78 (1) of the Marine Insurance Act of 1906 of the United Kingdom.
4 See Rule 28.iv
5 If the Member would be entitled to declare general average following the casualty or other event, cover is not available for any costs and expenses claimable in general average. See the Guidance to Rule 46.a.i under (D) below.
6 See the Guidance to Rule 54. Furthermore, cover is not available for claims for loss of freight due to interruption of the cargo voyage. See Rule 63.1.d.
7 See the Guidance to Rule 37, which includes a comparison of different Hull Policy conditions provide cover for liability for damage to fixed and floating objects.
8 See the Guidance to Rule 41. Cover is not available under Rule 41.a for general average contributions that are not legally recoverable by the Member solely by reason of a breach of the contract of carriage.
9 See the Guidance to Rule 82.1.b.
10 See the Guidance to Rules 41 and 63.1.i.
11 Cover may also be denied in circumstances pursuant to Rule 74 on the basis that such voyage is unsafe.
12 See the Guidance to Rule 82.1.b.
13 See the Guidance to Rule 76.
14 Whereas Rule 82.3 gives the Association the right to control or direct the conduct of any claim or legal or other proceedings etc., as well as the right to refuse to cover liabilities etc., in whole or in part if the Member fails to comply with the directions given, this does not go as far as to empower the Association to legally force the Member to make certain decisions or take specific actions in relation to the Ship or Crew.
15 See the Guidance to Rule 88.2.
16 Since the Association does not have any obligation to the Member to provide security cover is not available from the Association for such loss pursuant to this Rule and/or Rule 63.2.
17 However, depending on the circumstances, the Association may seek to recover some or all of such costs from other insurers.