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The Association shall not cover under a P&I entry:
a liabilities, losses, costs or expenses incurred by the Member in respect of death, personal injury, loss or damage to property, delay or other consequential loss sustained by any passenger by reason of carriage of that passenger by air or during any through carriage whilst the passenger is in the care of another carrier or during carriage to or from the Ship, except liability for illness, injury or death of, or loss of or damage to the effects of, passengers during:
i carriage to and from the Ship in its own boats, or in port by means of other boats, or
ii repatriation of injured or sick passengers or of passengers following a casualty to the Ship, or
iii shore excursions from the Ship (subject to the provisions of Rule 57.b below);
b liabilities, losses, costs or expenses incurred by the Member under a contract in respect of passengers whilst on an excursion from the Ship in circumstances where either:
i that contract has been separately entered into by the passenger for the excursion whether or not with the Member, or
ii the Member has waived any or all of his rights of recourse against any subcontractor or other third party in respect of the excursion;
c liabilities, costs and expenses in respect of the carriage of cargo arising out of contracts of carriage providing for carriage partly to be performed by the Ship and partly by means of transport other than the Ship, unless the transport is performed under a form of contract approved by the Association.
The nature of modern passenger and cargo carrying operations is such that passengers and cargo are not necessarily carried from the point at which they embark on the carriage to the point where the carriage terminates in the same carriage vehicle. For example, cruise passengers may travel to and from their home by airplane, coach, train and ship, whilst containerised cargo is carried by truck, railcar and ship, and sometimes also by airplane. However, such passengers or cargo may be carried under one contract of carriage which purports to regulate liability for the whole carriage regardless of the various modes of transport that have been used.
The risks that arise during the different stages of the transportation and as a result of the different methods of carriage pose difficulties for insurers, particularly for insurers such as the Association which provide cover on a mutual basis for marine risks that arise solely in connection with the operation of a Ship. Consequently, risks which arise in connection with the operation of other forms of transportation cannot be easily accommodated within the scope of such cover. However, in many instances, a non-marine mode of transport is an interlinked and necessary component of a carriage which may predominantly involve the operation of a Ship. Therefore, the Association and the other P&I clubs which are members of the International Group have endeavoured to assist Members who are engaged in transport operations of this nature, but this is done in a manner which seeks to balance the needs of such Members with the needs of Members whose Ships are engaged in purely marine transportation.
Rule 57 contains provisions that outline the scope of cover that is available for liabilities, losses, costs and expenses relating to the carriage of passengers and cargo in circumstances where such liabilities etc., do not arise in direct connection with the operation of the Ship, which is, in general, a pre-requisite for cover.1 Therefore, whilst Rule 57 contains exclusion provisions, the purpose and effect of the Rule is to give the Association the right to compensate the Member for certain liabilities etc., which arise in relation to passengers and cargo for which cover is, otherwise, not available under Rules 28 and 34. Consequently, Rules 28 and 34 should be read in the light of Rule 57 and vice-versa.
(A) The Association shall not cover under a P&I entry… (Rule 57)
In order to safeguard the basic tenets of Rule 2.4, Rule 57 excludes P&I cover for passengers and cargo whilst in the care of another carrier except in certain limited and specifically identified circumstances. Rule 57.a and b relate to passengers whist Rule 57.c relates to cargo.
(B) …liabilities, losses, costs or expenses incurred by the Member in respect of death, personal injury, loss or damage to property, delay or other consequential losses sustained by passengers2 (Rule 57.a)
Rule 57.a is drafted very broadly to exclude cover for liabilities etc., which may be incurred by the Member in respect of all types of claim that can be brought by passengers against the Member in the circumstances outlined in Rule 57 except for those liabilities etc that are incurred in the circumstances described in (D)-(F) below.
(C) …whilst the passenger is in the care of another carrier or during carriage to or from the Ship… (Rule 57.a)
Whilst cover is available for liability incurred by the Member in respect of passengers3 and other persons4 carried on board the Ship, Rule 57.a excludes cover for liabilities etc., incurred by the Member for death, personal injury, loss or damage to property, delay or other consequential loss sustained by a passenger whilst on board another ship, aircraft or other means of transport, subject to the exceptions referred to below in (D)–(F).
For example, if a passenger has bought a package tour from a Member which includes transportation from his home to the port where he will commence his cruise, and he is injured during the course of air or surface transportation to that port of embarkation, he may bring a claim against the Member as tour operator or organiser, but the Member is not entitled to claim reimbursement from the Association for such liability. However, if the passenger is injured on board the Ship after embarkation, cover is available for the Member’s liability pursuant to Rule 28.
(D) …except liability for illness, injury or death of, or loss of or damage to the effects of, passengers during…carriage to and from the Ship in its own boats, or in port by means of other boats… (Rule 57.a.i)
The exclusion from cover discussed in (C) does not apply to any liability that is incurred by the Member for the injury, illness or death of passengers or for the loss of, or damage to their effects which occurs whilst the passengers are either: (i) being carried to or from the Ship, whether within the port or not, by the Ship’s own boats; or (ii) being carried to or from the Ship by boats owned by other parties, provided in these circumstances, that the carriage is effected in the port in which the Ship is situated. For these purposes the term ’port’ is not to be understood in its strict geographical, legal and fiscal sense but as a practical description of the most convenient area or zone for the ship to be situated in order to transfer the passengers safely ashore.
For example, cover is available under Rule 285 for the Member’s liability if the passenger is injured or loses his or her effects whilst being carried to the Ship from outside the port area in the Ship’s own boats, but cover is not available for the Member’s liability if the passenger is injured whilst being carried to the Ship from outside the port area in boats owned by third parties. The word ’effects’ includes not only luggage but also the other personal property of passengers.6
(E) …repatriation of injured or sick passengers or of passengers following a casualty to the Ship…(Rule 57.a.ii)
In the event that a Ship should suffer a casualty, or in the event that a passenger should suffer injury or illness during the course of the carriage, the Member may have a legal obligation to send the passenger home or to a shore facility where proper treatment can be provided.7 Such repatriation may be done by helicopter or airplane, or by another ship or boat, or by some other form of conveyance, in which case the passenger will be in the care of another carrier for the whole or a part of such transportation. Rule 57.a.ii confirms that cover is available for liability incurred by the Member for the illness, injury or death of passengers or for the loss of or damage to the effects of such passengers that may occur during such repatriation. Cover is available regardless of where or how the illness, injury or death or loss of or damage to the effects occurred so long as the Member is found to be legally liable to compensate the passenger or his dependents.
(F) …excursion(s) from the Ship… (Rule 57.a.iii and Rule 57.b)
Rule 28.a outlines the cover that is available for the liability of the Member for the illness, injury or death of passengers or for the loss of or damage to the effects of such passengers when the event giving rise to such liability occurs whilst the passenger is on board the Ship. Rule 57.a. iii and 57.b outline the extent to which cover is available for such liability when the event giving rise to it occurs whilst the passenger is on a shore excursion from the Ship. The phrase ‘shore excursion from the Ship’ is construed broadly to include not only trips from Ship to shore but also water borne excursions from the Ship, e.g. an excursion by boat to view a coral reef or water sport activities such as a guided jet ski tour.
Whilst Rule 57.a.iii provides that cover is available for liabilities, losses, costs or expenses incurred by the Member in respect of the illness, injury and death of passengers or for the loss of or damage to the effects of such passengers that occurs during shore excursions from the Ship, Rule 57.b excludes cover for such liabilities, losses etc in certain circumstances when such liability, losses etc have been incurred by the Member solely by virtue of a separate contract which has been concluded with the passenger for that excursion. Cover is excluded in two circumstances, and the combined effect of Rules 57.a.iii and 57.b is to distinguish the cover that is available to the Member in his capacity as a passenger ship operator from that which is not available to him in his capacity as a specialist shore excursion provider or tour operator:
Cover is excluded:
a Where the liabilities, losses etc have been incurred solely because of the terms of a separate contract that has been entered into by the passenger for the excursion whether or not that contract has been entered into with the Member.
If the Member permits passengers to enter into separate shore excursion contracts with him or with other parties, he is expected to ensure that they include terms which exonerate him from liability and/or to arrange other insurance cover for his potential liability to the passenger. Therefore, the Member should be aware that such a separate contract may not be considered to be a ’contract of carriage’ which would entitle the Member to rely on the defences and limitation rights that would normally be available under the Athens Convention or which would entitle him to the defences and limitation rights which would otherwise be available to the Member under the relevant law. Therefore, cover is not available for any liability that arises solely as a result of the terms of such a separate excursion contract. However, cover is available for the liability that the Member may incur regardless of that separate contract, e.g. for liability in tort or for liability which arises under the passenger contract of carriage with the Ship provided that the terms of that contract purport to relieve the Member from liability to the maximum extent permitted by the applicable law.8
b Where the shore excursion has been effected by a sub-contractor of the Member or by any other third party, and the Member has waived any or all rights of recourse against such sub-contractor or third party.
Cover is not available if the Member has waived any rights of recourse which he may have against other parties in respect of his liability to the passenger for such excursion. The exclusion applies to any waiver of such rights by the Member. The Association is not obliged to prove that the Member would have been able to recover had he not waived his rights of recourse. The rationale for this provision is that it would be contrary to the interests of the membership to cover losses which result from the fact that a Member has voluntarily waived any rights of recourse that he may have against a third party.9 However, cover is available in circumstances where the Member has sought to preserve his rights of recourse, but the recourse claim does not succeed or cannot be enforced under the applicable law.
For example, if a passenger is injured whilst on a shore excursion from the Ship pursuant to a separate contract which he has concluded with the Member after the start of the cruise and for which he has paid a separate fee, cover is available for any liability that the Member would have incurred to the passenger in respect of the injury in any event even if he had not entered into the contract for the shore excursion, e.g. in tort. However, if the Member incurs the liability purely by virtue of the terms of the separate contract, then cover is not available for such liability.10
(G) …liabilities, costs and expenses in respect of the carriage of cargo arising out of contracts of carriage providing for carriage partly to be performed by the Ship and partly by means of transport other than the Ship… (Rule 57.c)
Rule 57.c is intended to protect the membership against risks that arise as a result of the carriage of cargo partly by a Ship and partly by modes of transport other than by a Ship, or by ships other than those controlled by the Member.11 In order to enable the Association to provide the balanced form of cover described above, Rule 57.c provides that cover is available in such circumstances only when the cargo is carried under contracts which are approved by the Association.
(H) …unless the transport is performed under a form of contract approved by the Association. (Rule 57.c)
The type of transportation to which reference is made in this Rule is usually performed under ‘through’ or ‘combined transport’ Bills of Lading the terms and legal effect of which may be substantially different. For example, under the laws of the United States, a carrier who issues such a Bill of Lading will be held responsible for the entire carriage unless the Bill of Lading clearly limits the carrier’s period of responsibility to a particular part or stage of the carriage.
The Association has approved the forms of ‘through’ or ‘combined transport’ Bills of Lading which are considered to be standard in the industry, e.g. the COMBICONBILL. The Association will normally approve other forms of contract if they purport to exclude the Member’s liability for cargo which is not in his care, custody or control, to the maximum extent permissible under the applicable law. The Association will also need to be satisfied that a contract of carriage which provides that the carriage is to be performed by modes of transport other than ships shall be subject to such rules of law that apply customarily to such modes of transport, and that the Member is liable for events which occur during cargo storage only to the extent that such storage is a reasonable and necessary part of the overall through transport.
Cover will be excluded if the cargo is not carried on terms which satisfy the provisions of Rule 34. Therefore the contract of carriage should give the carrier the right in relation to carriage by sea to rely on all rights and defences which are available to the carrier under the Hague or Hague-Visby Rules or the Hamburg Rules if compulsorily applicable.12 Similarly, the contract of carriage should give the carrier the right to rely on all rights and defences which are available to the carrier in relation to stages of the through transport other than sea stages. Liabilities arising at such stages may be subject to the provisions of national law or to conventions which regulate carriage by rail,13 road14 or air.15 The Member is obliged to take active steps to preserve all rights and defences which are available to him to the maximum extent permitted under the applicable law and to preserve all rights of recourse which he may have against any other carrier or other third party who may be involved in the transport operation.
In case of doubt, the Member is encouraged to consult the Association before agreeing to contracts of carriage which involve carriage with modes of transport other than his Ship.
1 See the Guidance to Rule 2.4.
2 See (A) of the Guidance to Rule 28 for a definition of ‘passenger’.
3 See the Guidance to Rule 28.
4 See the Guidance to Rule 29.
5 See (A) of the Guidance to Rule 28.
6 The word ‘effects’ is construed similarly to the manner in which it is construed in Rule 28 (see (C) of the guidance to Rule 28).
7 See (A) of the Guidance to Rule 28.
8 See the Guidance to Rule 28.i.
9 See also the Guidance to Rule 82.1.b.
10 See the Guidance to Rule 55.
11 If cargo is carried on a ship other than a Ship pursuant to a Consortium Agreement other factors and restrictions may apply. See the Guidance to Rule 52 and to Appendix II.
12 See the Guidance to Rule 34.1.b.iii.
13 The Regles uniformes concernant le contrat de transport internationale ferroviale des voyageurs et des bagages (CIM).
14 The Convention pour Merchandise par Route (CMR).
15 The Convention for the Unification of certain Rules relating to International Carriage by Air signed at Warsaw on 12 October 1929 subsequently at the Hague 1955 and in Montreal in 1975 (the Warsaw Convention).