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Rule 80 Time of occurrence

1 The event giving rise to a claim incurred by one Member in respect of damage to or loss of cargo (including claims in respect of cargo’s contribution to general average payable by the Member solely by reason of breach of contract of carriage) shall be deemed to arise as follows:

a all loss of or damage to cargo carried on the same cargo carrying voyage shall be deemed to arise out of the same event (a ’deemed event’), and that event shall be deemed to have occurred at the earliest of

i the first place of discharge or port at which such loss or damage was ascertained and at the time of such ascertainment; and

ii if such loss or damage was ascertained after discharge of the cargo from the Ship, at the time and place of discharge; and

iii where the Member sold the Ship (or otherwise disposed of his interest in the Ship) during a cargo carrying voyage, at the time when his last entry for the Ship with the Association or any other association which participates in the Pooling Agreement terminated and at the place where the Ship was at that time

provided that

i any reference in this Rule 80.1 to a cargo carrying voyage shall include, in cases where cargo is carried under a contract of carriage partly in the Ship and partly by other means of transport, the entire through or combined transport of that cargo under that contract; and

ii whenever the Association can demonstrate that any loss or damage either actually arose out of a particular event and that that event occurred at or prior to the time of the deemed event, or actually arose out of an event which occurred after the deemed event (irrespective of whether the particular event or the date on which it actually occurred can be identified), the Association may require that such claim be treated separately from those other claims deemed as aforesaid to have arisen out of the deemed event.

b all loss or damage to cargo carried under a contract for carriage partly in the Ship and partly by other means of transport, being a contract entered into during the period of entry of the Ship, arising out of an event occurring after the discharge of the relevant cargo from the Ship (or after the Member sells the Ship, or otherwise disposes of the interest in the Ship, if earlier) shall be deemed for the purpose of Rule 2.4.c to have occurred at the time of discharge of the relevant cargo from the Ship (or immediately prior to sale or disposal referred to above, if earlier).

Where the Member incurs a liability in respect of the death, disease or personal injury of an individual, and the specific date on which any event causing such death, disease or personal injury has not been ascertained, the Member shall be deemed to have incurred the liability at a uniform rate over the period during which the event or events causing the death, disease or personal injury occurred or may have occurred (’the period of exposure‘), and any claim the Member may have against the Association shall be limited to such proportion of the liability as the period for which the Member has relevant cover bears to the period of exposure.

3 For the purposes of Defence cover the event giving rise to a claim shall be deemed to arise as follows:

a claims arising out of contract (subject to paragraphs (b) and (c) below), in tort or under statute: when the cause of action accrues;

b claims for salvage or towage: when the services are commenced;

c claims arising in connection with the building of a ship: at the date of signing the building contract.

 

Guidance

Rule 2.4.c emphasises that the Association provides cover for liabilities, losses, costs and expenses that arise solely out of events that occur during the period of entry. However, liabilities, losses etc., may sometimes be caused by the cumulative effect of a number of different events, or by events that occur at a time that cannot be determined, or by events that overlap more than one Policy Year. Furthermore, if the Member terminates the Ship’s entry and enters it in another association with effect from 20 February, this may make it difficult to determine which association has the responsibility to cover claims that arise as a result of such overlapping events. 

Such situations make it difficult for the Member and the Association to determine whether cover is available in the particular circumstances, whether one or more deductibles should be applied, whether the steps that the Rules require to be taken promptly or within a stated time limit have been taken within such time, and whether notice of the claim has been given to the Association within the time bar specified in Rule 81. Therefore, Rule 80 provides guidelines that are intended to assist the Member and the Association to resolve such issues. 

In circumstances where it is possible to state with precision how and when an event that has resulted in loss or damage has occurred, the Association may treat it as having occurred as a result of such event and at that time. However, when it is not possible to identify either the precise event that has caused the loss or damage, or the time when that event occurred, the provisions of Rule 80 are intended to establish how and when it is deemed to have occurred for the purposes of the Rules. 

(A) The event giving rise to a claim incurred by one Member in respect of damage to or loss of cargo…shall be deemed to arise as follows… (Rule 80.1)
It is frequently difficult to establish exactly when cargo has been lost or damaged during a voyage. This may be because the loss or damage is not visible or apparent until the end of the voyage, e.g. since the cargo has been overstowed by other cargo or stowed in a sealed container, or because the relevant event has occurred without the knowledge of the Crew. Alternatively, the damage may be progressive and cannot be traced to any one particular event, e.g. condensation damage that increases on a day by day basis. In such circumstances, if the loss or damage cannot be traced to one specific event, it is necessary to administer claims on the basis that a deemed event has caused the loss or damage. 

(B) …all loss or damage to cargo carried on the same cargo-carrying voyage shall be deemed to arise out of the same event…and that event shall be deemed to have occurred at the earliest of… (Rule 80.1.a)
Rule 80.1.a applies when the event that has caused the loss or damage to the cargo that is being carried on board the Ship cannot be ascertained. Firstly, such loss or damage is deemed to have been caused by one event with the result that only one deductible is applicable to such a claim. This may be important in the case of loss or damage that is progressive during the course of a voyage. Secondly, the Rule establishes the time at which the causative event is deemed to have occurred, which is important in order to establish whether the Ship was entered with the Association at that time for the purpose of providing cover. 

Unless the precise event that has caused the loss or damage can be identified Rule 80.1.a provides that all loss or damage that has occurred on any one ’cargo carrying voyage‘ is deemed to have been caused by the one and the same event. In most cases, a ’cargo-carrying voyage‘ can be easily identified by reference to the ports where the cargo has been loaded and discharged, but this issue may be more difficult to resolve where part cargoes are loaded and discharged at different ports, or where, as in the liner trade, Ships perform round voyages. In such circumstances, the Association will be guided by what is stipulated in the governing contract of carriage and by other operational considerations. 

In the case of through or combined transport, proviso i to Rule 80 makes it clear that a ’cargo-carrying voyage‘ refers to the whole of the through or combined carriage, even though only part of the carriage has been performed by the Ship and part by another mode of transport. 

(C) …and that event shall be deemed to have occurred at the earliest of…and at the time of such ascertainment… (Rule 80.1.a)
If the Association can demonstrate that the loss or damage was caused by a particular event, proviso ii to Rule 80.1.a will apply. However, if the precise event cannot be identified, Rule 80.1.a establishes the time at which the event that has caused the loss or damage to the cargo is deemed to have occurred. 

Rule 80.1.a establishes that all loss and damage to cargo that is carried on the same cargo-carrying voyage shall be deemed to have arisen out of the same event, and Rule 80.1.a.i establishes that such event is deemed to have occurred at the time that the loss or damage is first ascertained at the port or place at which such loss or damage is first ascertained. Rule 80.1.a.ii then goes on to say that, if the loss or damage is not ascertained until after the discharge of the cargo from the Ship, then the event is deemed to have occurred at the time and place of discharge. 

Therefore, if the cargo is carried from port A to port B, any loss or damage that has occurred on that voyage is normally deemed to have occurred when the cargo is discharged at port B or, if the loss or damage is ascertained at an earlier time, e.g. when opening the hatches at port B, or at a port en route from A to B, then it is deemed to have occurred at that earlier point in time. However, if the loss or damage has not been ascertained until after discharge of the cargo at port B, then the event that caused the loss or damage is deemed to have occurred at the time and place of the discharge of that cargo. 

However, in the case of through or combined transport that involves part carriage of the cargo by a ship other than the entered Ship, or by another mode of transport, any loss or damage that has not been ascertained until after discharge from the entered Ship is deemed to have occurred at the time and place of discharge from the entered Ship.1 

If the Member sells or otherwise disposes of his interest in the Ship during the course of a cargo carrying voyage, Rule 80.1.a.iii establishes the time when loss of or damage to cargo that has occurred during the course of such voyage is deemed to have occurred. Rule 80.1.a.iii provides that:

  • If, following the sale or disposal of the Ship, it is entered afresh in the Association by the new owner, then the Association will apply the ’deemed event‘ provisions of Rule 80.1.a to ascertain whether cover is available to the former owner or the new owner. Therefore, unless the sale or disposal was effected after the ascertainment of cargo loss or damage at the first place or port of discharge, the Association will provide cover to the new owner pursuant to his terms of entry and subject to the deductible that he has agreed for cargo claims.
  • If, following the sale or disposal of the Ship, it is entered in another P&I club that participates in the Pooling Agreement, then that other P&I club will provide cover to its member on the same basis. This is because the Pooling Agreement, to which all the P&I clubs that are members of the International Group of P&I Clubs are parties, have provisions that mirror those of Rule 80.1.a.iii.In other words, unless the sale or disposal was effected after the ascertainment of cargo loss or damage at the first place or port of discharge, then the other P&I club will provide cover to its member.
  • However, if following the sale or disposal of the Ship, it is not entered with any of the P&I clubs that are parties to the Pooling Agreement, then Rule 80.1.a.iii establishes that the relevant event is deemed to have occurred at the time “when his last entry for the Ship with the Association terminated” or ceased pursuant to Rule 25.2.e and “at the place where the Ship was at that time”. Therefore, if the loss of or damage to cargo is ascertained after the sale or disposal has been effected, whether at the first place or port of discharge or after discharge, the event that caused the Member to become liable for cargo loss or damage is deemed to have occurred immediately before the cover has terminated or ceased. In this connection, it should be appreciated that a sale or disposal of the Ship will cause the entry of the Ship in the Association to cease automatically when such sale or disposal occurs.2 

(D) …provided that whenever the Association can demonstrate that any loss or damage…actually arose out of a particular event…the Association may require that such claim be treated separately from those other claims deemed…to have arisen out of the deemed event. (Rule 80.1.ii)
If the Association is able to establish clearly that loss or damage to cargo has been caused by a specific and particular event, the Association has the right to treat the loss or damage as having been caused by that particular event and not in accordance with the deemed event provisions of Rule 80.1.a.i-iii. In appropriate circumstances, the Association may conclude that it should exercise such right in the interests of the membership as a whole. Furthermore, if the Association is able to establish that the loss or damage was caused by more than one specific event, this may affect the question of whether cover was available from the Association at the time that one or more such events occurred, and the number of deductibles that are applicable.3 

(E) Where the Member incurs a liability in respect of the death, disease or personal injury of an individual…and the specific date on which any event causing such…has not been ascertained… (Rule 80.2)
Rule 80.2 is intended to regulate the administration of claims for long-term injury or disease that only becomes manifest after a prolonged period of time and in circumstances where the specific event that has caused the injury or disease cannot be identified. The Rule was introduced predominantly as a response to the asbestosis claims that were made, in the main, in the United States. 

Cover is available for only such proportion of the relevant liability that the period for which the Member has relevant cover from the Association bears to the period of exposure, i.e. the total period for which the individual has been subject to the injury or disease. For example, if a claim is made for USD 1 million in relation to a disease that has been developing over a period of five years (the period of exposure) against a Member that has been entered for only one year during the five year period of exposure, cover is available for only one-fifth of the claim, i.e. for USD 200,000. 

(F) For the purposes of Defence cover the event giving rise to a claim shall be deemed to arise as follows… (Rule 80.3)
Rule 80.3 establishes the time at which certain events are deemed to have occurred for the purposes of Defence cover. 

…claims arising out of contract...in tort or under statute: when the cause of action accrues… (Rule 80.3.a)
When a Member seeks Defence cover from the Association for a claim that is made in contract or in tort or pursuant to statute, the time at which the event that gives rise to the claim is deemed to occur is the time when the relevant cause of action accrues. The time at which a cause of action accrues is determined by the law that governs the particular claim. For example, under English law, a cause of action for the purposes of a contractual claim is the act or omission that has caused a breach of the contract whereas the cause of action for the purposes of a claim in tort4 is the act or omission that has caused loss, damage or injury to another person or to that person’s property. 

...claims for salvage or towage: when the services are commenced… (Rule 80.3.b)
The term salvage or towage includes not only the services that are rendered during the course of the salvage or towage operation, but also the preparatory work that may be necessary before commencement of the salvage or towage operation, e.g. the inspection and survey of a casualty, or the pumping out of water, or the carrying out of temporary repairs to make a damaged Ship ready for salvage. Therefore, the time when towage or salvage services commence may predate the actual salvage or towage. Rule 80.3.b establishes that, for the purposes of Defence cover, the event that gives rise to claim for salvage or towage is deemed to have occurred when salvage or towage services as defined above commence. 

…claims arising in connection with the building of a ship: at the date of signing the building contract. (Rule 80.3.c)
Rule 80.3.c should be read together with Rule 66 that includes specific provisions relating to the Defence cover that is available in connection with the building of a ship.5 Rule 80.3.c provides that the event that has given rise to a claim relating to the building of a ship is deemed to have arisen at the date that the building contract is signed, and Rule 66 provides that Defence cover is available only if the Ship has been entered for Defence cover at the latest on signing the relevant building contract.


 

1 See the Guidance to Rule 80.1.b. Rule 80 Time of occurrence.
2 See Rule 25.2.e.
3 Only one deductible will normally apply in respect of all cargo claims that arise on any one voyage.
4 The law of most countries establish that each person has a duty of care not to cause harm to another person or to that person’s property. A breach of such duty (e.g. a negligent act or omission) gives rise to a liability in tort even though there is no contractual relationship between the two persons concerned.
5 See (C) of the Guidance to Rule 66.