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FD&D (CLASS 6) / PART I / RULE 5
RIGHT OF RECOVERY
5.1 Right of Recovery
If a Member shall incur any Costs as hereinafter set out in Rule 17 Risks Covered in respect of a Ship which was entered in the Association at the time of the claim giving rise to such Costs, such Member shall be entitled to recover out of the funds of this Class of the Association the amount of such Costs to the extent and on the terms, conditions and exceptions provided by these Rules and by the Certificate of Entry. But if a tonnage less than the Full Tonnage of the Ship was entered in the Association, the Member shall, unless the entry of the Ship has been accepted on special terms which otherwise provide, be entitled only to recover such proportion as the Entered Tonnage bears to the Full Tonnage of the Ship.
Provided always that:
5.1.1 unless the Board (or, in the case of claims not exceeding USD2,000,000, the Committee) in its discretion otherwise determines, it shall be a condition precedent to a Member’s right to recover from the funds of the Association in respect of any liability, costs or expenses that the Member shall first have discharged such liability or paid such costs or expenses.
5.2 Subrogation
Any recovery by the Member from the Association is subject to the Association’s rights of subrogation and the Member will, on request of the Managers, sign a Certificate of Subrogation.
5.3 Set-off
Without prejudice to any other part of these Rules the Association shall be entitled to set-off any amount due from a Member against any amount due to such Member from the Association.
5.4 Currency
Where a Member is entitled to a recovery out of the funds of this Class of the Association in respect of a loss suffered by the Member in a currency other than the currency specified in the Member’s Certificate of Entry under Rule 6.3.7 (the specified currency), that loss shall be converted into the specified currency at the rate of exchange ruling on the day the relevant credit note is issued by the Association to the Member.
5.5 Limit
Recovery of Costs in respect of any one claim, dispute or proceeding shall be limited to USD10,000,000, except in respect of any claim, dispute or proceeding under Rule 18.7 Repairs or Rule 18.13 Buying and Selling in which case recovery of Costs shall be limited to USD2,000,000. For the purpose of this Rule, unless the Managers decide otherwise, all claims arising in connection with a contract for the repair, alteration, building, purchase or sale of a ship shall be considered to be one claim, dispute or proceeding. In respect of all other claims, disputes or proceedings, the Managers in their sole discretion will decide whether or not a series of claims, disputes or proceedings shall be considered to be a single claim, dispute or proceeding.
5.6 Sanctions
The Member shall have no entitlement to recovery out of the funds of this Class of the Association in respect of that part of any liabilities, costs and expenses which is not recovered by the Association under any reinsurance(s) arranged by the Association or the Managers, because, and to the extent, of any shortfall in recovery from such reinsurers by the Association which would result in a violation of any Sanction, or any prohibition or adverse action administered by any state, international or supranational organisation or other competent authority or the risk thereof if payment were to be made by such reinsurers. For the purposes of this Rule 5.6 “shortfall” includes any failure or delay in recovery by the Association by reason of such reinsurers making payment into a designated account in compliance with the requirements of any state, international or supranational organisation or other competent authority.