P&I (CLASS 3) / PART III / RULE 19 RISKS COVERED / 19.19 Fines

Fines or other penalties, together with costs and expenses incidental thereto, imposed in respect of the Entered Ship by any court, tribunal, or authority of competent jurisdiction, upon a Member or upon any Seafarer or person whom the Member may be legally liable to reimburse (other than under the terms of a contract or indemnity, unless and only to the extent such terms have been previously approved by the Managers) or reasonably reimburses with the approval of the Managers, for:

19.19.1 Cargo

Short or over delivery of cargo or failure to comply with regulations relating to declaration of goods or to documentation of the cargo (other than fines or penalties arising from the smuggling of goods or cargo or any attempt thereat), subject always to the Association having agreed to cover the Member’s responsibilities in respect of cargo under Rule 19.17 Cargo.

19.19.2 Immigration laws

Breach of any immigration law or regulation.

19.19.3 Pollution

The accidental escape or discharge of oil or any other substance subject always to:

19.19.3.1 the Association having agreed to cover the Member’s liabilities together with the costs and expenses incidental thereto, in respect of such accidental escape or discharge under Rule 19.12 Pollution; and

19.19.3.2 any overall Limit of Liability in respect of such escape or discharge.

19.19.4 Other faults

Any other act, neglect or default of a Seafarer or other servant or agent of the Member in the course of their duties in respect of the Entered Ship and which, in the discretion of the Board (or, in the case of claims not exceeding USD2,000,000, the Committee), comes within the scope of the cover afforded by the Association.

19.19.5 PROVIDED ALWAYS THAT:

There shall be no recovery from the Association of a fine or other penalty nor of the costs and expenses relating thereto:

19.19.5.1 imposed for the overloading of an Entered Ship; or

19.19.5.2 imposed for illegal fishing (including the costs and expenses incurred in defending any allegation of illegal fishing); or

19.19.5.3 imposed for the infringement of regulations relating to safe navigation (including the maintenance of proper charts), unless the Board (or, in the case of claims not exceeding USD2,000,000, the Committee) is satisfied that the Member had taken all reasonable steps to prevent the infringement which gave rise to the fine or other penalty; or

19.19.5.4 imposed for a criminal activity which the Member had knowledge of, recklessly disregarded, or failed to take reasonable steps to prevent; or

19.19.5.5 imposed for an infringement of MARPOL regulations where the Entered Ship’s oily water separator or similar pollution prevention device has been bypassed or rendered inoperable.

19.19.5.6 involving the confiscation of an Entered Ship by reason of the infringement of any customs law or customs regulation unless the Board (or, in the case of claims not exceeding USD2,000,000, the Committee) in its discretion authorises the recovery, in whole or in part, by the Member of the Member’s loss arising by reason of such confiscation.

19.19.5.6.1 The Board (or, in the case of claims not exceeding USD2,000,000, the Committee) in exercising its discretion under proviso 19.19.5.6 above shall take account of the following:

19.19.5.6.1.1 the amount recoverable from the Association shall in no circumstances exceed the market value (without commitment) of the Entered Ship at the date of the confiscation;

19.19.5.6.1.2 the Member shall satisfy the Board (or, in the case of claims not exceeding USD2,000,000, the Committee) that the Member took all reasonable steps to prevent the infringement which gave rise to the confiscation;

19.19.5.6.1.3 the Board (or, in the case of claims not exceeding USD2,000,000, the Committee) will only consider authorising such a recovery after the Member has been permanently deprived of the Member’s interest in the Entered Ship.