ITIC says hold-harmless clauses may not be so harmless
ITIC has warned that the so-called ‘hold harmless’ clauses in many of the contracts entered into by its members may contain pitfalls which could prejudice their rights.
A mutual hold-harmless indemnity clause should provide that each party to the contract agrees to take responsibility for - and to indemnify the other against - injury and loss to its own personnel and property and its own consequential losses, even if the accident and related losses are caused by negligence. But ITIC notes that, in many of the contracts it reviews, the party with the greater bargaining power will naturally seek to swing the balance back in its favour.
Writing in the latest issue of The Wire, the ITIC newsletter for the offshore and hydrographic sector, Robert Hodge, Senior Underwriter for the Offshore Sector, says, “It is staggering how often we see contracts stipulating that ‘the consultant shall indemnify the company against any and all losses’, yet there is no reciprocal benefit to the consultant. The clause must have a mutual provision.”
Meanwhile, the mutual hold-harmless clauses seen by ITIC often leave the distribution of third-party liabilities unclear. Hodge says, “A hydrographic consultant on a survey vessel, for example, should be protected from third-party claims arising from the operation of the vessel. The consultant should not be responsible for potentially multi-million-dollar pollution liabilities or collision damages to third-party property. These should fall on the party which has insurance for these liabilities.”
ITIC notes that, in some cases, it sees hold-harmless clauses amended to state that if one of the parties is found to be grossly negligent it will not be held harmless. Robert Hodge emphasises, “There is no true concept of gross negligence under English law. The line between negligence and gross negligence can become blurred, and cases will turn on facts and expert evidence. The inclusion of gross negligence within a hold-harmless clause in a contract pursuant to English law can lead to uncertainty and increased litigation costs.”
ITIC also warns that the distinction between indirect and direct loss can be complicated. Robert Hodge says, “A common misconception is that all ‘loss of profits’ is indirect loss. This is wrong. Loss of profits can be either direct or indirect, depending on the facts of the case. If, for example, a consultant was providing design work for sub-sea equipment and carried out the design negligently, this could cause not only damage to property but also lost drilling time, leading to lost revenue and profit. In such a case, a tribunal could find that the loss of profit arose naturally from the breach and was therefore a direct loss not excluded under the hold-harmless clause.
“Taking into account the current day rates of drill rigs, this could form a substantial part of any claim. The clause should be amended to state that loss of profits is excluded, whether direct or indirect.”
ITIC concludes that hold-harmless clauses should be carefully reviewed to ensure that they are actually mutual.
The Wire also includes a contract checklist for offshore and hydrographic consultants, and an explanation of why there is a growing need for them to take out professional indemnity insurance in an increasingly litigious business environment. Copies of the newsletter can be requested from: email@example.com
ITIC, the leading professional indemnity insurer for the offshore and hydrographic sector, will be exhibiting at Oceanology International 2014 at London Excel from 11 to 14 March. You can find us on Stand N550, where we will be holding a daily competition inviting visitors to complete a lap on a racing-car simulator. Participants will be entered into a champagne draw.
ITIC is managed by Thomas Miller. More details about the club and the services it offers can be found on ITIC’s website at www.itic-insure.com
For more information:
Tel. +44 (0)20 7338 0150
Fax. +44 (0)20 7338 0151
Labels: hold harmless clauses, hydrographics, ITIC, Oceanology 2014, offshore, professional indemnity insurance
New and existing members boost London P&I Club tonnage entry
The London P&I Club has increased its membership by almost two million gross tons over the past year. This increase reflects the entry of further tonnage with the club by existing members, and the addition of new members from China, Greece, Singapore, Turkey, and the UK.
Ian Gooch, chief executive of the club’s management team, says, “The London P&I Club heads into 2014/15 after a solid renewal and further controlled growth. The club has seen encouraging progress, including continued steady growth in its mutual membership, which now stands at 43.1m gt.
“On the one hand, the renewal took place against a backdrop of depressed freight markets in many sectors. On the other hand, the increases in rates and deductibles applied by our underwriters were an important part of the ongoing work on our operating performance and consolidation of the club’s financial strength. These competing pressures contributed to the few cases where it ultimately proved impossible to agree terms, while in a few other cases the decision was taken not to offer renewal.
“The club is grateful for the support received from its members, and will strive to continue to provide a first-class, dedicated P&I service.”
Labels: 2m gt, freight markets, London P and I Club, new members, shipping
Vestdavit wins French Customs Patrol Boat order
handling system and specialised davit supplier Vestdavit has been contracted by
French shipyard Socarenam to supply the davits for a new 50 m patrol boat which
it will build for the French customs. Vestdavit will supply two davits, one PAP6000
and one PAP3250 davit which will give the patrol vessel the capability of
launching and recovering RIBs up to 9.5 m long in sea state 6.
Rolf Andreas Wigand,
Managing Director, Vestdavit, says, “Socarenam is an important builder of
sophisticated patrol vessels and we are pleased to land our first order with
them. Our experience with supplying davits to other customs authorities in
Australia and Germany means we can provide them with a capability of launching and
recovering interception and boarding craft in a much wider weather window than
current customs patrol vessels.”
The PAP davit is a hydraulic
single point davit for FRC, MOB boats and daughter craft characterized by its
compact design and its anti-pendulation device. The anti-pendulation device is a
triaxial-compensated docking head which ensures control of the boat in all
positions. It is equipped with hydraulic shock absorbers, self-tensioning, line
puller and end stop, ensuring safe and fast launch and recovery in severe sea
Socarenam is a shipyard based in
Boulogne-sur-Mer, France, with a proud tradition of building sophisticated
vessels. The French customs vessel it is now contracted to build will be
delivered in 2015 for service in the Mediterranean area.
downloadable photos of Vestdavit PAP systems go to http://bit.ly/nfnCu5
supplies and supports tailor-made solutions for launching and recovering boats
in difficult conditions at sea. Its range of boat handling systems and davits
are the first choice of navies, coastguards, seismic survey operators, pilot
authorities and offshore operators who need to be able to operate small boats
safely from larger vessels. Since 1975 Bergen-based Vestdavit has supplied over
1,900 davits and side and stern launch systems. They have proven themselves
over more than 30 years use in the North Sea and other harsh environments
around the world. Self-tensioning and shock absorbing systems ensure crew
safety and widen the operational window for the users. Vestdavit’s key focus is
on operational effectiveness, safety and the reliability of its equipment. www.vestdavit.no
For more information:
Rolf Andreas Wigand
+ 47 99 46 48 62
Labels: boat handling, davits, patrol boats, warships
London Club stresses need to observe passage planning and weather information
The London P&I Club says it has seen a rise over the past twelve months in the number of deficiencies relating to Temporary and Preliminary (T&P) notices to mariners, and an increase in negative findings in relation to the management of radio navigation and meteorological warnings.
In the latest issue of its StopLoss Bulletin, the club says its Ship Inspection Programme has identified failure to manage T&P notices, or to apply them to the ship’s chart folio, as a commonly recorded occurrence. It says, “If T&P notices are not consistently applied to the chart folio, the ship’s navigating officer and officers of the watch may be deprived of valuable passage planning information. T&P notices contain a vast array of information which may influence the planning or conduct of a passage. Efficient passage planning requires the assimilation of good-quality information which ought to leave the mariner better equipped to decide how to conduct the passage of a ship.”
The club also points to a failure to properly observe navigation/meteorological warnings and/or systems by which information is collected, applied and displayed for watchkeeping officers to monitor. It says a lack of observation of the meteorological information provided by the Navtex system on the bridge of a ship entered with the club recently contributed greatly to a significant oil spill claim.
The Navtex equipment on the bridge of the ship, which was anchored at the time of the incident, was fully operational and properly set. Unfortunately, there was no established system by which the information – whether navigational or meteorological - was read, considered and applied on the bridge. Heavy weather was forecast by various means, including Navtex, but was quite unexpected at that time of year. By the time the poor weather struck, it caught the bridge team by surprise in the early hours of the morning. In the time that it took to get the main engine on-line, the ship had dragged its anchor approximately one nautical mile onto a rocky shoreline, puncturing its bunker tanks. The resultant spill clean-up and associated claims amounted to more than $44m.
The club concludes, “Officers should be reminded of the full extent of the chart and publication folio to which corrections apply, and of the risks of ignoring sources of navigational and meteorological information.”
Labels: London PandI Club, meterological warnings, mutual insurance, oil spill, punctured bunker tanks, radio navigation warnings, shipping
RINA certifies Aggreko marine generators
society RINA has certified the power generators which Aggreko provides for
temporary marine use. The certification provides ship owners with the assurance
that the generators meet all applicable SOLAS rules for temporary use on board
Pino Spadafora, Area
Manager, RINA Services, says, “This certification delivers peace of mind for
ship owners and ship operators that SOLAS rules are fully checked and complied
with by the equipment providers. The RINA approval certificate on an Aggreko
generator ensures compliance with on-board safety requirements.”
Maarten Martens, Business
Development Manager, Aggreko Continental Europe, says, “This is a major step in
the way we help our shipping customers meet SOLAS rules. This process will
ensure faster and simpler delivery of containerised diesel power generators for
planned or emergency projects.”
RINA certification of the
generators and associated safety systems makes it simpler for ship owners and
ship operators to comply with safety procedures when using a generator on board
for a short or medium period.
Aggreko has over 50 years’
experience in rental power and temperature control solutions and is a pioneer
in the development of temporary power solutions for shipyards and for sea-going
Aggreko plc is the world leader
in the supply of temporary power and temperature control solutions. Aggreko
employs over 5,700 people operating from 194 locations. In 2012 Aggreko served
customers in about 100 countries, and had revenues of approximately GBP 1.6bn
(USD 2.5bn or Euros 2.0bn). Aggreko plc is listed on the London Stock Exchange
(AGK.L), is a member of the FTSE-100 index, and is headquartered in Scotland.
For more information, please visit the company website at www.aggreko.com
RINA Services S.p.A. is the RINA Group’s company active
in classification, certification, inspection and testing services. RINA Group
is a multi-national group which delivers verification, certification, conformity
assessment, ship classification, environmental enhancement, product testing,
site and vendor supervision, training and engineering consultancy across a wide
range of industries and services. RINA Group operates through a network of
companies covering Marine, Energy, Infrastructures & Real Estate, Transport
& Logistics, Food & Agriculture, Environment & Sustainability,
Finance & Public Institutions and Business Governance. With a turnover of
around 280 million Euros in 2012, over 2,200 employees, and 150 offices in 53
countries worldwide, RINA Group is recognized as an authoritative member of key
international organizations and an important contributor to the development of
new legislative standards. www.rina.org
& Communications Manager
+971 56 682 5978
Relations RINA Group
+39 010 5385555
Labels: classification, generators, safety
Update: Hijacking of KERALA
Liberia continues its active investigation of the hijacking of the Liberian-flagged product tanker, KERALA, (IMO No.: 9390927), at Luanda, Angola on18 January 2014.
Liberia, in co-operation with the vessel owners, requested the attendance in Tema, Ghana, of an INTERPOL-led multinational Incident Response Team. These authorities, supported and helped by the Ghanaian authorities, undertook a crime scene investigation on board the vessel. A representative of the Liberian Flag Administration also attended onboard in Tema to observe the collection of forensic evidence by the authorities. All parties were given full access to the vessel's documents, officers and crew.
Although the investigation is still ongoing, the evidence gathered thus far by the INTERPOL Incident Response Team has allowed the Liberian Registry to conclude that the vessel was hijacked by pirates.
During the hijacking, the pirates disabled the vessel’s AIS and other communication equipment so that the vessel could not be tracked from shore or satellite. During this period, the pirates painted over the identifying features of the vessel, including funnel, name and IMO number and undertook three separate ship-to-ship transfers of cargo amounting to the theft of approximately 12,271.5mt of cargo.
The owners of the KERALA regained contact with the vessel on 26 January 2014, shortly after the pirates had disembarked. The vessel immediately set a course for the safety of the port of Tema, Ghana, as a port of refuge.
All crew members received immediate medical treatment on arrival at Tema. During the hijacking, one crew member was stabbed by the pirates and others were beaten.
Liberia will continue working with the authorities in Ghana, Nigeria and Angola and elsewhere in the region in order to bring to justice the perpetrators of this crime to justice. Liberia remains committed to fighting piracy in all of its forms wherever it may occur in the world.
Labels: Angola, Ghana, hijacking, INTERPOL incident response, KERALA product tanker, Liberia, pirates
Bureau Veritas cuts energy-saving time with HydrOcean
Leading international classification society Bureau Veritas has entered into a technical and commercial co-operation agreement with French hydrodynamic specialist HydrOcean. Under the agreement, HydrOcean will provide advanced Computational Fluid Dynamics (CFD) services to BV’s shipping and offshore clients, and Bureau Veritas will market HydrOcean’s specialist services worldwide.
Jean-Francois Segretain, Technical Director, Bureau Veritas, says, “HydrOcean’s CFD services save massive amounts of time for ship, offshore structure and marine energy systems designers. For example, hull forms can be optimised by evaluating hundreds of designs over a wide range of load conditions in only a few weeks, and produce ship fuel consumption savings up to 10 or 15 per cent.”
HydrOcean’s advanced numerical solutions can cost-effectively evaluate and optimize the performance of complex ship hull forms with appendages and propellers, offshore and marine energy units, accounting for non-linear and viscous effects, with a high degree of accuracy compared with model tests. These solutions are being co-developed with the Ecole Centrale Nantes fluid dynamic laboratory, one of the most advanced research teams in marine numerical simulation which provides HydrOcean with access to an unlimited number of licences used in parallel, thus drastically reducing project costs and time schedules.
“Working with HydrOcean’s powerful tools,” says Segretain, “we are no longer limited to a small number of load conditions when optimising hull forms. New vessels can now be optimised for a complete operational profile, which means genuine energy-saving over the entire working cycle of a vessel.”
Erwan Jacquin, HydrOcean CEO, explains, “HydrOcean is very proud to be associated with Bureau Veritas, with whom we have already undertaken successful projects, providing huge benefits for Bureau Veritas clients. CFD simulation is now extremely accurate, and is being used increasingly in the marine and offshore industries.”
Segretain concludes, “HydrOcean saves costs, reduces design risks and improves vessel performance. We are very happy to add its services to the range of energy-saving measures we can provide to our clients.”
HydrOcean is a leading specialist in numerical simulation for the marine industry. It offers design support in the shipbuilding, offshore, marine renewable energy and yacht industries, with the use of advanced numerical simulation tools capable of accurately simulating everything from the most simple to the most complex hydrodynamic phenomena. Its services reduce design risks and enable clients to save time in the design stage, reduce their research costs, and improve the performance of their products. HydrOcean specialises exclusively in ships, offshore units, marine energy and yachts to provide its clients with specific expertise and a unique knowledge which encompasses numerical simulation in the maritime field. www.hydrocean.eu
Bureau Veritas is a world leader in conformity assessment and certification services. Created in 1828, the Group has 61,000 employees in around 1,330 offices and laboratories located in 140 countries. Bureau Veritas helps its clients to improve their performance by offering services and innovative solutions in order to ensure that their assets, products, infrastructure and processes meet standards and regulations in terms of quality, health and safety, environmental protection and social responsibility.
for corporate information www.veristar.com
for marine information
For more information:
+33 1 55 24 71 98
For graphics to illustrate this story, please email firstname.lastname@example.org
Labels: Bureau Veritas, CFD, co-operation agreement, HydrOcean, hydrodynamics, shipping
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