PART VIII: ADMINISTRATIVE PROCEDURES

RULE 59: REGULATIONS

1 The Committee shall have power in its discretion to make Regulations in respect of any matter within these Rules.

2 When the Committee makes a Regulation under any power given it by these Rules, the Association shall give notice of it to all Members concerned but omission to give notice to or the non-receipt of it by any Member shall not invalidate any Regulation either generally or in relation to that Member.

3 A Regulation shall come into force at the time specified in the notice (which time may not be earlier than ten days after the date of the notice), and if its effect is to alter the terms and conditions of insurance in respect of any vessel such alteration shall take effect as from that time.

4 On the passing of any such Regulation, it shall be deemed to be incorporated in these Rules, and every Member shall conform to it insofar as it may apply to the voyages performed by the vessels entered by him or on his behalf in the Association or to the trades in which they may be engaged. If any Member shall commit a breach of any Regulation, the Committee may reject or reduce any claim by the Member to the extent to which it would not have arisen if he had complied with the Regulation and further impose such terms upon him as it may think fit, as a condition of the continuance of the entry of the Member's vessel or vessels in the Association.

5 No Regulation shall operate to prejudice the accrued rights of any Member; save as aforesaid, every Regulation shall be binding on all Members, whether or not they were Members at the time of notification of such Regulation, in the same manner as if it were incorporated in these Rules.

6 Whenever a power of making Regulations is given to the Committee by these Rules, the Committee shall also have power to vary, revoke or suspend any such Regulation and to restrict, extend or otherwise apply the provisions of any Regulation (in whole or in part) to insured vessels of any particular class, type or flag.

RULE 60: NOTICES

1 Any notice or other document required by these Rules to be served on a Member may be served as the Managers may in their discretion decide either personally, or by sending it through the post in a prepaid letter or by telegram, cable, radio telegraph, telex or facsimile addressed to him:

A at his address as recorded by the Managers;

B at any other address of which he has given notice to the Managers as his address for service; or

C at any place of business of a broker or agent through whom any insured vessel has been entered by the Member in the Association.

2 Every notice or other document served as aforesaid shall, if posted, be deemed to be served on the seventh day following the day of postage; if sent by telegram, cable or radio telegraph be deemed to be served on the day of handing in to the relevant office; if sent by telex or facsimile, on the day of despatch. In any case proof of posting, handing in or despatch shall be sufficient proof of service.

RULE 61: MEMBERSHIP OF NATIONAL AND INTERNATIONAL ORGANISATIONS

The Committee may cause the Association in its own right or in respect of such of the Members of the Association as are eligible, to become a member of or affiliated to any national or international society or organisation concerned with advancing the rights of shipowners and for this purpose may authorise the payment by the Association to those bodies of such subscriptions or grants as the Committee may think fit, either out of the general funds of the Association or by means of such special contributions to be levied from the Members concerned as the Committee may determine.

RULE 62: SETTLEMENT OF CLAIMS

The Committee shall meet as often as may be required for the settlement of claims on the Association and any other matters relating to the business of the Association, but the Committee shall have power from time to time to authorise the Managers to effect payment of such claims, without prior reference to the Committee, of such types and up to such sums as the Committee may determine.

RULE 63: DELEGATION

Whenever any power, duty or discretion is conferred or imposed upon the Managers by virtue of these Rules, such power, duty or discretion may, subject to any terms, conditions or restrictions contained in these Rules, be exercised by the Managers or any agent of the Managers to whom it shall have been delegated.

RULE 64: DISPUTES PROCEDURES

1 If any difference or dispute shall arise between a Member and the Association out of or in connection with these Rules or arising out of any contract between the Member and the Association or as to the rights or obligations of the Association or the Member thereunder or in connection therewith or as to any other matter whatsoever, such difference or dispute shall in the first instance be referred to and adjudicated by the Committee. Such reference and adjudication shall be on written submission only, but this reference and adjudication may be waived at the discretion of the Committee.

2 If a Member concerned in such difference or dispute does not accept the decision of the Committee following such reference and adjudication it shall be referred to the arbitration in London of two arbitrators, one to be appointed by the Association and the other by such Member, and an umpire to be appointed by the arbitrators, and the submission to arbitration and all the proceedings therein shall be subject to the provisions of the English Arbitration Acts 1950 and 1979, and any statutory modification or re-enactment thereof.

3 No Member may bring or maintain any action, suit or other legal proceedings against the Association in connection with any such difference or dispute unless he has first obtained an arbitration award in accordance with this Rule.

RULE 65: DEFINITIONS

In these Rules unless the context or subject matter otherwise requires:

Association means The Shipowners' Mutual Protection and Indemnity Association (Luxembourg).

Basic Rate of Contribution, in relation to an insured vessel, means the amount which constitutes the basis upon which calls are payable to the Association in respect of that vessel pursuant to Rule 36.

Call means any sum payable to the Association in respect of an insured vessel pursuant to Rules 3, 4 and 49 to 54.

Casualty within the context of Rule 2 Section 2B means an incident involving either (i) collision, stranding, explosion, fire or any other cause affecting the physical condition of the vessel so as to render it incapable of safe navigation to its intended destination, or (ii) a threat to the life, health or safety of passengers.

Closed Policy Year means a policy year which has been closed in accordance with Rule 57.

Committee means the Board of Directors for the time being of the Association.

Constitution means the Constitution for the time being of the Association.

Convention Limit in respect of a vessel, the limit of liability of the shipowner of that vessel for claims (other than claims for loss of life or personal injury) at the overspill claim date, calculated in accordance with Article 6 paragraph 1(b) of the International Convention on Limitation of Liability for Maritime Claims 1976 (the "Convention") and converted from Special Drawing Rights into United States Dollars at the rate of exchange conclusively certified by the Committee as being the rate prevailing on the overspill claim date, provided that,

A where a vessel is entered for a proportion (the "relevant proportion") of its tonnage only, the Convention limit shall be the relevant proportion of the limit of liability calculated and converted as aforesaid, and

B each vessel shall be deemed to be a seagoing ship to which the Convention applies, notwithstanding any provision in the Convention to the contrary.

Entered Tonnage means the tonnage agreed between the Association and an applicant for insurance of a vessel at the time of acceptance of that vessel for the purpose of calculating the basic rate of contribution and, in certain cases, the limits of the Association's liability in connection with that vessel.

Fines includes civil penalties, penal damages, and other impositions similar in nature to fines.

Gross Tonnage means the gross tonnage of a vessel as certified in the certificate of registry of such vessel or, if no such certificate exists, in any other official document relating to the registration of such vessel.

Group Reinsurance Limit means the amount of the smallest claim (other than any claim arising in respect of oil pollution) incurred by any party to the Pooling Agreement which would exhaust the largest limit for any type of claim (other than any claim arising in respect of oil pollution) from time to time imposed in the Group general excess loss contract provided that, for the purpose of this definition, all claims incurred by any party to the Pooling Agreement under the entry of any one vessel arising from any one incident or occurrence including any claim in respect of liability for the removal or non-removal of any wreck shall be treated as if they were one claim.

Hague Rules means the provisions of the "International Convention for the Unification of certain Rules of law relating to Bills of Lading" signed at Brussels, on 25th August 1924.

Hague-Visby Rules means the Hague Rules as amended by the Protocol to amend the said Convention signed at Brussels on 23rd February, 1968.

Illegal fishing within the context of Rule 31 encompasses the use of the vessel in contravention of any law, rule, regulation, requirement, protocol or article, (including but not limited to those of any coastal state, the flag state of the vessel and all applicable treaties and conventions) intended for the management, protection or conservation of marine living resources.

Incident means any one accident or occurrence (save that a series of incidents having the same origin shall be treated as one incident taking place at the time of the first of them).

Insured and Insurance shall include reinsured and reinsurance.

Insured Vessel means a vessel which has been entered in the Association for insurance.

ISM Code (International Safety Management) means the International Management Code for the Safe Operation of Ships and for Pollution Prevention as incorporated in Chapter IX of the International Convention for the Safety of Life at Sea 1974 as amended.

Managers means the Managers for the time being of the Association.

Member means a Member of the Association including a former Member of the Association.

Noon means noon GMT.

Oil means oil of any description whatsoever including any mixture containing oils.

Overspill Call means a call levied by the Association pursuant to Rule 52 for the purpose of providing funds to pay all or part of an overspill claim.

Overspill Claim means that part (if any) of a claim (other than any claim arising in respect of oil pollution) incurred by the Association or by any party to the Pooling Agreement under the terms of entry of a vessel which exceeds or may exceed the Group Reinsurance Limit.

Overspill Claim Date in relation to any overspill call, means the time and date on which there occurred the incident or occurrence giving rise to the overspill claim in respect of which the overspill call is made or, if the policy year in which such event occurred has been closed in accordance with the provisions of Rule 52.6.A and 52.6.B noon GMT on 20th August of the policy year in respect of which the Committee makes a declaration under Rule 52.6.C.

Overspill Reserve means a reserve established by the Association pursuant to Rule 56.1.B to provide a source of funds which may be applied towards meeting an overspill claim or claims.

Passenger means any person carried or intended to be or having been carried in the insured vessel under a contract of carriage for reward, not being a person engaged or employed in any capacity in connection with the business or operation of the insured vessel.

Period of Insurance, in relation to an insured vessel, means the period of time during which (according to the terms of any contract of insurance) the Association is at risk as regards the occurrence of events in relation to that vessel which may give rise to a liability on the part of the Association to indemnify the Member concerned.

Policy Year means a year from noon on any 20th February to noon on the next following 20th February.

Pooling Agreement means the agreement between certain members of the International Group of P&l Associations dated 20th February 1999 whereby the parties thereto undertook to share in agreed proportions the burden of the claims or outgoings (above an agreed retention) of the insurance business of each of them, and any amendment, variation or substitution of such agreement.

Renewal Date means 20th February of any year or such other date as has been agreed as the renewal date.

Seaman means any person (including the Master and apprentices) engaged or employed in any capacity in connection with the business of any insured vessel as part of such vessel's normal complement, whether on board or proceeding to or from such vessel.

Vessel (in the context of a vessel entered or proposed to be entered in the Association) means any ship, boat or other description of vessel (including a lighter, barge, or like vessel howsoever propelled) or hover vehicle (that is to say, a vehicle designed to be supported on a cushion of air) or structure (including any ship, boat, vessel, hover vehicle or structure under construction) used or intended to be used for any purpose whatsoever in navigation or otherwise on, under, over or in water (including inland waters of any description), or any part thereof or any proportion of the tonnage thereof or any share therein.

In Writing means written, printed or lithographed or visibly expressed in all or any of these or any other modes of representing or reproducing words.

Words importing the singular number only shall include the plural number and vice versa.