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Does your charter incorporate the Interclub Agreement or only parts of it?

BDM Septmeber

Answer – it depends on the words of incorporation used. At least that was the result in London Arbitration 18/18.

In this case Owners, having secured the cargo claim, demanded counter security from Charterers. The 2011 ICA expressly states that counter security should be provided and it was conceded that the 2011 ICA was the relevant agreement. However, it was argued that clause 35 which stated:

“…Liability for cargo claims, as between Charterers and Owners, shall be apportioned/settled as specified by the Interclub New York Produce Exchange Agreement effective from 1996 and its subsequent amendments”

meant that only the parts of the ICA dealing with liability, apportionment and settlement were incorporated. The Tribunal agreed and the provisions relating to security were not incorporated. The lesson is always to construe the words of incorporation literally.

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BDM is a specialist shipping law firm offering high quality legal advice and representation at a reasonable price. Please follow us on social media by clicking below.
+44 203 968 0500
+44 7887 710 950