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How to make sure you incorporate all of the Inter Club Agreement provisions into your charter

Those who follow us may have seen our take on a recent arbitration decision where the security provisions of the 2011 Inter Club Agreement were not incorporated. Basically the incorporation words in the charter were deemed not extensive enough. This has caused some concern for the International Group of P&I Clubs. They have now responded with a new suggested wording for those wishing to incorporate all provisions of the 2011 Inter Club Agreement. The wording proposed is:

“Cargo claims as between Owners and the Charterers shall be governed by, secured, apportioned and settled fully in accordance with the provisions of the Inter-Club New York Produce Exchange Agreement 1996 (as amended 2011), or any subsequent modification or replacement thereof. This clause shall take precedence over any other clause or clauses in this charterparty purporting to incorporate any other version of the Inter-Club New York Produce Exchange Agreement into this charterparty”.

This is an example of the industry seeking to close the stable door before more horses escape. If parties follow then we are unlikely to see future cases on this issue. However, those wishing to incorporate anything by reference into any contract should always give careful thought to and use the appropriate form of words.

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