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The Inter Club Agreement – just what is a “similar amendment” and why is it important?

The Inter Club Agreement – just what is a “similar amendment” and why is it important| BDM Blog | BDM Law

As many of our followers will know, the Inter Club Agreement (ICA) is invaluable as a rough and ready way of apportioning responsibility for cargo claims arising as a consequence of the carriage of goods.    The purpose of the ICA is to allow the carrier under the bill of lading, whether that be the owner or charterer of the vessel, to recover from their contractual counterpart if the requirements of the Inter Club Agreement apply.

The words “similar amendment” appear in clause 8(b) of the ICA.  The relevant provision is:

Claims in fact arising out of the loading, stowage, lashing, discharge, storage or other handling of cargo: 100% Charterers unless the words “and responsibility” are added in clause 8 [of the NYPE form] or there is a similar amendment making the Master responsible for cargo handling in which case: 50% Charterers 50% Owners.

Enter the recent decision of Mr Justice Waksman QC in Agile Holdings v Essar Shipping (1).   On appeal from an arbitration award, the Judge had to consider whether the following clause in a time charter constituted a “similar amendment” for the purposes of clause 8(b) thus altering the apportionment of responsibility for the cargo claim that had arisen:

The Stevedores although appointed and paid by Charterers/Shippers/Receivers and or their Agents, to remain under the direction of the Master who will be responsible for proper stowage and seaworthiness and safety of the vessel … 

It was held that the arbitral tribunal had been wrong at first instance and a “similar amendment” required transfer of all responsibility for cargo handling to Owners, not just responsibility for part of the loading process i.e. the stowage.   The tribunal’s decision was reversed and the correct apportionment was held to be 100% Charterers.

  1. Agile Holdings Corporation – and – Essar Shipping Ltd [2018] EWHC 1055 (Comm)
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