Clause for penalties and fines
At the meeting in Paris on 27 May, the BIMCO Documentary Committee endorsed the International Group Oil Pollution Indemnity Clause for penalties and fines which had been published by Circular in March 2013.
The Clause has been developed in response to amended legislation in Australia which, inter alia, extends longstanding criminal liabilities for pollution to charterers who are now severally liable with owners and Masters for pollution offences and resulting fines or civil penalties.
The Clause therefore aims to preserve the position as it would have been but for the new legislation.
This is achieved by a mutual indemnity provision between shipowners and charterers for the recovery of fines or penalties, as well as legal costs, imposed due to the negligent act or omission of the other party with recovery in the event of contributory negligence adjusted to reflect the degree of fault.
The Clause is available to download free of charge from the Clauses section of the BIMCO website
IG P&I Clubs – Oil Pollution Indemnity Clause for Penalties and Fines
(A)Subject to the terms of this Charterparty, as between Owners and Charterers, in the event of an oil pollution incident involving any discharge or threat of discharge of oil, oily mixture, or oily residue from the Vessel (the “Pollution Incident”), Owners shall have sole responsibility for responding to the Pollution Incident as may be required of the vessel interests by applicable law or regulation.
(B) Without prejudice to the above, as between the parties it is hereby agreed that:
(C) Nothing in this Clause shall prejudice any right of recourse of either party, or any defences or right to limit liability under any applicable law.
(D)Charterers shall procure that this Clause be incorporated into all sub-charters and contracts of carriage issued pursuant to this Charterparty.