The Yangtze Xing Hua

The Inter Club Agreement (“ICA”) is in form an agreement between the P&I clubs which are members of the International Group (in their capacities as the P&I insurers of shipowners and the Charterers’ Liability insurers of time-charterers) on the allocation between them of cargo claims by third parties where the obligations of the owners and charterers to one another are governed by a time charterparty on the New York Produce Exchange (“NYPE”) form in any of its versions (NYPE 1946, Asbatime 1981, NYPE 1993, and any subsequent amendment, including the NYPE 2015 form). As between the clubs, the ICA is not a binding agreement as to how claims shall be apportioned, but only an agreement to “recommend to their Members without qualification” that cargo claims be apportioned in accordance with the ICA. However, it is now usual for time charterparties on any version of the NYPE form (including charters where the parties are not insured by clubs within the International Group) to include an additional clause providing that cargo claims shall be settled in accordance with one or other version of the ICA, so that as between the owners and charterers the apportionment under that version of the ICA is legally binding. Thus, the interpretation of the ICA is a matter of general importance for the shipping industry and its liability insurers.