Advertisement

Legal Regime of Marine Insurance in Arctic Shipping: Safety and Environmental Implications

  • Proshanto K. Mukherjee
  • Huiru Liu
Chapter
Part of the WMU Studies in Maritime Affairs book series (WMUSTUD, volume 7)

Abstract

The primary driver of Arctic shipping and maritime operations is the development of natural resources in the Arctic. The melting of Arctic sea ice as a result of global warming and climate change is providing greater maritime access and potentially longer navigation seasons. This combined with advancements in ice-breaking technology benefitting commercial carriers are translating into shorter sea routes and reduced shipping costs. This chapter is concerned with safety and environmental implications of insurability and indemnifiability of enhanced Arctic shipping risks attributable to the presence of ice. The specific focus is on examination of relevant provisions in marine insurance contracts subject to English marine insurance law and the Nordic Marine Insurance Plan (NMIP). The discussion begins with a synoptic overview of the fundamental principles of marine insurance and then moves on to the regulatory dimension of Arctic shipping as manifested in the IMO Polar Code. Whether a violation of the Code leads to a potential breach of the implied warranty of seaworthiness entrenched in the UK Marine Insurance Act 1906 (MIA) operating through the Institute warranties is examined together with the corresponding elements in the NMIP regime. A comparative analysis is carried out of the MIA and Institute Clauses and Warranties on the one hand, and the NMIP legal framework on the other, which includes premium considerations, and ice class and notification requirements. The environmental implications for Arctic shipping are examined through the concept of protection and indemnity (P&I) insurance focusing on compulsory cover for third party liability required under relevant ship-source pollution conventions. Finally, the emerging concept of environmental salvage particularly in relation to Arctic waters is discussed peripherally.

Keywords

Arctic shipping Marine insurance Polar code P&I clubs STCW convention 

References

  1. Andrewatha, J., & Stone, Z. (2004). English maritime law update. Journal of Maritime Law and Commerce, 35, 369–404.Google Scholar
  2. Bennett, H. (2006). The law of marine insurance (2nd ed.). Oxford: Oxford University Press.Google Scholar
  3. Bishop, A. (2012a). Environmental salvage: Time for a change. In B. Soyer & A. Tettenborn (Eds.), Pollution at sea; Law and liability. London: Informa.Google Scholar
  4. Bishop, A. (2012b). The development of environmental salvage and review of the London Salvage Convention 1989. Tulane Maritime Law Journal, 37(1), 65–105.Google Scholar
  5. Brigham, L. (2013). IMO Polar Code for ships operating in polar waters. Produced by Arctic Climate Change Economy and Society (ACCESS), Policy Brief No.4. Retrieved October 11, 2016, from http://www.aeco.no/wp-content/uploads/2013/06/2015-04-ACCESS-PolicyBrief-Polar-Code.pdf
  6. Cefor. (2013). Commentary on Cefor Trading Areas Clause: Clause to replace Clause 3-15 and Clause 3-22, sub-clause 3 of the Nordic Marine Insurance Plan of 2013. Retrieved October 11, 2016, from http://www.cefor.no/Documents/Clauses/Hull/CeforClause-TradinAreas-Commentary13-11-26.pdf
  7. Cefor Archive. (2013). Commentary to sub-clause 3 of Clause 3-22 in the Nordic Marine Insurance Plan of 2013. Retrieved October 11, 2016, from http://archive.nordicplan.org/Commentary/Part-One/Chapter-3/Section-3/#-3-22
  8. Chircop, A. (2009). The growth of international shipping in the Arctic: Is a regulatory review timely? The International Journal of Marine and Coastal Law, 24(2), 355–380.CrossRefGoogle Scholar
  9. Gold, E. (2002). Gard handbook on P&I insurance (5th ed.). Arendal: Assuranceforeningen Gard.Google Scholar
  10. Gold, E., Kindred, H., & Chircop, A. (2003). Canadian maritime law. Toronto: Irwin Law.Google Scholar
  11. Hazelwood, S. J., & Semark, D. (2010). P&I clubs law and practice (4th ed.). London: Lloyd’s List.Google Scholar
  12. Hodges, S. (1996). The law of marine insurance. London: Cavendish Publishing Limited.Google Scholar
  13. Honka, H. (2004). Main obligations and liabilities of the carrier. Transport Review, 27, 278–283.Google Scholar
  14. IMO Media Center. “Shipping in Polar Waters”. Retrieved October 11, 2016, from http://www.imo.org/MediaCentre/HotTopics/polar/Pages/default.aspx
  15. Johannsdottir, L., & Cook, D. (2014). An insurance perspective on Arctic opportunities and risks: Hydrocarbon exploration and shipping. Working Paper for Institute for International Affairs of University of Iceland. Retrieved October 11, 2016, from http://ams.hi.is/wp-content/uploads/2015/04/An_Insurance_Perspective_PDF.pdf
  16. Khurram, R. (1994). Total loss and abandonment in the law of marine insurance. Journal of Maritime Law & Commerce, 25, 95–118.Google Scholar
  17. Lajeunesse, A. (2012). A new mediterranean? Arctic shipping prospects for the 21st century. Journal of Maritime Law and Commerce, 43(4), 521–537.Google Scholar
  18. Liu, H. (2016). Arctic marine insurance: Towards a new risk coverage regime. Journal of Maritime Law and Commerce, 47(1), 77–100.Google Scholar
  19. Mukherjee, P. K. (2002). Maritime legislation. Malmo: WMU Publications.Google Scholar
  20. Normann, A. K., & Mikkelsen, E. (2014). The role of insurance for use of the Northern Sea Route. Northern Research Institute (Norut) Publication. Retrieved September 10, 2016, from http://www.arcticfrontiers.com/downloads/arctic-frontiers-2014/poster-presentations-3/part-iii-shipping-a-offshore-in-the-arctic-2/610-anne-normann-and-eirik-mikkelsen/file
  21. Østreng, W., Eger, K. M., Fløistad, B., Jørgensen-Dahl, A., Lothe, L., Mejlænder-Larsen, M., et al. (2013). Shipping in Arctic waters, a comparison of the Northeast, Northwest and trans polar passages. Heidelberg: Springer-Praxis.Google Scholar
  22. Reddie, J. (1841). An historical view of the law of maritime commerce. London: William Blackwood & Sons.Google Scholar
  23. Rose, F. (2012). Marine insurance law and practice (2nd ed.). London: Informa.Google Scholar
  24. Sarrabezoles, A., Lasserre, F., & Hagougn'rin, Z. (2014). Arctic shipping insurance: Towards a harmonisation of practices and costs? Polar Record, 52(4), 1–6.Google Scholar
  25. Schroeder, J. U., Mejia, M. Q., Jr., Mukherjee, P. K., Manolis, F. M., & Dreessen, S. (2006). Potential consequences of imprecise security assessments. IAMU Journal, 4(2), 31–38.Google Scholar
  26. Soyer, B. (2001). Warranties in marine insurance. London: Cavendish Publishing Ltd.Google Scholar
  27. Tamvakis, M., Granberg, A., & Gold, E. (1999). Economy and commercial viability of the Northern Sea Route. In W. Østreng (Ed.), The natural and societal challenges of the Northern Sea Route: A reference work. Dordrecht: Kluwer Academic Publishers.Google Scholar
  28. The Nordic Association of Marine Insurers (Cefor). (2007). Norwegian Marine Insurance Plan of 1996, Version 2007, item (10). Retrieved October 11, 2016, from http://www.nordicplan.org/Documents/Archive/Plan-2007/Norwegian%20Plan%20of%201996,%20Version%202007%20-%20English.pdf
  29. Thomas, M., & Steel, D. (1976). Temperley’s merchant shipping acts (7th ed.). London: Stevens & Sons.Google Scholar
  30. Torrens, D. L. (1994). Marine insurance for the Northern Sea Routes pilot study. INSROP Working Paper IV 3.3, NO.1-1994.Google Scholar
  31. UK Parliament. (2015). Explanatory Notes. Insurance Bill [HL]. Retrieved October 11, 2016, from http://www.publications.parliament.uk/pa/bills/lbill/2014-2015/0039/en/14039en.htm
  32. Xu, J. (2013). The international legal framework governing liability and compensation for ship-source oil pollution damage. In M.Q. Mejia, Jr. (Ed.), Selected issues in maritime law and policy: Liber Amicorum Proshanto K. Mukherjee. Hauppauge, NY: Nova Science Publishers.Google Scholar

Suggested Reading

  1. Arctic Council. (2009). Arctic marine shipping assessment 2009 report, second printing. Retrieved October 11, 2016, from http://www.pmel.noaa.gov/arctic-zone/detect/documents/AMSA_2009_Report_2nd_print.pdf
  2. European Commission Maritime Affairs and Fisheries. (2010). Legal aspects of Arctic shipping: Summary report. Luxembourg: Publications Office of the European Union.Google Scholar
  3. Gold, E. (1989). Marine salvage: Towards a new regime. Journal of Maritime Law and Commerce, 20(4), 487–503.Google Scholar
  4. Marsh Report. (2014). Arctic shipping: Navigating the risks and opportunities.Google Scholar
  5. Mukherjee, P. K. (2006). Refuge and salvage. In A. Chircop & O. Linden (Eds.), Places of refuge for ships. Leiden: Martinus Nijhoff.Google Scholar
  6. The Nordic Association of Marine Insurers (Cefor). (2013a). Commentary on Cefor Trading Areas Clause: Clause to replace Clause 3–15 and Clause 3–22, sub-clause 3 of the Nordic Marine Insurance Plan of 2013. Retrieved October 11, 2016, from http://www.cefor.no/Documents/Clauses/Hull/CeforClause-TradinAreas-Commentary13-11-26.pdf
  7. The Nordic Association of Marine Insurers (Cefor). (2013b). Commentary on Clause 3–22 of the Nordic Marine Insurance Plan 2013. Retrieved October 11, 2016, from http://www.nordicplan.org/Commentary/

Copyright information

© Crown 2018

Authors and Affiliations

  1. 1.World Maritime UniversityMalmöSweden
  2. 2.Juris Dr. Honoris Causa, Lund UniversityLundSweden
  3. 3.Dalian Maritime UniversityDalianPeople’s Republic of China

Personalised recommendations