Commentary: Rule 14 Right of recourse
This Rule deals with two different situations of recourse.
14.2 Right of recourse against third parties
It follows from the first part of the Rule that by compensating the Member, the Club is subrogated to the Member’s rights of recovery against any third parties. It could be the Member’s right to proceed against a Charterer under a charterparty, against a shipper under a bill of lading, against the Owner of another ship involved in a collision or against a stevedore company under a stevedoring contract. The Member should assist the Club in any way possible to exercise any right of recovery, for instance by formally assigning the right of recovery to the Club or allowing any recovery action to be performed in the Member’s name.
The provision acts as a subrogation and empowers the Club to collect any amount recovered.
14.3 Right of recourse against Member
The second part of the Rule is applicable to situations where the Club has paid claims or other expenses for which the Member is not entitled to compensation under these Rules. The Club may have exercised its discretion to provide security in a case where subsequent and closer investigation proves that the liability is not of a nature covered under these Rules, or subject to one of its exclusions or limitations. See the comments under 12.2.
This part of the Rule applies also in cases where a Member fails to meet his obligations to help the Club exercise any right of recovery as mentioned in the first part of the Rule. The Club can claim the compensation to be repaid by the Member.
The Club can exercise its right of recourse by set-off according to Rule 13 against other compensation or premium refund due to the Member from the Club.