Commentary: Rule 31 Fleet entry

31.1 General

The first rung on the ladder of mutuality is for the Member to spread the risks within a fleet of ships entered with the Club under the same or associated ownership. A ship entered as part of a fleet is rated as a member of that fleet. She will enjoy lower premiums than if she had been entered as a singleton.

If the entered ship has a low premium as part of a fleet, it is reasonable that the due payment of that premium is supported by the fleet.

This is achieved by this Rule.

31.2 Fleet Members

A fleet is constituted by all ships entered under the same ownership. The fleet can also consist of ships where the registered Owners are separate legal entities, but where those entities are under the same or associated ownership.

A ship is a member of such a fleet when the terms of entry for the ships in the fleet have been negotiated at the same time or otherwise affected each other.

31.3 Fleet Members are jointly and severally liable for payments

According to the first part of the clause, Fleet Members remain jointly and severally liable for the payment of premiums and other sums due to the Club in respect of any ship in the fleet.

As regards premiums, the obligation is in respect of advance calls, additional calls, release calls and overspill calls.

Other sums due may be deductibles or lawyers’ and experts’ fees, advanced by the Club on the Member’s behalf.

31.4 Failure to pay premium

If one Fleet Member fails to pay premiums or other sums due to the Club on time, that failure shall have the effect described in these Rules, on the cover of all members of the fleet.

The Club may file a notice of termination under Rule 26 with the effect as described in Rule 28 against any or all of the Fleet Members.

The Club has a right under Rule 13 to set-off any amount due against any sum due to any of the Fleet Members from the Club, under these Rules or any other policy issued by the Club.

31.5 Mortgaged ships

As follows from Rule 35, the cover afforded by the Club shall be extended to a mortgagee.

If the Club has issued a Letter of Undertaking in favour of the mortgagee, or if the policy of insurance includes a Loss Payable Clause, a payment under these Rules due to a Fleet Member will be paid in accordance with the terms so agreed and will not be used to set-off debts of other members of that fleet.