Commentary: Rule 34 TOPIA and STOPIA

34.1 General

The Small Tanker Oil Pollution Indemnification Agreement (STOPIA) took effect as from February 2006. STOPIA applies to pollution damage in States in which the 1992 Fund Convention is in force. It is a contract between the Owners of small tankers to increase, on a voluntary basis, the limitation amount applicable to the tanker under the 1992 Civil Liability Convention. STOPIA provides that all tankers will be considered a “Relevant Ship” if they are of 29,548 tons or less and are entered in one of the P&I Clubs of the Group of P&I Clubs and/or reinsured through the pooling arrangements of the Group. The effect of STOPIA is that the maximum amount of compensation payable by Owners of all ships of 29,548 GT or less is SDR 20 million.

34.2 Extent of cover

For ships covered by STOPIA the Fund Convention will continue to be liable for pollution claims if the total amount of all claims for that ship exceeds the CLC limit. However, the Fund is entitled to indemnification by the Owner of the difference between the ships CLC limit and SDR 20 million.

A Member insured in respect of a ship which is a “Relevant Ship” (as defined above) shall by virtue of its entry in the Club become a party to STOPIA for the period of entry of that ship. If the Member decides to withdraw his ship from STOPIA there shall be no cover under Rule 6 for that ship. The Club provides an undertaking to the 1992 Fund covering Members liability under STOPIA.

The Tanker Oil Pollution Indemnification Agreement (TOPIA) is similar to STOPIA but with two main differences. Firstly, under TOPIA Tanker Owners undertake to indemnify the Supplementary Fund at 50% of the amount of any claim falling on the Supplementary Fund. Secondly TOPIA applies to all relevant tankers regardless of size.