MLC – Liability for uninsured MLC liabilities

All Clubs in the International Group have issued a circular reminding their members of the need to obtain the authority of all joint assureds on the policy to sign the Application Form on their behalf and to bind them to their obligations under the MLC Extension Clause, and to remind all Members and Joint Member/Joint Entrants that they are jointly and severally liable to reimburse the Club for any MLC liabilities falling outside standard P&I cover. Swedish Club said that “as Members will be aware from the Club’s Circulars of June 22nd 2016 and October 7th 2016, concerning the implementation of financial certification requirements in accordance with the amendments to the Maritime Labour Convention 2006 (MLC), the Boards of all International Group Clubs agreed that Clubs would provide the necessary certification”.

However, those circulars from 2016 also made clear that, whilst some of the liabilities arising under the certificates would be covered by standard P&I cover, the liabilities for outstanding wages and repatriation of seafarers, together with incidental costs and expenses would fall outside of cover. Should the Club be required to meet those liabilities in the first instance under its certificate, Members would be obliged to reimburse the Club.

This position is reflected in the terms of the MLC Extension Clause 2016, against which Clubs issue MLC Certificates. The MLC Application Form that Members are required to sign to obtain their Certificates explicitly binds all Co-Assureds, Members and Joint Members/Joint Entrants to the terms of the MLC Extension Clause and now includes a warranty that the party signing the Application Form has the authority of all those parties to so bind them.