Loss of Ships records Oslo 20. November 2013 Karl Petter Mhlbradt - - PowerPoint PPT Presentation

Loss of Ship’s records Oslo 20. November 2013 Karl Petter Mühlbradt - Senior Claims Adviser Gard AS

Agenda • The backround for discussing loss of ship records • H&M insurance – wear and tear • Instruction to Surveyor • The ISM Code om Maintenance Records • The Class • Sales Contracts • Summary

The Background • When a vessel changes ownership the rule is that the outgoing technical manager removes the PMS (Planned Maintenance System) containing all maintenance and service records from the ship. • Consequenses: − No fluid take-over of the vessel by the new crew − No maintenance records left om board − No list of short and long term maintenance to be carried out − Increased risk of required maintenance being overlooked − Increased risk of incorrect handling of equipment − Increased risk of serious breakdowns due to pure lack of knowledge of the ship’s history

Backround (cont.) • And as quoted in a recent edition of «Tradewinds»: • The owner of a secondhand ship is in a worse position than the buyer of a secondhand car!

Hull & Machinery Insurance – wear and tear • Nordic Conditions: The insurer is not liable for costs incurred in renewing or repairing a part which was in a defective condition as a result of wear and tear, inadequate maintenance etc. (§ 12-4) • English Conditions ITC-83: The insurer is not liable for ordinary wear and tear (MIA Section 55) • German Conditions: Underwriters are not liable for loss or damage caused solely by wear and tear (ADS Clause 59) • Consequently it is an important part of the task of the Surveyor, Claims Handler and Adjuster to check and evaluate if a damage is caused by wear and tear.

Instruction to Surveyor – In general • Establish the facts relevant in making a fair and correct insurance settlement • Identify courses of action and estimating the costs involved • Specification of the repair work • Obtaining tenders • Suprvising and checking repair work

Instruction to Surveyor - Specific • In order to ensure a fair and correct insurance settlement, the surveyor must include in his report: − Class status − ISM status − Maintenance status

Quotes from service reports

The Class Records • The Class records will always be available to the Owner of the ship. If a new Owner wants to inspect the Class records, then the present Owner must give instruction to the Class. • For CMS (Continuous Machinery Survey) records carried out by a Chief Engineer, the basis and where the records are gathered for presentation to the Class Surveyor is the on board PMS. • When the PMS is removed also the records the CMS was based on is lost for the new Owner (and the Class)

So how do we handle such situations • Ask Owners if they can get hold of previous maintenance records for the component • Ask Surveyor for additional evidence on board • But: • Always try to follow the principle that the Assured shall never be put in a better position by not producing the required documentation on the maintenance

The ISM Code (IMO International Safety Mangement Code) – Clause 10 • The ISM Code says: • The Guidelines says:

The ISM Code – Clause 10 • Guidelines say:

The Saleform 2012 • Nothing here about Ship Records, Planned Maintenance System or other Records of Maintenance and Repairs • It is also an issue if the PMS is Seller’s or Manager’s property

The Saleform 2012

The Saleform 2012 – In practice

CEFOR Change of Conditions Clause • Be careful when including this clause! Many interpretate this clause to cover for old damages that results in a breakdown after purchase of a vessel. That is not the intention!

Summary • We can accept that Managers computers and licenced PMS programs are removed • However, Owners, Class, Flag, Insurance should not accept that historical maintenance records and service history are not following the ship throughout its life. • The Saleform used for S&P of ships should be modified • The ISM Code should be modified to reflect the intention with the code.

Summary (Cont.) • And finally: • Should the H&M conditions include a clause which oblige the Owners to be able to present ship records in case of a claim? • THANK YOU FOR YOUR ATTENTION!