FEBRUARY 22, 2011 CIRCULAR NO. 08/11 TO MEMBERS OF THE ASSOCIATION (This Circular is addressed to owners of tank vessels carrying oil and calling at US ports) Dear Member: US VESSEL RESPONSE PLANS: SALVAGE AND MARINE FIREFIGHTING REQUIREMENTS: FINAL RULE: DECEMBER 31, 2008: DEADLINE FOR IMPLEMENTATION – FEBRUARY 22, 2011: FURTHER UPDATE: SALVAGE AGREEMENTS Members are referred to Circular No. 21/10 of August 23, 2010 concerning the above, which provided a list of salvor contracts/funding agreements which had been reviewed by the International Group, and to an update provided in Circular No. 29/10 of October 14, 2010. Since this date T&T Bisso have introduced an addendum to their contract. The T&T Bisso addendum with footer T&T Bisso SMFF Agreement Addendum February 2011 enables the owner to exercise an option to switch to Lloyd's Open Form (LOF) some time after the commencement of operations. While it has been held to conform with the International Group salvage guidelines, Members' attention is drawn to clause 5 of this addendum. This clause deals with owner’s authority to bind cargo to the LOF and requires owners to indemnify T&T Bisso for any losses, damages or costs as a result of any breach of such warranty of authority following any claim by any of the salved property that they are not bound by the LOF. While it is acknowledged that Article 6 of the Salvage Convention gives the master/owner of the vessel the authority to conclude a salvage contract on behalf of the owner of property on board the vessel, it is unlikely that this authority extends to an amendment of a pre-existing salvage contract which would be the case if the owner opted to switch from the standard T&T OPA 90 Agreement to LOF. Accordingly, specific agreement would in all probability be needed from cargo interests to this change. If exercising this option, Members are consequently advised to consider the potential need to obtain cargo interests’ authority before doing so and that a failure to recover from cargo interests because the owner did not obtain cargo interests’ permission to switch contracts may not be a valid claim on their P&I (or hull) cover. In addition Donjon Smit have introduced some minor changes in the labelling of their contract. In the October circular the reference was to Donjon Smit – July 2010, Version 1.1 on page 1 and Version 1.0 on subsequent pages. This version now shows Version 1.1 as a footer on all pages including the Annexes. The current salvor contracts/funding agreements which have been reviewed by the International Group and found to conform with the Vessel Response Plan salvage guidelines are the following: Donjon Smit – July 2010, Version 1.1 MRA – Marine Response Alliance, LLC Dated 2 August 2010 Resolve – Dated 14 June 2010 T&T Bisso – OPA 90 Ship Agreement Non-US – 22 April 2010 T&T Bisso – OPA 90 Ship Agreement US Owners – 15 June 2010 T&T Bisso SMFF Agreement Addendum February 2011 Members should further note that with effect from January 1, 2011, Scopic rates have increased. The current rates can be found at Appendix A in the following link. http://www.lloyds.com/The-Market/Tools-and-Resources/Lloyds-Agency-Department/SalvageArbitration-Branch/SCOPIC The rate comparison published in the two previous Circulars has not been updated and should now be disregarded. Yours faithfully, Joseph E.M. Hughes, Chairman & CEO Shipowners Claims Bureau, Inc., Managers for THE AMERICAN CLUB All Clubs in the International Group of P&I Clubs h