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CHARTERERS' LIABILITY INSURANCE / PART VI / Clause 6
RIGHT OF RECOVERY
6.1 Right of Recovery
If the Assured shall be liable as set out in the Association’s Certificate of Insurance in damages or otherwise, or shall incur any costs or expenses in respect of the Ship insured by the Association at the time of the casualty or event giving rise to such liability, costs or expenses, the Assured shall be entitled to recover from the Association the amount of such liability, costs or expenses to the extent and on the terms, conditions and exceptions set out in the Association’s Certificate of Insurance
Provided always that:
6.1.1 Not applicable.
6.1.2 unless the Association in its discretion otherwise determines it shall be a condition precedent to the Assured’s right to recover from the funds of the Association in respect of any liability, costs or expenses that the Assured shall first have discharged such liability or paid such costs or expenses.
6.2 Subrogation
Any recovery by the Assured from the Association is subject to the Association’s rights of subrogation and the Assured will, on request of the Managers, sign a Certificate of Subrogation.
6.3 Set-off
Without prejudice to any other part of the Certificate of Insurance the Association shall be entitled to set-off any amount due from the Assured against any amount due to the Assured from the Association.
6.4 Incident
Any liabilities, costs and expenses which the Assured may incur in accordance with Clause 6.1 Right of Recovery above in respect of the insured Ship arising from any one incident or occurrence, including any claim in respect of liability for the removal or non-removal of any wreck, shall be treated as if they were one claim by the Assured for recovery of the total amount of such liabilities, costs and expenses out of the funds of the Association.
6.5 Currency
Where the Assured is entitled to a recovery out of the funds of the Association in respect of a loss suffered by the Assured in a currency other than the currency specified in the Assured’s Certificate of Insurance (the specified currency), that loss shall be converted into the specified currency at the rate of exchange ruling on the day the relevant credit note is issued by the Association to the Assured.
6.6 Sanctions
The Assured shall have no entitlement to recovery out of the funds of the Association in respect of that part of any liabilities, costs and expenses which is not recovered by the Association under any reinsurance(s) arranged by the Association or the Managers, because, and to the extent, of any shortfall in recovery from such parties or reinsurers by the Association which would result in a violation of any Sanction, or any prohibition or adverse action administered by any state, international or supranational organisation or other competent authority or the risk thereof if payment were to be made by such parties or reinsurers. For the purposes of this Clause 6.6 “shortfall” includes any failure or delay in recovery by the Association by reason of such parties or reinsurers making payment into a designated account in compliance with the requirements of any state, international or supranational organisation or other competent authority.