Selected Legal Issues On Marine Insurance In Ice-infested Area

As global warming intensifies, ice in the ice-infested areas is melting rapidly, which enables ice navigation to attain potential economic advantages. This is manifested by the fact that both the Northeast and Northwest Passages of the Arctic Ocean can be utilised commercially during certain times of the year. With the thawing of ice, shipping in ice-infested areas is becoming the norm where marine insurance is an essential building block rather than the exception. The shipping industry in ice-infested areas cannot survive without some organized form of financial protection against marine risks. So far little has been done by way of research in the field of marine insurance in ice-infested areas which has prompted this author to embark on this initiative. Aiming at making some contributions to theoretical research and practices of the marine insurance industry in China, this thesis principally discusses some selected issues relating to the compatibility between the general marine insurance clauses and special marine risks in ice-infested areas. The analysis covers United Kingdom, Norwegian and Chinese marine insurance clauses in legislation and contractual instruments.The thesis is divided into three parts, namely, introduction, main body and conclusion. The introduction describes the background, objects and innovative ideas emerging from the research. The main body consists of five chapters. The first chapter lays the foundation of the analysis in the subsequent chapters by defining "ice-infested area" and "marine insurance in ice-infested areas" mentioned in context, and articulating the interfaces between general marine insurance and marine insurance in ice-infested areas. This raises four issues which are discussed in detail. The second chapter analyzes the influence of ice class stipulations in H&M insurance in ice-infested areas illustrating that marine risks in ice-infested areas can be included in the risks covered by relevant clauses under the Institute and Chinese H&M insurance clauses as well as the Nordic Marine Insurance Plan. This results in a gap in coverage in the Nordic Plan because of the ice class provision in the contract and the absence of any such gap in the Institute and Chinese Clauses. The third chapter depicts the issue of underwriting the nuclear risks caused by nuclear-powered vessels in ice-infested areas, especially icebreakers in Russia, through an explanation of the nuclear risk and a comparison of the stance adopted in the marine insurance clauses of the three jurisdictions mentioned. This leads to the author’s conclusion that nuclear risks should be excluded under the Chinese H&M insurance clauses. As in the second chapter, the fourth chapter analyzes similar issues relating to cargo insurance. To be precise, the influence of the defective packaging exception clause on the coverage of freezing damage to cargoes in ice-infested areas, demonstrates that freezing damage to cargoes in ice-infested areas can be included in the risks covered under Institute, Chinese and Norwegian cargo insurance clauses. However, there is a gap in coverage under the Institute and Chinese clauses because of the defective packaging exception. No such gap appears in the Norwegian clauses which can form the basis for Chinese clauses for the formulation of a "thermoclause" to resolve the issue. The fifth chapter discusses liability insurance for vessel-source pollution in ice-infested areas including civil and penal liability. In particular, it introduces penal liability for excess carbon emissions which is likely to be covered by P&I insurance via the "Omnibus Rule" in the future as ice navigation develops. The conclusion provides a clear and concise summary of the thesis.