Merchant Shipping Act 1995

Compulsory insurance U.K.

163 Compulsory insurance against liability for pollution. U.K.

(1) Subject to the provisions of this Chapter relating to Government ships, subsection (2) below shall apply to any ship carrying in bulk a cargo of more than 2,000 tons of oil of a description specified in regulations made by the Secretary of State.

(2) The ship shall not enter or leave a port in the United Kingdom or arrive at or leave a terminal in the territorial sea of the United Kingdom nor, if the ship is a United Kingdom ship, a port in any other country or a terminal in the territorial sea of any other country, unless there is in force a certificate complying with the provisions of subsection (3) below and showing that there is in force in respect of the ship a contract of insurance or other security satisfying the requirements of Article VII of the Liability Convention (cover for owner’s liability).

(3) The certificate must be—

(a) if the ship is a United Kingdom ship, a certificate issued by the Secretary of State;

(b) if the ship is registered in a Liability Convention country other than the United Kingdom, a certificate issued by or under the authority of the government of the other Liability Convention country; and

(c) if the ship is registered in a country which is not a Liability Convention country, a certificate issued by the Secretary of State or by or under the authority of the government of any Liability Convention country other than the United Kingdom.

(4) Any certificate required by this section to be in force in respect of a ship shall be carried in the ship and shall, on demand, be produced by the master to any officer of customs and excise or of the Secretary of State and, if the ship is a United Kingdom ship, to any proper officer.

(5) If a ship enters or leaves, or attempts to enter or leave, a port or arrives at or leaves, or attempts to arrive at or leave, a terminal in contravention of subsection (2) above, the master or [F1 registered owner] shall be liable [F2 on conviction on indictment to a fine, or on summary conviction to a fine not exceeding £50,000] [F2 on summary conviction, or on conviction on indictment, to a fine].

(6) If a ship fails to carry, or the master of a ship fails to produce, a certificate as required by subsection (4) above, the master shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale.

(7) If a ship attempts to leave a port in the United Kingdom in contravention of this section the ship may be detained.

Textual Amendments

F1 Words in s. 163(5) substituted (21.11.2008) by The Merchant Shipping (Oil Pollution) (Bunkers Convention) Regulations 2006 (S.I. 2006/1244), regs. 1(2), 16 (with reg. 1(5))

F2 Words in s. 163(5) substituted (E.W.) (12.3.2015) by The Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Fines on Summary Conviction) Regulations 2015 (S.I. 2015/664), reg. 1(1), Sch. 4 para. 27(10) (with reg. 5(1))

Modifications etc. (not altering text)

C1 s. 163 extended (with modifications) to Anguilla (30.11.1997) by S.I. 1997/2580, art. 2, Sch.

s. 163 extended (with modifications) to Bermuda (30.11.1997) by S.I. 1997/2581, art. 2, Sch.

s. 163 extended (with modifications) to the British Antarctic Territory (30.11.1997) by S.I. 1997/2582, art. 2, Sch.

s. 163 extended (with modifications) to the British Indian Ocean Territory (30.11.1997) by S.I. 1997/2583, art. 2, Sch.

s. 163 extended (with modifications) to the Falkland Islands (30.11.1997) by S.I. 1997/2584, art. 2, Sch.

s. 163 extended (with modifications) to the Pitcairn, Henderson, Ducie and Oneo Islands (30.11.1997) by S.I. 1997/2585, arts. 2, 3, Sch.

s. 163 extended (with modifications) to the Sovereign Base Areas of Akrotiri and Dhekelia (30.11.1997) by S.I. 1997/2587, art. 2, Sch.

s. 163 extended (with modifications) to the South Georgia and the South Sandwich Islands (30.11.1997) by S.I. 1997/2588, art. 2, Sch.

s. 163 extended (with modifications) to the Turks and Caicos Islands (30.11.1997) by S.I. 1997/2589, art. 2, Sch.

s. 163 extended (with modifications) to the Virgin Islands (30.11.1997) by S.I. 1997/2590, art. 2, Sch.

S. 163 extended (with modifications) to Jersey (1.12.1997) by S.I. 1997/2598, arts. 2, 3, Sch. 1

S. 163 extended (with modifications) to Guernsey (11.3.1998) by S.I. 1998/260, arts. 2, 3, Sch. 1

S. 163 extended (with modifications) to the Cayman Islands (20.5.1998) by S.I. 1998/1261, art. 2, Sch.

S. 163 extended (with modifications) to Montserrat (20.5.1998) by S.I. 1998/1262, art. 2, Sch.

S. 163 extended (with modifications) to Saint Helena (20.5.1998) by S.I. 1998/1263, art. 2, Sch.

[F3 163A Compulsory insurance against liability for pollution from bunker oil U.K.

(1) Subject to the provisions of this Chapter relating to Government ships, subsection (2) below shall apply to any ship having a gross tonnage greater than 1,000 tons calculated in the manner prescribed by an order made by the Secretary of State under paragraph 5(2) of Part II of Schedule 7.

(2) The ship shall not enter or leave a port in the United Kingdom or arrive at or leave a terminal in the territorial sea of the United Kingdom nor, if the ship is a United Kingdom ship, a port in any other country or a terminal in the territorial sea of any other country, unless there is in force—

(a) a contract of insurance or other security in respect of the ship satisfying the requirements of Article 7 of the Bunkers Convention; and

(b) a certificate complying with the provisions of subsection (3) showing that there is in force in respect of the ship a contract of insurance or other security satisfying those requirements.

(3) The certificate must be—

(a) if the ship is a United Kingdom ship, a certificate issued by the Secretary of State;

(b) if the ship is registered in a Bunkers Convention country other than the United Kingdom, a certificate issued by or under the authority of the government of the other Bunkers Convention country; and

(c) if the ship is registered in a country which is not a Bunkers Convention country, a certificate issued by the Secretary of State or by or under the authority of the government of any Bunkers Convention country other than the United Kingdom.

(4) Any certificate required by this section to be in force in respect of a ship shall be carried in the ship and shall, on demand, be produced by the master to any officer of Revenue and Customs or of the Secretary of State and, if the ship is a United Kingdom ship, to any proper officer.

(5) If a ship enters or leaves, or attempts to enter or leave, a port or arrives at or leaves, or attempts to arrive at or leave, a terminal in contravention of subsection (2) by reason of there being no certificate in force as mentioned in that subsection, the master or registered owner shall be liable on conviction on indictment to a fine, or on summary conviction to a fine not exceeding the statutory maximum.

(6) If a ship fails to carry, or the master of a ship fails to produce, a certificate as required by subsection (4), the master shall be liable on summary conviction to a fine not exceeding level 5 on the standard scale.

(7) If a ship attempts to leave a port in the United Kingdom in contravention of subsection (2), the ship may be detained.

(8) Any document required or authorised, by virtue of any statutory provision, to be served on a foreign company for the purposes of the institution of (or otherwise in connection with) proceedings for an offence under subsection (5) against the company as registered owner of the ship shall be treated as duly served on the company if the document is served on the master of the ship.

[F4 In this subsection “foreign company” means a company or body which is not one to which section 1139 of the Companies Act 2006 applies so as to authorise service of the document in question.]

(9) Any person authorised to serve any document for the purposes of the institution of (or otherwise in connection with) the institution of proceedings for an offence under this section shall, for that purpose, have the right to go on board the ship in question.

(10) In the case of a ship of which, at any relevant time, the tonnage has not been and cannot be ascertained in the manner set out in subsection (1), the best available evidence shall be used in calculating the tonnage of the ship in accordance with any order under paragraph 5(2) of Part II of Schedule 7.]

Textual Amendments

F3 S. 163A inserted (21.11.2008) by The Merchant Shipping (Oil Pollution) (Bunkers Convention) Regulations 2006 (S.I. 2006/1244), regs. 1(2), 17 (with reg. 1(5))

F4 Words in s. 163A(8) substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009 (S.I. 2009/1941), art. 1(2), Sch. 1 para. 152(3) (with art. 10)

164 Issue of certificate by Secretary of State. U.K.

(1) Subject to subsection (2) below, if the Secretary of State is satisfied, on the application for such a certificate as is mentioned in [F5 section 163(2)] in respect of a United Kingdom ship or a ship registered in any country which is not a Liability Convention country, that there will be in force in respect of the ship, throughout the period for which the certificate is to be issued, a contract of insurance or other security satisfying the requirements of Article VII of the Liability Convention, the Secretary of State shall issue such a certificate to the [F6 registered owner].

[F7 (1A) Subject to subsection (2) below, if the Secretary of State is satisfied, on the application for such a certificate as is mentioned in section 163A(2) in respect of a United Kingdom ship F8 ..., that there will be in force in respect of the ship, throughout the period for which the certificate is to be issued, a contract of insurance or other security satisfying the requirements of Article 7 of the Bunkers Convention, the Secretary of State shall issue such a certificate to the registered owner.]

[F9 (2) The Secretary of State may refuse the certificate if he is of the opinion that there is a doubt whether—

(a) the person providing the insurance or other security will be able to meet his obligations thereunder; or

(b) the insurance or other security will cover the registered owner’s liability under section 153, or the owner’s liability under section 153A, as the case may be.]

[F10 (2A) If the Secretary of State is satisfied, on the application for such a certificate as is mentioned in section 163A(2) in respect of a ship registered in any country which is not a Bunkers Convention country, that there will be in force in respect of the ship, throughout the period for which the certificate is to be issued, a contract of insurance or other security satisfying the requirements of Article 7 of the Bunkers Convention, the Secretary of State may issue such a certificate to the registered owner.]

(3) The Secretary of State may make regulations providing for the cancellation and delivery up of a certificate under this section in such circumstances as may be prescribed by the regulations.

(4) If a person required by regulations under subsection (3) above to deliver up a certificate fails to do so he shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale.

(5) The Secretary of State shall send a copy of any certificate issued by him under this section in respect of a United Kingdom ship to the Registrar General of Shipping and Seamen, and the Registrar shall make the copy available for public inspection.

Textual Amendments

F5 Words in s. 164(1) substituted (21.11.2008) by The Merchant Shipping (Oil Pollution) (Bunkers Convention) Regulations 2006 (S.I. 2006/1244), regs. 1(2), 18(2)(a) (with reg. 1(5))

F6 Words in s. 164(1) substituted (21.11.2008) by The Merchant Shipping (Oil Pollution) (Bunkers Convention) Regulations 2006 (S.I. 2006/1244), regs. 1(2), 18(2)(b) (with reg. 1(5))

F7 S. 164(1A) inserted (15.7.2006 for specified purposes, 21.11.2008 in so far as not already in force) by The Merchant Shipping (Oil Pollution) (Bunkers Convention) Regulations 2006 (S.I. 2006/1244), regs. 1(2)(4), 18(3) (with reg. 1(5))

F8 Words in s. 164(1A) omitted (30.11.2016) by virtue of The Merchant Shipping Act 1995 (Amendment) Order 2016 (S.I. 2016/1061), arts. 1, 2(a)

F9 S. 164(2) substituted (21.11.2008) by The Merchant Shipping (Oil Pollution) (Bunkers Convention) Regulations 2006 (S.I. 2006/1244), regs. 1(2), 18(4) (with reg. 1(5))

F10 S. 164(2A) inserted (30.11.2016) by The Merchant Shipping Act 1995 (Amendment) Order 2016 (S.I. 2016/1061), arts. 1, 2(b)

Modifications etc. (not altering text)

C2 s. 164 extended (with modifications) to Anguilla (30.11.1997) by S.I. 1997/2580, art. 2, Sch.

s. 164 extended (with modifications) to Bermuda (30.11.1997) by S.I. 1997/2581, art. 2, Sch.

s. 164 extended (with modifications) to the British Antarctic Territory (30.11.1997) by S.I. 1997/2582, art. 2, Sch.

s. 164 extended (with modifications) to the British Indian Ocean Territory (30.11.1997) by S.I. 1997/2583, art. 2, Sch.

s. 164 extended (with modifications) to the Falkland Islands (30.11.1997) by S.I. 1997/2584, art. 2, Sch.

s. 164 extended (with modifications) to the Pitcairn, Henderson, Ducie and Oneo Islands (30.11.1997) by S.I. 1997/2585, arts. 2, 3, Sch.

s. 164 extended (with modifications) to the Sovereign Base Areas of Akrotiri and Dhekelia (30.11.1997) by S.I. 1997/2587, art. 2, Sch.

s. 164 extended (with modifications) to the South Georgia and the South Sandwich Islands (30.11.1997) by S.I. 1997/2588, art. 2, Sch.

s. 164 extended (with modifications) to the Turks and Caicos Islands (30.11.1997) by S.I. 1997/2589, art. 2, Sch.

s. 164 extended (with modifications) to the Virgin Islands (30.11.1997) by S.I. 1997/2590, art. 2, Sch.

S. 164 extended (with modifications) to Jersey (1.12.1997) by S.I. 1997/2598, arts. 2, 3, Sch. 1

S. 164 extended (with modifications) to Guernsey (11.3.1998) by S.I. 1998/260, arts. 2, 3, Sch. 1

S. 164 extended (with modifications) to the Cayman Islands (20.5.1998) by S.I. 1998/1261, art. 2, Sch.

S. 164 extended (with modifications) to Montserrat (20.5.1998) by S.I. 1998/1262, art. 2, Sch.

S. 164 extended (with modifications) to Saint Helena (20.5.1998) by S.I. 1998/1263, art. 2, Sch.

165 Rights of third parties against insurers. U.K.

(1) Where it is alleged that the [F11 registered owner] of a ship has incurred a liability under section 153 as a result of any discharge or escape of oil occurring, or as a result of any relevant threat of contamination arising, while there was in force a contract of insurance or other security to which such a certificate as is mentioned in section [F12 163(2)] related, proceedings to enforce a claim in respect of the liability may be brought against the person who provided the insurance or other security F13 ....

[F14 (1A) Where it is alleged that the owner of a ship has incurred a liability under section 153A as a result of any discharge or escape of bunker oil occurring, or as a result of any relevant threat of contamination arising, while there was in force a contract of insurance or other security to which such a certificate as is mentioned in section 163A(2) related, proceedings to enforce a claim in respect of the liability may be brought against the person who provided the insurance or other security.

(1B) In the following provisions of this section, “the insurer” means the person who provided the insurance or other security referred to in subsection (1) or subsection (1A), as the case may be.]

(2) In any proceedings brought against the insurer by virtue of this section [F15 in respect of liability under section 153] it shall be a defence (in addition to any defence affecting the [F16 registered owner's] liability) to prove that the discharge or escape, or (as the case may be) the threat of contamination, was due to the wilful misconduct of the [F17 registered owner] himself.

(3) The insurer may limit his liability in respect of claims [F18 in respect of liability under section 153 which are] made against him by virtue of this section in like manner and to the same extent as the [F19 registered owner] may limit his liability [F20 under section 157] but the insurer may do so whether or not the discharge or escape, or (as the case may be) the threat of contamination, resulted from anything done or omitted to be done by the [F19 registered owner] as mentioned in section 157(3).

(4) Where the [F21 registered owner] and the insurer each apply to the court for the limitation of his liability [F22 (in relation to liability under section 153)] any sum paid into court in pursuance of either application shall be treated as paid also in pursuance of the other.

[F23 (4A) In any proceedings brought against the insurer by virtue of this section in respect of liability under section 153A it shall be a defence (in addition to any defence affecting the owner’s liability) to prove that the discharge or escape, or (as the case may be) the threat of contamination, was due to the wilful misconduct of the owner himself.

(4B) The insurer may limit his liability in respect of claims in respect of liability under section 153A which are made against him by virtue of this section in like manner and to the same extent as the owner may limit his liability by virtue of section 185; but the insurer may do so whether or not the discharge or escape, or (as the case may be) the threat of contamination, resulted from any act or omission mentioned in Article 4 of the Convention set out in Part I of Schedule 7.

(4C) Where the owner and the insurer each apply to the court for the limitation of his liability (in relation to liability under section 153A) any sum paid into court in pursuance of either application shall be treated as paid also in pursuance of the other.]

(5) The [F24 Third Parties (Rights against Insurers) Act 2010] shall not apply in relation to any contract of insurance to which such a certificate as is mentioned in section 163 [F25 or 163A] relates.

Textual Amendments

F11 Words in s. 165(1) substituted (21.11.2008) by The Merchant Shipping (Oil Pollution) (Bunkers Convention) Regulations 2006 (S.I. 2006/1244), regs. 1(2), 19(2)(a) (with reg. 1(5))

F12 Word in s. 165(1) substituted (21.11.2008) by The Merchant Shipping (Oil Pollution) (Bunkers Convention) Regulations 2006 (S.I. 2006/1244), regs. 1(2), 19(2)(b) (with reg. 1(5))

F13 Words in s. 165(1) omitted (21.11.2008) by virtue of The Merchant Shipping (Oil Pollution) (Bunkers Convention) Regulations 2006 (S.I. 2006/1244), regs. 1(2), 19(2)(c) (with reg. 1(5))

F14 S. 165(1A)(1B) inserted (21.11.2008) by The Merchant Shipping (Oil Pollution) (Bunkers Convention) Regulations 2006 (S.I. 2006/1244), regs. 1(2), 19(3) (with reg. 1(5))

F15 Words in s. 165(2) inserted (21.11.2008) by The Merchant Shipping (Oil Pollution) (Bunkers Convention) Regulations 2006 (S.I. 2006/1244), regs. 1(2), 19(4)(a) (with reg. 1(5))

F16 Words in s. 165(2) substituted (21.11.2008) by The Merchant Shipping (Oil Pollution) (Bunkers Convention) Regulations 2006 (S.I. 2006/1244), regs. 1(2), 19(4)(b) (with reg. 1(5))

F17 Words in s. 165(2) substituted (21.11.2008) by The Merchant Shipping (Oil Pollution) (Bunkers Convention) Regulations 2006 (S.I. 2006/1244), regs. 1(2), 19(4)(c) (with reg. 1(5))

F18 Words in s. 165(3) inserted (21.11.2008) by The Merchant Shipping (Oil Pollution) (Bunkers Convention) Regulations 2006 (S.I. 2006/1244), regs. 1(2), 19(5)(a) (with reg. 1(5))

F19 Words in s. 165(3) substituted (21.11.2008) by The Merchant Shipping (Oil Pollution) (Bunkers Convention) Regulations 2006 (S.I. 2006/1244), regs. 1(2), 19(5)(b) (with reg. 1(5))

F20 Words in s. 165(3) inserted (21.11.2008) by The Merchant Shipping (Oil Pollution) (Bunkers Convention) Regulations 2006 (S.I. 2006/1244), regs. 1(2), 19(5)(c) (with reg. 1(5))

F21 Words in s. 165(4) substituted (21.11.2008) by The Merchant Shipping (Oil Pollution) (Bunkers Convention) Regulations 2006 (S.I. 2006/1244), regs. 1(2), 19(6)(a) (with reg. 1(5))

F22 Words in s. 165(4) inserted (21.11.2008) by The Merchant Shipping (Oil Pollution) (Bunkers Convention) Regulations 2006 (S.I. 2006/1244), regs. 1(2), 19(6)(b) (with reg. 1(5))

F23 S. 165(4A)-(4C) inserted (21.11.2008) by The Merchant Shipping (Oil Pollution) (Bunkers Convention) Regulations 2006 (S.I. 2006/1244), regs. 1(2), 19(7) (with reg. 1(5))

F24 Words in s. 165(5) substituted (1.8.2016) by Third Parties (Rights against Insurers) Act 2010 (c. 10), s. 21(2), Sch. 2 para. 3; S.I. 2016/550, art. 2

F25 Words in s. 165(5) inserted (21.11.2008) by The Merchant Shipping (Oil Pollution) (Bunkers Convention) Regulations 2006 (S.I. 2006/1244), regs. 1(2), 19(8) (with reg. 1(5))

Modifications etc. (not altering text)

C3 s. 165 extended (with modifications) to Anguilla (30.11.1997) by S.I. 1997/2580, art. 2, Sch.

s. 165 extended (with modifications) to Bermuda (30.11.1997) by S.I. 1997/2581, art. 2, Sch.

s. 165 extended (with modifications) to the British Antarctic Territory (30.11.1997) by S.I. 1997/2582, art. 2, Sch.

s. 165 extended (with modifications) to the British Indian Ocean Territory (30.11.1997) by S.I. 1997/2583, art. 2, Sch.

s. 165 extended (with modifications) to the Falkland Islands (30.11.1997) by S.I. 1997/2584, art. 2, Sch.

s. 165 extended (with modifications) to the Pitcairn, Henderson, Ducie and Oneo Islands (30.11.1997) by S.I. 1997/2585, arts. 2, 3, Sch.

s. 165 extended (with modifications) to the Sovereign Base Areas of Akrotiri and Dhekelia (30.11.1997) by S.I. 1997/2587, art. 2, Sch.

s. 165 extended (with modifications) to the South Georgia and the South Sandwich Islands (30.11.1997) by S.I. 1997/2588, art. 2, Sch.

s. 165 extended (with modifications) to the Turks and Caicos Islands (30.11.1997) by S.I. 1997/2589, art. 2, Sch.

s. 165 extended (with modifications) to the Virgin Islands (30.11.1997) by S.I. 1997/2590, art. 2, Sch.

S. 165 extended (with modifications) to Jersey (1.12.1997) by S.I. 1997/2598, arts. 2, 3, Sch. 1

S. 165 extended (with modifications) to Guernsey (11.3.1998) by S.I. 1998/260, arts. 2, 3, Sch. 1

S. 165 extended (with modifications) to the Cayman Islands (20.5.1998) by S.I. 1998/1261, art. 2, Sch.

S. 165 extended (with modifications) to Montserrat (20.5.1998) by S.I. 1998/1262, art. 2, Sch.

S. 165 extended (with modifications) to Saint Helena (20.5.1998) by S.I. 1998/1263, art. 2, Sch.