The overhaul creates simplified clauses reflecting the changes to the oil price cap mechanism that have occurred since the original instrument was put in place.
Arabella Ramage, Legal Director of the Lloyd’s Market Association, noted: “After a number of recent changes to legislation by the global Price Cap Coalition (the sanctions coalition made up of the G7, the European Union and Australia), notably the decision to require ‘per voyage’ attestations on adherence to the price cap, and the inclusion of ancillary costs in the pricing formula, the LMA has decided to revise the hull and cargo clauses. We have also taken the opportunity to remove the introductory wording which was in the clauses when the concept was new and needed explaining to insureds when it was being introduced to existing contracts”.
“The new model wordings (LMA5650 and LMA5651) will be posted to the Lloyd’s repository and all previous versions of the hull and cargo clauses removed for clarity.
“While it is recommended that previous versions should not be used in new contracts to ensure all the changes have been properly taken into account, no changes are needed to existing contracts where previous versions have been used.”
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