VIETNAM MARITIME CODE

CHAPTER XV

CIVIL LIABILITY OF SHIPOWNER

             Article 194

 1.         The shipowner is liable for damages resulting from the employment of sea-going vessel where he fails to prove that damages have occurred not throughout his fault, such liability is hereinafter referred to as civil liability of the shipowner.
2.         Civil liability of the shipowner does not relive him of administrative and criminal responsibilities.

           Article 195

 1.         The shipowner is entitled to limit his liability according to the limitation of liability set out in Article 196 of the present Code where he makes good to any loss or damage incident to:

a)           Loss of life or personal injury or health damage caused to any person on board the vessel, or loss of or damage to any property on board the vessel;
b)          Loss of life or personal injury or health damage caused to any person outside the vessel, or loss of or damage to any property or other interests outside the vessel, or any rights infringed through the act or omission of any person, whether on board or not, whom the shipowner is responsible for.

Where loss or damage caused by any person outside the vessel whose act or omission the shipowner is responsible for, the shipowner is entitled to limit his liability to loss or damage only arising form the navigation or management of the vessel or in the loading, carriage or discharge of cargo; or in the embarkation, carriage or disembarkation of passengers;

c)           Statutory obligations, liabilities for disposal of shipwreck together with her material bodies when being raised, and for removal, destruction of a vessel which is sunk, stranded or abandoned; obligations or liabilities for compensation for damages to the facilities of port, berth and wharf, channel, waterway anchorage area, dock; obligations or liabilities for compensation for environmental pollution damages caused by the vessel other than environmental pollution damages caused by atomic radio-activity.

2.         The shipowner may limit his liability for compensation for the cases set out in point b, item 1 of this Article without proving fault on his privity or on part of the other persons for which he should be responsible where such liability resulting from the possession, proprietorship, management, control of the vessel.

3.         The shipowner is not entitled to limit his liability where the damage is incident to:
a)           Act of salvage or costs for general average contribution;
b)          Environmental pollution caused by atomic radio-activity;
c)           Claims of the shipmaster or other crew, shipowners servant working on board or outside the vessel whose duties have direct connection with the operation of the vessel including claims of the successor, his representative and other people who he should bring up if the statutory labour contract between the shipowner and the above people do not entitle the shipowner to the limitation of his liability for their claims or do entitle him only to limitation of the liability if this limitation is on a higher scale in comparison with that determined in Article 196 of the present Code.

4.         Where the provisions in the Vietnamese regulations and laws on environmental protection or in the international treaties signed, or recognized by Vietnam are different from those laid down in the present Code, the shipowners limitation of liability is determined and calculated on the basis of such acts.

            Article 196

 1.         The shipowner shall be, within the following limitations, entitled to limit his civil liability to:
a)           An aggregate value of the vessel concerned calculating on the basis of Poincare Francs three thousand one hundred for each ton of the vessels gross registered tonnage (GRT) in respect of compensation for loss of life, personal injury or health damage;
b)          An aggregate value of the vessel concerned calculating on the basis of Poincare Francs one thousand for each ton of the vessels gross registered tonnage (GRT) in respect of compensation for loss of or damage to the property;
c)           An aggregate value of the vessel concerned calculating on the basis of Poincare Francs three thousand one hundred for each tone of the vessels gross registered tonnage (GRT) in respect of compensation for loss of life, personal injury or health damage, and loss of or damage to the property where these losses or damages have been resulting from the same occurrence. However, out of the above set out aggregate value, the total amount of Poincare Francs two thousand one hundred for each ton of the vessels gross registered tonnage (GRT) is designated for compensation for loss of life, personal injury and health damage, the balance - for loss of or damage to the property. In case the total amount to cover the compensation for loss of life, personal injury or health damage is insufficient, the imbalance shall be nibbled in a corresponding proportion from the money covering the compensation for loss of or damage to the property.

2.         Any agreement to lessen the shipowners liability for compensation otherwise than the limitation determined in item 1 of this Article shall be null and void.

3.         Gross Registered Tonnage (GRT) referred to in item 1 of this Article is determined as follows:
a)           Net Registered Tonnage plus the tonnage of engine room space, if the vessel is self-propelled.
b)          Net Registered Tonnage, if the vessel is non-self propelled.

4.         In respect of limitation of the civil liability of shipowner, the ship having gross registered tonnage below three hundred tons shall be considered three hundred tons.

            Article 197

 1.         The limitation determined in Article 196 of the present Code is only exclusively applicable to compensation for loss and damage resulting from the same occurrence not connected with the other occurrence.

2.         Where in the same occurrence, the shipowner is entitled to lodge a counter claim against his claimant, the provisions of this Chapter is only applicable to ascertain the imbalance in comparison with liability of each party concerned.

3.         The limitation determined in Article 196 of the present Code shall be converted into the Vietnamese currency according to the official exchange rate announced by the State Bank of Vietnam at the time of payment.

            Article 198

 1.         Where the amount of compensation exceeds the limitation provided in Article 198 of the present Code, the shipowner may constitute a Compensation Fund to satisfy the claims.

2.         The Compensation Fund shall be available exclusively for satisfaction of the claims for compensation, the limitation of civil liability of which the shipowner is entitled to.

3.         The Compensation Fund shall be constituted either by depositing the sum or by producing other guarantee at the court where the claim is lodged or at a competent State authority and must be considered adequate and protected by such court or authority.

4.         Where the Compensation Fund has been constituted by the shipowner nobody is entitled to infringe upon the interests and property of the shipowner. The court or the competent State authority referred to in item 3 of this Article is entitled to order the release of the property liened or arrested or to similarly order the release of the security furnished to avoid such lien or arrest.

5.         The Compensation Fund shall be distributed among the claimants in proper proportion to the amounts of their established claims.

6.         The constituting of the Compensation Fund shall not be considered as the admission of civil liabilities by the shipowner.

            Article 199

           The limitation of civil liability of a shipowner shall also be applied equally to that of a ship-operator, ship-manager, professional salvor and those persons for whose acts, negligence and fault the shipowner himself or they themselves should be liable.

CHAPTER XVI

CONTRACT OF MARINE INSURANCE

 Section A: GENERAL PROVISIONS

             Article 200

 1.         A contract of marine insurance is a contract signed between the insurer and the assured whereby the insurer undertakes against an insurance premium paid by the assured to indemnify the latter, in manner and to the extent thereby agreed, for losses incurred by perils to which the subject of insurance is exposed.

2.         A contract of marine insurance may be extended so as to cover perils to which, in connection with the carriage by sea, the subject of insurance is exposed in the carriage by air, in inland waters or on land in combined transport.

3.         The contract of marine insurance should be done in writing.

            Article 201

 1.         A subject of marine insurance may be every property interest incident to the maritime shipping activities and appraisable in terms of money, such as any vessel, cargo, freight, passage money for the carriage of passengers, charter-hire, hire and purchase money, expected profit on cargo, commission, general average costs, obligations arising under civil liability and the security for the vessel, cargo or freight.
2.         The subject of marine insurance may be a vessel in course of building.

            Article 202

1.         The insurer may reinsure in respect of insurance concluded by him.
2.         The contract of reinsurance is independent with the original contract of insurance.

            Article 203

1.         On demand of the assured, the insurer is bound to issue to him a marine policy. The policy shall constitute an evidence as to the contract of insurance.
2.         Before issuing the policy, the insurer is bound to issue to the assured, on his demand, an insurance certificate stating the conclusion of the contract.
3.         The marine policy may be made out to a straight policy, to order or to bearer.
4.         The marine policy should contain:
a)           The name of the assured, or of some person whose interest being insured;
b)          The subject of insurance;
c)           The perils insured against;
d)          The voyage, or period of time, as the case may be, covered by the insurance;
e)           The sum or sums insured;
f)            The place, the date and the hour of issue of the policy;
g)          The signature and the confirmation of the insurer.

            Article 204

 1.         The assured is obliged to inform the insurer about all circumstances within are known to him or should have been known to him in connection with the conclusion of the contract of insurance, and are of essential significance to the assessment by the insurer relative to the risk, to the decision as to whether the proposal should be accepted or not, and to the terms of the contract, except circumstances which are common knowledge or have been known or should be known to the insurer.

2.         The obligation of the assured set out in item 1 of this Article is also applied to his representatives duly authorized by the assured.

3.         The obligations set out in this Article is also applicable to a third party where the contract of marine insurance is concluded for the benefit of the third party, unless it is not known to him.

            Article 205

 1.         A contract of marine insurance may be concluded for the benefit of a third party, hereinafter referred to as an insurable interest.
2.         The insurable interest is entitled to demand from the insurer delivery of the marine policy. As long as the marine policy remains in possession of the insurable interest, he may dispose of rights originating from the contract.

          Obligations of the assured connected with the performance of the contract of marine insurance, except the obligation to pay the insurance premium, pass to the insurable interest at the delivery of the marine policy to him.

            Article 206

1.         A contract of marine insurance shall invalidate where at the time of its conclusion the peril covered by insurance has already occurred, or where the possibility of its occurring has not existed. The insurer retains, however, the right to a cancellation fee, unless when concluding the contract, he knew of the circumstances causing its invalidity.

2.         The amount of the cancellation fee is determined by the contract between the two contracting parties.

            Article 207

           If the assured commits a breach of his obligation set out in Article 204 of the present Code, the insurer has the right to rescind the contract concluded, retaining the right to the entire insurance premium. When the assured fails to provide information or provides inaccurate information according to the provisions of Article 204 of the present Code, through no fault of his, the insurer has not right to rescind the contract, but to request a reasonable increase of the insurance premium.

            Article 208

           The assured has the right to rescind the contract of insurance at any time before that the state of peril as covered by the contract has not commenced and he is bound, however, to pay the cancellation fee.
          The amount of the cancellation fee and terms of the return of insurance premium are determined by the contract between the contracting parties.

            Article 209 

          Any claim in respect of a contract of marine insurance is barred at the expiration of two years from the date on which the casualty occurs.

Section B: INSURABLE VALUE AND AMOUNT INSURED

             Article 210

           Insurable value is the real value of the subject of insurance and it is ascertained as follows:

a)           The insurable value of the vessel is her value at the commencement of the insurance, including the value of her machinery, equipment, spare parts and stores plus the charges of insurance upon the whole. The insurable value of the vessel includes also, unless otherwise provided by the contract, money advanced for seamens wages and other disbursement incurred to make the ship fit for the voyage.

b)          The insurable value of the cargo is its value invoiced at the place of loading or is market value at the place and time of loading plus the charges of insurance and may include the expected profit;

c)           The insurable value of the freight is the gross amount of freight plus the charges of insurance. Where the charterers have the freight insured, this amount of freight is included in the insurable value of the cargo for insurance;

d)          The insurable value of any other subject of insurance, except obligations arising under civil liability, is the amount of the subject of insurance at the place and time when the insurance attaches, plus the charges of insurance.

            Article 211

 1.         Upon concluding a marine insurance contract, the assured must declare the amount for which the subject of insurance is insured, hereinafter referred to as the insured amount.

2.         Where the insured amount as specified in the contract is lower than the insurable value, the insurer is liable for losses in such proportions as the insured amount bears to the insurable valued, including other expenses under the insurance.

3.         Where the insured amount as specified in the contract exceeds the insurable value, the marine insurance contract is not valid for the difference.

            Article 212

           Where the subject of insurance has been insured against the same peril with two or more insurers for the amounts which in aggregate exceed the insurable value, all such insurers are liable only upto the amount of the insurable value, and within limit of that value each of them is liable in proportion to the amount insured as accepted by him. This insurance is called double insurance.

Section C: TRANSFER OF RIGHTS UNDER CONTRACT OF MARINE INSURANCE

             Article 213

           Rights under a contract of marine insurance may be transferred only to the transferee of the subject of insurance; where these rights have not been transferred to the transferee of the subject of insurance, the contract of insurance is dissolved, which does not relieve the insurer of liability for losses which arose prior to the alienation of the subject of insurance.
          Concurrently with the transfer of rights under a contract of insurance to the transferee, the latter assumes the obligations which were incumbent upon the transferor of the subject of insurance, including the obligations related to the defences as the insurer would have been entitled to raise, under the contract of marine insurance, against the transferer.

            Article 214

 1.         The transfer of rights under a contract of marine insurance which was evidenced in a policy is effected parallely with the transfer of the marine policy.
2.         The transfer of a marine policy is governed by the provisions on the transfer of a bill of lading.

            Article 215

 1.         Where the subject of insurance is a vessel, the transfer of rights under the contract of marine insurance to the vessels transferee requires the insurers consent.
2.         Where at the time of transfer the vessel is on a voyage, the rights under the contract of marine insurance have not been passed to the transferee of the vessel, and the contract of marine insurance remains in force until the vessel has made fast at the first port at which she has called after the transfer.