Feeder Collision in Mumbai Harbour: RDC and Cross-Liability
MV Sea Link, a 1,200 TEU feeder, collides with a fishing trawler in Mumbai harbour at night. Both vessels are at fault; the harbour master's inquiry apportions 70% to Sea Link and 30% to the trawler. Sea Link's hull damage is INR 1.5 crore; the trawler's damage is INR 60 lakh. Sea Link's H&M policy includes the 3/4 collision liability (RDC) clause, with a deductible of INR 10 lakh each accident. The trawler's owner claims INR 60 lakh from Sea Link; Sea Link claims INR 1.5 crore from the trawler. There are no injury or pollution claims. The H&M insurer asks the surveyor to advise on the settlement. How should the claims be adjusted?
1. Apply the single-liability (cross-liability) principle and calculate the net amount payable between the vessels.
Read the worked answer
Under the single-liability principle used in collision clauses, the two claims are set off rather than paid gross in both directions.
- Sea Link's liability to the trawler: 70% x INR 60 lakh = INR 42 lakh
- Trawler's liability to Sea Link: 30% x INR 1.5 crore = INR 45 lakh
- Set-off: INR 45 lakh - INR 42 lakh = INR 3 lakh net payable by the trawler to Sea Link
So Sea Link does not pay the trawler the gross INR 42 lakh; the trawler pays Sea Link INR 3 lakh after set-off. The surveyor should verify the 70/30 apportionment from the harbour master's inquiry, AIS/VDR data, bridge logs, look-out and Collision Regulations evidence before accepting the figures. If the policy contains a single-liability clause, the insurer is entitled to adjust on this net basis. If not, the gross claims would be handled separately, which would produce a different result and could expose the insurer to a larger collision liability claim.
2. What is recoverable under Sea Link's H&M policy for own damage and collision liability, and how does the deductible apply?
Read the worked answer
Own damage. Sea Link's hull damage is INR 1.5 crore. The H&M insurer pays the admissible repair cost less the INR 10 lakh deductible, i.e. INR 1.4 crore, subject to survey and policy terms. The insurer is subrogated to Sea Link's recovery from the trawler, but because of the set-off the net third-party recovery is only INR 3 lakh, not INR 45 lakh in cash.
Collision liability. The 3/4 RDC clause responds only to Sea Link's liability to the trawler. On the net single-liability calculation, Sea Link owes nothing; the trawler owes Sea Link INR 3 lakh. Therefore no 3/4 collision liability payment arises. If the claims were not set off, the insurer would pay 3/4 of INR 42 lakh = INR 31.5 lakh and P&I would cover the remaining 1/4, but that is not the position under single liability.
Deductible. Apply the deductible once to the accident under the policy wording. The surveyor should check whether the wording treats collision liability and own damage as one aggregate claim or separate claims, and should ensure the assured does not recover the same loss twice.
3. What evidence and principles should the surveyor include in the report to support the adjustment?
Read the worked answer
The report should set out the factual and legal basis for the adjustment, not merely the arithmetic:
- Collision evidence: AIS/VDR tracks, bridge and engine logs, look-out and speed records, sound signals, lights, helm orders, protest and witness statements.
- Apportionment: the harbour master's inquiry findings and any independent navigation expert's analysis, with reasons for the 70/30 split.
- Damage evidence: survey reports, repair specifications, invoices and photographs for both vessels.
- Policy basis: the collision liability clause, single-liability wording, deductible clause and any 3/4 RDC limitation.
- Legal principles: fault, causation, contributory negligence and set-off. The surveyor should reserve the insurer's rights on limitation and on any unseaworthiness or navigation breach.
The conclusion should state the net inter-vessel position, the H&M own-damage payment, the collision liability position and the P&I interface. If the trawler's damage includes pre-existing unrepaired damage, the surveyor should exclude that element before applying the 70% apportionment.