LMA to revise marine hull and cargo oil price cap clauses after sanctions changes

The Lloyd’s Market Association (LMA) will revise oil price cap clauses for hull and cargo in response to a series of sanction changes.

The overhaul introduces simplified clauses that reflect the changes to the oil price cap mechanism since the original was implemented.

“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,” Arabella Ramage, legal director of the LMA, said.

“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.”

Changes

The move comes after a number of recent changes to legislation by the global Price Cap Coalition.

This is made up of the G7, the European Union and Australia.

”After a number of recent changes to legislation by the global Price Cap Coalition, 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,” Ramage said.

”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.”