Circular No. 9/98 - Renewal of the IGA



APRIL 21, 1998



Dear Member:



This Circular is to report further developments in the negotiations with the European Commission in Brussels on the application to renew the exemption for the International Group Agreement and on the issue of the limit on Club Cover which have occurred since Circular No. 6/98 dated March 23, 1998 was issued.

During March the International Group had hoped that prior to an Oral Hearing further discussions would take place with officials from DGIV to explain why further proposals to modify the current IGA procedures could not be put forward and to explain the Group's transparency proposal in the context of administrative costs submitted in November 1997 in greater detail.

At the same time the Group had also hoped that the uncertainty about the validity of the overspill system which has arisen in the absence of DGIV's approval of the new 2.5% limit which applies for 1998 would be resolved.

Although a meeting with representatives from the Group and DGIV officials took place on April 3, 1998, no progress was made on the IGA issue or on the level of cover. Before the meeting the Commission had indicated by fax on April 1, 1998 that since no new proposals had been submitted by the Group for amending the existing IGA quotation procedures the Commission would be progressing the proceedings by inviting the Group to an Oral Hearing. Formal notice of an Oral Hearing was sent to the Group on April 6, 1998 stating that it would take place on April 27, 1998 in Brussels.

The Group is now completing preparations for the Oral Hearing. As already advised, the procedure is not an adversarial process or a judicial hearing but an opportunity to present the Group's case to European Member States and for the Group and others to raise questions with DGIV. The Group's case will be presented by Club Managers, the Club's legal advisers, Lovell White Durrant, and by individual Shipowners and other speaking on behalf of the shipowning industry.

Further developments will be reported in due course.

Yours faithfully,

Joseph E.M. Hughes
Chairman & CEO 
Shipowners Claims Bureau, Inc., Manager