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Chapter 1 Classification of Steel Ship

1.17 Liability and Compensation

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1.17.1 Article 1

(a) CR CLASSIFICATION SOCIETY is a Society (the "Society") whose purpose is the classification (« Classification ») of any ship or vessel or structure of any type or part of it or system therein collectively hereinafter referred to as a "Unit" whether linked to shore, river bed or sea bed or not, whether operated or located at sea or in inland waters or partly on land, including submarines, hovercrafts, drilling rigs, offshore installations of any type and of any purpose, their related and ancillary equipment, subsea or not, such as well head and pipelines, mooring legs and mooring points or otherwise as decided by the Society.

The Society:

(i) prepares and publishes Rules for classification, Guidance Notes and other documents (« Rules »);

(ii) issues Certificates, Attestations and Reports following its interventions (« Certificates »);

(iii) publishes Registers.

(b) The Society also participates in the application of National and International Regulations or Standards, in particular by delegation from different Governments. Those activities are hereafter collectively referred to as « Certification ».

(c) The Society can also provide services related to Classification and Certification such as ship and company safety management certification; ship and port security certification, training activities; all activities and duties incidental thereto such as documentation on any supporting means, software, instrumentation, measurements, tests and trials on board.

(d) The Society can also provide services in independent surveys, such as independent survey of a ship, materials and equipment, or other equipment carried out according to the Purchase Agreement or specified rules; or appraisal before purchase of a non-CR class ship or verification of seaworthiness of a ship conducted at the request of the owner; or damage survey of a non-CR class ship as required by an insurance company.

(e) The interventions mentioned in (a), (b) and (c) are referred to as « Services ». The party and/or its representative requesting the services is hereinafter referred to as the « Client ». The Services are prepared and carried out on the assumption that the Clients are aware of the International Maritime and/or Offshore Industry (the "Industry") practices.

(f) The Society is neither and may not be considered as an Underwriter, Broker in ship 's sale or chartering, Expert in Unit's valuation, Consulting Engineer, Controller, Naval Architect, Manufacturer, Shipbuilder, Repair yard, Charterer or Shipowner, who are not relieved of any of their expressed or implied obligations by the interventions of the Society.

1.17.2 Article 2

(a) Classification is the appraisement given by the Society for its Client, at a certain date, following surveys by its surveyors along the lines specified in 1.17.3 and 1.17.4 hereafter on the level of compliance of a Unit to its Rules or part of them. This appraisement is represented by a class entered on the Certificates and periodically transcribed in the Society's Register.

(b) Certification is carried out by the Society along the same lines as set out in 1.17.3 and 1.17.4 here after and with reference to the applicable National and International Regulations or Standards.

(c) It is incumbent upon the Client to maintain the condition of the Unit after surveys, to present the Unit for surveys and to inform the Society without delay of circumstances which may affect the given appraisement or cause to modify its scope.

(d) The Client is to give to the Society all access and information necessary for the performance of the requested services.

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1.17.3 Article 3

(a) The Rules, procedures and instructions of the Society take into account, at the date of their preparation, the state of currently available and proven technical knowledge of the Industry. They are not a code of construction neither a guide for maintenance or a safety handbook. Committees consisting of personalities from the Industry contribute to the development of those documents.

(b) The Society only is qualified to apply its Rules and to interpret them. Any reference to them has no effect unless it involves the Society's intervention.

(c) The Services of the Society are carried out by professional Surveyors according to the Code of Ethics of CR CLASSIFICATION SOCIETY.

(d) The operations of the Society in providing its Services are exclusively conducted by way of random inspections and do not in any circumstances involve monitoring or exhaustive verification.

1.17.4 Article 4

The Society, acting by reference to its Rules:

(a) Reviews the construction arrangements of the Units as shown on the documents presented by the Client;

(b) Conducts surveys at the place of their construction;

(c) Classes Units and enters their class in its Register;

(d) Surveys periodically the Units in service to note that the requirements for the maintenance of class are met.

The Client is to inform the Society without delay of circumstances which may cause the date or the extent of the surveys to be changed.

1.17.5 Article 5

(a) The Society acts as a provider of services. This cannot be construed as an obligation bearing on the Society to obtain a result or as a warranty.

(b) The certificates issued by the Society pursuant to 1.17.5(a) here above are a statement on the level of compliance of the Unit to its Rules or to the documents of reference for the Services provided for. In particular, the Society does not engage in any work relating to the design, building, production or repair checks, neither in the operation of the Units or in their trade, neither in any advisory services, and cannot be held liable on those accounts. Its certificates cannot be construed as an implied or express warranty of safety, fitness for the purpose, seaworthiness of the Unit or of its value for sale, insurance or chartering.

(c) The Society does not declare the acceptance or commissioning of a Unit, nor of its construction in conformity with its design, that being the exclusive responsibility of its owner or builder, respectively.

(d) The Services of the Society cannot create any obligation bearing on the Society or constitute any warranty of proper operation, beyond any representation set forth in the Rules, of any Unit, equipment or machinery, computer software of any sort or other comparable concepts that has been subject to any survey by the Society.

1.17.6 Article 6

(a) The Society accepts no responsibility for the use of information related to its Services which was not provided for the purpose by the Society or with its assistance.

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(b) If the Services of the Society cause the Client a damage which is proved to be the direct and reasonably foreseeable consequence of an error or omission of the Society, its liability towards the Client is limited to two times the amount of fee paid for the Service having caused the damage, but no greater than ten million (NT$10,000,000) New Taiwan dollars. The Society bears no liability for indirect or consequential loss such as e.g. loss of revenue, loss of profit, loss of production, loss relative to other contracts and indemnities for termination of other agreements.

(c) All claims are to be presented to the Society in writing within three months of the date when the Services were supplied or (if later) the date when the events which are relied on of were first known to the Client, and any claim which is not so presented shall be deemed waived and absolutely barred.

1.17.7 Article 7

(a) Requests for Services are to be in writing.

(b) Either the Client or the Society has rights to terminate the requested Services after giving the other party thirty days' written notice, for convenience, and without prejudice to the provisions in 1.17.8 hereunder.

(c) The class granted to the concerned Units and the previously issued certificates remain valid until the date of effect of the notice issued according to 1.17.7(b) hereabove subject to compliance with 1.17.2(c) hereabove and 1.17.8 hereunder.

1.17.8 Article 8

(a) The Services of the Society, whether completed or not, involve the payment of fee upon receipt of the invoice and the reimbursement of the expenses incurred.

(b) Overdue amounts are increased as of right by interest in accordance with the app licable legislation.

(c) The class of a Unit may be suspended in the event of non-payment of fee after a first unfruitful notification to pay.

1.17.9 Article 9

The documents and data provided to or prepared by the Society for its Services, and the information available to the Society, are treated as confidential. However:

(a) Clients have access to the data they have provided to the Society and, during the period of classification of the Unit for them, to the classification file consisting of survey reports and certificates which have been prepared at any time by the Society for the classification of the Unit;

(b) Copy of the documents made available for the classification of the Unit and of available survey reports can be handed over to another Classification Society in case of the Unit's transfer of class;

(c) The certificates, documents and information relative to the Units classed with the Society may be reviewed and disclosed upon order of the concerned governmental or inter-governmental authorities or of a Court having jurisdiction. The documents and data are subject to a file management plan.

1.17.10 Article 10

Any delay or shortcoming in the performance of its Services by the Society arising from an event not reasonably foreseeable by or beyond the control of the Society shall be deemed not to be a breach of contract.

1.17.11 Article 11

(a) In case of diverging opinions during surveys between the Client and the Society's surveyor, the Society may designate another of its surveyors at the request of the Client.

(b) Disagreements of a technical nature between the Client and the Society can be submitted by the Society to the advice of its Head Office.

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1.17.12 Article 12

(a) Disputes over the Services carried out by delegation of Governments are assessed wit hin the framework of the applicable agreements with the States, international Conventions and national rules.

(b) Disputes arising out of the payment of the Society's invoices by the Client are submitted to Taiwan Taipei District Court.

(c) Other disputes over the present Article 1.17 or over the Services of the Society are exclusively submitted to arbitration, by three arbitrators, in Taipei according to the Arbitration Act or any statutory modification or re-enactment thereof. The contract between the Society and the Client shall be governed by the Republic of China (Taiwan) law.

1.17.13 Article 13

(a) The Article 1.17 constitutes the sole contractual obligations binding together the Society and the Client, to the exclusion of all other representation, statements, terms, conditions whether express or implied. They may be varied in writing by mutual agreement.

(b) The invalidity of one or more stipulations of the present Article 1.17 does not affect the validi ty of the remaining provisions.

(c) The definitions herein take precedence over any definitions serving the same purpose which may appear in other documents issued by the Society.

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Table I 1-1

List of Automation Symbol affixed to CMS

Symbol Description Reference

CAS

This symbol will be assigned when a ship's machinery installation complies with the requirements for automatic or remote control and monitoring system.

Part VIII Chapter 4 of the Rules

CAU

This symbol will be assigned when a ship's machinery installation complies with the requirements for automatic or remote control and monitoring system with unattended machinery spaces.

Part VIII Chapter 5 of the Rules centralized location within the propulsion machinery space.

Part VIII Chapter 6 of the Rules

Table I 1-2

List of Ship Type Notation

Notation Description Reference

Barge Non-self-propelled barges intended to be towed or pushed Part II and Part III Chapter 9 of the Rules

Bulk Carrier

For ships intended primarily to carry dry cargo in bulk, generally having single deck, topside tanks, hopper side tanks and double bottom in cargo spaces, cargo holds bounded by single or double side skin.

Part III Chapter 1 and 1A of the Rules

Chemical Carrier For ships which are constructed generally with integral tanks and intended primarily to carry chemicals in bulk.

Part III Chapter 5 of the

Part III Chapter 12 of the Rules

Fishing Vessel For ships which are built for the purpose of fishing. Part III Chapter 7 of the Rules

Floating Dock For floating docks which comply with the applicable requirements in Chapter 8 of Part III of the Rules.

Part III Chapter 8 of the Rules

General Dry Cargo Ship For ships which are defined in Part I Chapter 2.

Rules for the construction and classification of steel

ships General Dry Cargo Ship

with Double Hull

For ships which comply with the requirement of general dry cargo ships of double side-skin construction specified in I/2.1.2(l). carry ore cargoes in the center holds only.

Part III Chapter 1 of the Rules

Oil Tanker

For ships which are constructed generally with integral tanks and intended primarily to carry oil in bulk., having flash point at or below 60°C (closed cup test). When carry oil product with a flash point exceeding 60°C such as asphalt, additional service notation "Flash Point > 60°C " should be added .

Part III Chapter 2 and 2A of carry ore cargoes in the center holds or oil cargoes in center holds and wing tanks.

Part III Chapter 2 and 2A of the Rules

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Ore/Bulk/Oil Carrier

For ships which are constructed generally with single deck, double bottom, hopper side tanks and topside tanks and with single or double side skin construction in the cargo length area, and intended primarily to carry oil or dry cargoes, including ore, in bulk.

Part III Chapter 2 and 2A of the Rules

Passenger Ship For ships which carry more than 12 passengers.

Rules for the Construction and Classification of Steel

Ships Refrigerated Cargo Ship For ships which are specially designed and constructed for

the carriage of refrigerated cargoes. Part X of the Rules RO/RO Cargo Ship

For ships which are specially designed and constructed for the carriage of vehicles, and cargoes in pallet form or in containers and loaded/unloaded by wheeled vehicles.

Part III Chapter 6 of the Rules

Tug For ships which are built for the purpose of towing or pushing other vessels.

Part III Chapter 11 of the Rules

Escort Tug (FS, t, v)

An escort tug is a tug intended for escort operation. The escort rating number (FS, t, v) shall be determined by approved full scale trials.

Part III Chapter 11A of the Rules

Offshore Service Unit For Ships built for the purpose of ocean service Part III Chapter 13 of the Rules

HLA This notation (Heavy Lift Appliance) will be assigned to ships equipped with heavy lift appliance.

Rules for the Construction and Survey of Cargo Gears Self-Propelled Unit

This notation will be assigned to units designed with means of propulsion capable of propelling the unit during long distance ocean transits without external assistance.

Part III Chapter 13 of the Rules

Non Self-Propelled Unit This notation will be assigned to units that are not a self-propelled unit.

Part III Chapter 13 of the Rules

Self-Elevating Unit

This notation will be assigned to units with movable legs capable of raising its hull above the surface of the sea and lowering it back into the sea.

Part III Chapter 13 of the Rules

SUBMARINE

This notation will be assigned to submarines complying with the requirements of chapter 1 to chapter 3 of the Rules for the Construction and Classification of Submarines (hereinafter referred to as the Rules for Submarines).

Chapter 1 to Chapter 3 of the Rules for Submarines Note:

(1) For ships deemed necessary by the Society, an appropriate notation except specified above may be affixed to classification characters.

Table I 1-3

List of Additional Service Notation

Notation Description Reference

CSR

This notation will be assigned to bulk carriers or oil tankers which fully comply with the IACS's Common Structural carry dry bulk cargoes of cargo density of 1.0 t/m3 and above with all cargo holds loaded in addition to BC-C conditions.

Part III/1.2 of the Rules

BC-C This notation will be assigned to bulk carriers designed to

carry dry bulk cargoes of cargo density less than 1.0 t/m3. Part III/1.2 of the Rules {Maximum cargo density

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{No MP}

This service feature will be indicated within the annotation for notation BC-A, BC-B and BC-C if the ship has not been designed for loading and unloading in multiple ports in accordance with the conditions specified in 1.2.5(c) of Part III. are to be designed for loading/unloading by grabs having a maximum specific weight X equal to or greater than 20 deemed as appropriate by the Society.

Rules for the Construction

This notation (Enhanced Survey Plan) will be assigned to oil tankers, combination carriers, bulk carriers, ore carriers and chemical tankers, as defined in 2.1.2 of Part I of the Rules which are subject to an enhanced survey plan.

Part I Chapter 2 of the Rules

PSPC

This notation (Performance Standard for Protective Coating) will be assigned to any ship where the applicable requirements in 23.1.4 of Part II of the Rules are complied with.

Part II/23.1.4 of the Rules

HSC-N

This notation, with N being PA, PB or C, will be assigned to ships which fully comply with the Rules for the Construction and Classification of High-Speed Craft.

Rules for the Construction and Classification of

High-Speed Craft LSC

This notation (Light Structure Craft) will be assigned to ships which comply with Chapter 3 of the Rules for the Construction and Classification of High-Speed Craft.

Rules for the Construction and Classification of

High-Speed Craft

PMA

This notation (Permanent Means of Access) will be assigned to ships where the applicable requirements in Chapter 28 of Part II of the Rules are complied with.

Part II Chapter 28 of the Rules

GBS This notation will be assigned to GBS ships which fully

comply with the requirements of Part XIV Part XIV of the Rules BP[X] This notation will be assigned to ships which have a

maximum bollard pull load X in tons. Part III/11.9 of the Rules NR

This notation (the comfort Rating of Noise) will be assigned to ships where the applicable requirements in Chapter 34 of Part II of the Rules are complied with.

Part II Chapter 34 of the

Part III Chapter 14 of the Rules

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Table I 1-4

List of Service Restriction Notation

Notation Description Reference

Coastal Service

Service along a coast, the geographical limits of which will be indicated in the Register, and for a distance out to sea generally not exceeding 30 nautical miles, unless some other distance is specified for 'Coastal Service' by the Administration with which the ship is registered, or by the Administration of the coast off which it is operating, as applicable.

Greater Coastal Service

Service along a coast, the geographical limits of which will be indicated in the Register, and for a distance out to sea generally farther than the area of Coastal Service in domestic voyage.

Protected Waters Service

Service in sheltered water adjacent to sand banks, reefs, breakwaters or other coastal features, and in sheltered waters between islands.

Specified Operating Area Service

Service within one or more geographical area(s) which will be indicated in the Register.

Specified Route Service Service between two or more ports or other geographical features which will be indicated in the Register.

Table I 1-5

List of Additional Survey Notation

Notation Description Reference

IWS

This notation (In Water Survey) will be assigned to ships which are suitable for in-water survey in lieu of bottom survey in dry dock.

Part I/1.6.7(b) & 2.2.2 of the Rules

PCM(1)

This notation (Propeller shaft Condition Monitoring) will be assigned when oil lubricated propeller shaft arrangements with approved oil glands are fitted and the requirements of 2.3.4 of Part I of the Rules are complied with.

This notation (Propeller shaft Condition Monitoring) will be assigned when oil lubricated propeller shaft arrangements with approved oil glands are fitted and the requirements of 2.3.4 of Part I of the Rules are complied with.