Partial preview of the text
Download IMHH - Oil and Gas Law UK - IMHH principle. and more Lecture notes Law in PDF only on Docsity!
about:blank IMHH - Oil and Gas Law UK - IMHH principle 1. In the UKCS, what is the IMHH? Explain its objectives, modus operandi, and the advantages that accrue to companies that sign up for it. IMHH = Industry mutual hold harmless. an agreement which the oil and gas, industry in the UK is encouraged to sign up to in order to allow every ‘contractor and operator to be safe from the claims of other contractors for injury or death to their employees or subcontractors and for claims for loss of damage to equipment. Interacts with the CRINE/LOGIC contract system. Indemnity’s are a way of being responsible for another person’s loss, this can be expensive and unpredictable in the oil and gas industry. Mutual Hold ‘Harmless provisions can be adopted in contracts to create certainty over liabilities, such provisions have been used by the LOGIC standard forms. The primary objective of IMHH is to address the contractual gap that exists between ‘contractors working in the UKCS in regards to the allocation of liability. It was first introduced in 2002 following an industry consultation process facilitated by LOGIC. The aim of IMHH was to provide mutual hold harmless liability relationship among those contractors in projects within the UKCS. On offshore installations, operators will give contracts to contractors who may sub contract to its sub contractors - this creates multiple vertical relationships but zo relationships horizontally across contractors and sub contractors. IMHIH is background agreement where there is no direct contract between the ‘contractors. The oil and gas industry produced the Industry metal hold harmless scheme through the IMHH deed to address the contractual gaps ‘contractors and sub contractor groups. LOGIC operates the IMHH Scheme to help companies and sub contractors manage the allocation of liability within an agreed standard framework, This concept is not new, before the introduction of IMHH operators had implemented ‘mutual hold harmless schemes. IMHH was pushed further by the introduction of the Contracts (Rights of Third Parties) Act 1999 which gave the ability to pass the benefit of indemnities into the contracting parties respective groups. Some operators have their own version of IMHH because they are common practise in the industry. The IMHH applies to the UK’s North Sea and Irish Sea and covers all offshore activity (some exceptions) in the industry and participants can enter into it long term Parties who are not members can also join at any time. IMHH manages the risks in the industry in an effective way, it operates on the basis, that a company can protect and insure their workers and equipment better. IMMBH is usefill because it provides certainty, a clear indemnities clause allows parties to understand where they legally stand with each other. It reduces ‘costs because most obvious risks only need to be insured once and by a single party as opposed to multiple insurance policies across different parties ‘covering the same risks - each party knows their assets and what insurance is necessary. Third of all, it helps protect the industry because without IMHH< smaller companies could face taking on potential risks that could destroy their ‘business or be forced to take out expensive insurance policies to cover risks 12 
