LOGIC, the administrator of the Industry Mutual Hold Harmless (“IMHH”) Scheme is calling for comments on the current version of the scheme (“IMHH 2012 Deed”) so that these can be considered in time for the next phase of the IMHH Scheme.

The IMHH 2012 Deed automatically expires on 31st December 2021. LOGIC intends to renew the scheme for 2022 (“IMHH 2022”).

LOGIC has requested that any comments or corrections on the current IMHH 2012 Deed be sent to them (by email: logic@oilandgasuk.co.uk) by 30 September 2017.

The IMHH 2012 Deed replaced the original IMHH Deed (which came into force in July 2002) and so LOGIC has been through this renewal process once before. When the original IMHH Scheme was renewed, comments were sought from industry on the scope and content of the replacement IMHH Deed. These comments resulted in fewer exclusions from the scope of the IMHH Scheme: the original IMHH Deed did not include loss or damage (including consequential loss) arising out of the carriage of goods by sea; the provision of emergency response/rescue vessels; activities involving heavy lift vessels; or any activities involving transport by air. The IMHH 2012 Deed narrowed these exceptions to transport by air. Unlike the original, however, it extends not just to the UKCS and UK territorial waters but also to the territorial waters of Ireland.

LOGIC put in place a replacement IMHH Deed in 2012, rather than amending the original, because of the large number of signatories, each of which would have had to sign up to an amendment in order for it to be effective. LOGIC, in collaboration with industry, created the IMHH 2012 Deed, and invited signatories to execute this new Deed, so that it went live with a core of industry support, with later signatories signing up through the Deed of Adherence process.

We anticipate that the process will be similar for IMHH 2022 and LOGIC has stated that current IMHH 2012 Deed signatories will be advised of the sign up process for IMHH 2022 in due course.

The IMHH Scheme was created to put in place a long term, pan-industry, pan-UKCS indemnity scheme between contractors. The IMHH Scheme only applies to contractors, as it was perceived that there were significant contractual ‘gaps’ within this sector. These gaps arose from the large number of contractors on an installation not otherwise in direct contractual relations with one another. Where there is no contractual relationship between parties, and where “other contractors” are not included in the “Company Group” (as in the LOGIC Standard Contracts), there is no contractual indemnity and, in that case, risk will fall to be determined under the applicable law. The concepts in the IMHH Scheme were not new to the industry when the original IMHH Deed came into force. Several operators had (and some still have) similar schemes in place on an installation-by-installation, contract-by-contract or project-by-project basis. The goals of the IMHH Scheme were: to reduce the need for contractors to enter into several of these schemes, with different operators or in relation to different installations, each scheme being on slightly different terms; to reduce the contractual “gaps” in the sector; and to address contractors’ concerns where operators do not give indemnities in relation to “other contractors”.

The risks addressed in the IMHH 2012 Deed are as follows:

  • loss of, recovery of, or damage to property; and

The principles behind the IMHH Scheme remain valid, and recent case law has shown a willingness on the part of the courts to uphold clearly drafted mutual hold harmless indemnities. Support within the industry for the IMHH Scheme has traditionally been widespread and LOGIC is keen to receive comments so that IMHH 2022 can be put in place.