Page 19: of Marine News Magazine (June 2011)

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www.marinelink.com MN 19 obligation.

Although the concept seems simple, in practice it can be complicated. As

MSAs are drafted to be used in a vari- ety of settings, it is often difficult to specifically identify the parties to be indemnified. As such, we have seen agreements use terms such as “sub- sidiaries,” “related companies,” “members of the company group,” or companies “working for or with com- pany.” Although these terms appear innocuous, once you request defense and indemnity from an injured work- er’s employer, they may claim that they had no idea that you were with- in the scope of companies covered by the obligation. With that in mind, it is important to clearly identify the parties to be indemnified and to use language that is clear, easy to under- stand and can’t be described as being vague or ambiguous.

Another area to be wary of is the choice of law provisions. If it is a mar- itime contract, it is usually safe to agree to a provision that states that maritime law applies. If maritime law does not apply, it is also customary to have the law of the state in which the companies resides or where the work is being done as a secondary source. If a company suggests that another jurisdiction’s law should apply, look at the issue very carefully.

If the other side is insisting on it and you don’t know why, contact someone who knows before signing, as it probably does not inure to your benefit. An example would be a con- tract for the provision of necessaries to a vessel that specifies that English

Law applies. Although most people would assume English law is similar to general maritime law, it may not provide for a general maritime lien against the vessel. Thus, if you pro- vide necessaries and are not paid, you would have inadvertently waived any right that you have to arrest the vessel to recover under the contract. But, during the sales process when every- one was getting along, English law would not seem like a terribly offen- sive request.

In our practice we also like to include a provision that states that the executed MSA’s provisions control