### Merchant Shipping (Local Vessels) Ordinance 《商船(本地船隻)條例》

23A. Interpretation of Part VA
In this Part—
class (類別), in relation to a local vessel, has the meaning assigned to it by section 2(1) of the Merchant Shipping (Local Vessels) (Certification and Licensing) Regulation (Cap. 548 sub. leg. D);
type (類型), in relation to a local vessel, has the meaning assigned to it by section 2(1) of the Merchant Shipping (Local Vessels) (Certification and Licensing) Regulation (Cap. 548 sub. leg. D).

23B. Application of Part VA
(1) Subject to subsection (2), this Part shall apply to the following local vessels—
(a) local vessels which were subject to Part XIVA of the Merchant Shipping Ordinance (Cap. 281) immediately before the commencement* of this paragraph;
(b) local vessels which are certificated under the Merchant Shipping (Local Vessels) (Certification and Licensing) Regulation (Cap. 548 sub. leg. D) for the following classes and types—
(i) Class I: ferry vessel, launch and multi-purposes vessel;
(ii) Class II: transportation boat and tug; and
(iii) Class IV: all types; and
(c) all other local vessels which are required to be certificated under this Ordinance.
(2) This Part shall not apply to—
(a) any laid-up vessel which is the subject of a written permission under section 66; and
(b) non-mechanically propelled vessels which do not exceed 4 metres in length overall.

Editorial Note:
* Commencement date: 2 January 2007.

### Merchant Shipping (Local Vessels) Ordinance 《商船(本地船隻)條例》

23C. Obligation on users of vessels to be insured against third party risks
(1) No owner, charterer or coxswain of a local vessel to which this Part applies may use, or cause or permit any other person to use, the vessel in the waters of Hong Kong unless there is in force in relation to the use of the vessel by such owner, charterer or coxswain or that other person, as the case may be, such policy of insurance as complies with section 23D.
(2) If an owner, charterer or coxswain contravenes subsection (1), he commits an offence and is liable—
(a) where the offence relates to the use of a local vessel permitted to carry more than 12 passengers, to a fine at level 6 and to imprisonment for 2 years; or
(b) where the offence relates to the use of a local vessel permitted to carry no more than 12 passengers, to a fine at level 4 and to imprisonment for 1 year.
(3) It shall be a defence to a charge under subsection (2) for the person charged to prove that he took all reasonable precautions and exercised all due diligence to prevent the contravention to which the charge relates.

### Merchant Shipping (Local Vessels) Ordinance 《商船(本地船隻)條例》

23D. Requirements in respect of policies of insurance
(1) For the purposes of section 23C(1), a policy of insurance shall be a policy which—
(a) is issued by an authorized insurer;
(b) is expressed to be—
(i) governed by the laws of Hong Kong; and
(ii) issued for the purposes of section 23C(1); and
(c) insures such person, persons or classes of persons as may be specified in the policy in respect of any liability which may be incurred by him or them in respect of the death of or bodily injury to any person caused by or arising out of the use of local vessels in the waters of Hong Kong.
(2) The liability covered by a policy of insurance required by subsection (1) shall include the liability for—
(a) interest, costs and expenses indemnified under the policy; and
(b) other costs and expenses incurred by the insured and recoverable from the insurer under the policy.
(3) A policy of insurance required by subsection (1) shall not be required to cover—
(a) liability in respect of the death of or bodily injury to any person in the employment of a person insured by the policy which arises out of and in the course of the first mentioned person’s employment;
(b) any contractual liability; or
(c) any liability in respect of any one accident or series of accidents arising out of the same event exceeding such amount as shall be specified by the Director under any regulation made under section 89.
(4) Notwithstanding anything in any law, an authorized insurer issuing a policy of insurance for the purposes of section 23C(1) shall be liable to indemnify the persons or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of those persons or classes of persons.
(5) A policy of insurance which is issued for the purposes of section 23C(1) shall be governed by the laws of Hong Kong.

23E. Certain conditions of policies to be of no effect
(1) If a condition in a policy of insurance issued for the purposes of section 23C(1) provides that—
(a) no liability shall arise under the policy; or
(b) any liability so arising shall cease,
in the event of some specified thing being done or omitted to be done after the happening of the event giving rise to a claim under the policy, the condition shall be of no effect in connection with the liability mentioned in section 23D(1)(c).
(2) Nothing in this section shall be taken to render void any provisions in a policy of insurance requiring the person insured to repay to the authorized insurer any sums which—
(a) the authorized insurer may have become liable to pay under the policy; and
(b) have been applied to the satisfaction of the claims of third parties.

### Merchant Shipping (Local Vessels) Ordinance 《商船(本地船隻)條例》

23F. Duty of insurers to satisfy judgment against persons insured in respect of third party risks
(1) If—
(a) a policy of insurance has come into operation;
(b) the terms of the policy cover a liability which the policy is required under section 23D(1)(c) to cover (being a liability covered by the terms of the policy); and
(c) judgment in respect of the liability is entered against any person insured by the policy,
the authorized insurer shall pay to the persons entitled to the benefit of the judgment any sum payable under the judgment in respect of the liability.
(2) A sum payable under subsection (1) shall include—
(a) any amount payable in respect of costs; and
(b) any amount payable under any law relating to interest on judgments in respect of interest on the sum.
(3) Subject to subsection (4), an authorized insurer shall make payment under subsection (1) notwithstanding that—
(a) he may be entitled to avoid or cancel the policy of insurance concerned; or
(b) he may have avoided or cancelled the policy.
(4) The amount required to be paid by an authorized insurer under subsection (1) shall not exceed the amount specified by the Director in respect of the policy of insurance under any regulation made under section 89.
(5) An authorized insurer shall be entitled to recover the excess from a person insured by a policy of insurance if the amount of the liability of the authorized insurer under this section exceeds the amount of the liability of the authorized insurer under the policy of insurance.
(6) The Court of First Instance has power to hear and determine a claim against an authorized insurer in respect of his liability under subsection (1) notwithstanding that the authorized insurer is not within the jurisdiction of the Court.
(7)  In subsection (1), liability covered by the terms of the policy (保險單條款所承保的法律責任) means a liability which—
(a) is covered by the policy of insurance; or
(b) would be so covered but for the fact that the authorized insurer is entitled to avoid or cancel, or has avoided or cancelled, the policy.

(8) In subsection (5)—
amount of the liability of the authorized insurer under the policy of insurance (獲授權保險人根據某保險單須負的法律責任的款額) means the amount for which the authorized insurer would, apart from this section, be liable under the policy of insurance in respect of the liability of the person described in that subsection;
amount of the liability of the authorized insurer under this section (獲授權保險人根據本條須負的法律責任的款額) means the amount for which the authorized insurer becomes liable under this section to pay in respect of the liability of the person described in that subsection.