Introduction & Background

The primary objective of the industry mutual hold harmless deed (IMHH) is to address the contractual gap that traditionally exists between contractors working on the UKCS with regard to the allocation of liability. On an offshore installation or vessel an operator will award contracts to a contractor who may sub-contract to its sub-contractors. This provides a vertical relationship between some of the parties but no relationship across contractors and sub-contractors. The IMHH is designed to sit as a background agreement where there is no direct contract between the contractors.

The use of mutual hold harmless provisions within the industry’s contracts is common practice. In fact some operators have their own version of the IMHH. These are, however, limited to specific contracts or companies and as a result an industry scheme was developed.

The IMHH applies to the UK’s territory of the North Sea and the Irish Sea. It is intended to underpin all offshore activity (with a few exceptions) in the offshore energy industry, including oil, gas, wind, and carbon storage. Participants should be able to enter into it for the long term (although there are limited rights of withdrawal and termination). Parties who were not members initially may join at any time. The IMHH Scheme has been created to manage the risks inherent in the industry in a much more comprehensive and effective manner. It operates on the premise that a company is in a much better position to protect and insure their own people and equipment. In doing so, companies can be more certain of the risks they need to insure and this, in turn, reduces multiple policies insuring the same risk.

Of course, there are other benefits in that it reduces the need to negotiate or litigate such matters as companies should understand their liabilities. In any event, the IMHH has proved to be a success within the industry and is now in its second phase.

Companies do not need to be registered in the United Kingdom to enter into the Scheme, but it is important that all companies are equally bound by the terms of the IMHH Deed when they become signatories to it. For this reason, overseas companies are required to provide a Counsels’ Opinion as part of their deed application, to provide assurance that the deed has been entered into validly, and is enforceable in the company’s home jurisdiction. Guidance on the required content of the Opinion is available.

The IMHH Scheme has been running since 1st July 2002, with IMHH Deeds running for 10 years. The first deed (the 2002 IMHH Scheme) ran until 31st December 2011, while the second (the 2012 IMHH Scheme) ran from 1st January 2012 until 31st December 2021.

Registrations are open for the current, 2022 IMHH Scheme, which runs from 1st January 2022 until 31st December 2031. Electronic signatures are preferred as the most cost effective and timely approach.