Indispensability of Restriction. The first negative condition of indispensability relates to the concept of necessity and proportionality. The restriction could justify itself on two aspects: it is the only solution without alternative, and not out of proportion. This was held by Cooperative Stremsel-en Kleurselfabriek v. Commission95 at the heart of its judgment. In the context of the restricted quotation and minimum cost for tankers insofar as the retention level, the question of necessity is settled with no hurdle considering how the risk assessment is carried out in the underwriting of P&I insurance. Modern P&I associations apply an empirical approach to the individual characteristics, requirements and risk profile of a particular member.96 Assuming that the restricted quotation and minimum cost for tankers are only applicable to the pooling level, the separate risk assessment over the retention level should be provided objectively and accurately as a prerequisite. However, severability with respect to risk assessment between the pooling level and retention level is not feasible due to the fact that “as risk assessment is based on subjective parameters (such as vessel safety measures and training of the crew), it would be easy for a club to manipulate this assessment by decreasing the relative weight of the retention costs and 93 Ibid. 92 94 Ibid. 4 para 41 and Ibid. 5 para 108 95 Case 61/80 [1981] ECR 851 96 Ibid. 86 p.98 increasing the weight of the shared cost.”97 For the sake of preventing quotation of discriminatory rate, preserving the principle of mutuality and accordingly continuing of the pool arrangements, the restricted quotation and minimum cost for tankers, even on the retention level, are borne out of necessity in the absence of any viable alternative. Under the parameter of proportionality, it is hard for the restricted quotation and minimum cost for tankers to spill over the boundary when the pre-30 September procedure of de-administrative costs is incorporated. The rules indeed have been tailored strictly. The mechanism which is thus set up appears to the Commission to constitute an acceptable compromise between the legitimate interests of the clubs in maintaining stable membership and the interests of the operators who now take advantage of competition between clubs with respect to rates and services offered.98 By comparison, the 1999 Commission Decision discussed indispensability of restriction mainly on the side of necessity while the 1985 Commission Decision shed ...
