ISM Code (International Safety Management Code) was progressing through the IMO (International Maritime Organization) at a slow pace. In 1994, The Herald of Free Enterprise capsized and followed that tragic incident by the Estonia. These tragic incidents resulted i to implement the ISM Code for phase I ships, on 1 July, 1998. 1 July, 2002, ISM Code for phase II ships became mandatory. During late 1970s there was a major shift in the shipping industry to Flags of Convenience and shipowners were not operating their ships but passing them out to ship management companies, which were often based in countries new to the shipping world. Shipping industry quality was low and ship losses and a large increase in loss of life increased exponentially. In 1990, Lloyd’s of London paid out $ 4bn in claims. Initially, ship manager companies were dealing with ISO9001. Shipping companies’ own ISO9000 series of quality management systems were not enough. IMO introduced ISM Code. Before the introduction of ISM Code, International Ship Managers’ Association (ISMA) standard was introduced, but that standard failed.