Documentary matters

A revised Himalaya clause, a new contract for the mid-sized heavylift sector, stowaways and greenhouse gases attract BIMCO’s attention

BIMCO’s documentary committee met in Athens in June and adopted a new charterparty and a revised standard clause. The committee was chaired for the final time by John Tsatsas, who stepped down after more than six years as chairman of BIMCO’s largest and best known committee. The documentary committee’s agenda was, as usual, extensive and diverse. In addition to the adoption of a new heavy-lift charter codenamed HEAVYLIFTVOY and a revised Himalaya clause, the committee also reviewed progress on the revision of SHIPMAN 98 – one of BIMCO’s most widely used and successful forms. Also reviewed were a number of standard clauses, including a revision of the stowaways clause and new piracy clauses for voyage charters and COAs.

HEAVYLIFTVOY

The HEAVYYLIFTVOY voyage charterparty is a niche contract derived from BIMCO’s CONLINEBOOKING Note. It is designed to provide the growing mid-sized heavy-lift sector with a purpose-made standard form to replace the current widespread use of amended booking notes. The key difference between HEAVYLIFTVOY and BIMCO’s other well-used heavy-lift form, HEAVYCON 2007, is that the new form operates on the basis of conventional cargo liability regimes and not knock-for-knock. While HEAVYCON is designed for float on/ float off cargo operations on semi-submersible vessels, the new HEAVYLIFTVOY is for lift on/ lift off vessels loading parcel cargoes on and under deck.

The new form offers a variety of loading and discharging options, providing for free-in or liner in-hook terms for loading and free-out or liner out-hook terms for discharging. Among the many comprehensive clauses, provision is made for the suitability for transportation and proper presentation of the cargo, including lifting and securing devices, and also for the timely submission of drawings.

The new contract contains the full suite of BIMCO standard clauses covering issues such as dispute resolution, war risks, ISPS and trading in ice.

BIMCO has worked with a number of key operators in this trade to develop the form, including BigLift, Jumbo, SAL Shipping and Leibherr, with support from specialist brokers Larsen and Partners, and the Standard P&I Club. The new contract is due to be published in August along with a comprehensive set of explanatory notes. HEAVYLIFTVOY will be available as an electronic document on idea.

Revised Himalaya clause

The committee reviewed a final draft of a revised Himalaya clause for bills of lading prepared by the International Group bills of lading subcommittee. There was general approval of the revised Himalaya clause, which more clearly sets out the rights and defences conferred on third parties under a bill of lading. The revised Himalaya clause has been endorsed by BIMCO and will be incorporated as appropriate into all new and revised BIMCO forms.

SHIPMAN 98 and CREWMAN

The revision of SHIPMAN 98 is a project that is followed closely by the members of the documentary committee and one which generates much discussion. At the June meeting a final draft of the revised edition was put forward for adoption. Although the overall response to the revision was very positive, it was felt that further consideration should be given to some aspects of the co-assurance arrangements before the document is passed for adoption. In returning the draft to the subcommittee for further work the committee took into account that the parallel revision of the CREWMAN agreements might result in changes to SHIPMAN and that there should be consistency across the range of BIMCO management forms.

The revision process of SHIPMAN and CREWMAN maintains the overall structure and principles of the existing forms – which is an important element in ensuring for users a smooth transition to the new edition. The key changes to SHIPMAN include the addition of references to the ISPS code and greater clarity in respect of the relationship between the shipmanagement agreement and the ISM/ISPS codes.

The SHIPMAN subcommittee met again in June and has now reviewed the comments and suggestions made by the committee. The revised SHIPMAN has been finalised and work on CREWMAN has begun. It is hoped to complete the revision process on the two crew management agreements in time to be able to present all three revised forms for adoption in November.

New standard clauses

The committee has provided useful feedback on current projects, including the revision of wellused standard clauses like the stowaways clause for time charterparties and the liberty/deviation clause for voyage charterparties. Consideration was also given to clauses dealing with highly topical issues such as piracy and greenhouse gas (GHG) emissions reduction/slow steaming. Work will continue on the development of these new or revised clauses over the next few months. It is likely that a crop of new standard clauses covering various issues will be approved in November.

Stowaways Clause for time charterparties

The stowaways clause has been revised to add greater clarity to the text and to broaden the responsibility of the charterers in respect of the means by which stowaways gain access to the vessel as part of the cargo operations. The revised clause was presented for adoption but the DC felt that more work could be done to create a better perception of balance between the obligations and responsibilities of each party. It was agreed to defer adoption until November pending further work by the drafting team.

Piracy clauses

At the November 2008 meeting of the committee a mandate was issued for a drafting team to prepare and publish a piracy clause in response to increasing demand from the industry for a contractual instrument to help clarify the position of the parties in respect of the risk and potential consequences of trading to or through areas at risk of piracy.

In March 2009 a piracy clause for time charterparties was published by BIM CO. Subsequently, the team also drafted versions suitable for use in COAs and consecutive voyage agreements, although these have not yet been published.

The documentary committee has reviewed the piracy clauses in response to comments received from the industry. Although the time charter version has gained widespread recognition for clearly allocating rights, obligations, responsibilities and costs between the parties, there is a perception among some charterers that the clause is not well balanced. The committee decided that such is the importance of getting these clauses established as standards in the industry that the concerns expressed should be addressed in a review of the clauses.

The drafting group responsible for developing the piracy clauses met again in June to review the clauses and will meet again in early September to finalise their work. The new piracy clauses will be circulated to documentary committee members for comment but will be published prior to the next committee meeting in November.

Slow steaming/GHG reduction clause

A preliminary draft of a slow steaming/ greenhouse gas clause was reviewed by the committee. It was agreed that this highly topical issue should be given a priority and that the draft should be further refined before the next meeting. The preliminary draft was given the support of the committee in as far as the concept and direction was concerned. There are a number of important considerations for the drafting team to consider, not least issues of deviation and due despatch.

Other work in progress

The committee heard project updates on a new comprehensive bunker clause for time charterparties and the development of automated manifest system and automated export system clauses for time and voyage charterparties for North American trade. A first draft of a standard time charterparty guarantee was reviewed. Valuable input has been received from a banking industry representative from Citibank in London. A final draft of the standard guarantee will be presented to the committee in November.

New projects

Among the new projects that will be started this summer include work on drafting a standard pooling agreement for the tramp sector. This has been a project that has been on the committee’s work programme for a while, pending the publication by the European Commission of guidelines. While the guidelines have not proven to be particularly helpful, the Commission has at least given a clear indication that pooling arrangements are certainly not unlawful. BIMCO is very pleased that a top competition law lawyer, Marjorie Holmes of Reed Smith, has agreed to participate in this important project.

Other projects that will be started this summer include a revision of the wreck removal agreements, WRECKHIRE 99, WRECKCON 99 and WRECKFIXED 99. The primary motivation for the revision of these forms is the need to update WRECKFIXED to reflect new responsibilities in respect of the removal of bunkers. The revision process will involve members of the International Group of P&I Clubs salvage subcommittee and the international salvage union.

Another new project will be the development of a standard lay-up contract – an issue of particular topical interest in the current depressed market conditions.

RightShip

Finally, the committee were given a presentation by RightShip in relation to well publicised concerns about the use by some charterers of so-called RightShip approval clauses. BIMCO shares the concerns of RightShip that owners are being placed in a difficult position by these clauses because they are simply unable to comply with their provisions. A draft clause which attempts to properly address what the RightShip service offers and what an owner and charterer can reasonably expect compliance with was presented to the committee. The draft clause will be reviewed by a BIMCO working group during the summer and its findings reported to the DC in November.

Next meeting

The documentary committee will meet again on 13 November 2009 in Copenhagen under the new chairmanship of Mr Karel Stes of Belgium.

Grant Hunter
Chief Documentary Affairs Officer
BIMCO