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Documentary matters

A round-up of the most recent developments in BIMCO’s forms; dealing with piracy, stowaways, pooling agreements and more

At BIMCO’s Documentary Committee meeting in Copenhagen in November the revision of one of BIMCO’s most widely used forms, SHIPMAN 98, was approved. In addition, new versions of the standard crew management agreements, CREWMAN A and B were adopted, along with a number of new standard clauses. BIMCO’s documentary work programme remains as extensive as ever, with ongoing projects including the development of a standard pooling agreement for the tramp sector; a revision of its standard wreck-removal service agreements; a green recycling contract; and work on devising standard clauses for slow steaming, marine risk assessment, and bunkers.

SHIPMAN 98 and CREWMAN

The revision of SHIPMAN 98 has been ongoing for two years and was initiated to take account of the changes in shipmanagement practice and the law to bring this important document up to date. The revision has focused on bringing greater clarity to the agreement and great care has been taken not to change the basic principles of the agreements. Among the key changes are the inclusion of references to the ISPS Code and greater clarity in respect of the relationship between the management agreements and the ISM/ISPS Codes. The drafters have exercised great care in the amendments to the co-assurance arrangements and the final review of the insurance provisions in SHIPMAN has been done with the main focus on the issue of the shipmanager’s potential liability for the owner’s P&I Club release calls.

Parallel amendments to streamline the CREWMAN agreements with the SHIPMAN 98 revisions have been made with the aim of producing a consistent set of documents by using, where possible, the same principles, definitions and wordings throughout the documents. Revision work on all three agreements has been done in close consultation with the industry, and BIMCO owes particular thanks to the Cyprus Shipping Chamber for their important input throughout the revision process. SHIPMAN 2009 and CREWMAN A & B 2009, accompanied by explanatory notes, will be published in the February edition of the BIMCO Bulletin.

Piracy Clauses

In November 2009 BIMCO published a revised piracy clause for timecharters and two additional piracy clauses – one for single voyage charterparties and one for consecutive voyage charterparties and COAs. Generally, the publication of the first piracy clause for time charterparties in March 2009 was well received by the industry. However, BIMCO also received criticism from some quarters that the clause was not as well balanced as it could be. BIMCO decided to do an early revision concurrent with drafting two more clauses for voyage charterparties. A measure of a successful BIMCO clause is that it comes into widespread and common usage in the industry.

Primarily due to the provision in the clause that the vessel would remain on hire in the event it was detained by pirates, the clause was considered to be potentially more favourable to owners to gain widespread usage by all parties. The clause for consecutive voyage charterparties and COAs is closely modelled on the timecharter edition. The key difference between the two clauses is that while the vessel is under the orders and directions of the charterers under a timecharter and therefore should bear any costs related to piracy, it was felt that in a consecutive voyage/COA scenario it would be more equitable if costs were shared between the owners and the charterers. The significant difference between the single voyage charter version and the two other clauses is that the owners are not entitled to invoke this clause if the piracy risk existed at the time of the fixture.

All three clauses were published in special circulars in November 2009 and are available to download free of charge from BIMCO’s website at www.bimco.org AMS/AES Clauses – automated manifest provisions for the US and Canada A revised AMS (Automated Manifest System) clause was also adopted at the Documentary Meeting in November, taking into account new and harmonised US and Canadian legislation. The intention is that the clause can be used for trade throughout North America. To comply with the newly implemented export rules equivalent to AMS – the Automated Export System (AES) – a draft AES Clause for Voyage and Time Charterparties has also been drafted and approved.

Liberty and Deviation Clause for Voyage Charterparties

This clause, which was also adopted in November, has been developed in close co-operation with the International Group of P&I Clubs as it concerns important issues in relation to what may or may not be a reasonable deviation under the terms of Clubs’ cover. The clause also addresses a charterer’s request for a deviation under a voyage charter and what indemnities and insurances should be in place to cover such an event.

Revised Stowaways Clause for Time Charterparties

This clause has been one of BIMCO’s standard clauses for many years but an update which provides a more clearly worded division of obligations and responsibilities was approved at the last Documentary Committee meeting.

Bunker clauses

Work is underway to draft a “suite” of bunker-related clauses for use in time charterparties. The project will in many ways consolidate various clauses produced by BIMCO in recent years for this purpose and will provide a useful basket of up-to-date provisions covering this increasingly regulated area.

Pooling Agreement

A specialist working group has started work on the challenging task of drafting a standard pooling agreement for the tramp sector. The intention is to draft a generic agreement that will provide a useful template for those contemplating entering into pooling arrangements. The working group is working closely with expert competition lawyers to ensure that the provisions adhere to competition laws and that recently issued guidelines on pooling agreements by the European Commission are closely followed. Work is at a preliminary stage during which a suitable structure for the agreement will be agreed. This could take the form of an agency agreement or a limited company arrangement or an agreement which offered each method as an option (as many of the core clauses to such an agreement will be common to both structures). It is hoped to have a first draft of a standard pooling agreement ready to be reviewed by the Documentary Committee when it meets in Brussels in May.

Slow Steaming Clause

Work has begun on this highly topical but complex issue by a group of industry experts. The objective is to draft a set of standard slow/economical steaming clauses for use by the general industry. The experts are drawn from technical, commercial and legal backgrounds to ensure that every aspect of the challenging task is properly considered and thought through. The aim is to examine the technical and legal complexities of implementing such provisions in charterparties. The needs of the liner sector differ from those of dry cargo and tanker, but there are nevertheless common elements that can be embraced by a common clause. The group will also develop a charterparty clause suitable for the Virtual Arrival Project initiated by BP which seeks to reduce waiting time at terminals by agreeing to adjust the vessel’s speed en route to the discharge port to match the anticipated berth date.

The clauses will be designed to reflect the fact that there may well be sound commercial reasons to reduce speed, such as reducing bunker consumption/fuel costs and, possibly, to increase demand for tonnage. It will also consider issues such as due dispatch, deviation and vessel performance warranties. Not least, consideration will be given to the use of slow steaming as part of company environmental policies to help reduce CO2 emissions.

Marine Vessel Risk Assessment Clause

A specialist working group has been reviewing the issue to determine how BIMCO may assist the industry with the development of a balanced and generic risk assessment clause for the dry cargo sector. BIMCO feels that it is appropriate to develop a standard charterparty clause for marine risk assessments that clearly establishes a fair balance between the expectations, rights and obligations of the owners and the charterers. Drafting is in progress on a clause for time charterparties and one for COAs. Another reason for attending to this issue is the fact that there seems to be some misconception on the market as to how exactly operators such as RightShip operate their vessel assessment system. There is a need to underline that a vessel risk-assessment company provides a dynamic vetting system and that a so-called “approval” is valid only for the point in time in which it is requested for a specific nominated task, ie a vessel being nominated for a particular voyage. If the owners have agreed to maintain approval during the period of a time charterparty it can cause significant problems for the owners to face a lowering of the vessel’s rating as this could lead to breach of contract.

Wreck Removal Agreements

Drafting work continues on the revision of WRECKHIRE 99, WRECKCON 99 and WRECKFIXED 99. Whilst the BIMCO wreck removal forms are very well established and used worldwide, the need for amendment has arisen chiefly in the light of the technical difficulties and high costs of removing bunkers prior to other salvage work (such as cargo and wreck removal).

The revision of these forms will be done with a view to addressing the above issues but whilst retaining their current appeal.

New projects

A new subcommittee has been formed to look at the development of a new green recycling contract for the sale of vessels for recycling in the light of the impending coming–into-force of the IMO Recycling Convention. The contract will take into account the new provisions of the Convention such as the Inventory of Hazardous Materials, Ship Recycling Plan and certification.

The intention is to develop a contract so that it can be used commercially both before (during the transitional period) and after the Convention comes into force. Work is also expected to begin shortly on the development of a standard lay-up contract.

Publication of online forms and documents

The revised chemical carrier charter BIMCHEMVOY 2008, which was published in the BIMCO Bulletin October 2009, is now available on idea, together with BIMCHEMVOYBILL and a set of Explanatory Notes. The Explanatory Notes to BIMCHEMVOY 2008 provide a clause-by-clause comparison with ASBATANKVOY, which is the form currently used by the trade, as well as a comparison with the recently released ASBACHEMTANKVOY, which is a minor tailored amendment of the ASBATANKVOY form for the chemical sector.

Sample copies of the above new contract, as well as the explanatory notes, will be available to download free of charge from BIMCO’s website.

Susanne Købler Carstens
Documentary Affairs Officer
BIMCO

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