BIMCO’s Documentary Committee has set itself a busy schedule for its autumnal meeting in Copenhagen. Sale and purchase, dry bulk, piracy and bunker contracts and clauses, among other topics, all require its expert eye. The committee will be working hard to push through many amendments before the end of the year to keep standard forms up to date.
The autumn meeting of BIMCO’s Documentary Committee in Copenhagen looks set to be a busy affair with the group set to examine a number of key contracts and clauses.
One such clause is the Marine Risk Assessment Clause for Time Charters. The purpose of this new clause is to provide contractual clarity in respect of when and under what circumstances a charterer can conduct a vetting and/or inspection of a vessel under time charter and to what extent an owner has to comply with any recommendations given by the vetting company.The clause is designed to assist in avoiding the problems that some owners have faced in being pressured to accept ‘Rightship approval’ type clauses. These clauses oblige the owners to warrant that their vessel will be Rightship approved throughout the charter period, even though Rightship do not offer such approval. Another under examination is the Designated Entities Clause for S&P Agreements. Following the successful publication of a Designated Entities Clause for Charter Parties in April, work has begun on adapting the Clause for use in sale and purchase agreements which also need to take into account financial prohibitions. A first draft of the S&P Clause will be reviewed by the Documentary Committee at its autumn meeting and then fast tracked for adoption by the end of the year.The North American Advance Cargo Declaration Clauses are also on the agenda. Due to a change in legislation in Canada, a new requirement for carriers to post bonds when trading with Canada is to be introduced on February 1, 2014. The current version of the North American Advance Cargo Declaration Clause needs to be amended to reflect the new regulations before they come into force. Work is underway to draft appropriate wording so that an amended version of the Clause can be fast tracked for publication by the end of the year.
There is concern that [an anti-bribery] clause could potentially disadvantage shipowners in difficult situations and possibly give unscrupulous charterers an opportunity to bring a charter party to a premature end.
On the anti-bribery front, BIMCO’s documentary committee has been closely monitoring developments concerning anti-bribery and corruption legislation (primarily from the UK perspective) with a view to considering whether it would be appropriate for BIMCO to develop a charter party clause. There is concern that a clause could potentially disadvantage shipowners in difficult situations and possibly give unscrupulous charterers an opportunity to bring a charter party to a premature end. BIMCO’s Documentary Committee will consider at its autumn meeting whether the time is now right to develop a clause to provide a useful foil to shipowners faced with existing poorly worded individually drafted anti-bribery clauses.
Take a dip
Meanwhile, the Standard “Agency Based” Pooling Agreement is on the agenda. Since November 2012 an ‘agency version’ of the POOLCON standard pooling agreement has been under development. While many of the provisions are common to both contracts, POOLCON B, as the agency version is known, has the pool managers acting as agents on behalf of the pool participants. As a result, the managers do not enter into any agreements in their own name, which has a direct bearing on the liability and responsibility structure of the contract. The agency model is favoured by many owners involved in and operating pools. It is anticipated that POOLCON B will be well received by the market as a template for new pooling arrangements by companies who have not previously been in pools. The drafting work on POOLCON B is now complete and the contract will be put forward for adoption by the Documentary Committee at its next meeting.For the dry market, the revision of NYPE 93 is now close to completion. A two day drafting meeting was held in New York in September in which BIMCO’s Sub-committee joined forces with ASBA (who are the owners of NYPE) and the Singapore Maritime Foundation. The objective of this project is to produce an internationally acceptable modern dry cargo time charter party form – a ‘global’ NYPE form. The draft revised NYPE is well developed although not yet ready to be considered for adoption. The current draft will be reviewed by the Documentary Committee in November. Later in the year the draft will be made available to the industry as part of a consultation process soliciting feedback from potential users. It is intended to conduct a series of short introductory seminars in Europe, Asia and the US during the consultation. The results of the consultation process will be taken into account in the final preparation of the revised NYPE before it is put forward for formal adoption in Dubai in the spring of 2014. With regards to piracy, GUARDCON’s Recommended Amendments for West Africa have been addressed. The GUARDCON Sub-committee has concluded its work to develop a set of recommended amendments that can be applied to GUARDCON for those owners wishing to use the contract to hire security services from PMSCs when trading in West Africa (or other areas where piracy takes place within the territorial waters of a functioning state). Unlike the situation in east Africa, owners can of course employ local security personnel directly using local agents, rather than using the services of a private maritime security company (PMSC). The proposed amendments have been reviewed by a number of leading underwriters who have verified that as far as insurability is concerned, the changes present no problems, but will attract a higher premium. This is due to the fact that PMSCs operating within territorial waters in West Africa are not permitted by local law to place on board vessels ‘foreign’ armed guards. Local security personnel must be used, but PMSCs can only engage them on behalf of owners, there is no direct employment. As a result GUARDCON must be applied with a degree of pragmatism when used in this area.It should be noted that BIMCO is not going to issue an amended version of GUARDCON, but instead will publish a set of recommended amendments that an individual can choose to apply to the existing form.
Rolling with the times
Meanwhile, drafting work has begun on the development of a new RoRo Passenger Ferry Time Charter Party. This highly specialised form will be based on BIMCO’s own GENTIME charter which has been used in an adapted form by a number of ro-ro operators for some years. Work is at a preliminary stage but will continue throughout the rest of 2013 and into 2014. It is hoped to have a first draft ready for review of the Documentary Committee at their spring meeting in Dubai in 2014. Lastly, one of BIMCO’s most talked about but least used contracts is the Standard Bunker Contract (previously FUELCON). However, a number of companies recently approached BIMCO with a request to update the contract as they felt that it may now be opportune to once again try to produce a standard set of terms for the purchase of marine fuels. A Sub-committee has been formed which includes both buyers and suppliers as well as a representative of the International Bunker Industry Association. At a later stage the Sub-committee will liaise with the Singapore Bunker Technical Committee to work towards finding common ground for Asian bunker supplies under the same contract umbrella. It is hoped to have a first draft ready for the review of the Documentary Committee in Dubai.
Grant Hunter is chief documentary affairs officer at BIMCO, responsible for the development, revision and promotion of BIMCO’s wide range of standard contracts and clauses. He has worked for BIMCO since 1997. Previous careers include five years at sea with Ben Line and eight years working ashore in the commercial and operations department of P&O Bulk Shipping in London. Grant has a Masters degree in maritime policy and law from the London School of Economics.