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documentary
round-up
Clauses, contracts and charters. Grant Hunter outlines a full programme for BIMCO over the coming months
 A dramatic backdrop for the documentary committee’s latest meeting |
Amid Hong Kong’s spectacular skyscraper skyline BIMCO’s Documentary Committee met on 5 June under the chairmanship of John Tsatsas. As usual, a wide range of documentary projects were considered – both proposed adoptions and project updates.
The major item on the agenda was NEWBUILDCON – BIMCO’s new standard newbuilding contract. The new form was presented to the Documentary Committee and warmly and unanimously endorsed for adoption. Furthermore, a standard clause dealing with removal and disposal of dunnage was adopted. The progress on a number of other charterparty and standard clause projects was also reviewed by the committee and several new documentary projects were added to the work programme.
NEWBUILDCON
The Standard Newbuilding Contract, codenamed NEWBUILDCON, is the product of two years’ intensive work by a specialist drafting group supported by a steering committee. The new contract received the unanimous support of the Documentary Committee in Hong Kong who praised all those involved in the project for their hard work in producing a well-structured, balanced and clearly written newbuilding contract for international use.
For BIMCO the newbuilding contract represents a significant achievement for the organisation. Firstly, it completes the “Ship’s lifecycle of documents” produced by BIMCO covering every aspect of a ship’s working life from construction to recycling. Secondly, it is the first attempt in many years to produce a modern and international standard shipbuilding contract reflecting current commercial practice.
Based on initial feedback from industry commentators, the newbuilding contract has met its objective of contractually harmonising international shipbuilding practice in a clearly worded and easily read format, while bringing an equitable balance to the responsibilities and liabilities of the parties.
The BIMCO Standard Newbuilding Contract offers builders and buyers alike a solid contractual platform on which to base their negotiations. Work is currently being done to finalise and proof check the text of NEWBUILDCON which BIMCO plans to publish in September. BIMCO intends to embark on a marketing tour of a number of major yards worldwide during the late summer so that we can show them the new form and explain its benefits.
The newbuilding contract was a major undertaking for BIMCO, drawing significantly on the organisation’s resources to produce such a complex and major documentary work in such a relatively short time. The organisation is in no doubt that the marketing of the newbuilding contract will be no small challenge but that they have produced a worthy alternative to existing shipbuilding contracts in current use. BIMCO believes that the merits of the new form will be self evident to anyone who takes the time to read NEWBUILDCON.
Dunnage Removal Clause for Time Charterparties
The Documentary Committee considered for adoption a new standard clause dealing specifically with the removal and disposal of dunnage under a time charter. The Dunnage Removal Clause is designed to complement the previously published BIMCO Hold Cleaning/ Residue Disposal Clause and is drafted to be consistent with the disposal and removal of dunnage provisions under the relevant parts of MARPOL.
In a further step to improve the shipping industry’s impact on the environment, the Clause provides that all dunnage must comply with applicable phyto-sanitary regulations. The committee was satisfied that the dunnage clause met its objectives and agreed to adopt it subject to the inclusion of the term “lashing materials”. The Dunnage Removal Clause will be published during the late summer.
Stevedore Damage Clauses
The BIMCO Stevedore Damage Clauses for Voyage and Time Charter Parties are frequently the focus of attention of documentary subcommittees who feel that the present wording of the clauses does not reflect practical reality.
In the majority of cases in recent years the Stevedore Damage Clauses have been modified by successive sub-committees. Against this background, the Stevedore Damage Clauses have been reviewed and amended to reflect current practice by consolidating the various revisions recently introduced by a number of sub-committees.
The Documentary Committee reviewed the progress on the revised Stevedore Damage Clauses and made a number of suggestions as to how the wording could be further improved. Additional drafting work will be carried during the next few months with a view to putting final versions of the clauses forward for adoption in November.
Fertilisers and chemicals
A new standard fertiliser voyage charterparty carrying the FERTICON codename is currently under development. The new FERTICON is based on GENCON 1994, but contains provisions adapted to the peculiarities of the fertiliser trade. The latest versions of standard BIMCO Clauses have, as appropriate, been incorporated.
The Documentary Committee reviewed a first draft of FERTICON and proposed a number of amendments which will be passed to the sub-committee responsible for the project. Based on the good progress undertaken by the sub-committee since the last Documentary Committee meeting, it is hoped that the document will be adopted in November.
The Documentary Committee also noted the good progress being made to revise the CHEMTANKVOY form. The revised CHEMTANKVOY is the result of a substantial overhaul to ensure that the terms and conditions specifically relating to the chemical trade properly reflect current commercial conditions and legal regulations. Several suggestions to improve the draft were made by the committee and these will be sent to the CHEMTANKVOY Sub-Committee for their consideration at their next meeting. Based on the current rate of progress it is hoped that the revision of CHEMTANKVOY will achieve its target adoption date of November this year.
BARGEHIRE 94
The Documentary Committee agreed to a restricted revision of BARGEHIRE 94 and a subcommittee consisting of representatives from owners, charterers and a P&I Club has been established. Although BARGEHIRE users are generally satisfied with the current form, there are a few recognised problematic areas – in particular the insurance provisions – that warrant some attention. Because of the limited revision it is hoped that the project will be completed by May 2008.
HEAVYCON
Work on the revision of HEAVYCON continues at a good pace. The draft revised HEAVYCON presented to the Documentary Committee has been brought up to date with the latest commercial practice in the super-heavy-lift sector and was well received by the committee. It was also reported that the HEAVYCON sub-committee had concluded that its parallel project to create a hybrid HEAVYCON form for the mid-sized lift-on/lift-off sector should be discontinued because HEAVYCON was not thought to be the ideal base document for the new form. A new sub-committee consisting of some of the members of the HEAVYCON group will be formed to draft a new form based on the commonly used CONLINEBOOKING Note.
It is estimated that this new project should be completed around November 2008. In view of the fact that the HEAVYCON subcommittee will now focus on only one form, the target completion date has been brought forward to November 2007.
Himalaya Clause
The Himalaya Clause for bills of lading is being revised in cooperation with the International Group of P&I Clubs (IG). A draft Himalaya Clause was considered by the Documentary Committee and was in general well received. The committee was, however, not in a position to adopt the clause because the IG sub-committee intends to refer the clause to counsel. It will not be possible to consider the clause for adoption until November at the earliest.
AMS Clause
A number of BIMCO members have approached the Secretariat asking if the existing AMS Clause permits them to rely on the charterers’ international carrier bond (ICB) to fulfil new requirements that owners post a crew manifest together with an acceptable bond to the US authorities in advance of the arrival of their ship. As the existing AMS Clause contains an indemnity from the owners to the charterers against consequences of the use of the ICB by the US authorities, the Documentary Committee considered whether a revision of the existing AMS Clause was necessary. However, to clarify the allowed procedures to the owners, the committee preferred to amend the clause to make an express reference to the crew manifest issue. The clause will be revised in co-operation with the representative P&I Clubs of the International Group in the autumn.
Pooling Agreement
A report into tramp shipping commissioned by the European Commission has been published. The Documentary Committee has identified a number of issues of concern and feels that embarking on the development of a standard Pooling Agreement at this stage before the resolution of these issues might result in a false sense of comfort for shipowners. The Documentary Committee decided that the work on a standard Pooling Agreement should be postponed pending the publication of the socalled Commission Guidelines.
CMI YAR 2004
In a Special Circular of 24 February 2005, BIMCO commented on the CMI YAR 2004. BIMCO expressed the view that the new set of rules was less favourable to shipowners than the 1994 Rules and recommended that general average should be adjusted in accordance with the 1994 Rules. Early this year, CMI responded to BIMCO’s Special Circular and asked BIMCO to review its position towards YAR 2004.
The Documentary Committee discussed the approach from CMI but has maintained its opinion that YAR 2004 are less favourable to owners than YAR 1994. A BIMCO Special Circular recommending members to use YAR 1994 and to remove any references to “subsequent amendments” will be issued in due course.
New items
At the end of the Documentary Committee meeting, the Secretariat’s future work programme was discussed. With the adoption of NEWBUILDCON, work on a number of new items will begin. TOWCON and TOWHIRE will be revised and consideration will be given to a revision of CONGENBILL and the Dispute Resolution Clause. The committee will also consider the possibility of developing a standard contract for building shipping containers as well as a revision of SLOTHIRE. A request has been received for a revision of SHIPMAN 98 and work on this project will begin shortly. It was also suggested that the Secretariat should include more tanker documents in its work programme and this aspect will also be investigated.
Offshore Forum and BOXDAY
BIMCO will host a free one-day seminar in Hamburg in September focusing on the BOXTIME 2004 time charterparty and how it compares to the original BOXTIME. Several other standard forms in BIMCO’s suite of containerrelated forms will also be discussed including its BOXCHANGE Interchange Agreement and BOXLEASE Standard Container Leasing form. A two-day Offshore Forum will be held in Rotterdam in October to discuss SUPPLYTIME 2005, PROJECTCON, BARGEHIRE 94 and TOWCON/TOWHIRE. For more details visit the BIMCO website on www.bimco.org The Documentary Committee will next meet on Friday 16 November 2007 in Copenhagen.
Grant Hunter
Head of Documentary Department
www.bimco.dk
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