The latest edition of this contract is NYPE 2015.
Copyright in NYPE 93 is held by BIMCO.
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It is left to the parties to fill in the actual figure agreed in respect of maximum force on the Beaufort wind scale depending on the size and type of vessel and her engine power.
In the Preamble as well as in various other places in the charter, it is necessary to specify whether "long" or "metric" tons which is also important in relation to the rate of hire (Clause 10) if fixed per ton on the vessel's total deadweight carrying capacity.
An Appendix "A" has been provided for filling-in such further details of the vessel as may be required. It is of particular importance to insert in Appendix A a full specification of the bunker fuel oil to be supplied for burning in the vessel's main engines and auxiliaries (for further comments on this subject see also comments on Clause 9 below).
This clause has now been incorporated in the NYPE 93 and has been clarified to take into account, inter alia, the fact that nowadays vessels are often delivered/re-delivered during sea passage or on arrival/departure pilot station where no such surveys can be conducted.
Recognising that many hull insurance policies put a limit on the amount of dangerous cargo to be carried on any voyage, new provisions have been included (sub-clause (b)) which, if IMO - classified cargo is agreed to be carried, require the parties to agree and fill in the maximum amount of such cargo; the clause also gives clear rules as to the packing, labelling, loading and stowing of such cargo according to IMO regulations.
Both the NYPE 1946 and the ASBATIME 1981 contain provisions regarding signing of bills of lading, etc., which, it has been found to be somewhat misplaced in a clause which basically deals with the performance of the voyage. Provisions covering the signing of bills of lading, etc. are now found in a self-standing clause (Clause 30) for comments on which see below.
The supply of inferior bunker fuel oil has become a growing problem over recent years and serious damage to main engines or auxiliaries caused by unsuitable bunker fuel oil has frequently occurred.
Sub-clause (b) of Clause 9 addresses this problem and the parties are strongly recommended to agree and specify clearly in Appendix A the specification(s) of bunker fuel oil(s) required for the particular vessel and her main auxiliary engines.
To avoid recurring disputes on whether local time or GMT shall apply for the purpose of hire calculation or termination, Clause 10 now solves this problem by providing that for this purpose the times of delivery/re-delivery or termination of charter shall be adjusted to GMT.
Rather than continue to make some of these provisions optional as in the ASBATIME 1981, all these elements have now been integrated in Clause 11 of the NYPE 93 also because, in practice, they are commonly added to the basic NYPE 1946 form, albeit often in a badly drafted manner.
The right of withdrawal (cancelling) when the charterers are in default of payment of hire is a traditional and very important safeguard for owners. This principle has, therefore, been fully maintained in sub-clause (a) of Clause 11.
In recent years there have been frequent delays of remittances through banks and in order to avoid abuse of the right of withdrawal, it has become common practice, in many instances, to insert in time charter forms a so-called "Anti-Technicality" Clause or a "Grace Period" Clause. In some charter forms, the length of the period of grace has been arbitrarily determined, whereas other charter forms leave it open to the parties to agree on the length of the period of grace normally stipulated as "banking days" and, usually, combined with notification to the charterers.
This latter choice has been included in sub-clause (b) of Clause 11 and it is strongly recommended to study carefully the provisions of sub-clause (b) and to fill in the number of days of grace etc., as agreed, in a correct manner.
These provisions are also fair to charterers since they should prevent cancellations for trifling delays where the situation is no signal of lasting failure to pay.
On the other hand, any abuse of the period of grace by constant late remittance should be safeguarded against by the provisions in the last paragraph of sub-clause (b) entitling owners to withdraw in the case of continued "misuse" of the grace period.
If the hire happens to be still outstanding on the expiry of the grace period, or any time thereafter, the second paragraph of sub-clause (a) of Clause 11 entitles the owners, without prejudice to the liberty to withdraw, to withhold the performance of any and all of their obligations under the charter. The hire may happen to be missing, for instance, just when the vessel is about to load for a new voyage and with a charterer who is about to go bankrupt, the owners then run the risk of being saddled with the performance of a new voyage without hire being paid and without cover for expenses falling upon the charterer. It is too late to withdraw the vessel if cargo has been loaded and bills of lading have been signed obliging the owners to perform the voyage according to the bill of lading contract. Such risk is guarded against by the last paragraph of sub-clause (a).
In matters such as late hire payment, the parties must know where they stand, both when it comes to trifling delays or protracted delays, not to speak of complete failure to pay. It is believed that Clause 11 solves these problems in a fair and equitable manner.
It should also be noted that, whereas the Hire Payment Clause in both the NYPE 1946 and the ASBATIME 1981 provided for payment of hire in U.S. currency only, Clause 11 provides for the option of agreeing on payment in a currency other than United States currency.
Finally, sub-clause (c) deals with last hire payment and sub-clause (d) covers the matter of cash advances.
The second paragraph titled "Extension of Cancelling" is a so-called Interpellation Clause. It is an attempt to avoid the sometimes harsh result to an owner who cannot make a cancelling date but, nevertheless, is legally obliged to tender his vessel perhaps at a remote port after having performed a long ballast voyage, only to be cancelled and find himself with a spot prompt vessel. With today's high capital investment in new vessels and high daily running costs this is not considered fair and equitable when, for bona fide reasons, the vessel is delayed because of events beyond owners' control.
Within certain time limits, the clause requires the charterer either to cancel in advance or extend the cancelling date in circumstances when the vessel cannot make her cancelling date.
Over the last 10-15 years it has become common practice to include such interpellation provisions in modern charterparties for both voyage and time chartering.
This practice was already recognised and acknowledged in connection with the ASBATIME 1981 revision which contained a very detailed off-hire clause. Subject to a few minor amendments, the text of the ASBATIME Off-Hire Clause has also been incorporated in Clause 17 of the NYPE 93 and should, hopefully, meet the requirements for a modern off-hire clause acceptable to both sides.
A modern solution which reflects present-day practice, is now offered in Clause 19 and leaves it to the parties to agree between themselves as to whether option (a) or (b) shall apply.
Given the global use of the NYPE Charter, it is now left to the parties to agree on the venue and currency for adjustment/settlement of general average.
The background to this clause is a more than 25 year old dispute resolution agreement between the International Group of P & I Clubs, the objective of which is to avoid costly litigation in matters of cargo claims.
According to the Inter-Club Agreement, ultimate liability for cargo loss or damage is allocated in accordance with a widely accepted formula based on the cause of damage. Basically, cargo claims caused by unseaworthiness of the vessel are borne 100% by the owners; cargo claims resulting from improper loading, stowing or discharging are allocated 100% to charterers and shortage claims are split equally between owners and charterers.
Regrettably, the Inter-Club Agreement has been considerably undermined over the years by owners and charterers agreeing on numerous deletions, alterations and additions to the printed text of the basic NYPE 1946 form resulting in a very considerable increase in litigation and arbitration over cargo claims arising under charterparties agreed on the NYPE 1946 form.
In the ASBATIME 1981 revision an attempt was made to curb the problem by including a so-called Cargo Claims Clause (Clause 30) which may, at best, be described as a simplified version of the Inter-Club Agreement, but without making any express reference to the Inter-Club Agreement itself. Moreover, and unfortunate enough, it was decided at that time to include the Cargo Claims Clause in the Rider of Suggested Additional Clauses instead of incorporating the clause in the printed body of the ASBATIME 1981, thus, limiting the use of the clause in practice.
This problem has now been solved in Clause 27 of the NYPE 93 which makes an express reference to the Inter-Club New York Produce Exchange Agreement and also includes a catch-all provision which will pick up any further modification or replacement thereof, thus, avoiding the necessity of revising the charter solely for the purpose of any future revision or replacement of the Inter-Club Agreement.
In this connection it may be mentioned that a sub-committee under the International Group of P & I Clubs is presently reviewing the Inter-Club New York Produce Exchange Agreement with a view to re-enforce the principle of the agreement, viz., to allocate the risks and costs of cargo claims between owners and charterers in a fair and equitable manner. For that purpose, the provisions in Clause 27 of the NYPE 93 expressly specifying that all cargo claims between the owners and charterers shall be subject to the Inter-Club New York Produce Exchange Agreement will be most helpful.
In this context there is reason to warn the commercial parties against any attempt to tamper with the text of Clause 27 or, for that matter, all other pertinent clauses in the printed text of the NYPE 93 including but not limited to Clause 8 (Performance of Voyages) and Clause 26 (Navigation) by way of amendments, deletions or additions as this may destroy the equitable allocation of responsibility for loss of or damage to cargo laid down in the Inter-Club Agreement and which, it is submitted, is not in the interest of either owners or charterers.
Clause 30 which, in addition, now also includes a reference to waybills as well as provisions dealing with clausing of bills of lading when deck cargo is carried.
Clause 31 of the NYPE 93 makes the charter and all bills of lading or waybills issued hereunder, subject to the provisions of the Carriage of Goods by Sea Act of the United States, the Hague Rules or the Hague-Visby Rules, as applicable, or "such other similar national legislation as may mandatorily apply by virtue of origin or destination of the bills of lading", as stipulated in sub-clause (a) (Clause Paramount) as well as the other protective clauses specified in sub-clauses (b), (c), (d) and (e).
Whereas sub-clause (b) (the Both-to-Blame Collision Clause) and sub-clause (c) (the New Jason Clause) are standard clauses, sub-clauses (d) and (e) may call for some observations.
Sub-clause (d) (U.S. Trade - Drug Clause).
It is a regrettable fact that during recent years the incidence of drug smuggling on board vessels has increased dramatically and has caused serious problems to the shipping industry, also resulting in the introduction of strict legislation and its enforcement in an attempt to curb this evil. To ignore this serious problem in a modern charterparty form would be wrong and the fact is that such an "anti-drug abuse clause" in one or the other form is commonly included in or added to the basic form of many charterparties. Sub-clause (d) of Clause 31 is an example of a clause commonly attached to, for instance, the NYPE 1946 and has been chosen for inclusion in the NYPE 93.
Sub-clause (e) (War Clauses).
One of the serious shortcomings of the NYPE 1946 is that it contains no war clause in its printed text which, from time to time, has caused serious problems when parties having fixed on the basis of the NYPE 1946 form were confronted with a war or warlike situation. Even worse, in order to rectify this obvious shortcoming, there are many examples of parties having agreed to include as a rider clause to the NYPE 1946, the old Chamber of Shipping War Risks Clauses 1 & 2 which since long have been withdrawn as obsolete clauses and which were drafted way back in 1935 in connection with the Spanish Civil War for use with voyage charter parties only and, therefore, totally unsuitable for time chartering. This problem was recognised in the ASBATIME 1981 which in Clause 23 (Clauses Paramount) included a proper war clause. In addition, a war cancellation clause as well as a war bonus clause were included as well, but only in the form of Rider Clauses in the Rider of Suggested Additional Clauses for use with the ASBATIME 1981 which limited the use of these clauses in practice.
Conscious of the necessity of including a proper war clause which would apply not only to the charterparty itself but also to all bills of lading and sea waybills issued under the charter, Clause 31 in the NYPE 93 now provides that the charterparty is subject to the war clause (sub-clause (e)) which is also to be included in all bills of lading or waybills issued hereunder. The war clause as such contains no cancellation rights and for practical reasons provisions dealing with the parties' right to cancel in case of war has been kept separate from the war clause and are to be found in the self-standing War Cancellation Clause (Clause 32).
Things are changing fast in a fast-changing world and as far as international shipping is concerned, the necessity of up-dating and modernising charterparties to match changes and new developments is more important than ever before. This also applies to war clauses - be it for voyage or time chartering - and has recently prompted the Documentary Committee of BIMCO to revise its time-honoured and well tested standard war clauses, i.e., the CONWARTIME 1939 War Risk Clause for Time Charters and the VOYWAR 1950 War Clause for Voyage Chartering because of recent developments and, in particular, the fact that new supranational organisations such as the United Nations and the European Community are daily acquiring more power to intervene in war situations (the Gulf War and the situation in former Yugoslavia are recent examples of such intervention by the issuance of U.N. Security Council Resolutions and Directives issued by the European Community seriously affecting trading to and from war zones).
In connection with the discussions on how best to deal with the matter of a war clause in the NYPE 93, BIMCO had suggested that the revised CONWARTIME Clause known as the CONWARTIME 1993 War Risks Clause for Time Charters, be incorporated in the NYPE 93 since this clause has been thoroughly revised to meet present-day requirements for a modern war clause including the possible action or intervention by supranational bodies or organisations as referred to above; besides, given the multitude and characteristics of war or warlike operations now seen, the Definitions in the CONWARTIME have been considerably expanded and clarified.
Whilst acknowledging that the CONWARTIME 93 Clause is a great improvement, since the revision of the clause is of very recent date ASBA would prefer to see the clause in use and tested for some time before including the CONWARTIME Clause in the NYPE 93. However, ASBA would be prepared to circulate the CONWARTIME 93 Clause to its members as an alternative clause and to consider including the clause in an amendment to the NYPE 93 at a future date when time had shown that the clause works satisfactorily.
The parties should ensure to fill in the names of the countries as may be agreed. In the event of the charter being concluded on the basis of world-wide trading, it may be advisable to mention the five Permanent Members of the U.N. Security Council, i.e., the United States of America, Russia, the United Kingdom, France and the People's Republic of China, whose conflict, in case of a conflict between themselves, may spread throughout the world or a large part of it.
If a vessel is chartered to trade in a restricted part of the world only, parties may wish to restrict the name of countries to be inserted, accordingly.
The text now included in Clause 35 of the NYPE 93 has been carefully drafted in order to overcome the shortcomings of many home-made stevedore damage clauses presently seen in current charterparties and also with a view to ensure a balanced and equitable solution fair to both sides, thus, representing a new approach to a long-standing problem.
(Printed in BIMCO Bulletin No. 6, 1993)
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