Arrest Clause for Time Charter Parties 2019

Overview

Arrest clauses in charter parties are frequently one-sided with charterers having the right to terminate the charter party if the ship is not released within two or three days of an arrest. To provide a fairer allocation of risk and responsibility in the event of ship arrest BIMCO has developed two new standard clauses for time and voyage charter parties. Risk allocation is based on the “sphere of responsibilities” approach taken by the Court of Appeal of England and Wales in the "Global Santosh" judgment . Under this approach, a distinction is drawn between issues such as the management of the ship and its crew, which fall within the owners’ sphere of responsibility, and employment for use of the ship which falls within the charterers’ sphere of responsibility.

This clause was published on 14 June 2019.

BIMCO Arrest Clause for Time Charter Parties 2019

(a) “Arrest” means the detention, seizure or restraint of the Vessel by order of a Court or government authority. The Owners shall promptly notify the Charterers of any Arrest and keep them informed of the Vessel's status.

(b) In the event of Arrest that is the result of any act, neglect or default of the Charterers, their sub-charterers, servants or agents, or by any other party connected to the employment of the Vessel under this Charter Party, then the Vessel shall remain on hire. The Charterers shall take all reasonable steps to release the Vessel, including and without limitation the provision of security. In the event that the Charterers’ security is not accepted, the Owners may provide security against the provision of counter-security by the Charterers.

(c) In the event of any other Arrest, the Owners shall take all reasonable steps to release the Vessel, including and without limitation the provision of security, and should the full working of the Vessel be prevented, the Vessel shall be off-hire for the time thereby lost.

(d) The responsible party under subclauses (b) or (c) shall indemnify the other party for losses directly arising out of the Arrest that are reasonably foreseeable.

Neither party shall be liable to the other party for any indirect or consequential loss or damage suffered by the other party in connection with the Arrest.

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