Bunker Quality and Liability Clause 2011

BIMCO Bunker Quality and Liability Clause 2011

(a) The Charterers shall supply fuels of the agreed specifications and grades. The fuels shall be of a stable and homogeneous nature and suitable for burning in the Vessel’s engines or auxiliaries and, unless otherwise agreed in writing, shall comply with ISO standard 8217:2010 or any subsequent amendments thereof.

(b) The Charterers shall be liable for any loss or damage to the Owners or the Vessel caused by the supply of unsuitable fuels and/or fuels which do not comply with the specifications and/or grades set out in sub-clause (a) above, including the off-loading of unsuitable fuels and the supply of fresh fuels to the vessel. The Owners shall not be held liable for any reduction in the Vessel’s speed performance and/or increased bunker consumption nor for any time lost and any other consequences arising as a result of such supply.

Explanatory notes

Background

In October 2009 BIMCO initiated a project to develop a suite of standard bunker clauses for use in time charter parties. The rationale behind developing the suite is simply to address the ever increasing importance of bunker issues in time charter parties and the need to ensure that the risk of bunker disputes is minimised by clearly worded clauses that reflect legislative developments. The Suite of Clauses was adopted by BIMCO’s Documentary Committee at its meeting in Vancouver in June 2011.

The Suite provides clauses covering matters relating to delivery/redelivery bunkers; bunkering operations; sampling; fuel testing programmes; and ECA trading, all of which are matters that are frequently absent from or insufficient in many standard time charter parties. Many older time charter forms contain bunker clauses covering the fundamental principles under the charter, but simply do not contemplate today’s situation where vessels are required to carry and use several grades of fuel and where sampling and testing regimes are an integral part of the process.

It is not the intention that BIMCO’s Suite of Bunker Clauses should be a direct replacement for the existing bunker clauses in a time charter - there is, for example, no intention to deal with the actual pricing or quantities of bunkers, as this will already be dealt with. What the Suite offers is a means of supplementing standard time charters with bunker provisions that are missing or poorly worded. Each clause within the Suite is designed to be self-standing and independent of the other clauses in the Suite. As always, users should be careful when incorporating any additional clauses so that the new clauses do not conflict with existing provisions.

The current suite of standard bunker clauses for use in time charter parties consists of:

Explanatory notes

The following explanatory notes provide some background to the thinking behind the bunker quality and liability clause

This Clause requires that the fuels supplied are to comply with ISO 8217:2010 unless the parties have agreed otherwise. While BIMCO is aware that the 2010 edition of ISO 8217 is not yet enjoying widespread acceptance, it is felt that BIMCO should not be publishing clauses that refer to old standards.

The phrase “stable and homogenous” although not found in ISO 8217 (Section 5 of the ISO standard refers to “homogenous” – but not to “stable”) has been used because it is in such widespread use in the industry, as well as being found in a number of BIMCO contracts.

Sub-clause (b) deals with loss or damage suffered by the owners (e.g., delay) or the vessel (e.g., physical damage to or underperformance of the engines) caused by bad or off-spec fuel. The charterers’ liability extends not only to the consequences of them loading bad fuel, but also to liability for the cost and expense of off-loading the bad fuel from the vessel and replacing it with suitable fuel.

As the unsuitability of the charterers’ fuel may not be detected until actually burned in the vessel’s engines, the last part of the Clause provides the owners with protection against any potential claim by the charterers for under-performance or increased bunker consumption which can be directly attributed to the bad fuel.

Originally published in BIMCO Special Circular No. 4, 4 November 2011 (Updated 25 June 2014) - BIMCO Suite of Bunker Clauses for Time Charter Parties

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