Stevedore Damage Clause for FIO Voyage Charter Parties 2008

BIMCO Stevedore Damage Clause for FIO Voyage Charter Parties 2008

(a) The Charterers shall be responsible for damage (fair wear and tear excepted) to any part of the Vessel caused by Stevedores. The Charterers shall be liable for all costs for repairing such damage and for any time lost, which shall be paid in an amount equivalent to the demurrage rate.

(b) The Master or the Owners shall notify the Charterers or their agents and the Stevedores of any damage as soon as reasonably possible, failing which the Charterers shall not be responsible.

(c) Stevedore damage affecting seaworthiness shall be repaired without any delay before the Vessel sails from the port where such damage was caused or discovered. Stevedore damage affecting the Vessel’s trading capabilities shall be repaired before leaving the last port of discharge, failing which the Charterers shall be liable for resulting losses. All other damage which is not repaired before leaving the last port of discharge shall be repaired by the Owners and settled by the Charterers on receipt of Owners’ supported invoice.

Explanatory notes

The BIMCO Stevedore Damage Clauses have been revised and updated to reflect current commercial practice and to provide a balanced solution to this often contentious issue. The Clauses were adopted by the Documentary Committee at its meeting in London in May 2008. 

For the sake of clarity the title of the voyage charter party version has been amended to indicate that the Clause applies to FIO charters. In other types of voyage charter party the owners are generally responsible for stevedores and for the repair to their vessel of any stevedore damage. 

Both versions of the new Stevedore Damage Clause begin with establishing that liability for damage to the vessel caused by stevedores rests with the charterers. In the voyage charter party version this liability is only applicable in the context of FIO charters where the charterers are responsible for stevedores. Having established liability, the Clauses attribute the costs of repairs and any time lost to the charterers. Unlike many stevedore damage clauses found in charter parties the new BIMCO Clause does not imply that the charterers should physically repair stevedore damage – just that they must pay for repairs. For voyage charter parties any time lost that occurs after the discharge/voyage has ended (where the discovery of stevedore damage is most likely) is to be compensated at a rate equivalent to the contractually agreed demurrage rate. 

One of the significant changes to the time charter version of the Stevedore Damage Clause is the removal of the emphasis on owners to report stevedore damage within 24 hours of occurrence. It is felt that an owner cannot reasonably be expected to do more than exercise due diligence in the discovery of such damage – it is however imperative that the owners report the damage as soon as possible so that the charterers can take appropriate action against the stevedores. It was felt to be unreasonable that charterers should be held liable for stevedore damage if the owners fail to inform them of such damage within a reasonable time. If the owners simply collate all the stevedore damage during a time charter period and then present it to the charterers towards then end of the charter it will be difficult if not impossible for the charterers to establish which stevedores are responsible for particular damage. 

There is no requirement for the master to seek to obtain any form of acknowledgement of liability from the stevedores or even acknowledgment that damage has occurred, as this is considered too impractical to try to enforce. 

In terms of the seriousness of damage caused by stevedores and the bearing such damage has on the imperative to repair, the revised BIMCO Clauses categorize three types of damage. This creates a better balance in the Clause and is fairer to both parties than many other stevedore damage clauses which are potentially open to abuse. The most serious damage is that which affects the vessel’s seaworthiness. This type of damage must be repaired before sailing from the port where the damage occurred or was first discovered. It should be noted that a reference to “class” is not included because not all damage affecting class is required to be rectified immediately – the classification society may, for example, simply require the damage to be repaired at the next dry dock. The essential factor is that the vessel’s seaworthiness is not compromised. 

The second type of stevedore damage contemplated by the new Clauses is damage which affects the vessel’s “trading capabilities”. This is a new concept which is designed to cover certain types of damage which although do not affect the vessel’s seaworthiness are of a sufficient seriousness to have an impact on the vessel’s ability to comply with the trading requirements on a subsequent voyage. It may be that a crane is damaged by stevedores and requires a spare part to be shipped in to fix it. If the crane is not required for the next voyage then it is unreasonable to delay the vessel at charterers’ time and expense waiting for the spare part to arrive. If, however, the crane is required for the next voyage, then the charterers must bear the cost of delay. 

The third type of damage categorized by the Clause is any type of damage caused by stevedores which does not affect the vessel’s seaworthiness or trading capabilities. Such damage is to be repaired before the end of the time charter period or before sailing from the last discharge port – whichever is applicable. If it is not practical or possible to achieve this then the Clause provides a mechanism for the owners to effect repairs at a later date and to invoice the charterers for the cost. It is the owners’ responsibility to mitigate such repair costs by providing the charterers with supporting invoices. 

To ensure that any time lost due to repairs done after completion of discharge, i.e. after the voyage has ended, is properly compensated, paragraph (a) has been amended to state that the measure of damages for any time lost is to be based on the demurrage rate.

Originally published in BIMCO Special Circular No. 1, August 2008 - Stevedore Damage Clauses for FIO Voyage Charter Parties and Time Charter Parties Revised

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