ASVTIME is a time charter party for accommodation support vessels (ASVs) engaged in the offshore oil and gas and renewables sectors. The charter party is based on SUPPLYTIME 2017 and operates on a knock for knock liability regime, which means that each party agrees to bear responsibility for and indemnify the other in respect of loss of or damage to their own property, and injury to or death of their own personnel, regardless of fault. ASVTIME incorporates several features from WINDTIME, including a contractual limitation of liability. Tailormade provisions have been introduced catering for the specificities of the ASV sector, such as provisions dealing with optional equipment, parallel operations and offshore bunkering of crew transfer vessels.
The latest edition of this contract is ASVTIME, issued in 2021.
Copyright in ASVTIME is held by BIMCO.
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In 2019, BIMCO decided to develop a time charter party for accommodation support vessels (ASVs) engaged in the offshore oil and gas and renewables sectors. Although the market for ASVs is relatively small the new form, which has been codenamed ASVTIME, will fill an important gap in BIMCO’s suite of offshore contracts. Thus, it is the first offshore contract designed for use both in the non-renewable and renewable energy sectors. With offshore windfarms moving further offshore it is likely that ASVs will see an increased use in the future.
ASVTIME is based on the latest edition of BIMCO’s time charter party for offshore support vessels, SUPPLYTIME 2017, which is already being used for ASVs in an amended form. The new charter party maintains the provisions in SUPPLYTIME 2017 in so far as these are also considered relevant and appropriate for the ASV sector.
Certain provisions have been taken from WINDTIME, BIMCO’s time charter party for offshore wind farm personnel transfer and support vessels, because they are considered to be equally applicable in the offshore oil and gas and renewables sectors. This is the case, amongst other, for the three options in Clause 2 (Delivery and Redelivery) regarding how liability for late delivery and cancellation of the charter party should be dealt with and the introduction of contractual limitation of liability in Clause 16(d) (Liabilities and Indemnities – Contractual Limitations).
A number of new provisions have been developed for ASVTIME to cater for the specificities of the ASV sector. This is the case inter alia for the tailormade provision on automatic extension in Clause 1 (Charter Period) and the introduction of optional equipment including gangway, crane, offshore bunkering and daughter craft, and parallel operations, in Clause 6 (Employment and Area of Operation). The annex developed for SUPPLYTIME 2017 relating to extended offshore operations has, with certain adjustments, been incorporated in the charter party as the provisions contained in the annex are considered to be standard in the ASV sector.
The two annexes on vessel specification and insurance have been adapted to be suitable for the ASV sector. Annex A has increased focus on ASV specific aspects of offshore operations (gangway, crane, offshore bunkering, daughter craft, environmental limits and facilities available for the charterers’ personnel). Annex B has been adapted to reflect that both parties may be responsible for obtaining insurance and enabling the parties to elect whether co-insurance is required.
BIMCO would like to thank the drafting committee for their commitment to the project and their considerable time and efforts in producing ASVTIME:
BIMCO secretariat support was provided by Christian Hoppe, General Counsel and Nina Stuhrmann, Manager, Contracts & Clauses.
As part of the development work, the drafting committee consulted a group of key stakeholders in the oil and gas and renewables sectors. BIMCO would like to thank them all for their support and valuable input to the process.
The following notes are intended to provide a background to the development of ASVTIME and share some of the drafting committee’s thinking behind key clauses. The notes are not part of the charter party and should not be taken as a legal interpretation of any of the terms and conditions set out in the form.
ASVTIME is based on SUPPLYTIME 2017, BIMCO’s standard time charter party for offshore support vessels. The explanatory notes carry over the guidance provided in SUPPLYTIME 2017, where relevant, while identifying where ASVTIME differs from SUPPLYTIME 2017. Attention is focused on areas where it is beneficial to provide an explanation as to why the drafting committee has chosen a particular wording.
The charter party includes a number of standard BIMCO clauses (such as the Anti-Corruption Clause and the Sanctions Clause). Some of these clauses have been amended to fit the ASV sector and, notably, that an ASV will not be a cargo carrying vessel. The notes will focus mainly on the changes made to the clause in ASVTIME and it is therefore recommended to also review the explanatory notes to the standard clause.
The charter party is divided into four main sections. Part I, Part II, Annex A and Annex B. Part I is used to insert the deal-specific information that has been agreed between the parties. Part II contains the standard provisions. The content and clause numbering in Part II has been maintained, in so far as possible, to ensure familiarity and make it easier to cross reference with SUPPLYTIME 2017.
The box layout in ASVTIME is based on the one in SUPPLYTIME 2017 with the addition of boxes relating to key features of the ASV sector, including automatic extension period to complete the immediate task (Box 11), optional services (Box 22), parallel operations (Box 24) and limitation of liability (Box 38).
As a novel feature of BIMCO standard contracts, Part I incorporates the BIMCO Authenticity Clause above the signature boxes. The objective of the clause is to decrease the frequency of the industry’s - often unknowing - use of counterfeit copies of BIMCO forms by including the Contract Authenticity Clause. If one of the parties provides the contract template for negotiation and is reluctant to include this clause, then this should serve as a warning that the offered contract is not a genuine BIMCO standard agreement.
This section includes defined terms that appear several times throughout the contract. With a few exceptions, highlighted below, the definitions are the same as those included in SUPPLYTIME 2017.
“Affiliates” – This definition has been added here mainly because it is used in the definitions of Charterers’ and Owners’ Group, but is also found elsewhere in the charter party.
“Banking Days” – is defined as days on which banks are open in the parties’ place of business. Parties can link the currency of the hire with the place of that currency by amending this definition. For example, if the charter hire is to be paid in US dollars, reference can be added to days on which banks are open in New York.
“Charterers’ Group” – The definition of Charterers’ Group defines the entities that the charterers are responsible for under ASVTIME. All parties operating in the field and/or site and which may suffer loss or damage when working at the site are covered by the knock for knock regime. Parties both up as well as down the charterers’ contractual chain are included and owners avoid liability towards the charterers’ contractual counterparties several tiers removed from them. This assists in clarifying which indemnities the charterers have to give and ensures a robust and clear-cut knock-for-knock liability regime.
As compared with SUPPLYTIME 2017, the words “of any of the foregoing” have been introduced to specify that contractors and sub-contractors (of any tier) under subparagraph (iv) also cover subcontractors of the clients etc. listed in subparagraphs (i) to (iii). The scope of this term is limited by the requirement of the listed entities having to be related to the work or project on which the ship is employed.
“Charterers’ Personnel” – Despite being defined as a distinct grouping, these persons are included in the “Charterers’ Group”. Further, the definition is intended to identify clearly which persons on board the ship the charterers are responsible for in respect of compliance with the MLC 2006 Convention. In SUPPLYTIME 2017, the definition of Charterers’ Personnel was included in the MLC 2006 Clause but as it is also used elsewhere in ASVTIME it has been moved to the Definitions section.
“Crew” – A definition of crew is included to assist in distinguishing the enumerated people from personnel placed on board by the charterers. Crew also now encompasses the previously used term ‘Master, Officers and Crew’.
“Environmental Limits” – This is a common term ASV sector referring to weather, significant wave height, etc. For the avoidance of doubt, it is not related to environmental aspects such as greenhouse gases and similar issues. The definition is linked to Annex A where the environmental limits can be specified for each optional service agreed.
“Offshore Units” – Rather than naming all operations that an offshore unit may be involved in, which carries with it the risk of excluding others, reference is made to “offshore operations”.
“Owners’ Group” – Similar to the definition of Charterers’ Group, and to avoid unclarity about whether subcontractors of the owners’ affiliates etc. are also included, the words “of any of the foregoing” have been added to the definition. The scope of this term is limited by the requirement of the listed entities having to be related to the work or project on which the ship is employed.
“Owners’ Personnel” – Despite being defined as a distinct grouping, these persons are included in the “Owners’ Group”. The definition comes from the SUPPLYTIME 2017 Extended Offshore Operation Annex which has been incorporated into ASVTIME as Clause 8 which is the only place where it is used.
This clause describes the charter period and any agreed and automatic extensions with references to the boxes in Part I.
Subclause 1(a) – The period of time that the charterers agree to hire the ship from the owners should be stated in Box 9.
Subclause 1(b) – This subclause gives the charterers the option to extend the charter period. Such an option needs to be declared in accordance with Box 10 where the period of extension and number of days’ notice required to declare the option should be inserted.
Subclause 1(c) – The purpose of this subclause is to reflect the common law position and to clarify that the charterers shall not instruct the vessel to commence any services unless that service can be performed within the charter period. “Services” is not defined in the contract but is not intended to mean the services the owners provide under ASVTIME but rather the charterers’ services under the project/other contract.
Subclause 1(d) – The concept of automatic extension was part of subclause 1(c) of SUPPLYTIME 2017 and has been singled out under ASVTIME to become a new subclause 1(d).
Under this concept, the charter period shall be automatically extended for the time required by the charterers to complete the listed tasks/activities under the main project which are not performed by the ASV. Compared to SUPPLYTIME 2017, the scope of the clause has been extended to cover tasks in the renewables industry (“Wind Turbine”) as well as “other similar activity” which is intended to cater for activities which are performed but not captured by the definitions. Together, all of these are forming the “immediate tasks”. The parties are required to identify them in Box 11.
The users of ASVTIME should state in Box 11 for which activities the automatic extension option should apply and further state the maximum extension period. The subcommittee highlighted that the extension should be of an exceptional nature and that, therefore, the maximum extension period shall be rather short to avoid that the owners are prevented from using the ship under a new contract.
The subclause does not contain a reference that the hire rate should increase for the extension and that the hire rate stated in Box 27 will be payable. If the parties wish that the hire rate should increase for the period when the contract is automatically extended, this needs to be reflected individually.
This clause is based on SUPPLYTIME 2017 but new provisions dealing with the cancellation of the charter party due to late delivery have been carried over from WINDTIME, which provides charterers with options for compensation following cancellation, as it is considered more appropriate in an ASV context to have a flexible solution adaptable for use in the oil and gas and renewables sectors.
Subclause 2(a) (Delivery) – This subclause addresses the main delivery obligation of the owners who are also under the obligation to keep the charterers informed about the estimated time of arrival of the ASV at the delivery port or place.
To reflect the lengthy and costly project preparation in offshore projects involving ASVs and the consequent critical importance of the vessel arriving when expected, the owners are required to exercise reasonable endeavours to keep the charterers informed of the vessel’s estimated time of arrival at the delivery place, which is a new requirement under ASVTIME.
Subclause 2 (b) (Mobilisation) – This subclause deals with payment of the mobilisation fee to cover the cost for owners to bring the ship to the area of operation. The mobilisation fee should be paid as a lump sum without discount concurrent with the delivery of the ship.
Subclause 2(c) (Cancelling) – If the ASV is not presented for delivery by the cancelling date as per Box 6 the charterers have the option to cancel the charter party. If the ASV is running late, the owners must notify the charterers of the date by which they will be able to deliver it. The purpose behind this clause is that a ship at risk of arriving after the cancelling date should not have to proceed on a long voyage towards the delivery place, not knowing whether or not the charterers will accept the ship once it has arrived. Without this provision, the charterers would be able to wait until the ship tenders its notice of delivery before they decide whether or not to cancel. Under the clause, the charterers will have to declare their option within 48 hours from the owners’ notice. 48 hours was considered more common in the ASV sector than the 24 hours in SUPPLYTIME and 3 days in WINDTIME. If the charterers choose not to cancel, the new cancelling date will be the new readiness date and time that the owners stated in their notice.
Subclause 2(d) – Subclauses (d), (e) and (f) are alternative options dealing with the consequences when the charterers cancel the charter party because of late delivery of the ASV. The users of the form should elect in Box 17 which option should apply. Subclauses (e) and (f) have been taken from WINDTIME and are not in SUPPLYTIME 2017. Since they represent what is often agreed in ASV contracts, they have been added to the form. The default position is subclause (d) which reflects the position under SUPPLYTIME 2017. If subclause (d) applies and the charterers cancel the charter party, neither party is liable to the other party for any losses resulting from the non-delivery of the ASV or the cancellation.
Subclause 2(e) – If the parties elect subclause (e), the charterers can either cancel the charter party or accept the late delivery. The parties retain their right to claim general contractual damages in the event of late delivery or cancellation.
Subclause 2(f) – If this option is chosen, the owners have to pay liquidated damages calculated per day and pro rata until the actual delivery of the ship or a substitute or until the time the charterers cancel the charter party which would be the sole remedy for the late delivery. The amount of liquidated damages payable to the charterers is subject to a cap of liability which should be stated in Box 16 to avoid that the owners’ liability is unlimited. The charterers are not entitled to claim liquidated damages if they or any member of the charterers’ group has caused the delay.
This approach has been taken from WINDTIME as is intended to reflect practice also in the ASV sector where parties often agree that liquidated damages should be payable in the event of a late delivery to compensate for potential losses and penalties the charterers have to pay under the project contract.
Subclause 2(g) (Redelivery) – The redelivery provision generally mirrors the delivery clause but, as a novel feature in ASVTIME, the provision states that the ship should be redelivered with all charterers’ personnel disembarked, free of charterers materials and equipment, property and cargo and with cargo tanks clean to industry standards. It should be noted that reference is made only to the cargo tanks, and not the fuel tanks. The standard of cleanliness will vary depending on the contents of the tanks and there may be different standards around the world. The words “applicable industry standards” is intended to provide a certain standard without depriving the parties of their required flexibility. In the offshore industry, it is common to have liquid mud and brine cargo tanks cleaned to “brine standard”. However, there are other standards as well and the wording has therefore been kept more general.
The place for redelivery and the number of days’ notices should be stated in Box 8.
Subclause 2(h) (Demobilisation) – This provision mirrors subclause (b) (Mobilisation) in that the demobilisation fee should be paid as a lump sum fee without discount on the expiration or on earlier termination of the charter party. There is one exception to this and that is where the charter party has been terminated because of owners’ repudiatory breach. In such cases, it would be unfair to require the charterers to pay the demobilisation fee.
Subclause 2(i) (Cargo and services) – The clause provides that if the ship carries cargo or performs some other service for the charterers on its way to the delivery port or from the redelivery port, then the charter party will apply to such services as well. However, payment for such additional services should be made as a lump sum in advance, whether ship or cargo lost or not.
The owners have an absolute obligation to deliver the ship in a seaworthy condition and as described and classed as per Annex A. Thereafter, during the currency of the charter, there is a due diligence obligation on the part of the owners to maintain the ship in a seaworthy condition and in class. Apart from that, there is no continuing obligation to maintain the ship as per Annex A. Rather, Annex A represents an account of the state of the ship at the time of delivery. If it was otherwise, Annex A would have to be amended every time the ship is modified, which would be impractical.
The charterers may need to modify the ship to be able to perform the services that they have hired it for. This provision gives them the option to make structural changes to the ship or to install equipment. In both cases, the owners’ written consent is required. However, before the ship is redelivered, the charterers must have it reinstated and remove any additional equipment that has been installed.
The ship should be reinstated to its “condition on delivery” with an exception for fair wear and tear. This is to avoid the need for the ship to be returned to its original condition as a new ship. Rather, the ship should be returned to a condition commensurate with its condition on its delivery to the charterer and allowing for the normal wear and tear over the period of the charter.
The modifications and reinstatements should be done in the charterers’ time and at their cost, and they are also responsible for repairing and maintaining the added equipment. Still, the owners have the right to make repairs or maintenance, at charterers’ cost, if necessary for the safety and efficient performance of the ship. For clarification, it is expressly stated that equipment installed by the charterers will not give rights of ownership in favour of the owners.
Subclause 5(a) – This subclause deals with delivery and redelivery surveys. The parties should jointly appoint a surveyor whose task it is to determine and record the items listed in the clause and the condition of the ship and any equipment specified in Annex A. The latter is an addition to the SUPPLYTIME 2017 clause. Its purpose is to reflect the existence of the special equipment on an ASV and its value, which is also reflected in the hire.
Subclause 5(b) – In practice, it is sometimes a problem that charterers do not survey, inspect or audit the ship before delivery and then argue that the ship should not go on hire until sometime afterwards, when the survey, audit or inspection has been completed, approved and the charterers have accepted the ship. Ideally, the charterers should do this before delivery so that the ship is ready to go on hire at the time of delivery. The provision aims to facilitate this by giving the charterers the right to survey, audit or inspect the ship prior to delivery. Furthermore, it provides the charterers with the right to survey, audit or inspect the ship during the charter period upon giving notice to the owners.
In the final paragraph, the owners are given the opportunity to review and comment on the findings of the surveyors, auditors and inspectors before such information is made publicly available in systems like the OVID (Offshore Vessel Inspection Database) and CMID (Common Marine Inspection Document) databases. Reference is made to “similar systems” to take into account other such possible databases that may exist now or in the future.
Subclause 6(a) (Employment) – This subclause describes how the ship may be employed. The offshore activities must be lawful and limited to the services as described in Box 19. Furthermore, there is a due diligence obligation on the charterers to order the ship to safe places where it can always lie afloat. The geographical area is limited to the area of operation as described in Box 18.
The Charterers are under the obligation to ensure that the number of the charterers’ personnel does not exceed the number stated in Box 20, which is a new feature of ASVTIME to protect the owners’ interest.
Subclause 6(b) (Accommodation and Recreational Facilities) – This new subclause deals with one of the major characteristics of an ASV, namely the provision of accommodation against the payment of the accommodation rate. The standard and class of the accommodation will be described in Annex A. Further, it entitles the charterers to use the fitness and recreational facilities which are described in Annex A.
Subclause 6(c) (The Vessel’s other space) – This subclause sets out what access the charterers have to the ship’s space. To avoid discussion, the parties should specify in Annex A the number of guaranteed berths that will be available to the charterers’ personnel. The charterers may carry cargo on or under deck as long as it is lawful, and also explosives, dangerous, toxic and noxious cargo as long as owners are notified and relevant regulations are complied with.
Subclause 6(d) (Catering) – Catering is one of the main services provided under ASVTIME. This new subclause simply establishes the owners’ obligation to provide the catering. The details of the service shall be described in Annex A.
Subclause 6(e) (Optional equipment) – The availability of optional equipment is one of the core features of an ASV. The subclause is an addition to the SUPPLYTIME 2017 provisions and has been included as a new subclause, before ROV operations and diving platform and permission and licences, due to the significance of optional equipment in an ASV context. The optional equipment is listed in this subclause and includes the gangway, cranes, the offshore bunkering system and the daughter craft. The charterers have no automatic use of it as the parties need to specifically agree to such use and state this accordingly in Box 22. The equipment needs to be operated by the crew (typically by specially qualified personnel) and the parties have to agree on the operation times. The operation of all optional equipment has in common that it has to be done within the environmental limits specified in Annex A.
Subclause 6(f) (Parallel Operations) - This subclause reflects another common feature of an ASV, namely the possible parallel operation of the operational equipment. Unless it is stated in Box 24, the charterers cannot automatically request the equipment to work in parallel. The reason for this is that parallel operations are an exemption to the obligation that the ASV has to perform its services continuously. Performing parallel operations needs a certain planning and organisation. Therefore, it is important that the parties are aware of the scope and duration of the parallel operations and specify in Box 24 which operations are supposed to work in parallel and for how many hours per day.
Subclause 6(g) (ROV operations and diving platform) –The parties can agree in Box 23 that the ship may be used for ROV operations or as a diving platform. However, users should be aware that such operations may require a lot of additional clauses to provide for this.
Subclause 6(h) (Permission and licences) – It is the charterers’ responsibility to obtain the relevant permissions and licences so that the ship can enter, work in and leave the area of operation. Owners should make reasonable efforts to assist the charterers with this. What is reasonable may depend, amongst other things, on the duration of the employment in question. For example, what is reasonable by way of assistance in obtaining a permit for a location where the ship is intended to stay for six months, might not be reasonable in relation to a single cargo run.
Charterers, where necessary, should assist owners in obtaining work permits and visas for the crew. In a few jurisdictions, the ship’s crew can only obtain work permits and visas by an invitation and/or sponsorship from the charterers or their clients.
The clause has been carried over from SUPPLYTIME 2017 with certain amendments to subclause (a) to reflect the optional services and parallel operations.
Subclause 7(a) – The ship and crew will be at the charterers’ service, the ship always in accordance with its own particular capabilities. The general principle is that the services shall be rendered 24 hours a day. ASVTIME however, introduces a exemption to this. The operation of the gangway, crane, offshore bunkering system, daughter craft, parallel operations and other agreed operations are excluded from this principle and can only be used in accordance with the parties’ specific agreement.
Compared to SUPPLYTIME 2017, subclause (a) has been divided into subparagraphs (i) and (ii), with subparagraph (ii) dealing with circumstances when charterers require extra hours for the operations of the gangway, crane, offshore bunkering system, daughter craft and parallel operations, or as otherwise expressly agreed between the parties.
When agreeing to the increase of operational hours, the parties need to ensure that the additional hours do not exceed a specific number of hours to remain compliant with the applicable laws and regulations.
Two boxes have been added for (1) charterers’ notices to be given prior to the operations (Box 31), and (2) for the special rate which will apply (Box 32). It is now specifically stated that services provided under subclause (i) are limited to those set out in Annex A.
Subclause 7(b) – It is not intended that cargo belonging to third parties should be carried on board the ship in exchange for freight payments. Therefore, no bills of lading should be issued for any charterers’ cargo carried under ASVTIME and the master should only sign cargo documents which function as a receipt and are non-negotiable. The charterers are required to indemnify the owners against any liabilities that could arise as a consequence of the master signing such cargo documents, but only to the extent that the liabilities are greater than those assumed under ASVTIME.
Subclause 7(c) – This subclause sets out the various tasks which the ship’s crew will undertake. If they are prevented by port regulations or unions from performing the listed tasks then the charterers must make other arrangements at their own expense.
Subclause 7(d) – The owners are required to investigate and take appropriate action in respect of complaints received by the charterers regarding the behaviour of the owners’ personnel.
Subclause 7(e) – The operational control of the ship remains with the owners throughout the charter party.
This clause is based on the Extended Offshore Operation Annex to SUPPLYTIME 2017.
The purpose of the clause is to address the impact on the ship’s common activities and owners’ obligations, including but not limited to crew changes, repairs, surveys, storing, etc. that normally require the ship to be at or in a port, arising from the charterers’ requirements or instructions that the ship is held offshore.
Subclause 8(a) (Transportation of Owners’ Personnel) deals with the transportation of owners’ personnel when the ASV is held offshore and the owners are unable to embark and disembark its personnel. The subclause allocates the costs and responsibilities for the transport. It clarifies that the charterers are liable to pay the wages of the owners’ personnel, which include leave pay and additional wages if they cause a delay in transportation (see subclause (a)(v)).
Subclause 8(b) (Fuel, water, lube oil stores, provisions and spare parts) addresses another important aspect when the ASV is held offshore: the replenishment of water, fuel and other listed materials which are needed and how the responsibilities and costs of its transport is allocated between the charterers and owners.
Subclause 8(c) (Statutory or Mandatory Surveys and Inspections) deals with statutory and mandatory surveys and inspections whilst the vessel is held offshore. These surveys fall within the definition of “maintenance allowance” under subclause 15(d) and thus no hire is payable. It is not intended that the provision is used for maintenance resulting from breakdowns.
This clause sets out in a straightforward way what the owners must provide and pay for under the contract.
The clause is identical to the clause included in SUPPLYTIME 2017 except for two changes: Firstly, in subparagraph (c)(iv), the reference to “fumigation expenses” has been deleted as this only applies to cargo and there will be no such fumigation in an ASV context. Secondly, the subparagraph in SUPPLYTIME relating to towing and anchor handling equipment has been deleted as this is typically not done in an ASV context.
This clause sets out in an equally straightforward manner what the charterers must provide and pay for under the charter party.
Subclause 10(a) – The clause is based on the clause in SUPPLYTIME 2017 with the following significant changes: Firstly, the reference to fuel has been deleted to reflect that fuel may be provided by owners as well as charterers (see Clause 11). With respect to the costs for quarantine, a reference has been added to situations occasioned by members of the charterers’ group as this is considered particularly relevant in an ASV context due to the large number of charterers’ personnel typically on board the ship. Finally, a cross reference has also been added to Clause 27 (Infectious or Contagious Diseases), in which a new definition of “Quarantine” has been added to reflect the risk related to the large number of people typically on board an ASV (see Clause 27).
Subclause 10(b) – This subclause deals with what the charterers should provide and pay for in relation to the loading and unloading of cargoes.
Subclause 10(c) – At the time of the agreement, or latest by the time of delivery, the charterers should provide any necessary documents and operational plans to the owners relating to the safe and efficient operation of the ship. On redelivery, the owners must return these documents to the charterers.
Subclause 10(d) – Costs relating to customs clearance and import duties are for the charterers’ account.
Subclause 10(e) – The replacement of anchor handling, towing and lifting wires, together with accessories, are for the charterers’ account, unless the damage or loss has been caused by the negligence of the owners. Subclause 10(e) is carved out from the knock for knock liability regime contained in subclause 16(a) so that the charterers are liable to replace damaged wires even if they belong to the owners. The reason for this is that these wires can be regarded as consumables, albeit very expensive consumables, the wear and tear of which should not be encompassed by the knock for knock liability regime. Needless to say, it is open to the parties to negotiate a different balance.
Subclause (f) – Any fines or other related costs that would arise relating to the discovery of contraband, unmanifested drugs or cargoes that have been shipped in the charterers’ cargo will be for the charterers’ account. They will also be required to put up any financial security. If there is a delay as the result of such a discovery the ship will remain on hire. If the crew has been involved in smuggling, the owners are required to provide financial security in respect of fines and other related costs and the ship will be off-hire for any time lost.
This clause is a deviation from SUPPLYTIME 2017 as it gives the parties the option to choose who will provide the fuel. The reason for that is that ASVTIME should be used in the renewables and oil and gas industries which have a different standard on who provides the fuel. In the oil and gas sector the fuel is commonly provided by the charterers, whereas in the renewables sector the owners will normally provide the fuel. The default position is that charterers provide the fuel.
Subclause 11(a) (Upon delivery) – The parties should state in Box 25 the minimum quantity of fuel that the ship should be delivered with.
Subclause 11(b) (Upon redelivery) – On redelivery, the ship must have on board enough fuel to be able to reach the nearest port where the agreed fuel stated in Box 25 is available.
Subclause 11(c) (Payment for fuel upon delivery or redelivery) – deals with the payment of fuel on delivery and redelivery and not with the payment of fuel during the operation of the contract which is dealt with in subclauses (d), (e) and (f).
The clause provides the parties with two options for payment of fuel which should be indicated in Box 25, the default position in case of failure to state an option being subclause 11(c)(i).
Subclause 11(c)(i) – Under this option, the charterers buy the fuel that is on board at delivery at the same price as the owners paid for it at the last bunkering. The mirroring provision applies at redelivery where owners buy or reimburse the fuel from the charterers.
Subclause 11(c)(ii) – Conversely, under this option, the fuel is not bought or sold between the parties during the contract. Instead they should settle the balance at redelivery. If the charterers redeliver the ship with less fuel than it had on delivery, then they pay the owners for the difference. If the ship is redelivered with more fuel than at delivery, the owners credit the charterers for the difference. For calculating the quantity, reference is made to the delivery and redelivery surveys. The price for the fuel can either be agreed and stated in Box 25(iii), or it will be the price paid at the last bunkering of the ship.
Subclause 11(d) addresses one of the main new features of ASVTIME: the option of the parties to choose who will provide the fuel during the charter party. The parties should elect in Box 25 (i) which party should provide the fuel and, if no election is made, the default position is that charterers provide the fuel.
Subclause 11(e) addresses the situation when the owners provide the fuel. It is a new subclause as SUPPLYTIME 2017 does not provide for this option. The charterers only have to pay for the fuel as long as the ASV is on hire. In situations where the ASV is off hire, the payment obligation is suspended. The owners have an obligation to plan the stemming of fuel as much as “reasonably” possible so that unnecessary delays and disruptions can be avoided (see subclause (e)(ii)). Since the fuel stemmed could also be used for fuelling the crew transfer vessels (CTVs), it is important that the fuel complies with the specifications set out in Box 25 as well as with ISO Standard 8217 and the relevant MARPOL provisions.
Subclause 11(f) – This subclause will apply if the parties elect that the fuel shall be provided by the charterers.
Subclause 11(f)(i) – This provision deals with the specifications and grades of the fuel. It requires representative samples to be taken during bunkering. The sampling point should be as close as possible to the receiving ship’s manifold. The representative samples should be divided into a minimum of four samples and should be labelled and sealed by the bunker suppliers. One sample should be retained on board for MARPOL purposes. The remaining samples should be divided between the owners, charterers and the bunker suppliers. Quality claims should be resolved by having the samples analysed by a qualified and independent laboratory which has been jointly selected by the owners and charterers. The cost of this analysis should be borne by the charterers in case the samples are shown to be off-spec. However, if all samples are in compliance, then the owners pay for the analysis.
Subclause 11(f)(ii) – Under this subclause, the owners accept responsibility for consequent damage to the engine. However, the charterers must give owners some time in return, on hire, to stop the bunkering operation if there is reason to believe that the fuel is not compliant. Thus, owners have the possibility, through the chief engineer of the ship, to stop the bunkering process if he or she reasonably believes that the fuel does not comply with subclause (f)(i). When deciding whether or not to suspend loading of the fuel, the chief engineer must be acting in good faith.
Subclause 11(f)(iii) – If the fuel is not in compliance with subclause (f), the ship will remain on hire and owners will not be liable for any speed, performance or fuel consumption claims.
This clause is limited to the refuelling of CTVs and caters for the situation when the ASV and the CTV use the same fuel.
Subclause 12(a) – This subclause states that the charterers can use the fuel provided to the ASV for fuelling of the CTVs. The subclause contains a reference to Clause 11 which has the effect that the specifications and sampling procedures set out in that clause also apply here.
Subclause 12(b) deals with the situation when the owners provide the fuel to the ASV and clarifies that the fuel needs to meet the specification as set out in Box 26. The quality standard has been added to avoid damages on the CTVs due to bad fuel.
Subclause 12(c) ensures the cooperation between the ASV and the CTV during the offshore bunkering obligation to limit the risk of a potential pollution.
Subclause 12(d) deals with the sampling procedures if the CTVs fuelled via the offshore bunkering system. The charterers can request for sampling even though the MARPOL convention may not be applicable for the CTV because of its size. The reason for this approach is that CTVs are mostly chartered on WINDTIME which provides for sampling and the requirements under both forms should be consistent.
The clause contains all requirements in relation to owners and charterers in respect of the ISPS Code (the International Code for the Security of Ships and Port Facilities and amendments to Chapter XI of SOLAS).
In case of trading to or from the United States of America, the owners are required to comply with the MTSA Act (US Maritime Transportation Security Act 2002). Relevant certificates should be made available and presented to the charterers upon request. Subclause (c) provides that delays, costs and expenses in relation to security measures required by the ports or relevant authorities are for the charterers’ account.
The clause is identical to the Hire and Payments Clause in SUPPLYTIME 2017, except for subclause (d) which takes into account the situation where the owners provide the fuel.
Subclause 14(a) (Hire) – This subclause sets out the charterers’ obligation to pay hire at the rate stated in Box 26(i) from delivery to the end of the contract.
Subclause 14(b) (Extension Hire) – The charterers have the option to extend the charter period. The hire rate for the extended period should be stated in Box 27. If the parties have left Box 27 blank, they must agree on an extension rate, otherwise the charterers lose the option to extend.
Subclause 14(c) (Adjustment of Hire) – If there are changes in laws and regulations, or in their interpretation or implementation, which leads to changes in owners’ costs, then hire may be adjusted to cover this. The scope of this possibility to adjust hire is limited by the requirement that it has to be changes of the laws and regulations within the area of operation and they have to be governing the ship, its owners, crew or the charter party.
Subclause 14(d) (Invoicing) – This clause provides for how invoicing should be done. Invoice currencies and exchange rates are to be stated in Box 26. Invoices for hire and other payments should be issued monthly and in advance or in arrears as per Box 33(i). Invoicing for fuel should be done at the time of delivery if the charterers are to buy and pay the owners for the fuel as per subclause 11(c)(i). In case the owners provide the fuel, such fuel shall be invoiced at the time it is delivered to the vessel.
Sub-clause 14(e) (Payments) – This subclause requires payment of hire, fuel and disbursements to be received by the owners within the specified number of days in Box 35 from the date of the receipt of the invoice. Account details should be described in Box 34. The charterers are not allowed to make deductions or set-off for claims they may have, with the exceptions for advances for disbursements made on behalf of and approved by the owners, and disputed parts of invoices as per the last paragraph of this subclause. The charterers should notify owners at the earliest opportunity, but not later than the due date, if they reasonably believe that an incorrect invoice has been issued. The subcommittee considered whether to add the “handling fee” to “payments” in the subclause. In practice, the suppliers add the handling fee to the invoice and it will form part of the “fuel invoices” and there is therefore no need for a specific reference.
Sub-clause 14(f) (Suspension and Termination) – This subclause deals with the consequences of the charterers failure to make punctual payments of hire and other sums due to the owners. The other sums due and payable are intended to cover any sums owed by charterers that remain due and unpaid, for example, mobilisation fees.
Subclause 14(f)(i) – The owners must notify the charterers of their failure to have made any due payment(s) and requiring that such payment(s) be made within five days.
Subclause 14(f)(ii) allows the owners to suspend performance of their obligations under the charter party at any time after payment becomes due and whilst it remains unpaid. During such suspension, the ship will remain on hire. There is no requirement on owners to give notice to the charterers before exercising their right to suspend performance. The words “and/or other sums” shall clarify until what point in time the owners are allowed to suspend performance.
Subclause 14(f)(iii) gives the owners the right to terminate the charter party if the charterers have still not paid after five days of the notice that was sent under subclause 14(f)(i). It should be noted however, that if the charterers pay after the five days’ grace period has lapsed, but before the owners have sent the written termination notice, the owners lose the right to terminate.
Subclause 14(g) (Audit) – In order to verify the validity of the owners’ charges, the charterers may appoint an independent and qualified accountant to audit the owners’ accounts relating to the charter party.
Subclause 15(a) (Off-hire and exceptions) – This subclause describes when the ship may be placed off-hire and the exceptions to this. For the ship to go off-hire, firstly, it must be prevented from working. Secondly, this must be due to either the deficiency of the crew or the owners’ stores, or a strike by the crew, or the breakdown of the machinery or equipment (but not the charterers’ equipment), damage to the hull, non-compliance with Clause 28 (this addition is the only change to the SUPPLYTIME 2017 clause) or another accident to the ship. Hire will only cease for the time that is lost – this is what is generally called a “net loss of time clause”. The reference to Clause 28, which deals with health, safety and environment, was considered appropriate by the subcommittee in view of the significant number of personnel on board an ASV.
Subclauses 15(a)(i)-(vii) – These subclauses contain the exceptions to off-hire. In other words, when the ship does not go off-hire even if it is prevented from working. These are events that fall within the charterers’ area of responsibility or control. To clarify that hire continues to be payable during a force majeure event, this is specified in subclause (a)(vii). Clause 38 (Force Majeure) only deals with loss, damage and delay, but not hire. However, if a force majeure event lasts for more than 14 days the charter party may be terminated in accordance with Clause 37 (Early Termination).
Subclause 15 (b) (Reduction of Hire) – The concept of reduction of hire is not included in SUPPLYTIME 2017. In the ASV sector, it is included in most contracts and the subcommittee therefore felt it would be appropriate to reflect it in ASVTIME.
Under this subclause, the charterers have the option to request the ASV’s continued performance, despite the unavailability of certain equipment, against payment of a reduced hire. The reduction of hire will not depend on loss of time and the users should agree on the percentage of hire to be reduced for each optional equipment which will be stated in Box 28. If the Owners reject the request, the ASV will go off-hire if the conditions set out in subclause (a) are met. The reason for this approach is that a simple loss of hire clause would not reflect the special services an ASV has to perform with its optional equipment. The optional equipment is reflected in the hire rate and if those services become unavailable, the hire rate should be reduced accordingly.
Subclause 15(c) (Liability for Vessel not working) – If the ship is prevented from working, no matter for what reason, even due to negligence on the part of someone within the owners’ group, the charterers’ sole remedy for losses is limited to putting the ship off-hire. However, there is one exception to this, and that is where the owners have failed to comply with the ISPS Code/MTSA or Clause 13 (BIMCO ISPS/MTSA Clause for Time Charter Parties 2005). Direct losses from such a failure will be for owners’ account. This subclause applies generally and not only when the ship is off-hire.
Subclause 15(d) (Maintenance, survey, inspections and drydocking) – This subclause has been modelled on the corresponding clause in SUPPLYTIME 2017 but has been amended and rearranged to make the form fit for use in the ASV industry.
Subclause 15(d)(i) (Maintenance) – The charterers grant the owners 24 hours per month on hire to do maintenance, dry-docking, statutory or mandatory surveys or inspections. Compared to SUPPLYTIME 2017, the reference to “statutory or mandatory surveys or inspections” has been added. This is to clarify that, in order for the surveys and inspections to fall within the definition of maintenance allowance and be covered by its regime, these have to be statutory or mandatory.
This so-called “maintenance allowance” will start to accumulate from the commencement of the charter period. It does not cover “repairs” anymore which was the case under SUPPLYTIME 2017. The reason for this is that it should be avoided that the maintenance allowance would be used for repairs of damages that could relate to situations where there could otherwise be a suspension of hire event under Subclause 15(a). An example of what would fall within maintenance allowance in an ASV context include maintenance of the gangway that cannot be done with the gangway connected, e.g. greasing of moving parts, whereas another example could be a mandatory re-certification of the crane.
Maintenance is an accepted practice in the offshore industry where ships generally operate with a greater amount of equipment and machinery when compared to other types of ships and, as such, require more maintenance more frequently. As noted previously under Subclause 3(b), the owners are under a due diligence obligation to maintain the vessel. The maintenance allowance is balancing this due diligence obligation, as the charterers pay the agreed maintenance allowance. It is important for owners to be able to do this maintenance without being in risk of being placed off-hire when doing so. However, to provide for balance, the owners shall use all reasonable endeavours to carry out the maintenance during periods of non-utilisation of the ASV to avoid interference with the charterers’ use of the ASV during the execution of the project. The obligation to exercise “all reasonable endeavours” shall not be taken lightly by owners and it is recommended to closely work together with the charterers when planning the maintenance or to amend the reference.
An addition to the maintenance regime under SUPPLYTIME 2017 is a clarification that voyage times to and from the port where the maintenance will be performed will not count against the maintenance allowance and the ship will remain on hire.
Subclause 15(d)(ii) (Dry-docking) – No substantial changes have been made to the content of the dry-docking provision under SUPPLYTIME 2017. The only change is that the reference to suspension of hire and when the ship shall go back on hire has been moved from the first paragraph of the subclause to the end where it sits more naturally as a consequence of the dry-docking.
The charterers must allow the ship to dry-dock from time to time as required by its classification society. Unless being carried out using accumulated maintenance allowance, the ship will be off-hire during such dry-dockings and, the provision states when the ship goes off-hire respectively comes back on hire again, namely from the time the charterers place it at the owners’ disposal until the time it is placed at the charterers’ disposal at the place where it was originally released. The owners’ choice of dry-dock location should always be reasonable, to both parties, when it comes to time and cost.
To promote collaboration between the parties, and facilitate the charterers’ planning, the last paragraph states that the owners must provide the charterers with the ship’s scheduled dry-docking programme for the entire charter period.
Subclause 15(d)(iii) –- The provision stating that it is the owners’ decision when to use their maintenance allowance or not has been singled out from subparagraph (i), where it was under SUPPLYTIME 2017, and now forms a new subparagraph (iii). If owners decide not to use some or all of their maintenance allowance, they will not be able to claim the value of the allowance at the end of the charter period. However, there is one exception to this, and that is where the charterers have specifically asked the owners not to use the maintenance allowance. In such cases, hire will be payable for such unused maintenance allowance on redelivery or at the earlier termination of the charter party.
This approach is seen by the subcommittee as a more balanced solution which may encourage owners to use their maintenance allowance within the charter period and at the same time discourage the charterers from not making the ship available for this time.
This clause is based on the knock for knock provision in SUPPLYTIME 2017 which is also fundamental in the ASV sector. It provides the parties with a clear-cut allocation of risk and responsibility and has worked well in the offshore industry for more than 40 years. In this sector, the knock for knock regime is invaluable in minimising the number of claims and disputes between members of the owners and charterers groups.
Subclause 16(a)(i) (Knock for knock) – This subclause is unamended as compared with SUPPLYTIME 2017 and describes the losses that the owners must bear, namely loss or damage to any property belonging to the owners’ group and personal injury and death of anyone in the owners’ group. The charterers will not be responsible for these head of losses even if they were caused by, for example, neglect or default on the part of the charterers’ group. Furthermore, the owners are obliged to indemnify the charterers if any claims should arise from the losses described in this subclause. This reflects the knock for knock liability regime where the loss lies where it falls at its purest.
However, there are three exceptions where the charterers may be responsible for loss or damage to property belonging to members of the owners’ group. These are subclause 10 (e) (Charterers to Provide) where the charterers have to pay for replacing owners’ wires; subclause 16(c) (Statutory limitations) under which the parties may limit their legal liability; and subclause 20(c) (Saving of Life and Salvage) in respect of salvage services.
The definitions of the charterers’ group and owners’ group encompass all the parties which may suffer a loss and which the owners and charterers will be liable to indemnify each other in respect of (see above under Definitions and, notably, the addition of the words “of any of the foregoing” to avoid unclarity about whether subcontractors of the charterers’ clients and of the owners’ affiliates etc. are included).
It is important to note that the loss must be one “arising out of or in any way connected with the performance or non-performance of this Charter Party whatsoever and in any circumstances, even if such loss, damage, or personal injury or death is caused wholly or partially by the act, neglect, breach of duty (whether statutory or otherwise)”. The background to these references is found in court cases such as the A Turtle Offshore SA v Superior Trading Inc (The A Turtle)  1 Lloyd’s Rep. 177.
The knock for knock provision under SUPPLYTIME 2017 has been carried over to ASVTIME unamended. This means that there is no exemption for damages arising from owners’ supply of off-spec fuel to the Crew Transfer Vessels which is provided for under WINDTIME (subclause 12 (c)).
Subclause 16(a)(ii) (Knock for knock) – This subclause describes the losses which the charterers are responsible for and should indemnify owners in respect of in case of claims. It is not an exact mirror image of subclause (a)(i) for the simple reason that the services that the owners and the charterers perform are not identical. Hence, the description of the type of losses of the two parties will differ. The exceptions from the knock for knock liability regime are naturally different from the exceptions in subclause (a)(i) describing the owners’ losses. Under subclause (a)(ii), the owners will be responsible for replacing wires if they were lost as a result of the owners’ negligence as per subclause 10(e), and for wreck removal and other related measures as per Clause 18 (Wreck Removal).
The parties should be aware of the International Group of P&I Clubs’ Pooling Agreement exclusion (App V. 23(a)), regarding ‘non-marine personnel’ who are typically employed by the Charterers’ client (i.e. the oil, gas or renewables company) and are accommodated on board the entered ship. Under the terms of the Pooling Agreement, any liability that the shipowner member has in respect of these non-marine personnel is excluded unless the ship is moored or anchored more than 500 metres from any oil or gas production or exploration facility and there has been a contractual allocation of risks between the member and the employer of these personnel, which has been approved by the club’s managers (e.g. a contract on knock for knock terms). With regards to this exclusion for non-marine personnel, the clubs may be able to provide a non-poolable cover to respond, up to an agreed limit which would be separately reinsured (i.e. not under the IG General Excess of Loss reinsurance arrangements). Owners should contact their Club who can advise them further regarding this issue.
Subclause 16(b) (Excluded losses) – This clause excludes liability of the parties for certain direct and indirect losses as enumerated in the clause. Consequential losses are dealt with separately in subclause (b)(ii), and certain specific heads of losses, whether direct or indirect, are covered in subclause (b)(i).
Subclause 16(b)(i) – This subclause encompasses certain losses that the parties are excluded from liability for, whether these may be direct or indirect. Direct losses have been defined in English law as meaning losses “which flows naturally from the breach without other intervening cause and independently of special circumstances”, while indirect or consequential losses have been described as “losses which are not the direct and natural result of the breach, (Saint Line Ltd v Richardsons, Westgarth & Co Ltd  67 Lloyd’s Rep. 62, at p. 103-104). Under English law, loss of use, loss of profits, loss of production will be considered as direct losses because these are losses that will flow naturally from a breach of contract. Marine spread costs (cost of use of property, equipment, materials and services including without limitation, those provided by contractors or subcontractors of any tier or by third parties) have been made part of the exclusion clause. Similarly, so has the loss of financial benefit, sometimes referred to as deferral of production, been excluded from liability.
The terminology in subclause (b)(i) has been amended to include permits and site interests which form part of and are commonly used in the renewables sectors.
The subcommittee considered whether to specify that loss of use or cost of use of property would be “property other than the Vessel”. The objective of such a change would be to ensure that the charterers are still entitled to claim damages from the owners, in case e.g. the vessel was withdrawn by the owners from the charter (if the owners are in breach of contract, etc.), as otherwise subclause (b)(i) states that the owners are not liable to the charterers for any loss of use of property, which might then be understood as including a vessel, which is the owners’ property. However, on some occasions, it might be difficult to draw a line between “loss of vessel” under subclause (a), which is related to physical damage to property, and “loss of use” under subclause (b), which is related to economic loss arising out of loss of use. For this reason, and in order to avoid any unclarity with respect to what is then covered by “property” in SUPPLYTIME 2017, no change was made in ASVTIME.
Subclause 16(b)(ii) – This subclause excludes liability for indirect or consequential losses.
Subclause 16(c) (Statutory limitations) – Under this subclause, which remains materially unamended as compared with SUPPLYTIME 2017, the parties retain their rights to limit their liability afforded by applicable law, statute or convention. Furthermore, when the owners and charterers face indemnity claims under the charter party or from each other for third party claims, they are required to try to limit their liability against such third parties.
The corresponding limitation clause under SUPPLYTIME 2017 (subclause 14(c)) contained a reference to “save that nothing in this Charter Party shall create any right to limit liability” which has been deleted as it would be in conflict with the new contractual limitation provision in subclause (d).
Subclause 16 (d) – Contractual limitations
This is a new concept taken over from WINDTIME (subclause 16(c)) which allows the parties to agree on a cap on their liability. The concept is commonly used in the industry and therefore it was added to ASVTIME. The liability will not be automatically capped. It is a requirement that the parties fill in Box 39, failing which no cap on liability will apply.
In addition to the list of indemnity and liability clauses carried over from WINDTIME, the subclause lists the relevant clauses from ASVTIME to which the cap on liability should not apply. Simple payment obligations are not meant to be covered by the cap as the cap should be on liabilities and indemnities only, whereas the payment of hire or fees would be an obligation under the contract. The reason why the listed clauses are exempted from the cap is because they include liability and indemnification obligations.
Subclause 16(e) (Himalaya clause) – The aim of the Himalaya provision is to extend the benefits under the charter party to the charterers’ group and their underwriters, and to the owners’ group and their underwriters, the ship, its registered owners and the crew. The purpose of the agency provision in the final paragraph is to provide the mechanism whereby the protective clauses in the charter party will be applicable to the third parties listed in the previous paragraphs.
This clause has, except for one addition (see below under subclause (a)), been carried over from SUPPLYTIME 2017. The clause provides a clear-cut solution in respect of the parties’ liabilities for pollution.
Subclause 17(a) – This subclause sets out that, with the exception of the provisions found in subclause 20(c)(iii) (Saving of Life and Salvage), in respect of pollution caused within the offshore site, the owners are liable for pollution damage whether actual or threatened when due to discharge, spills or leaks emanating from the ship (but not from the cargo).
As compared with SUPPLYTIME 2017, the subclause specifically refers to the owners’ liability for pollution from the offshore bunkering system up to and until the connection to the CTV, if applicable. It was considered that adding such a reference was appropriate in the context of an ASV, even if it does not change the overall scope of application of the clause.
Subclause 17(b) – In line with the knock for knock principle and mirroring subclause (a), this subclause sets out the charterers’ liability for all other cases of pollution. The parties will be liable towards each other in respect of property damage or death and personal injury caused by pollution as per subclauses (a) and (b).
Subclause 17(c) – The charterers have the right to place a representative on board the ship or at the site of the pollution or threatened incident to monitor the owners’ and the authorities measures to prevent and minimise the pollution damage. A notice of such attendance should be given to the owners beforehand.
This clause has been carried over from SUPPLYTIME 2017. According to the clause, the responsibility for wreck removal and associated measures should the ship become a wreck rests with the owners.
As compared with SUPPLYTIME 2017, the insurance provision covers both the owners and the charterers. The reason for including insurance provisions relating to the charterers is due to the special operations performed by ASVs and the number of charterers personnel on board. Annex B has been amended accordingly (see Annex B).
Subclause 19(a) – The parties are both under an obligation to obtain and maintain during the charter period the insurances for the ship as stated in Annex B. As in SUPPLYTIME 2017, the obligation is to insure the ship with “reputable insurers” which is intended to provide a benchmark guide indicating that the chosen insurers should be financially sound and have a good market reputation. Adequate insurance is an essential aspect for the proper functioning of the knock for knock regime. Either party’s failure to obtain and/or maintain insurance cover may result in the non/defaulting party terminating the charter party in accordance with the early termination provisions of subclause 37(b)(vi) (Early Termination – For Cause) which has been made mutual to reflect that both parties have an obligation to obtain and maintain insurances.
Subclause 19(b) – Because of the mutual obligation according to subclause (a), the possibility to be named as co-insured on the other party’s policy applies to both owners and charterers. Such co-insurance should be specified in Annex B. If requested, the owners and charterers should ask their insurers to waive rights of subrogation against the charterers’ group or owners’ group, respectively, as the case may be.
Subclause 19(c) – Upon request from one of the parties, the other party must provide evidence that they have complied with the insurance requirements of the charter party.
The clause is identical to the Saving of Life and Salvage clause in SUPPLYTIME 2017.
Subclause 20(a) – The ship has the right (and obligation) to deviate in order to save life at sea. No advanced notice to the charterers is required, but the owners should inform them of the deviation as soon as possible.
Subclause 20(b) – In respect of deviation for purposes other than saving life, the ship may only deviate if the charterers have given their consent. If the ship deviates for such other purposes it will be off-hire during the salvage operation, and the charterers will be entitled to half the salvage award.
Subclause 20(c) – The owners waive their right to any salvage award for salvage of the property of anyone included in the Charterers’ Group if the ship was chartered for that purpose. However, this does not affect any entitlement of the crew as defined in this contract. This subclause is sometime considered contentious by charterers, but it is nevertheless needed because of the legal requirement to make payments to the crew in a salvage situation and it would not be balanced if owners were liable for this expense. A number of other costs and risks are for the charterers’ account including damage to the ship, spills, seepage and emission of pollutants. Furthermore, since no salvage award will be due to the owners the ship will remain on hire during the operation. Finally, the charterers should indemnify owners for any liability in respect of damage, personal injury and death in connection with the salvage of charterers’ property.
This clause has been carried over from SUPPLYTIME 2017. Owners have a lien for claims against the charterers on all cargoes, fuel and equipment. Such a lien can only be exercised if these items are owned by the charterers. The charterers on the other hand have a lien on the ship for monies they have paid in advance but that have not yet been earned by the owners.
The charterers undertake not to permit any lien over the ship and they must secure the release of the ship in case of an arrest, unless the arrest was brought about by an act or neglect by the owners.
With the exception of Clause 16 (Liabilities and Indemnities), and if caused by the act or neglect of the owners, the charterers must indemnify and hold the owners harmless if any lien on the ship or other claims arise due to the charterers. The scope of this indemnity is limited by the qualification that the said claims against the owners must have arisen out of the operation of the ship by the charterers or out of any neglect by them in relation to the ship or its operation.
The clause is identical to the Sublet and Assignment Clause in SUPPLYTIME 2017.
Subclause 22(a) (Charterers) – After approval by the owners, the charterers have the right to sublet, assign or loan the ship to companies that are not competing with the owners. The original charterers will remain responsible to the owners for the due performance of the charter party. The party to which the ship is sublet, assigned or loaned will become part of the charterers’ group for the purposes of the charter party. Additional hire should be paid by the charterers to the owners in the amount agreed in Box 39 if agreed due to any change in the intended work or period.
Subclause 22(b) (Owners) – The owners cannot assign or transfer any part of the charter party to a third party without the written approval of the charterers. Even with such approval the owners remain responsible for the performance of the transferred or assigned services. The subclause refers to “transfer and assignment” as opposed to “subletting and assignment” in line with a correction made in SUPPLYTIME 2017.
The clause has been carried over from SUPPLYTIME 2017. In line with the clause, the owners can at any time substitute the ship provided they receive prior approval from the charterers. The wording “of at least equivalent capability” should demonstrate more precisely the required particulars and characteristics of the substituted ship and at the same time clarify that it need not be identical to the original ship. The charterers are prevented from unduly withholding or delaying such approval as owners may have to act quickly to secure a suitable ship in the market.
The purpose of this clause is to give the owners flexibility in case the ASV has to transit or is stationed in a war risk area. The changes to the standard clause (the BIMCO War Risk Clause “CONWARTIME 2013”) have been made to reflect the existence of charterers’ personnel on board. For more information, especially on the definitions, please check the explanatory notes to the BIMCO War Risks Clause which are freely available on the BIMCO website.
The owners have the right to change or disembark charterers’ personnel in a war risk scenario. This is because the owners should have full control and flexibility over the ship which would include the right to change or disembark charterers’ personnel. The charterers’ rights are protected by entitling them to nominate the port of disembarkation. If however, the charterers do not nominate such a port, the owners can change or disembark the charterers’ personnel at a port which is both safe for disembarkation and further onward transport to protect the individuals.
The indemnity provision under subclause (j) has been adjusted to better reflect the ASV sector by also covering claims made by the charterers’ personnel.
This clause is identical to the War Cancellation Clause in SUPPLYTIME 2017. It provides the parties with the option to cancel the charter party if war breaks out between any of the countries stated in Box 40. An outbreak of war does not need to occur between all of the countries stated; the clause will be triggered by the outbreak of war between “any two or more” of the listed countries.
This is a bespoke ice clause developed for the ASV industry which replaces the BIMCO Ice Clause for Time Charter Parties included in SUPPLYTIME 2017. For more information, please check the explanatory notes to the BIMCO Ice Clause which are freely available on the BIMCO website.
Subclause 26(a) makes it clear that the ship should not be obliged to force ice, but may reasonably be expected to follow ice breakers where other ships of the same size, class and construction are doing so.
Subclause 26(b) – It is in the master’s discretion to assess whether in the ordinary course of events the ship will not be able to safely enter into, remain at or depart from an ice bound port or area. The reference to “leave” the risk areas has been added to highlight that this should also be a safe operation. Furthermore, in the event that there is a risk that the ship may be frozen in, the master shall be at liberty to sail to the nearest “ice-free place”. It is important to note that the owners are under the obligation to notify the charterers in case the place of operation becomes unsafe because of ice. Further, as opposed to the BIMCO standard ice clause, the owners have the discretion to give sailing orders to the ASV in case of potential danger of damage to the ASV, leaving cargo and charterers’ personnel behind. Given that it is a prerequisite that the charterers have to be informed about the unsafety due to ice before the ship can sail, the charterers are aware of the situation and can take the appropriate measures to avoid that either their cargo or personnel is left behind.
Subclause 26(c) states that any delay or deviation caused by ice does not place the ship off-hire. After all, under a time charter party it is the charterers who make the commercial decisions regarding the employment of the ship and it is they, therefore, that must assume the associated risks. The charterers are responsible for all additional costs, expenses and liabilities incurred in connection with a deviation caused by ice. The responsibility is limited to deviation only and if the parties wish it to include costs, expenses and liabilities incurred in connection with delays, the wording should be amended accordingly.
Additional premiums will be for the charterers’ account (subclause (d)).
This clause is based on the BIMCO Infectious or Contagious Diseases Clause for Time Charter Parties. Changes have been made to reflect the needs of the ASV industry. For more information, especially on the definitions, please check the explanatory notes to the BIMCO Infectious or Contagious Diseases Clause which are freely available on the BIMCO website.
As opposed to the standard clause, this bespoke clause also covers quarantine which is to reflect the risk related to the large number of people typically on board of the ASV. Due to the potential high number of people on board the ASV, the owners are also entitled to leave the infected area immediately with or without cargo and/or charterers’ personnel on board to be able to protect the persons on board by reducing the time of potential exposure to the disease.
The charterers are under the obligation to issue alternative voyage orders (see subclause (e)). If the charterers do not issue such orders, the owners are not entitled to discharge any cargo or disembark the people on board. Leaving the affected area would be sufficient to protect the persons.
Under subclause (g), the charterers have to indemnify the owners for claims made by the charterers’ personnel and the owners of the cargo. Compared to the indemnity under the BIMCO Infectious or Contagious Diseases Clause for Time Charter Parties, material changes have been made to reflect the nature of ASVTIME. Firstly, the indemnity is limited to “claims” only and does not cover “costs, expenses and liabilities” anymore. The reason for this is that this indemnity is intended to operate where the owners are confronted with claims coming from the named persons and are not seeking recovery for losses they have suffered because of charterers’ orders to visit the affected area. These losses are covered by the provision under subclause (h)(iii) which clarifies that any additional costs, expenses and liabilities whatsoever arising out of the visit shall be for the charterers’ account. Subclause (k) contains a further indemnity which should be confused with the rights mentioned herein. The indemnity under subclause (k) covers delays, costs, expenses or liabilities after the charter party has come to an end.
The ASV will remain on hire during the operation of the clause and even if it is not performing its services anymore. The reason for this is that the charterers have ordered it to the area where the problem occurs. This clause however contains a carve-out for situations when the situation which triggers the clause was caused by the crew without consent or instructions from the charterers having communication with the shore or any other vessel at the affected area not in connection with the employment of the vessel. The reason for this is to provide balance and not holding charterers responsible in the circumstances.
The Infectious or Contagious Diseases Clause has been amended to include a quarantine provision which is often found in such contracts.
This clause has been carried over from SUPPLYTIME 2017. The owners must comply not only with all statutory regulations relating to health and safety but also the environment. Furthermore, the owners must comply with any agreed and additional HSE requirements of the charterers. A qualification has been added that such compliance with the charterers’ requirements should not conflict with the ship’s flag state obligations.
The clause relating to compliance with laws and regulations has been carried over from WINDTIME. It was not included in SUPPLYTIME 2017 because, in the offshore sector, there is a potential conflict between the laws of the place where the ship trades and the laws of the flag state. For the purpose of ASVTIME, the subcommittee considered that it would be useful to include the clause as it would be relevant more often than not.
This clause has been carried over from SUPPLYTIME 2017. The owners must have a drug and alcohol policy in place which at least meets the standards referred to in the OCIMF (Oil Companies International Marine Forum) Guidelines for the Control of Drugs and Alcohol on Board Ship 1995. More information can be found at www.ocimf.com. The ban on drugs extends to prescription drugs if used or abused for purposes other than those for which they were medically prescribed.
This standard BIMCO clause provides users with a regime for responding to unlawful demands for gifts in cash or kind, such as cigarettes or alcohol. The clause sets out a series of steps with the contracting parties working together to resist such demands but if this fails, owners’ rights to hire is protected. Termination, by either party, is the ultimate sanction but a high threshold has been set so that it cannot be easily used as an exit from an inconvenient charter.
Detailed explanatory notes to the clause can be found on the BIMCO website.
This clause is identical to the MLC 2006 Clause in SUPPLYTIME 2017, except that the definition of Charterers’ Personnel has been moved to the Definitions section as it is used elsewhere in the charter party.
Detailed explanatory notes to the clause can be found on the BIMCO website.
ASVTIME incorporates the version of the Personal Data Protection Clause developed for SUPPLYTIME 2017. The clause was developed as a free-standing additional clause which parties should consider using in the context of legislation relevant and applicable to them. The ASVTIME subcommittee found that it should be included as a standard provision in the accommodation support vessel charter party.
“Data Subject” covers any identified or identifiable “natural” (i.e. living) person;
“Personal Data” relates to any information about any Data Subject covered by the underlying agreement;
“DPR” refers to data protection regulations and is the catch-all phrase meaning any such applicable legislation. While not strictly necessary in a provision for worldwide use, it is expressly stated that the term includes GDPR;
Subclause 33(a) sets out the parties’ respective duties for compliance with their DPR obligations for the collection and use, safeguarding, transfer and retention of information and protection of Data Subjects’ rights as enumerated at subparagraphs (i) to (v);
Subclause 33(b) requires arrangements to be in place for dealing with, and notifying regulatory authorities about, any breach of data security; and
Subclause 33(c) requires party cooperation in relation to auditing company data protection systems and procedures.
The sanctions clause in ASVTIME is based on the BIMCO Sanctions Clause for Time Charter Parties 2020 and has been amended to reflect the features of the ASV industry. For more information, especially on the definitions, please check the explanatory notes to the BIMCO Sanctions Clause for Time Charter Parties 2020 which are freely available on the BIMCO website.
The clause appears to impose a high burden on owners and charterers when they have to warrant for their group which is necessarily wide and may contain persons the owners and charterers are not aware of. It is important to note that the groups, according to their definitions, are limited to “but always related to the work or project on which the Vessel is employed”. Parties considering to amend the clause by limiting the warranty are recommended to obtain prior legal guidance from their P&I club and/or sanctions lawyers.
It is important to note that if the warranties excluded the groups, the question could arise as to whether any risk remains that one of the members of the group or personnel could become sanctioned such that the performance of the contract is impacted or other parties are put at risk. There would be some residual risk for the other party if the reference to the groups were to be excluded - potentially under U.S. sanctions as they are often broad and deliberately opaque in their application.
Under such a balanced clause, each party should be responsible for its own contractors. In practice, parties are highly recommended to perform sanctions compliance due diligence which will reduce the sanctions exposure significantly.
The clause is identical to the Taxes Clause in SUPPLYTIME 2017. The taxes that the owners should be responsible for should be stated in Box 41. All other taxes will be for the charterers’ account. Hire should be adjusted if there is a change in the owners’ tax burden by reason of change in the local regulations or their interpretation after the date of the charter party or the commencement of employment, whichever is earlier.
The clause has been carried over from SUPPLYTIME 2017. The procedure to lay up a ship requires a lot of decisions to be made and the clause aims to clearly set out in chronological order those decisions.
The preamble of the clause gives the charterers the option of laying up the ship at any time during the charter period in accordance with the process as set out in the clause.
Under subclause 36(a), the charterers must notify the owners in writing that they intend to lay-up the ship; when the lay-up should start; and for how long it will last. The charterers should also nominate a safe port or place for the lay-up.
Once the charterers have notified the owners in accordance with subclause 36(a), the owners must within a week provide the charterers with the information listed in subclause 36(b). Such information includes, for example, the nature of the lay-up and the reasons for it; the estimated costs; and the amount of reduced hire during the lay-up period. In the clause, reference to cold, warm or hot lay-up has purposely been avoided as there are a variety of permutations for lay-up, hence the requirement on the owners to provide information on the nature of the intended lay-up.
The charterers then have a week to confirm to the owners if they want to go ahead with the lay-up. Once they have confirmed that they wish to lay-up the ship and upon receipt of instructions to the ship, the owners must take all actions required to effect the lay-up, subclause 36(c).
For reactivation, the notice period is 30 days and the hire will revert to the normal hire rate under the contract at the earliest of either the expiration of the 30 days’ notice period or when the ship again is fully operational and ready, subclause 36(d).
Subclause 36(f) sets out what the charterers should pay to the owners if the ship is in lay-up when the charter party comes to an end.
If any of the owners’ obligations cannot be complied with because of the ship is laid-up then they will be suspended during the lay-up.
Regarding the maintenance allowance under subclause 15(d), they will not continue to accrue during lay-up, see subclause 36(h). Maintenance allowance are given to allow the owners to stop the ship for maintenance, repairs and surveys, but without loss of hire, and without interruption by the charterers. All these conditions are automatically met whilst a ship is in lay-up and the owners continue to be paid hire throughout. Therefore, the effect of granting maintenance allowance whilst a ship was in layup would be that the owner got paid twice. A ship in layup (warm or cold) is not going to sail anywhere within short notice and hence the owners can use the layup crew, or put people on board, at any time and without needing the charterers’ permission nor having any concern that the ship will sail, and all the time being paid charter hire. It would therefore be rather unfair if the charterer were obliged to pay for maintenance allowance during this period.
The clause is identical to SUPPLYTIME 2017, except that the clause now reflects that both parties have an obligation to procure insurance policies according to Clause 19.
Subclause 37(a) (At Charterers’ Convenience) – This is an optional clause that applies only if the parties have stated as such in Box 13(i). It provides the charterers with the right to terminate the contract before the end of the charter period, provided they give the owners the prescribed notice in Box 14 and pay the agreed early termination fee as per Box 13(ii) together with the demobilisation fee, and hire and other payments due under the charter party at the time of termination.
Subclause 37(b) (For Cause) – This subclause gives the parties the right to terminate the agreement if an event listed in the clause takes place. These events are: requisition of ship by government of state of registry or flag; confiscation of ship other than by way of arrest for security purposes; bankruptcy or similar of either party; loss of vessel; force majeure event as per Clause 38 (Force Majeure); and if either of the parties have not procured insurance in accordance with Clause 19 (Insurance).
The clause operates with two notices and makes clear in which circumstances the parties may terminate; how much time the defaulting party has in which to remedy; and the time frame within which the termination may take effect. If a “Termination Event” as listed in the clause occurs, either party may give a written notice of its intention to terminate if the said Event is not cured within 14 days from the receipt of the notice. On expiry of the 14 days the notifying party may terminate with immediate effect by giving a second notice latest within three days of the expiry of the 14 days’ period. This enables the terminating party to give the second notice before the expiry of the 14 days’ notice period so that termination can take effect immediately after that period has lapsed. It also adds some certainty to the non-terminating party as to whether the terminating party will go ahead and terminate. The charterers will still be liable to pay hire and other payments that are due to the owners under the charter party up to the date of termination.
Subclause 37(c) (Repudiatory Breach) – In the event of a repudiatory breach, the party not in repudiatory breach of its obligations may terminate the charter party immediately by following the notice procedure under Clause 42. Subclause (c) reflects the common law position that in the event of a repudiatory breach the “innocent” party may terminate immediately by giving notice.
Subclause 37(d) (Off-hire) –The provision focuses on maximum periods of off-hire. In the provision, which is not subject to the 14 days’ grace period under subclause 37(b), if there is an off-hire event as per subclause 15(a) that lasts longer than the agreed periods in Box 42, depending on whether single consecutive periods or combined periods are to apply, and the owners have not provided a substitute ship, then the charterers are entitled to terminate the contract. Notice to such effect should be given in accordance with the notice clause, Clause 42. It should be noted that when an off-hire event arises that may be covered by the owners use of any accumulated maintenance allowance, the owner may use such accumulated allowance, which are on-hire days, and they will not therefore contribute towards the calculation of off-hire days that lead to any right of termination by the charterers.
This clause is identical to the force majeure provision in SUPPLYTIME 2017 except that, in line with the addition of liquidated damages in Clause 2 (Delivery and Redelivery), liquidated damages has been added to the excluded liabilities following a force majeure event.
The clause is modelled on the ICC (International Chamber of Commerce) model Force Majeure Clause 2003 which BIMCO has used to create a “standard” force majeure provision for its contracts. The clause excuses the performance without liability of the party invoking force majeure if it can show that the alleged force majeure event falls within any of the listed event in the clause; that its performance is prevented by that event; and that it has taken reasonable steps to avoid or minimise the consequences of the event. Courts tend to interpret force majeure clauses narrowly so that only the events listed or similar events will be considered to be force majeure events. In order for force majeure to operate, the event has to have been beyond the parties’ control and they could not have avoided its consequences, nor could it have reasonably foreseen by them. Parties cannot invoke force majeure if they are relying on their own acts or omissions. A party wishing to invoke force majeure must give notice to the other party in writing within five days from when the event occurred. The clause, combined with subclause 37(b)(v), can give rise to a right of early termination by either party if the force majeure event continues for a period exceeding 14 consecutive days from the date of the event or notification to the other party.
A ship will not be considered off-hire during a force majeure event. The force majeure provision deals with loss, damage and delay, but not with hire, which will therefore continue to be payable during a force majeure event. This is emphasised in subclause 15(a)(vii) (Off-hire – Off-hire and exceptions).
The clause is identical to the Confidentiality Clause in SUPPLYTIME 2017. It is designed to protect the parties from the disclosure of confidential information or data to third parties. The owners and charterers are bound by confidentiality in respect of all information and data that they receive about the performance of the charter party. Both parties must try to ensure that any affiliates, sub-contractors, employees or agents also abide by this confidentiality undertaking. The clause provides certain exceptions where the confidentiality undertaking does not apply, for example regarding information that has already been published in the public domain or which is required for legal purposes.
This is BIMCO’s 2020 edition of the law and arbitration clause which offers four named arbitration venues and a free choice of law and forum. When using SmartCon, the option chosen by the parties in Box 43 will appear automatically in the body of this clause. If the parties fail to make a choice, English law and London arbitration will be the default position.
Subclause 40(a) determines the governing law; the place of arbitration; the applicable arbitration legislation; and the seat of arbitration (where the arbitration takes place in a jurisdiction other than the agreed place of arbitration). It is an “exclusive” arbitration agreement. This is emphasised by the addition of the phrase “referred exclusively to arbitration”.
Subclause 40(b) requires the parties to appoint three arbitrators but allows for a different number of arbitrators to be agreed.
Subclause 40(c) applies the terms (or rules) of the chosen arbitration association to the conduct of the arbitration. An appointment procedure is no longer included in the clause because the terms of the named arbitration venue contain a procedure to which parties should refer when making appointments of arbitrators.
Subclause 40(d) provides for the small claims procedures offered by the named arbitration association. Parties are free to decide on the maximum applicable sum for small claims, but otherwise the clause will display the default amount used by each of the named venues. If the London arbitration version of the clause is chosen then an additional “intermediate claims procedure” provision will apply optionally.
Subclause 40(e) applies the terms, rules procedures of the chosen arbitration association current at the time that arbitration proceedings are commenced. This is the common approach for arbitration in London, Singapore and Hong Kong. In New York the rules are different and it is those current at the time the contract was concluded that will apply.
Subclause 40(f) addresses the correct service of arbitration notices and communications. Parties are free to serve notices by whatever effective means they choose, but if they choose email then they must provide the email address of someone authorised to receive arbitration notices (and advise the other party of any change of address during the period of the agreement). Notices are considered effectively served immediately on sending by email.
The Mediation Clause has been taken directly from BIMCO’s Dispute Resolution Clause which has been redrafted to deal only with arbitration (see Clause 40).
The clause is designed for use internationally under a wide variety of jurisdictions. Because of differences in the application of statutory time limits under different jurisdictions, the Mediation Clause is careful to draw to the attention of the parties that they should be aware that the mediation process might not necessarily interrupt time limits.
The clause is identical to the Notices Clause in SUPPLYTIME 2017. It is a general notice provision with reference to the contact details that should be used for giving notice to the respective parties and that notices should be given effectively. The words “effectively given” should encompass different methods of giving notices and in that sense, be “future proof”.
The clause is identical to the Headings Clause in SUPPLYTIME 2017 and has been added to ensure that the headings of the contract are not considered part of the interpretation of the text of the clauses.
The clause is identical to the Severance Clause in SUPPLYTIME 2017 and seeks to avoid a situation where the entire agreement is held to be invalid because a provision is deemed by an arbitrator or other competent authority to be illegal, void or unenforceable.
The clause is identical to the Entire Agreement Clause in SUPPLYTIME 2017. The purpose of the clause is to limit the rights of the parties to the written terms of the contract. As such it is intended to exclude representations, written and oral, not intended to be part of the final concluded charter party.
In most BIMCO contracts the parties are labelled in plural, for example in ASVTIME they are labelled as “Owners” and “Charterers” which are merely labels that point to the identity of each of the parties to the contract. However, to provide for situations where singular and plural terms need to apply in a particular context, provision has been made that the singular includes the plural and vice versa as the context admits or requires. The clause is identical to the Singular/Plural Clause in SUPPLYTIME 2017.
Annex A (Vessel specification)
The annex maintains the structure and content of the corresponding annex in SUPPLYTIME 2017, with the addition of more ASV related aspects including facilities available for charterers such as catering, hospital, recreational and fitness facilities, office spaces and conference rooms, IT and communication, etc.
Each optional equipment covered by subclause 6(e) is listed and enables the parties to include relevant details such as environmental limits. Environmental measurement has been added as a separate section in the annex to enable to parties to specify the measurement device to be used for measuring the environmental limits.
Annex B (Insurance)
This insurance annex appears to be a significant change from the insurance annex under SUPPLYTIME 2017. However, in general only the outfit of the annex has been changed and a table format has been introduced which should provide for a better overview. The annex is split up into insurances which (1) the owners and (2) the charterers have to provide. The wording of the provisions dealing with Marine Hull Insurance, General Third Party Liability Insurance and other insurances has remained unaltered. What is new is that the party should state whether there should be co-insurance for the listed insurances and whether additional terms and conditions have been agreed. The reference to co-insurance for each insurance should avoid uncertainty about which insurances the co-insurance should apply for and make the form more user-friendly even for insurers.
The owners’ insurance section now addresses specialist operations and contractual liability cover which is a standard requirement in the ASV sector.
It is important to note that Annex B also caters for charterers’ insurance which is a standard requirement for contracts in the ASV market. It is now clear that the charterers have to provide insurance for charterers’ liability cover, construction all risk and/or operating all risk insurance and an employers’ liability insurance.
Copyright in ASVTIME is held by BIMCO.
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ASVTIME, the new time charter party for accommodation support vessels, was recently adopted by BIMCO’s Documentary Committee and is now available for use in SmartCon.
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