BOXTIME

BOXTIME

Overview

The latest edition of this contract is BOXTIME 2004.

Supporting documents

Explanatory notes

Introduction

General background

Special observations

Part I

Part II

Part III


Introduction

The maritime industry has undergone many changes of various nature during the past years, however, few have been so remarkable and of such unprecedented dimensions as the one which has been characterised as the "Container Revolution".

Declining freight rates, fierce competition and oversupply of tonnage were amongst the factors which back in the late 1950s and early 60s forced shipowners to look into every possible means to reduce costs in transporting cargo.

Transporting cargo in containers seemed to offer cost¬-friendly solutions, and at the same time obvious prospects and benefits could be seen in containerization in the sense that it would now be possible to offer customers "door to door" service in its real sense. Using various modes of transport, containerization from one day to another, made it possible for the carriers to deliver the cargo at the customer's "door" inland practically irrespective of where such customer had his domicile. The late 50s and early 60s should appear to be the start of the era of containerization.

From its early and one could say reluctant inception in the United States during the 1950s, containerization developed rapidly on a global basis up through the 70s and onwards and it is without doubt that the container trade has come to remain one of the dominant means of transport.

With that background, BIMCO was approached some time ago by interested parties engaged in the container trade asserting that there was no appropriate time charter party available for container vessel chartering. It was claimed that for a number of years the chartering of container vessels had largely been effected on grossly amended terms of the New York Produce Exchange Charter Party with the additional text of the Inter-Club Agreement as recommended by the P & I Clubs, or on the basis of heavily amended BALTIME or LINERTIME charters, also claiming that none of these three charter parties were suitable for chartering of container vessels.

In recognition of a demonstrated need for such a uniform time charter party for container vessels with standard terms and conditions reflecting the peculiarities and hazards of the trade, the Documentary Committee of BIMCO agreed that BIMCO should embark upon such a project and decided to establish a drafting committee for the purpose composed of persons with extensive experience in the chartering and operation of container vessels.

General background

Throughout the preparatory drafting work, the drafting committee has been guided by the following principles:

  • To cover the need for a uniform time charter party in the container trade by preparing a modern contract form which takes into account all the peculiarities and hazards of the trade and thereby, to provide a document which would facilitate the day to day chartering transactions, thus assisting all those actively engaged in the chartering trade including shipowners, charterers and the brokers.
  • To prepare a reasonably balanced document acceptable to both sides based on the philosophy of equal risk sharing, recognizing that in the preparation of a modern charter, it serves no useful purpose to attempt to allocate all or most of the risks solely to one of contracting parties, the ultimate aim being to establish charter which would strike a fair balance between parties.
  • To try to clarify the document by use of apt words trade terminology so as, hopefully, to obviate or reduce the scope of disputes on interpretation of clauses.
  • To seek the view of the trade on this project in recognition of the fact that such a document could only be accepted and become a standard document of the trade if a broad consultation with the users in the trade ie, shipowners, charterers and brokers alike, be made.
  • In compliance with the above policy and practice of BIMCO when preparing standard transportation documents, the drafting of this new standard charter party was entrusted to a drafting committee composed of individuals with expert knowledge within the specific field of the container trade and representing the various interests involved, ie, shipowners, charterers, brokers as well as club representatives. Full recognition has been given to the fact that a balanced composition of the drafting committee with representatives from interested parties within this specific trade is considered of utmost importance in order to achieve what has been laid down in the BIMCO policy ie, to prepare balanced documents with fair and equitable terms attractive to both the owners and the charterers.

Also in compliance with the above policy, the drafting committee invited and received comments from many trade interests specialized in the container trade and which have been useful in the drafting committees' work developing a uniform time charter party for the container trade.

One of the features of container vessel chartering is most vessels are essentially liners and both the owners and the charterers are usually transport operators versed in the practice of ship operation. Requirements of the owners and the charterers in relation to container vessels may often be substantially different from those in relation to conventional break bulk vessels. This has been recognized by the drafting committee in developing BOXTIME charter as a completely new charter party representing quite some novelties.

The Uniform Time Charter Party for Container Vessels, code name BOXTIME is the final result of the wo the drafting committee after proper consultation negotiation with trade interest.

The BOXTIME charter was officially adopted by Documentary Committee of BIMCO at its meeting he Leningrad in June 1990.

Special observations

The BOXTIME charter follows the usual pattern used by BIMCO for a number of years in the preparation of modern charter parties for various trades, ie, the "Box Layout" system with separate Part I and Part II.

The main idea behind this division is to have a charter party where the filling-in and all amendments and special provisions are made by the parties in Part I, leaving the printed text of Part II unaltered. In this context, it may be useful to emphasize that a standard charter party constitutes an integrated whole and that a change or changes of some of the printed clauses may destroy the overall balance of the charter, a fact which should never be lost sight of when attempting to introduce changes or amendments in standard clauses.

Part I

As far as part one is concerned, all items to be agreed for the particular fixture and to be filled in by typewriter have been arranged in boxes in Part I. The boxes contain a brief description of the particular item and a reference to the relevant clauses in the printed body of Part II.

Additional clauses covering special provisions, if necessary and agreed for a particular fixture, may be added as a rider to the charter and the clauses should be referred to in Box 36 in Part I.

Some of the boxes to be filled in in Part I may call for special observations; however, in view of the fact that the details to be written into the boxes should be considered on the background of the provisions in the corresponding clauses in Part II, it has been considered more practical to make these observations together with the comments on the standard clauses in Part II.

Index

It has been considered useful to include in the "Boxtime" charter on the reverse side of Part I an Index to provide for an easy and quick identification of the required clauses in Part II.

Part II

In the following Is set out a brief description of the standard clauses contained in Part II in as much as it has been found useful to give some background explanation to the clauses so as to assist owners, charterers and other interested parties, in the practical use of the charter.

Clause 1 - Period of Charter Party and Delivery

Sub-clause 1(b) merely provides for the place of delivery of the vessel on hire and the dates within which delivery must be effected. It is to be noted that the times to be inserted in box 19 and box 20, respectively, are local times and not universal time co-ordinated (UTC). Universal Time Co¬ordinated is a new way of expressing what so far has been known and referred to as Greenwich Mean Time (GMT) The second paragraph of this sub-clause contains important provisions relating to cancelling. Traditional cancelling clauses in some of the existing old charter parties have been construed to mean that the charterers may await the vessels arrival at the delivery place before exercising the option of cancelling, even if it is perfectly clear that the vessel may not be able to keep the cancelling date.

During recent years it has become a growing practice to include in modern charter parties a so-called "interpellation provision" the idea of which is that the vessel shall not have to proceed on a long voyage towards the delivery place, not knowing whether or not the charterers will accept the vessel once she has arrived. With the high capital investment in modern vessels combined with high daily running costs, this has not been considered fair or equitable. The second paragraph of this sub-clause requires that the charterers within 48 hours decide whether they want to cancel the charter party or accept late delivery.

Clause 2 - Owners' Undertaking

Pursuant to this clause the owners undertake to deliver a vessel which conforms with the description which has been given by the owners in Part I and III. It is of importance for the charterer's use of the vessel, in particular within the container trade that details of the vessel provided by the owners are accurate. Accordingly, there is a strict obligation on the part of the owners to ensure that at the time of delivery the vessel is as described by them.

Clause 3 - Trading Limits

According to the first paragraph of this clause, the employment of the vessel is subject to the following restrictions:

(i) Lawful Trades

ie, the vessel must not be involved in smuggling of passengers or goods, trading with the enemy etc.

(ii) Within Institute Warranty Limits

ie, the vessel must only trade within the limits as defined by the Institute of London Underwriters as being the normal trading limits imposed on vessels for hull and machinery purposes without the payment of additional premium.

The second paragraph of this sub-clause addresses the problem of blacklisting and boycotts. Obviously, the charterers wish to ensure that the past employment of the vessel will not affect their intended employment of the vessel.

Clause 4 - Permitted Cargoes

The preamble of this clause suggests that the primary purpose of the vessel is to carry goods in containers complying with the International Convention for Safe Containers.

4(a) This sub-clause gives the owners and the master the necessary control over the carriage of non-standard items that are not containerized. Such items are not to be carried without the prior consent of the owners and the master.

4(b) The carriage of hazardous goods is obviously always a matter of concern to both the owners and the charterers. The owners need to keep a strict control of the types, amounts and stowages of such goods and must ensure that proper documentation is available to facilitate carriage and to comply with the necessary laws and regulations in force at ports of call.

4(c) It is possible to carry quite a wide variety of animals in special custom built or adapted containers and in some trades there is quite a regular shipment of such goods. Again, the owners and the master must consent before shipment of such goods can be effected.

4(d) The main concern of the owners in relation to the carriage of radioactive goods is not to breach their P & I cover, so control over the carriage of these types of goods is exercised by reference to the owners' P & I cover. If carriage does not breach the P & I cover then, with the prior consent of the owners and the master such substances may be carried.

4(e) The carriage of arms and ammunition always has political and military overtones, even if such arms and ammunition are designed for non-belligerent sporting use. Again, both the owner and the master must consent before shipment of such goods can be effected.

Clause 5 - Owners' Obligations

This clause contains in sub-clause 5(b) a catalogue of provisions setting out to what extent the owners will have to provide and pay crew assistance on the request of the charterers in connection with the loading and discharging operations, bunkering, the regular checking of lashings of containers during the voyage, etc., provided port and local labour regulations permit.

5(c) Any vessel employed to trade internationally needs a substantial amount of documentation if it is to proceed and operate without hindrance. Provision of documentation relating to the vessel is the responsibility of the owners, whilst the documentation relating to goods in containers is the responsibility of the charterers.

5(f) Considering the recent developments in US legislation, ie the enactment of the Anti-Drug Abuse Act 1986, specific reference has been made to smuggling under this sub-clause. Fines imposed under the Anti¬ Drug Abuse Act 1986 may be rather high and it is therefore a matter which both the owners and the charterers may consider carefully if the trading limit includes the United States.

Clause 6 - Charterers' Obligations

6(a) It appears that some charterers keep the master in a state of ignorance about the details of the goods in the containers they are putting on board the vessel just before departure of the vessel. This sub-clause therefore gives the master the right to demand the necessary information about goods in containers including their weight and stowage positions, at the earliest possible time.

6(b) This sub-clause gives the charterers the right to give instructions direct to the master without having to address the master via the owners.

6(i) It should be noted that whereas the first paragraph of this sub-clause covers stevedore damage only, the second paragraph covers all damage to the vessel for which the charterers are responsible.

6(m) The first paragraph of this sub-clause contains the usual provisions pertaining to redelivery of the vessel.

The second paragraph of the sub-clause takes into consideration that if a vessel is cellular, the configuration of the guides may sometimes be changed by the charterers and not changed back prior to the redelivery of the vessel.

6(n) The owners are responsible for insuring the vessel for normal trading for hull and machinery, war risks and protection and indemnity at their expense. However, if the charterers wish to trade the vessel into a restricted area within the trading limits, they should pay any potential, additional premium levied. The question which inevitably arises in such a situation is who places such additional insurances. Both parties have a vested interest. The charterers want to obtain the cover at the most advantageous rates as they are paying the premiums and the owners want to ensure that the cover does not contain any unacceptable exclusions and is placed with reputable insurers. This sub-clause has been designed to meet both parties' requirements.

6(p) This sub-clause is complementary to sub-clause 5(f) and sets out in which event the charterers should be responsible when contraband and/or unmanifested drug or goods have been shipped on board the vessel.

Clause 7 - Hire

7(a) As the vessel may be delivered in one time zone an redelivered in another, the local times of delivery an redelivery as specified in boxes 19 and 20, respectively have to be converted to U.T.C. to facilitate the accurate calculation of the total time on hire for hire payment purposes.

7(c) This sub-clause contains the usual provisions in respect of what happens in the event of non-payment of hire.

7(d) This is another well-known clause covering the last payment of hire at the end of the charter party period in the event the vessel is redelivered before the next payment of hire is due.

7(e) This sub-clause contains two important provisions. Firstly, the charterers must produce supporting vouchers for any deductions they make from hire and all such deductions must be in respect of any expenditure incurred on behalf of the owners and which is payable by the owners under the terms of this charter party. Secondly, if the expenditure is in a currency other than in which hire is paid it should be converted into the currency of the hire payment at the rate of exchange prevailing on the day when the expenditure was incurred, at the place where hire is paid.

7(f) The charterers are obviously expected to arrange the trading pattern of the vessel so that they can redeliver in accordance with the terms of the charter party however even the best schedule can be impeded and this subclause attempts to provide for this eventuality.

Clause 8 - Off Hire

This clause lists various events which may lead to that the vessel will be off hire.

8(a) This sub-clause enumerates a series of reasons for which the vessel may be unable to comply fully with instructions from the charterers, which will lead to the vessel being put off hire, either partially or totally. The philosophy behind this clause is that if an event affects the charterers full use of the vessel and prevents from complying with the charterers instructions at all, then the vessel shall be totally off hire, but in the event it only partially effects the charterers use of the vessel, then shall be off hire to the extent such incidents affect the charterers use of the vessel.

8(b) This sub-clause contains the usual provisions in relation to deviation.

8(c) Blocking and Trapping is a risk to which attention was drawn by the trapping of vessels in the Suez Canal, in the Egyptian and Israeli war. Vessels that were undamaged were unable to gain access to the open sea and thus became constructive total losses, along with their cargoes. The provisions of this sub-clause are closely connected to sub-clause 19(b).

8(d) It occasionally happens that vessels are requisitioned by governments or governmental authorities not only for the purpose of war but for other purposes as well. In the event that such a situation arises during the charter party period, it has the effect of frustrating the balance of the charter party at the option of the charterers, provided that they exercise such an option within 14 days after being advised of the requisition of the vessel.

8(e) The second paragraph of this sub-clause provides the charterers with the right to extend the charter party for any off hire period which occurred more than 2 months before expected redelivery. Such option must be declared two months before expected redelivery or two weeks after the off hire commenced if off hire commenced within the period of two months before expected redelivery.

Clause 9 - Loss of Vessel

This clause contains the usual provisions in respect of termination of hire if the vessel is lost or becomes a constructive total loss.

Clause 10 - Lashings and Stevedoring

Careful consideration should be given to this clause which contains very important provisions concerning lashings and stevedoring.

10(a) This sub-clause places on the owners the responsibility for:

(i) Providing and maintaining an adequate supply of lashings,

(ii) Ensuring that they are of the required strength,

(iii) Warranting the adequacy of the design of the lashing pattern supplied to the charterers.

These are all matters which should be within the control of the owners and it is therefore only right that they should bear this responsibility.

10(b) This sub-clause provides for the charterers to supply any special lashings, for instance such as would be required for American over-height containers. In the event that the charterers have supplied non-standard lashings, or any other gear, equipment or stores, they should be entitled to expect the master to care for them and redeliver such gear on demand in the same condition as supplied, fair wear and tear excepted.

10(c) According to this sub-clause the charterers shall be prevented from stowing heavy containers on top of light containers without the master's approval. It also restricts the charterers to stowing in accordance with the requirements supplied by the owners in Part Ill. Accordingly, whilst the owners are responsible for the lashings, the charterers shall be responsible for the stowage within the parameters set out by the owners.

10(d) This sub-clause provides for the charterers to pay for stevedoring but for the master to supervise it and check the lashings at sea, weather permitting.

10(e) Under this sub-clause the owners shall be responsible for the consequences of failure of any lashing or lashing pattern design or the failure to properly service lashings during the voyage, excepting in respect of the failure of any lashings supplied by the charterers or excepting in those cases where the owners have exercised due diligence in carrying out services relating to lashings during the voyage.

Clause 11 - Vessel's Gear

11(a) An increasingly number of laws and regulations enter into force requiring vessels to have up-to-date and valid certificates relating to vessels gear. The owners are therefore reminded to ensure that the vessel is at all times during the currency of the charter party in possession of valid certificates to comply with any such laws and regulations.

11(b) According to this sub-clause, the owners shall provide to maintain all cargo handling gear including derricks, cranes and winches in good working order. It should be noted that in the event of a breakdown of derricks cranes or winches, the charterers should have an option to put the vessel off hire or to expedite matters by engaging shore-cranes. In the event the charterers continue working by using shore-cranes the owners shall pay for such cranage but not exceeding the hire payable for such period.

11(d) This sub-clause provides for the charterers to have the use of all refrigeration facilities described in Part Ill. It should be noted that these facilities shall be maintained in good working order throughout the currency of this charter party.

11(e) Many major container terminals operate on a 24-hour shift basis. Thus, there is a need to ensure that the vessel has sufficient lighting to facilitate 24-hour working that complies with the regulations of the ports of call. This sub-clause provides for the owners to supply lighting free of expense to the charterers throughout the currency of the charter party.

Clause 12 - Bunker Fuel

12(a) In a time charter party, it is always the responsibility of the charterers to provide fuel. Obviously, no vessel is ever delivered or redelivered with full or empty tanks.

Accordingly, at delivery the charterers shall buy the bunker fuel in the vessel from the owners and vice versa the owners shall buy the fuel from the charterers at redelivery.

12(b) Occasionally it happens that towards the end of a previous charter party or at the end of the charter party in question, the vessel calls at a port where bunker fuel can be obtained at an advantageous rate. This sub-clause allows for the charterers or the owners as the case may be, to take advantage of this opportunity provided prior agreement has been made between the parties.

12(c) Having provided for the taking over of existing supplies of bunker fuels on board at delivery or redelivery in sub-clause(a) of this clause, sub-clause(c) provides for the price to be paid for such bunker fuel. As prices on bunker fuel can fluctuate quite dramatically in a short period of time and due to the fact that there can be different prices from different suppliers in the same port this sub-clause provides for the price to be paid by reference to the indicative prices advised in the Platts Oil Gram. Damage to the vessel's engines by the fuel supplied by the charterers suppliers is a common cause of charter party disputes, so specification is an important feature to consider if disputes are to be avoided. B.S.M.A. 100: 1989 is a specification which most owners find acceptable.

12(e) In view of the high cost of fuel, the charterers look carefully at the consumption figures and take these into account when entering into a charter party. The charterers require some undertaking from the owners as to the vessel's maximum fuel consumption in normal circumstances which in this sub-clause has been defined as smooth water with winds not exceeding Beaufort Scale 4.

Clause 13 - Charterers' Requirements

13(a) Container ships are sophisticated vessels and the safe operation depends upon detailed calculations to ensure that stowage containers and lashings are effected within defined parameters. Accordingly, in order to provide for a safe and correct stowage, the charterers need details of the vessel and accurate data relating to the containers. This sub-clause therefore provides for the owners to supply the necessary documents upon request.

13(b) This sub-clause provides for the charterers to change the stowage configuration to carry different sized containers. The vessel may be set up to carry 20 foot containers and the charterers may wish to carry 40 foot containers. If the vessel is cellular, this entails re-arrangement of the guides under the deck. Obviously, the liberty for the charterers to change the stowage configuration for containers requires that it be done in the charterers time and at their expense and that such configuration be reconverted on similar terms prior to redelivery.

13(f) According to this clause the owners shall co¬ operate with the charterers to provide for the charterers access to the necessary information needed to handle potential claims.

13(k) According to this provision, the charterers shall have the right to sub-let all or part of the vessel. It may be that the charterers only want to sub-let part of the vessel, if for instance the vessel is to be used in a consortium operation, the charterers will swop slots on the vessel with his consortium partners. Any sub-letting of the vessel or a part of the vessel needs the owners prior consent.

13(m) When the charterers charter a vessel they do this on the basis of the vessel as it is, by whom it is managed and according to what regulations it is run. Accordingly, the charterers like to exercise control over any potential changes that the owners may seek to enforce during the charter party and which in the charterers' view might deteriorate their employment of the vessel.

13(n) If the charterers envisage that the use of the vessel on a long-term charter party changes so radically as to make the employment of the vessel uneconomical ie, no alternative employment for the vessel can be found and this happens in circumstances which do not fall within a situation according to which the charter party may be terminated by frustration or some other cause, the charterers shall have the right to lay-up the vessel at any time and for any period of time at a safe berth or place.

13(o) This sub-clause provides for the charterers and/or their agents to sign bills of lading on the owners and/or the master's behalf, if required. However, in such a situation the charterers shall indemnify the owners and the master against all consequences or liabilities arising therefrom.

Clause 14 - Owners' Requirements

14(a) The owners must obviously have the right to take the vessel out of service for maintenance and repairs. In the event of emergency repairs, this can be done immediately.
However, for maintenance and less urgent matters, the charterers must be consulted.

14(b) As the owners are not the party preparing bills of lading with the owners of the goods, the owners may wish to be assured that the charterers' bills of lading contain the usual protective clauses. This sub-clause therefore lists a number of clauses which must be included in the charterers' bills of lading with their customers.

Specific attention should be made to sub-clause 14(b)(iv) which makes reference to the ''Himalaya" clause and the "Circular Indemnity" clause. Whereas most people may be familiar with the "Himalaya" clause, this may not be the case with the "Circular Indemnity" clause. At least it is correct to say that the "Circular Indemnity" clause may not be so well-known outside the jurisdiction of the United Kingdom.

It briefly can be said that the purpose of the clause is to protect the owners from any claims being made by a third party under a bill of lading. It should be noted though, that whereas the clause is valid within some jurisdictions for instance in the United Kingdom and Australia, it may not be considered valid in some other jurisdictions.

14(c) Because of the many interests involved in the event of a "General Average", it has been thought necessary to consider means by which the problems of security required by the owners before the goods can be released to the customers can be solved. This is of particular interest, as if any delay is caused, arguments may arise about responsibility and off-hire.
The first paragraph of this sub-clause therefore provides that the charterers shall provide an acceptable temporary security in all goods and containers to avoid delay and secure release so that transit/delivery may continue and that the owners agree that the charterers temporary guarantee may be exchanged in due course for a full set of securities from the appropriate interested parties covering all goods in containers.

14(d) This sub-clause addresses the situation which arises if the vessels renders salvage services to a third party. Such services involve both the owners' and the charterers' interests and accordingly it provides for an equitable distribution of costs and benefits between the charterers and the owners.

14(e) This sub-clause contains the usual provisions regarding lien.

Clause 15 - Sundry Matters

15(a) This sub-clause makes it clear that the charterers shall pay the cost incurred pursuant to the vessel being required to employ pilotage, towage and other such services to the vessel to assist with navigation, whereas the responsibility for the navigation of the vessel whilst under pilotage or towage remains with the owners.

15(d) The cost of survey is high so it is common practice for both parties to agree and mutually accept the surveyor to act on their joint behalf. The sub-clause does not specifically mention the cost involved in such surveying. However, it is obvious that as the Surveyor acts on both parties behalf, his fees should be shared equally between the parties.

15(e) This is just a short definition clause to ensure that references throughout the charter party to "sub¬contracting" will get the widest interpretation to include for instance also servants and agents of sub-contractors.

Clause 16 - Charterers' Responsibilities/Liabilities 

Clause 16 is a very important clause to which much attention should be paid.

16(a) This sub-clause contains general provisions providing for the charterers to be primarily liable for any claim which may arise in connection with the carriage of goods in containers, except as provided elsewhere in the charter party and without prejudice to the charterers right subsequently to initiate recovery action against the owners for any claims they have had to pay to a third party.

16(b) Whilst it is possible in a charter party to govern the relationship between the owners and the charterers, it is not possible for the owners to govern the contractual relationship between the owners and any third parties such as for instance the charterers' customers. This sub¬ clause recognizes that despite contractual provisions to the contrary in sub-clause(a), claims may well be made against the owners by third parties. If such a claim is made against the owners, this sub-clause provides for the charterers to take over the conduct and defence of such a claim or allegation or alternatively if for some reason the owners prefer to handle that claim themselves, the charterers shall put the owners in funds to meet legal fees, witness and third party expenses as well as settlement funds. It is important to note that nothing in this sub¬ clause precludes the charterers from later initiating recovery for such claims against the owners under the terms of the charter party.

16(c) This sub-clause provides for the charterers to indemnify the owners against all claims in respect of liability or expense as set out in sub-clause(a) of this clause.

16(d) This sub-clause merely provides that if the charterers goods and containers, or any inaccurate or incomplete documentation relating to such goods and containers results in any fines or costs etc. to the owners, then the charterers must bear such fines and costs.

16(e) Whilst it is common to find clauses in charter parties applying time bars in respect of claims to be made by the charterers against the owners it is not so common to find time bars applying to claims made by the owners against the charterers. This sub-clause provides for the owners to progress any claim they may have against the charterers promptly ie within 15 months after redelivery of the vessel.

16(f) This sub-clause is an agency appointment provision, by which the owners appoint the charterers as their agent, so that the charterers may stipulate for the owners the benefits of any immunities, exceptions or liberties in their bill of lading terms and conditions.

16(h) In a liner service operation where a wide range of small claims can arise, the charterers need a degree of flexibility to handle claims arising from their customers. At the same time, the owners want to control such matters and ensure that they get the earliest advice of claims so that they can advise their respective P & I Clubs. This sub¬ clause attempts to satisfy the requirements of both parties in this respect in a reasonable manner.

Clause 17 - Owners' Responsibilities/Liabilities 

Equal to Clause 16 this is a very important clause to which much attention should be paid.

17(a) This sub-clause contains provisions very much similar to the ones which can be found in the Hague or Hague-Visby Rules and provide for the owners to provide a vessel which is in all respects seaworthy to carry the goods and containers required.

17(b) Most refrigerated goods carried on chartered container vessels are carried in containers of which the charterers may be the actual owners. The question then arises as to what extent the charterers can look to the owners to effect repairs if any refrigeration machinery in the containers is malfunctioning. As most integral refrigerated containers are carried on deck, the state of weather and size of the vessel may make it impossible for immediate attention to be given to a container with malfunctioning machinery. This sub-clause attempts to provide in a reasonable manner the extent to which the owners shall look after any refrigerated containers carried on board and to which extent they shall be liable for the malfunctioning of such unit.

17(c) This sub-clause sets out in clear terms to what extent the owners can limit their liability to the charterers as far as goods and containers are concerned.

17(d) This sub-clause provides for a time limit of 15 months, identical to the same provision applicable to claims by the owners against the charterers under Clause 16(e). The reason why the usual one-year time limit has been extended to 15 months is that if the charterers get a late claim under the Hague or Hague-Visby Rules they will still have some time to give notice of recourse action to the owners.

17(f) In some jurisdictions it is only the owners who can limit liability and not the bareboat charterers or time charterers, as the case may be. Accordingly, this sub¬ clause provides that it is the owners who shall have the control and conduct of any limitation proceedings on the joint behalf of the owners and the charterers.

Clause 18 - Insurances

18(a) According to this sub-clause the owners warrant that throughout the currency of this charter party the vessel shall be insured on the usual terms for worldwide trading within the limits provided for in the Institute of London Underwriters' Institute Warranty Limits (IWL).

The sub-clause also provides that the charterers maximum liability for loss or damage to the vessel shall be the insured value as shown in Box 27. This is an important provision for the charterers as the market value of a vessel can fluctuate substantially in quite a short period of time if the trading conditions change. In the absence of such a provision the charterers would have difficulties in quantifying their exposure to risk under Clause 6(l).

18(b) Both the owners and the charterers have a vested interest in knowing that the liabilities of the respective parties are fully insured in a P & I Club with calls paid up to date throughout the currency of the charter party.

18(c) The warranty given by the owners under this sub¬ clause covers trading within normal IWL limits excluding additional premium/restricted/prohibited areas. If the charterers wish to trade in any such areas, they must obtain the owners' prior consent.

Clause 19 - War

In many cases sufficient attention is not given to this clause until it is too late. The multitude of different war situations with which the world has been confronted during recent years has shown that some war clauses, notably in the older charter parties, have some shortcomings. This clause attempts to cover all the various situations which may arise nowadays as a result of war or warlike situations.

Clause 20 - Law and Arbitration

In a standard time charter party intended for use on a worldwide basis, it has not been considered reasonable to let the charter be governed by one law system only or to fix only one venue of arbitration which may restrict the use of the charter in practice.

It has therefore been found reasonable to let Clause 20 provide for optional law system and venue of arbitration by leaving it to the parties to make their own choice in each individual case and to fill in Box 34 accordingly.

As follows from sub-clause 20(c), if Box 34 is not filled in, sub-clause(a) of this clause (ie, English law and arbitration in London) will automatically apply.

Clause 21 - Commission

This is self-explanatory.

Clause 22 - Notices

This is self-explanatory.

Part III

In recognition of the requirements in the container trade for a detailed technical description of the vessel, it has been found appropriate to prepare a separate Part III which lists a number of such technical details and which, it is believed, in most cases should suffice so as to provide charterers with the necessary information.

Due care should be taken in filling in Part III in the correct manner.

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