COAL-OREVOY is a standard coal and ore voyage charter party. It is accompanied by its own bill of lading, COAL-OREVOYBILL 2016. The latest edition of this contract is COAL-OREVOY, issued in 2003.
Copyright in COAL-OREVOY is held by BIMCO.
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The COAL-OREVOY charter uses the well-known BIMCO Box Layout system with a separate Part I and Part II. Although the majority of BIMCO charter parties and contracts use this method and have done so for many years, it is worth repeating the reasoning behind the system. The main idea behind dividing the form into two parts 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 in Part II unaltered. This method has considerable merit in reducing the amount of documentation work where parties are considering repeat business, as only Part I of the charter needs to be amended. Part I also provides a useful recap of the concluded fixture.
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 32 of Part I.
Care should be taken when completing the boxes in Part I to ensure that the details entered are consistent with the requirements of the relevant provisions of Part II.
In comparing OREVOY with COAL-OREVOY it will be noted that Part I of the form now extends over two pages, although there is one less box to complete. This has been done because the boxes in the original OREVOY Part I were felt to be too cramped to allow the necessary details to be added when using a typewriter. C
In sub-clause 1(b) the owners’ obligation to maintain the vessel’s class throughout the currency of the charter party is now an absolute warranty. The vessel must also be fully insured against loss of or damage to the cargo and the owners must provide to the charterers evidence of such insurance on request.
It should also be noted that sub-clause 1(b) requires only that the vessel be “classed” and that the class of the vessel at the commencement of the charter should be maintained throughout the charter period. No attempt has been made to require the vessel’s classification society to be a member of IACS or to conform to the Institute Classification Clause definition of the commonly used term “Lloyd’s 100 A1 or equivalent”. In BIMCO’s view, such a narrow definition of an acceptable classification society is unduly restrictive and penalises some smaller classification societies who have, over the years, demonstrated the very highest standards of quality. For this reason, it is left to the charterers to establish, as part of their pre-fixture safety and quality considerations to establish whether the vessel is of sufficient quality and if its class is of a commercially acceptable standard.
In order to ensure the optimal use of modern loading facilities the charterers may wish to make sure that the chartered vessel is capable of receiving cargo at the maximum loading speed available at the port in question. In such cases the parties can insert the relevant figure in Box 6 of Part I. In keeping with the original OREVOY, the requirements relating to the suitability of the vessel for grab discharge are provided for in sub-clause 1(b)(iv).
Sub-clause 1(a)(v) provides for any other technical requirements and particulars to be detailed in Box 7 of Part I.
The cancelling provisions previously found in Clause 2 have now been moved to a new Clause 3 (Cancelling).
strikes a balance between the parties in this difficult situation in as much as the owners may avoid setting out on a long ballast voyage to no avail, whereas the charterers are, at the same time, to declare whether or not they wish to cancel the charter party.
It should be noted that the period within which the charterers must declare their option of cancelling the charter or agreeing a new cancelling date after the receipt of the owners’ notice has been reduced from 5 running days to 2 working days (as applied at the charterers place of business) as it was felt that 5 days was too long a period of time to allow the charterers. The requirement that the option should not be declared more than 20 running days before the revised date of load readiness has been deleted.
For the sake of clarity and for emphasis, the charterers’ obligation to declare whether they intend to exercise their option to cancel the vessel no later than the time of the vessel being ready to load has been made into a separate sub-clause 3(c).
Sub-clause 6(b) provides the charterers with the right to ship different parcels in separate holds within the natural segregation of the vessel, i.e., depending on the construction of the vessel. The carriage of such parcels should not in any way affect the vessel’s seaworthiness.
The provision relating to the expression of quantities in metric tons of 1,000 kilograms formerly found in sub-clause 5.3 of OREVOY has been deleted as Box 13 in Part I now provides for the parties to specify whether metric or long tons should apply to the cargo quantity.
The owners’ right to order the vessel to reduce speed to conserve fuel, previously found in the last sentence of sub-clause 7.2, has been removed from the amended version. This has been done because the provision was felt to be contemporaneous with the high bunker consumption rates of vessels and high fuel prices that marked the 1980s and which was no longer applicable.
In sub-clause 8(c) the charterers’ warranty of safe ports/berths has been clarified to ensure that it applies only to nominated ports/berths that are not specifically named in the charter party. For fixtures where the loading and/or discharging ports/berths have been expressly named in the charter party, it is the owners’ obligation to ensure that the ports/berths are safe and accessible for their vessel.
An issue that is a constant source of disputes is whether or not the charterers are obliged to nominate ports in geographical rotation when two or more loading/discharging ports have been agreed. This issue is dealt with by sub-clause 8(e) by providing that, unless otherwise agreed, loading and/or discharging at two or more ports will be done in geographical rotation.
(a) Notice of Readiness - Sub-clause 9(a)(i) introduces a new provision relating to the transportation of coal under the charter party. The final sentence of the sub-clause requires that the vessel, if it is a combination carrier that has carried a liquid cargo on its previous voyage, must be in possession of a valid gas free certificate on tendering notice of readiness. Reflecting the very fast loading/discharging that is commonplace in the coal and iron ore trades, sub-clause 9(a)(iii) provides that notice of readiness can be given “on any day at any time” and that laytime will commence when notice has been given and notice time has expired (if any has been agreed and stated in Box 17).
In sub-clause 9(a)(ii) the risk of weather delay, tidal conditions, strike of tug boats or pilots, etc, all of which are considered maritime risks, have been allocated to owners as falling within their sphere of risks.
Part (iii) of this sub-clause addresses the issue of whether demurrage should be applied during notice time at discharge ports if total laytime has been agreed. The provision expressly states that in such circumstances notice time will apply at discharge ports unless the vessel is already on demurrage.
Sub-clause 9(b)(vii) has been drafted to protect the owners from a potential “Happy Day” scenario whereby the vessel is loaded or discharged by the charterers despite the notice of readiness being invalid, the result being laytime not counting. The sub-clause expressly states that laytime will start counting from the commencement of loading or discharging, regardless of whether a valid notice of readiness has been tendered.
It should be noted that sub-clauses 9(b)(iv) and 9(b)(v) are optional choices relating to whether Total or Separate Laytime is agreed in accordance with Box 18 in Part I. Parties must ensure that Box 18 is correctly filled in. By way of example, Box 18 a) could read “2 days SHINC” and 18 b) “3 days SHEX” or, if applicable, Box 18 c) could read “4 days SHINC”.
(c) Suspension of Laytime
This sub-clause is unchanged from the version that appeared in OREVOY sub-clause 8.3. Exceptions to laytime agreed by the parties applying to the loading and/or discharging must be expressly stated in Boxes 19 and 20 of Part I.
Attention is drawn to sub-clause 9(c)(i) and sub-clause 9(c)(iv) which are to be read in conjunction with other clauses - namely Clause 16 and sub-clause 10(m) respectively.
(d) Termination of Laytime
This sub-clause is unchanged from the version that appeared in OREVOY sub-clause 8.4. The provision in sub-clause 9(d)(i) spell out when laytime/time on demurrage cease to count. The reference to “cargo documentation” in line 229 means the documents for the production of which the charterers or their servants (shippers or receivers) are responsible - such as bills of lading and draft survey certificates. In line 231/232 a reference is made to the completion of repairs to stevedore damage in accordance with sub-clause 12(b).
Sub-clause 9(d)(ii) obliges the vessel to depart the berth as soon as possible after the completion of loading or discharging if so required by the charterers. Failure of the vessel to depart when so requested will result in the charterers being entitled to proved damages. This provision is viewed as a fair concession to the charterers to allow them to make optimal use of loading/discharging facilities and to minimise delays to waiting vessels.
(e) Demurrage/Despatch Money
This sub-clause is unchanged from the version that appeared in OREVOY sub-clause 8.5. The revised OREVOY has retained the provision that allows the owners the possibility to cancel the charter party if the vessel has been on demurrage for 15 days or more, provided that no cargo has been loaded.
It should be noted that in sub-clause 9(e)(iii) despatch money is payable only if agreed to and stated accordingly in Box 23 of Part I. It is assumed that if despatch money is agreed, then it will be payable at half the demurrage rate for laytime saved in loading/discharging, unless otherwise agreed.
In sub-clause 10(b) reference is made to shifting costs incurred as a result of the charterers failing to nominate a free loading or discharging berth on the vessel’s arrival. It is implied, consistent with the provisions of sub-clause 10(g) (see below), that the charterers will also pay for any costs incurred in shifting, including bunkers, from the waiting area to the berth, if no free berth is available on arrival.
The matter of shifting costs and time spent in shifting is dealt with in sub-clause 10(d). The basic principle is that once the vessel is in berth, should it become necessary to shift between berths then the charterers should pay all associated costs. This wording of this provision has been amended from the earlier edition of OREVOY and now simply states that the costs of shifting the vessel between berths at port(s) of loading and discharge, including bunkers, are for the charterers’ account. It should be noted that although the costs of bunkers are normally excluded for shifting under most voyage charter parties, it has been decided to maintain the inclusion of bunker costs in this provision as it is considered reasonable that the charterers should also pay for the bunker used.
In sub-clause 10(g) the reference to the charterers loading the vessel “always within the capacity of the loading installations” has been deleted. This has been done because it was felt to be unreasonable for the owners to have to bear the risk related to the loading capacity of the installations which would, most likely, be unknown to them.
Sub-clause 10(g) provides that the cargo has to be loaded, spout trimmed and discharged (including shovel cleaning) by the charterers free of any risk, liability and expense to the vessel. From this sub-clause it also follows that if the Master or the owners require any extra trimming and/or levelling, then this will be for the owners’ account and any time lost during such activities will not count as laytime or time on demurrage.
In sub-clause 11(a) the charterers are required to ensure that the terminal operators co-operate with the vessel’s master in completing the IMO Ship/Shore Safety Checklist and that the cargo operations are conducted in accordance with the IMO guidelines.
Sub-clause 11(b) requires the charterers to ensure that the vessel’s loading/discharging is done in accordance with the loading/discharging plan approved by the master.
In Sub-clause 11(c) the Master is given the right to instruct the terminal operators to slow down or stop the cargo operations for reasons of safety.
Finally, sub-clause 11(d) makes it clear that the counting of Laytime is not affected by compliance with the Bulk Carrier Safety Clause.
In sub-clause 12.2 the provision giving the charterers the responsibility for making repairs to the vessel arising out of stevedore damage has been amended to simply state that the charterers must pay for such damage. It was felt that no responsible owners would allow the charterers to make actual repairs to their vessel
Recognising the availability of repair facilities at some of the ports used in the coal and ore trades is often limited, Clause 12 contains a mechanism whereby the parties can mutually agree on an alternative place for repairs not affecting seaworthiness on completion of the voyage. In such circumstances the charterers must bear the costs for the repairs as well as compensating the owners for any time lost at the agreed demurrage rate.
Two changes have been made to the freight provisions. Firstly, as it is no longer the practice for charterers to advance funds to agents to cover the owners’ ordinary disbursements the Freight Advances provision found in sub-clause 13.6 does not appear in this version.
Secondly, in sub-clause 15(f) (Deductions), the provision relating to the charterers’ right to deduct despatch money from freight has been qualified to refer to “undisputed despatch”. The charterers’ right to deduct extra insurance from the freight is conditional on the provision by the charterers of evidence of payment supporting such deductions.
Clause 16 becomes operative in the event of any of the causes referred to in Clause 24 (Force Majeure) either preventing or threatening to prevent or delay the loading or discharging of the cargo. It is important to note that the application of this Clause is confined to those strikes that take place in the loading and discharging ports.
Sub-clause 16(a) (Port of Loading) provides the owners with the possibility of cancelling the charter party unless the charterers agree to count the time during which the loading is prevented by any of the causes stated in Clause 24 (Force Majeure).
Attention is also drawn to sub-clause 16(b) which expressly states that half demurrage is payable after the time provided for discharging has expired until the strike or lock-out comes to an end. After the strike or lock-out has ended full demurrage is payable until the discharging of the cargo has been completed.
In the event that the charterers opt to order the vessel to another port of discharge, all terms and conditions of the charter party and bill of lading are to apply as if the vessel had discharged at the original intended port. If the distance from the original discharge port to the substitute discharge port exceeds 100 nautical miles, the charterers must increase the freight paid on the cargo delivered at the substitute port in proportion.
BIMCO published a revised General Ice Clause for Voyage Charter Parties in 2002 to reflect recent legal and commercial developments. The updated version is now incorporated as standard practice into all new and revised BIMCO voyage charter parties. The amendments have been made because the existing ice clause was found to be deficient in a number of ways, in particular that the vessel should not be required to follow ice breakers or to force ice. It was also felt that provisions were needed to protect the owners against the risk of ice being experienced on the approach voyage.
The preamble to Clause 17 permits the vessel to follow icebreakers when reasonably required, subject to the owners’ approval and taking into account its size, construction and class. There is no obligation for the vessel to force ice.
In sub-clause 17(a)(i), if ice impedes the vessel from arriving at the loading port, the charterers are given three options: (1) nominate an alternative safe and accessible port; (2) agree to reckon laytime as if the port were accessible or; (3) declare that they cancel the charter party. The option must be declared to the owners within 48 running hours, which is the period deemed reasonable to allow the charterers sufficient time to make arrangements either for the cargo to be transferred to or a substitute cargo made available from an alternative port of loading.
Where there is a risk that the vessel may be frozen in at the load port after part of the cargo has been loaded, sub-clause 17(a)(ii) requires the Master/owners to notify the charterers that the vessel is leaving for the nearest safe place to await the charterers’ nomination of an alternative safe port. If the charterers fail to nominate a port within the stipulated time the vessel may leave and complete with cargo at another port.
Sub-clause 17(b) provides parallel provisions for the port of discharge.
The revised OREVOY charter party incorporates BIMCO’s Standard War Risks Clause for Voyage Chartering - VOYWAR 1993. This clause is found in a number of modern charter parties published by BIMCO during recent years and has time and again stood the test whenever a war situation has arisen, making it necessary to take a quick decision. The Clause contemplates the possible action by terrorists and action or intervention by supranational bodies. It also offers a definition of war and warlike operations.
The Clause has been split into two sub-clauses to distinguish between the owners’ rights and the charterers’ responsibilities. References to “damages for detention” have been deleted from the list of categories under which an owner can exercise a lien. This has been done because damages for detention are considered to fall outside the contract and are therefore not a feasible option for the owners. A new category has been added to extend the Clause to cover general average contributions.
In the Lien Clause of the original OREVOY there was a reference to the charterers being responsible for freight and demurrage incurred at the discharge port, but only to the extent that the owners were unable to exercise a lien to obtain payment. In reviewing this provision a number of P&I Clubs expressed a concern that if the owners were to make a claim for demurrage after discharge was completed, the charterers could counter-claim that the owners had failed to establish whether it was legally and practically possible to exercise a lien and had therefore waived their right to a claim. It should be noted in this respect that although it might be legally possible to exercise a lien in a particular jurisdiction, it might not be possible practically if a bulk cargo has been discharged on to an existing stockpile. For this reason the reference to the owners’ exercising a lien has been deleted from the final part of the Lien Clause.
The General Clause Paramount has been revised on the basis of recognising the Hague-Visby Rules as the principle liability regime covering the particular contract of carriage. The Paramount Clause has the following main components:
Thus, sub-clause 23(a) refers to the Hague-Visby Rules as the governing liability regime providing a clear choice of law as regards which jurisdiction’s Hague-Visby Rules shall apply in trades between two Hague-Visby Rules countries. The wording irrespective of whether such legislation may only regulate outbound shipments at the very end of this paragraph is meant to make sure that, in a voyage from a non-Hague-Visby Rules state to a jurisdiction which only applies the Hague-Visby Rules to outward shipments, such Rules will still apply.
Sub-clause 23(b) includes a fall back provision in line with 3) above effectively providing that in the trades where the Hague-Visby Rules are neither applicable in the country of shipment or in the country of destination the terms of the Hague-Visby Rules apply. The only exception to this general rule is, however, where the Hague Rules are compulsorily applicable in either the country of shipment or destination, in which case the Hague Rules prevail. Accordingly, due respect has been paid to those states still signatories to the Hague Rules. In the event of clean Hague Rules trades the choice of law provision provides which jurisdiction’s Hague Rules shall apply.
Sub-clause 23(c) takes care of another of the key components as mentioned under 4) which is that the SDR Protocol 1979 shall also apply in those trades where they are not mandatorily applicable. It is to be realised, however, that those states that are signatories to the Hague-Visby Rules but not the SDR Protocol 1979 may, irrespective of what is provided in this Clause, apply the old limitation rules.
The final sub-clause, 23(d), expressly exonerates the carrier from all liability for loss or damage to the cargo before loading and after discharge and to deck cargo and live animals. It is realised that this provision may not be upheld in all jurisdictions applying the Hague- or Hague-Visby Rules. Thus, for instance, it will be considered invalid under the Scandinavian maritime codes that contain rules compulsorily applicable when the cargo is in the custody of the carrier in the port, i.e. outside the “tackle-to-tackle” period and for deck cargo and live animals.
The final provision of the original OREVOY “Responsibilities and Immunities” Clause has been moved from this Clause to form a new “Force Majeure” Clause as it was felt that the provision warranted elevation to a freestanding clause.
This Clause provides that the bill of lading to be used for shipments under the COAL-OREVOY Charter is to be the COAL-OREVOYBILL Bill of Lading. The Clause also provides that bills of lading are always to be presented and signed in accordance with Mate’s Receipts and that the owners’ agents can sign bills of lading provided that the owners have issued a written authority for them to do so, and given a copy to the charterers.
It should also be noted that the provision gives the owners an express right of indemnity from the charterers against issuing bills of lading at the charterers’ request as a result of which the owners are exposed to or suffer greater liabilities than under the charter party. Although such a right of indemnity might be considered by some courts to be implied, there have been cases where courts have been inclined to deny the owners such a right of indemnity because the charter party prescribed a specific named bill of lading. Given that the COAL-OREVOY Charter prescribes the use of the COAL-OREVOYBILL Bill of Lading and to avoid a situation where the owners might have to absorb liabilities in excess of those contemplated under the charter party, an express right of indemnity has been incorporated.
The provision protecting the owners from being obliged to sign or endorse freight pre-paid bills of lading unless and until the freight has actually been paid, formerly found in the second paragraph of sub-clause 22.1 of OREVOY has been deleted, as this matter is already covered in sub-clause 15(a) of the Freight Clause.
In the second part of the provision, dealing with the non-execution of the charter, the responsibility to pay one third of the brokerage commission no longer falls to the owners by default, but is now to be paid by the party responsible for the non-execution.
Sub-clause 28(b) defines what “in writing” means and provides a non-exclusive list of acceptable effective means of sending notices, such as telex, fax, e-mail and registered or recorded mail.
(Printed in BIMCO Bulletin No. 3, 2003)
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