Explanatory notes

Background

When the freestanding ETS Allowances Clause for SHIPMAN was adopted in December 2023, consideration was given to developing an accompanying standard ETS mandate but set aside in anticipation of the possibility of a standard template being published by the EU authorities. However, this has not happened, hence along with the adoption in March 2024 of SHIPMAN 2024 (which includes the ETS Allowances Clause, see Clause 10), BIMCO decided to develop its own standard template in order to provide a complete “package” comprising the ETS Allowance Clause and the Standard ETS Mandate.

The standard ETS Mandate is intended for use when the parties to a ship management contract agree to give a mandate to an organisation or person to comply with (a) the national measures transposing Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a system for greenhouse gas emission allowance trading within the Union and amending Council Directive 96/61/EC and the obligation to surrender allowances under Article 3gb and 12 of that Directive (“the ETS Obligations”) and (b) the obligations under Regulation (EU) 2015/757 of the European Parliament and of the Council of 29 April 2015 (“the MRV Obligations") for the ship(s) covered by the mandate.

While the ETS Allowances Clause for SHIPMAN has been developed for use with any applicable emission scheme, including but not limited to the EU ETS, the standard ETS Mandate has been developed specifically for mandates given under the EU ETS. Parties should carefully consider the consequences of the shipowners mandating and the managers accepting such mandate whereby the managers assume responsibility for compliance with applicable emission scheme(s) under subclause (b) of the ETS Allowances Clause.

Drafting Team

SHIPMAN 2024 is the result of a collaborative and consensual process between owners, managers, P&I clubs, insurance and legal experts. BIMCO is grateful to the drafting team for their considerable time, effort and commitment in producing the revised agreement:

• Captain Ajay Hazari, Anglo-Eastern (Chairperson)
• Captain Gaurav Rajora, Fleet Management
• Graham Prayel and Dora Costa, V Ships
• Manolis Nicolaou, Columbia Shipmanagement
• Sebastian Hardenberg, BSM
• Steve Davies, Anglo International Shipping Operations
• Torfin Eide, Hansa Tankers
• Johan Botes, Oldendorff Carriers
• Tim Davies, West P&I Club
• Tim Howse, Gard P&I Club
• Robert Hodge, ITIC
• Stephen Mackin, Clyde & Co.

BIMCO representatives:

• Christian Hoppe
• Zehra Göknaz Engin

Structure and content

The ETS Mandate contains the traditional BIMCO box layout enabling the parties to fill in relevant information relating to the mandate. The article numbers in Boxes 1 to 5 correspond to the article numbers in Commission Implementing Regulation (EU) 2023/2599 of 22 November 2023 (“the Implementing Regulation”).

The information has been rearranged to enable the date of application of the mandate, which is of crucial importance as it will determine when the responsibility for compliance with the ETS Obligations and the MRV Obligations are transferred, to be included in the first box. Parties intending to use the ETS Mandate should be aware that the administering authority of a member state may have individual requirements which have to be complied with. Parties are therefore encouraged to check with the relevantg administering authority / authorities in advance before submitting the signed mandate agreement.

In line with article 1(3)(f) of the Implementing Regulation, Box 5 enables the parties to insert the relevant information relating to the ships covered by the mandate. While some parties may wish to make use of this possibility, they should be aware that it may create complications to have more than one ship listed in the mandate in case, e.g., one ship is sold or its management transferred to another ship manager (ISM Company) whereas the other ships are to continue under the mandate.

The box layout is followed by three subclauses setting out the mandate given by the owners to the organisation or person being mandated to comply with the ETS Obligations and MRV Obligations (subclause 1), the acceptance by this organisation or person of the mandate (subclause 2), and a warranty that the person signing the mandate on behalf of each party is authorised to do so and to bind the party accordingly (subclause 3).

The Implementing Regulation sets out in article 1, paragraph 2, that the mandate document shall be signed by both the shipowner and the organisation or person mandated by the shipowner, and the standard ETS Mandate contains signature boxes to this effect.

If a copy of the mandate (instead of the original) is being submitted, it shall require to be certified as a true copy by a notary public or other similar person specified by the administering authority. If such certified copy is issued outside the Member State of the administering authority, then it shall need to be legalised, unless otherwise provided for by national law.

The parties also should be aware that Implementing Regulation 2023/2599 does not address the termination of the mandate, article 2 therein only gives direction on listing ships and updating the list of ships where the shipowner has assumed responsibility for compliance. The parties may therefore wish to address this contractually in their SHIPMAN agreement and include a provision stating the consequences of termination with an obligation on the owners to notify the administering authority that the managers’ mandate has come to an end and ensure that the managers are no longer the responsible entity.