HEAVYLIFTVOY

Overview

HEAVYLIFTVOY is a voyage charter party for the mid-sized heavy lift sector carrying specialist cargo. It is a comprehensive contract providing for free-in or liner in-hook terms for loading and free-out or liner out-hook terms for discharging. HEAVYLIFTVOY operates under the conventional cargo liability regime of the Hague-Visby Rules and is designed for the carriage of multiple shipments both above and below deck. A standard bill of lading, HEAVYLIFTVOYBILL, is intended to be used with it. The latest edition of this contract is HEAVYLIFTVOY, issued in 2009.

Copyright in HEAVYLIFTVOY is held by BIMCO.

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Explanatory notes

 

Introduction

HEAVYLIFTVOY is part of the comprehensive suite of standard contracts developed by BIMCO. It has been developed in response to demand from heavy lift operators working in the mid-sized “lift on/lift off and roll on/roll off” sector for a dedicated contract for their trade dealing with the carriage of on- and under-deck specialist cargo. At present, the trade relies on using amended liner booking notes for its contractual needs, which is not ideal given the specialised nature of the trade.

BIMCO’s HEAVYLIFTVOY has been drafted by experts from the heavy lift trade who have brought together their commercial and practical expertise to produce a comprehensive purpose-made form that incorporates many of the usual amendments and rider clauses that are currently applied to booking notes. The form provides for the various loading and discharging options used in the trade – free-in, liner-in hook, free-out and liner-out hook. It is accompanied by its own bill of lading, HEAVYLIFTVOYBILL.

BIMCO is extremely grateful to the representatives listed below from BigLift Shipping, Schiffahrtskontor Altes Land (SAL) Shipping, Jumbo Shipping, Liebherr Werk, the Standard Club and Larsen & Partners for their extensive and valuable work on this project.

Mr Arie Peterse, BigLift Shipping, Amsterdam (Owner) (Sub-committee Chairman)
Mrs Tina Poulsen, SAL Shipping, Steinkirchen (Owner)
Mr Arnold F van der Heul, Jumbo Shipping, Rotterdam (Owner)
Mr Ralf Schumacher, Liebherr Werk, Nenzing (Charterer)
Mrs Barbara Jennings, Standard Club, London (Club)
Mr Per Larsen, Larsen and Partners, Odense (Broker)

HEAVYLIFTVOY joins BIMCO’s other and already well-established heavy lift form, HEAVYCON, which was most recently updated in 2007. Although both are classed as special voyage charter parties for the heavy lift trade, there is an important distinction between their uses and application. HEAVYCON, on the one hand, is a “knock for knock” contract designed primarily for the semi-submersible vessels serving the super heavy lift market where cargoes are almost exclusively carried on deck and are, in most cases, sole cargoes. HEAVYLIFTVOY, on the other hand, embraces the conventional cargo liability regimes of the Hague/Hague-Visby Rules and is designed for the carriage of multiple shipments, both above and below deck.

The original intention of the drafting Sub-committee was to create a new contract that retained the “look and feel” of the CONLINEBOOKINGNOTE commonly used in the trade. However, as drafting progressed it became apparent that the incorporation of a number of “voyage charter party” type terms and provisions not normally found in a booking note effectively changed the nature of the contract. For example, to provide for free-in/out loading and discharging terms there are references to laydays/cancelling and laytime, which are more familiar in a voyage charter party rather than a booking note.

The Sub-committee in consultation with experts from BIMCO’s Documentary Committee analysed the nature and purpose of a booking note and how it might be applied in the heavy lift trade. Under a conventional booking note, which is essentially a reservation note for cargo to be carried at a future date, the booking note ceases to have any function once a bill of lading is issued. The booking note is evidence of the carriage contract issued in the form of a bill of lading once the goods have been shipped. Although the booking note is a legally binding document on the parties, once the goods are shipped and the bill of lading is issued, the booking note has no further function and the bill of lading takes over as the binding contract between the Carrier and the lawful holder of the bill of lading.

However, the intention for HEAVYLIFTVOY was that the “booking note” should survive the issuing of a bill of lading and remain binding on the merchant and carrier until the successful delivery of the cargo. Booking notes normally incorporate all the terms and conditions of the carrier’s bill of lading (in much the same way that CONLINEBOOKINGNOTE incorporates all the terms and conditions of the CONLINEBILL Bill of Lading). Because the new contract is so extensive and because the provisions are not limited to liner terms, a standard bill of lading has been drafted to accompany HEAVYLIFTVOY, with the normal protective clauses and words of incorporation that draw in the terms and conditions from the booking note. The end result is a contract that is substantively different from a conventional booking note.

For the above reasons the Documentary Committee decided to classify HEAVYLIFTVOY as a specialist voyage charter party rather than a booking note.

HEAVYLIFTVOY and HEAVYLIFTVOYBILL were formally adopted by BIMCO’s Documentary Committee at its meeting in Athens in June 2009.

Explanatory Notes

The following Explanatory Notes are intended to highlight some of the key issues and provisions of HEAVYLIFTVOY and to provide background information in respect of the thinking behind some of the clauses.

Part I – Box layout

HEAVYLIFTVOY retains the trademark BIMCO box layout Part I which usefully summarises the key variable information agreed by the parties. In this respect it provides the familiarity of the box layout of the CONLINEBOOKINGNOTE form, although it is much more comprehensive.

Part I consists of 28 boxes that need to be completed by the parties in concluding the agreement. The boxes are clearly labelled to indicate the required information and also contain references to the relevant clauses in Part II of the agreement.

Most of the boxes are self-explanatory in terms of the information that the parties are required to enter. A few boxes worthy of note are dealt with below:

In Box 4 (Vessel) it should be noted that in accordance with Clause 5 (Substitution) the carrier has the right to substitute the vessel named in Part I at any time prior to the cancelling date agreed in Box 10. The carrier may also choose to leave Box 4 blank on the basis that a suitable named vessel will be designated by the carrier after the contract has been agreed.

In Box 5 (Cargo) it is important that particular attention is paid to the requirements of column 6 – “deck option”. Against each described item of cargo in Box 5 the parties should clearly indicate if the carrier has the option to ship the cargo on deck in accordance with Clause 26 (Deck Cargo). If the merchant does not want the carrier to have the option of shipping any of his items of cargo on deck at any time during the voyage, then “NO” should be stated in column 6 against each listed cargo. If the intention of the parties is not clearly stated then the carrier will have the right to ship items of cargo on deck at the merchant’s risk.

Boxes 8 and 9 deal with the loading and discharging conditions covering the agreement. The choice of loading and discharging terms take the form of tick boxes which provide four possible permutations: 1. Free-in/Free-out; 2. Liner-in hook/Liner-out hook; 3. Free-in/Liner-out hook; and 4. Liner-in hook/Free-out. If free-in/-out is selected then the amount of laytime must be specified in Box 8 and 9 for loading and discharging.

Box 17 deals with freight tax and whether it is to be paid by the merchant or the carrier. It should be noted that if this box is not filled in then the merchant will be liable for freight tax.

Box 18 is essential to the proper working of the contract in that it deals with demurrage rates for free-in/-out terms and also damages for detention for liner terms. It is therefore important that this box is properly and clearly filled in by the parties to suit their agreement.

Box 19 deals with one of the optional clauses under HEAVYLIFTVOY – bunker price adjustment. If users do not want the bunker adjustment provisions of Clause 25 to apply to their agreement they should simply not fill out this box. Should they wish to include the provision however, then the information required in Box 19 needs to be carefully compiled. Details and a worked example can be found under the note for Clause 25 below.

Box 20 gives a maximum time that the carrier must wait at loading and/or discharging port when, due to reasons outside the carrier’s control, loading or discharging operations cannot be performed. If not filled in then 72 hours will apply as the maximum time. The provision is included in the charter party to protect the interests of other shippers with cargo on board and/or future commitments of the vessel.

Boxes 21 and 22 relate to further optional clauses that the parties can agree to if they so wish. Leaving the boxes blank indicates that the optional clauses 1(d) and 1(e) are not to apply.

Finally, Box 27 (Dispute resolution) is perhaps one of the most important boxes in the form. It is vital that the parties agree from the outset how disputes under HEAVYLIFTVOY are to be resolved. If the parties fail to complete this box to indicate their choice of arbitration venue and law then, by default, English law and London arbitration will apply. The choice of London simply reflects the current most commonly used arbitration venue by the industry.

Part II – Terms and conditions

Part II of HEAVYLIFTVOY contains the main terms and conditions of the agreement. The contract has been divided into 5 sections for ease of reading:

Section 1 – Definitions and Voyage
Section 2 – Cargo
Section 3 – Substitution/Laydays Date/Cancelling Date
Section 4 – Loading
Section 5 – Discharging
Section 6 – General

SECTION 1 – DEFNITIONS AND VOYAGE

Definitions

In line with other BIMCO standard forms, the Definitions section defines the parties to the contract (by reference to the information entered into the boxes in Part I of the form) and a number of important words and expressions used throughout the agreement.

Despite HEAVYLIFTVOY being classified as a specialised voyage charter party, BIMCO has retained the terms “Carrier” and “Merchant” found in CONLINEBOOKINGNOTE primarily because these are the terms in common usage in the trade. In this respect the definition of “Merchant” extends beyond the party named in Box 3 to also include, as it does in a booking note, the shipper, receiver, consignee, the holder of the bill of lading, the owner of the cargo and any person entitled to the possession of the cargo.

It is worth noting that in the definition of “Vessel” reference is made to how “Vessel” should be defined if no vessel is named in Box 4 at the time of concluding the agreement. Any vessel subsequently named by the carrier will be deemed to be the “Vessel” for the purposes of the contract. The term “designated” has been used because there is no formal nomination procedure to follow – although the parties are free to agree such a procedure if required.

“Transportation” has been so defined in order to ensure that the agreement covers more precisely the nature of the trade and provides for possible pre-loading and post-discharging operations.

Clause 1 (Scope of Voyage)

Sub-clause 1(a) provides the preamble to the contract setting out the basics of what has been agreed by the parties – i.e., that the agreed cargo will be loaded in port A, transported to port B and discharged, all in accordance with the terms of the contract.

Sub-clause (b) - This short but important provision reflects the carrier’s obligation to exercise due diligence in respect of the seaworthiness of the vessel. In this respect it reflects the obligations under the Hague/Hague-Visby Rules.

Sub-clause 1(c) - HEAVYLIFTVOY contemplates that the carrier will, unless otherwise agreed, use the vessel to carry cargoes for other merchants at the same time as the cargo agreed for the merchant under the contract. To clarify that the carrier’s liberty to carry cargoes for other merchants only applies when the merchant under this charter party books a part cargo, Sub-clause (c) refers to “complete or sole cargo” as the only exception to the carrier’s usual liberty.

The second paragraph provides the carrier with transhipment rights under the contract as commonly found in booking notes.

Due to the fact that in this trade part cargoes are a common occurrence, the third paragraph gives the carrier the possibility to deviate to load and/or discharge other part cargoes without this constituting a deviation under the contract or any bill of lading issued under the contract.

Sub-clauses 1(d) (optional) and 1(e) (optional) – To protect the interests of the merchant booking part cargo, the parties may agree in the commercial negotiations on a maximum number of days for transit time (sub-clause (d)) or a date of latest time for arrival (sub-clause (e)).

It should be noted that the final sentence of sub-clause (d) excludes delays due to weather and engine breakdown from the payment of damages by the carrier to the merchant. The same principle applies to the date of latest time for arrival in optional sub-clause (e).

SECTION 2 - CARGO

Clause 2 (Cargo Requirements)

The purpose of this clause is to set the standards for the cargo in respect of its fitness to be transported, how it should be marked and where and how it should be lifted (i.e. lifting points/centre of gravity). Furthermore, the liability for failure to comply with the cargo requirements is placed on the merchant such that the carrier is not responsible for loss of or damage to cargo due to the merchant’s failure to meet the required standards for the cargo.

Sub-clause 2(a) - The cargo should be “fit for Transportation” such that it is able to withstand “forces to which it will be subjected” during loading, carriage and discharging.

The location of the centre of gravity is significant as there is risk of damage to the cargo if the load is imbalanced with the centre of gravity out of centre line. In such cases the carrier needs to know this before slinging the cargo so that the necessary lifting arrangement can be prepared. This concern does not generally apply to small cargo items and so the provision states that the centre of gravity should be marked only where it is necessary to load the cargo in a steady and stable manner.

The last sentence of sub-clause 2(a) requiring cargo to be properly boxed or crated and fully stackable is a reference to general cargo items carried by the vessel and not to larger “heavy lift” type cargoes.

Sub-clause 2(b) - The phrase “all to the satisfaction of the Carrier” in relation to the cargo is included in order to be consistent with the use of the phrase in the rest of the charter party and to provide the carrier with a greater say in the number and disposition of handling and securing points and the arrangement and composition of cradles and supports. The phrase is not intended to increase the carrier’s risk or liability but it was felt that to exclude the requirement to meet the carrier’s satisfaction might result in the carrier accepting the arrangement of the cargo as sufficient without question.

Sub-clause 2(c) (optional) - This Sub-clause is optional as weight certification is not always required. If Box 14 is not filled in with a weight figure, or if the cargo does not exceed the stated weight, then this sub-clause will not apply.

Sub-clause 2(d) - This provision is subject to the requirement of the carrier. The clause provides the opportunity for the carrier to ask for transport drawings for items weighing less than 100 tons but which may be of sizeable physical dimensions.

Sub-clause 2(e) provides the carrier with an indemnity from the merchant against all claims, costs, etc., resulting from the merchant failing to comply with the requirements of Clause 2. It should be noted that the indemnity provided by the merchant is given irrespective of whether the carrier has accepted the cargo.

Although discussed during the drafting process, it was decided to omit from HEAVYLIFTVOY any provision on consequential damages similar to Clause 23 in HEAVYCON 2007 on the basis that it was felt that it was preferable to leave it to background law to cover the issue of damages. In any event, as the governing regime under the contract, the Hague/Hague-Visby Rules will cover cargo liability.

Sub-clause 2(f) protects the carrier from liability for cargo damage if due to insufficiency of the packaging to protect the cargo from the normal stresses and strains of sea transportation.

Clause 3 (Cargo Description)

This Clause stipulates how the cargo is to be measured in terms of volume and weight and also provides a definition of freight ton. The Clause has been included to help avoid possible disputes in relation to cargo discrepancies as provided in Clause 4 below and possibly the division of costs over various part cargoes as per Clause 23 (Part Cargoes).

Clause 4 (Cargo Discrepancy)

This Clause deals with discrepancies between the cargo as described by the merchant in Box 5 and the actual cargo as presented. The carrier has the right to refuse to ship the cargo if the volume and/or weight is different than that specified by the merchant and this results in the vessel being physically unable to load, carry or discharge the cargo. If the cargo is in excess of that described but can be accommodated and the carrier is willing to load the cargo, then the merchant will be liable to pay additional freight plus any additional relevant costs. If the cargo is less than described then the sub-clause gives the carrier the right, but not the obligation, to charge full freight.

SECTION 3 – SUBSTITUTION / LAYDAYS DATE / CANCELLING DATE

Clause 5 (Substitution)

This Clause permits the carrier to substitute the named vessel in Box 4 with one of “equivalent capability and capacity” – provided such substitution takes place prior to the cancelling date and always subject to the merchant’s approval.

Clause 6 (Laydays/Cancelling)

The cancellation and interpellation provisions in this Clause are based on the usual laycan and interpellation provisions commonly found in BIMCO voyage charter parties. The Clause clearly sets out the obligations and consequences regarding cancellation and thus helps to avoid dispute.

Sub-clauses 6(a) and (b) establish the opening layday and the cancelling date for the contract. Where it has become practice in the trade to agree on occasion a first layday but not a cancelling date, HEAVYLIFTVOY responds by imposing an automatic cancelling date 14 days after the first layday. This ensures that the interpellation and cancellation provisions of the contract can take proper effect.

Sub-clause 6(c) deals with the arrival of the vessel at the loading port and the tendering of notice within the agreed laydays. If the vessel arrives prior to the first layday and tenders notice of readiness then the merchant has the option, but not the obligation, to load the vessel early. If the merchant does load the vessel early then the actual time used will count as laytime.

Clauses 6(d) and 6(e) - These are the interpellation provisions whereby the carrier is obliged to notify the merchant immediately if the vessel is unlikely to be able to start loading before the cancelling date and to propose to the merchant a new cancelling date based on the vessel’s updated arrival date at the loading port.

In Sub-clause (e) the merchant is given 72 running hours after notification by the carrier, or latest before the vessel is ready to load, to decide whether to cancel the charter party or accept the carrier’s proposed new cancelling date. The key element here is that the provision does not require the merchant to decide whether or not to cancel before he has been informed of the proposed new cancelling date. The interpellation provision assists both parties in dealing with unforeseen delays to the vessel. It provides the merchant with timely notice of a delay giving him the chance to obtain later loading dates if possible or seek an alternative vessel. For the carrier, he is given the opportunity to obtain a later cancelling date for a delayed vessel or avoid an unnecessary voyage to a loading port only to be cancelled on arrival.

Sub-clause 6(f) obliges the carrier to reimburse the merchant in the event of termination for sums paid in advance but not earned. The reimbursement excludes any agreed termination fee stated in Box 24.

Clause 6(g) - The purpose of Sub-clause (g) is to exclude the carrier from liability for consequential loss or damages, whether direct or indirect, arising out of the merchant terminating the agreement or the vessel missing its cancelling date.

Clause 7 (Notice of Readiness)

The Notice of Readiness Clause is a fairly standard wording of the type commonly found in voyage charter parties. It provides a simple requirement for the master to tender notice of readiness when the vessel is ready in all respects to load or discharge and has arrived at the customary anchorage or port or is at the place of loading or discharging within the port area. The giving of the notice of readiness by the master will lead to the triggering of laytime.

Clause 8 (Advance Notices)

Sub-clauses (a) and (b) require the Carrier to give notices of estimated time of arrival at the loading and discharging ports and specifies a default sequence of notices should the parties not agree their own notice schedule.

Sub-clause (c) obliges the carrier to notify the merchant immediately should he become aware of any damage to the cargo during the voyage, so that the merchant can make preparations for repair, insurance surveys, etc.

Sub-clause (d) links the notice requirements of Clause 8 to the method of notices provided in Clause 42. This requires that all notices be in writing and legible and are to be sent by any effective means, which includes e-mail. It is, however, recommended that any vital notices requiring the immediate attention or acknowledgement of the merchant are not sent by e-mail unless a follow up confirmation by phone is made.

SECTION 4 - LOADING

This Section provides the parties with a choice of loading terms - liner terms or free-in. If no choice is made by the parties the free-in terms will apply.

Under the free-in terms it is up to the merchant to provide a berth and to load, stow, and lash etc. the cargo. The merchant may use the vessel’s gear for loading and any lashing materials on board for securing the cargo. Time used and expenses/costs incurred in this respect is for the merchant’s account.

Under the liner-in hook terms the nomination of the berth, loading, stowing and lashing etc. is for the carrier’s account. Loading should be done “fast as can” and time lost due to certain events on the carrier’s side will be for the carrier’s account as well.

The last three clauses of this section apply to both options, whichever is chosen by the parties. They provide for standards in accordance with which the cargo should be lashed and the responsibility for time lost due to swell or waiting for berth. Furthermore, the carrier has the option to terminate or sail with part cargo in cases where the cumulative time lost exceeds an agreed number of days. However, should the carrier agree to wait, his decision will not prejudice his rights under this clause or any other clause in the contract.

Unusually, this charter party contains both liner terms and free-in and -out terms and the words “demurrage” and “detention” have been used throughout, giving them identical treatment. However, it is important to note that these are not identical terms; demurrage is liquidated damages for detention beyond laytime, while damages for detention are, strictly speaking, unliquidated damages which accrue in respect of the wrongful detention of the ship. Such wrongful detention can result e.g. from the merchant’s failure to load, or failure to give orders for the loading or discharging place, or for some other breach by the merchant.

In order to clarify the distinction, laytime and demurrage have been provided for in Clause 9(g) (Free-in), damages for detention in Clause 10(f) (Liner-in hook), whilst cross references to other relevant clauses have been made throughout the charter party.

Clause 9 (Free-in)

In Sub-clause 9(a) - The merchant is required to nominate a berth or anchorage “suitable for the intended operation” meaning that the provision of a good, safe, swell free and accessible berth is not sufficient if other activities on the berth preclude or interfere with the planned loading operation. It is intended to give a wide description of the number of issues that may restrict the ship on the berth of which the merchant must inform the carrier, so that the carrier can select the right vessel to perform the charter.

In Sub-clause 9(b) the free-in terms are set out, i.e. that the merchant is to load, stow, lash, etc., the cargo. The term “Seafastened” relates to the method of securing cargo by welding stoppers, brackets, clips, etc.. The Sub-clause provides that the carrier must, if requested, provide the merchant with a stowage plan to assist with the loading sequence. It should be noted that in order for the carrier to make a stowage plan, the merchant must provide the carrier with details of the intended cargo.

Sub-clauses (c) and (d) contain a reference to the ILO Convention No. 180 (Seafarer’s Hours of Work and the Manning of Ships Convention) to ensure that the crew’s rest hours are properly regulated when they are operating the gear and perform lashing operations on behalf of the merchant. Only daylight cargo operations are permitted using the ship’s gear unless otherwise agreed by the Master, as practice in the heavy lift trade is that, for safety reasons, heavy lifts are only handled in daylight.

In Sub-clause 9(d) a 20 metric tons limitation has been assumed as it is usual in the heavy lift trade that the crew handles the gear and performs the lashing of the heavy lifts but that the merchants employ stevedores to handle larger quantities of general cargo.

Sub-clause 9(e) has been worded to reflect that shore labour imposed by unions is not necessarily compulsory in terms of local regulations. In the event that any imposed labour or equipment is not used then the merchant still remains responsible for paying for such services.

The purpose of Sub-clause 9(f) is to state the total free time for loading and when time is to count during loading under the free-in option.

The trigger for the counting of time is the moment the Master tenders notice of readiness in accordance with Clause 7 (Notice of Readiness). The Sub-clause stipulates that any time used for moving and any pre-loading preparation time required by the vessel, should not count as laytime. This sub-clause also specifies that laytime stops counting once the cargo operation has ended.

Sub-clause 9(g) is a sweep-up provision to account for any time lost arising out of cargo description, cargo discrepancy, permits/licences and presentation of bills of lading.

Clause 10 (Liner-in hook)

Under Sub-clause 10(a), unless the nature of the cargo requires that a specific berth be used for loading, the carrier has the right to arrange and use a berth of his own choosing. If the carrier is unable to choose the berth because of the cargo then the risk of time lost due to swell and/or waiting for the special berth rests with the merchant.

Sub-clause 10(b) has been added to reflect that in this particular trade under liner terms port congestion is at the merchant’s risk. However, so as to strike a reasonable balance, the merchant has been given a 72-hour grace period during which the risk of delay due to port congestion rests with the carrier.

In Sub-clause 10(c) the addition of “unless otherwise stipulated by the carrier” ensures that the cargo is brought alongside the vessel in such a way that it can be loaded with the vessel’s own cranes or with shore cranes/floating cranes.

Sub-clause 10(d) spells out the liner terms, i.e. that the carrier should load, stow, lash and seafasten the cargo. The division of stevedoring costs under the term “liner-in hook” is defined in the Sub-clause.

Sub-clause 10(e) - The words “fast as the Vessel can receive” are included in order to be consistent with the term used in CONLINEBOOKINGNOTE and in order to avoid potential situations where the carrier might claim damages for detention and the merchant denies the claim because the carrier was not able to load at the rate the cargo was delivered to the side of the vessel.

To avoid the problem in some ports where cargo work is restricted to ordinary working hours the words “notwithstanding any custom of the port” have been added.

In Sub-clause 10(f) provision is made for damages for detention in sub-clause (f), see explanation above under Section 4 - Loading.

Clause 11

Sub-clause 11(a) provides for the lashing and seafastening to be done in accordance with a set of agreed standards and to the Master’s satisfaction. If the parties have not agreed a standard then the carrier’s own lashing/seafastening standard is to be used.

In Sub-clause 11(b) the merchant is required to pay for any additional securing materials. “Cargo interests’ ” has been added before “Marine Warranty Surveyor” so as to distinguish between the various surveyors involved.

Clause 12

This Clause applies to both alternative Clauses 9 and 10, whichever is chosen by the parties. The phrase “port congestion” has been added to reflect that in this particular trade port congestion is at the merchant’s risk, with the proviso of Sub-clause 10(b).

Clause 13

This Clause applies to both alternative clauses 9 and 10, whichever is chosen by the parties.

To avoid excessive cumulative delays for the carrier due to swell and/or waiting for berth and/or cargo, the carrier has the right under Clause 13 to cancel or sail when the time lost has exceeded an agreed amount of time (72 hours - unless the parties have agreed otherwise in Part I). However, if the carrier chooses to wait, such waiting time will count as laytime or time on demurrage or be compensated at the detention rate. The carrier’s decision will not prejudice any of his rights under this or any other clauses of the contract.

Should the carrier choose to exercise his right to terminate or sail with only part cargo, the merchant is obliged to pay deadfreight and demurrage/damages for detention. The Clause also gives the merchant the right to call for the vessel to sail with only part cargo on board. This particular wording has been incorporated in order to avoid potential abuse by the carrier by sitting around collecting damages for detention instead of sailing against a payment of deadfreight.

SECTION 5 - DISCHARGING

Similar to Section 4 - Loading, the Section on discharging gives the parties the option to discharge on liner-out hook or free-out terms. If no choice is made the free-out terms will apply. The equivalent clauses in both sections have been drafted to mirror each other. The same remarks apply to the last two clauses of this section (Clauses 16 and 17) which mirror the final two clauses of the loading section except that when the cumulative time lost exceeds an agreed number of days the carrier has the right to sail and discharge at another port instead of terminating, as the latter would not at that late stage be a meaningful option for the carrier.

Clause 14 (Free-out)

This Clause mirrors Clause 9 (Free-in) in Section 4 - Loading, except that an additional sub-clause (c) has been added to provide for deck cleaning. Please refer to Clause 9 for a more detailed commentary.

Clause 15 (Liner-out hook)

This Clause was re-worded to mirror Clause 10 (Liner-in hook) in Section 4 - Loading. Please refer to the notes to Clause 10 for a more detailed commentary.

Clause 16

This Clause applies to both alternative Clauses 14 and 15, whichever is chosen by the parties.

Clause 17

This Clause applies to both alternative Clauses 14 and 15, whichever is chosen by the parties. Please refer back to the notes to Clause 13 for a more detailed commentary - except that when the cumulative time lost exceeds an agreed number of days the carrier has the right to sail and discharge at another port instead of terminating, as the latter would not at that late stage be a meaningful option to the carrier. 

SECTION 6 - GENERAL

Clause 18 (Freight/Demurrage/Detention)

The freight provisions of Sub-clause (a) are derived from the freight prepaid provisions of GENCON 1994. However, unlike GENCON 1994, a grace period of three banking days after completion of loading has been included. In the event of a laden passage shorter than 3 days the merchant is required to pay freight no later than at breaking bulk.

Freight must be paid in full, in the currency and to the bank account stated in Box 17. The freight will not be considered paid until the money is actually in the carrier’s bank account.

Sub-clause 18(b) provides for the payment of demurrage and detention on receipt of the carrier’s invoice by the merchant.

Clause 19 (Permits/Licenses)

Sub-clause (a) is taken from Clause 5 (Permits/Licences) in HEAVYCON 2007 and has been added to require the merchant to acquire and pay for all such permits (with the assistance of the carrier if necessary to obtain permits and licences pertaining to the vessel).

Sub-clause (b) includes wording clarifying the level of assistance required by either party in obtaining necessary permits and licences (particularly for hot work). For example, if the merchant has to obtain a permit that requires evidence of the vessel’s insurance which only the carrier is in possession of, then the carrier is obliged to provide the merchant with such evidence to enable the merchant to obtain the permit in question.

Clause 20 (Agents)

This Clause simply states that the carrier is to appoint and pay for agents at loading and discharging ports. In order to give the merchant an opportunity to arrange for the cargo well in advance of loading and discharging the carrier has to inform the Merchant of the agent’s contact details “as soon as practicable”.

Clause 21 (Terminal Charges)

This Clause establishes that all terminal related charges are to be paid by the merchant. If the carrier for any reason is invoiced for any of these charges he is to be reimbursed by the merchant.

Clause 22 (Canal Transit)

This Clause is based on Clause 15 of HEAVYCON 2007 except that sub-clause (b) regarding additional canal charges has been removed as this is dealt with under Clause 24(d) (Taxes, Dues and Charges). In practice the Clause is only relevant if the transportation is scheduled to pass through either the Panama or Suez Canals or the Great Lakes St Lawrence Seaway System.

The time allowance under this Clause is referred to as “free time” (consistent with other BIMCO contracts) in order not to confuse the time granted to the merchant in which to transit canals with laytime and demurrage. If the free time is used up in transit due to delay then the merchant is obliged to pay for additional time at the demurrage/detention rate stated in Box 18.

Sub-clause (b) contemplates the situation where the intended canal is closed through no fault of the carrier. In such circumstances the vessel will have to re-route to reach the discharging port and the merchant is obliged to pay for the extra time incurred at the demurrage/detention rate.

Clause 23 (Part Cargoes)

This Clause is included to provide for pro rating part cargoes in respect of not only canal transits but also for ice and war risks. Costs are apportioned pro rata according to the freight tons of the cargo in relation to the total freight tons on board. 

Clause 24 (Taxes, Dues and Charges)

This Clause is based on the Taxes, Dues and Charges Clause of GENCON 1994 dealing with taxes on the vessel, cargo and freight, as well as canal dues.

It should be noted that freight taxes under Sub-clause (c) are payable by the party stated in Box 17 – and if this is blank then the merchant has to pay freight taxes.

Sub-clause (d) has been inserted to provide for canal dues and surcharges due to the cargo during canal transits. As example: a surcharge, which is based on cargo characteristics, is added to the vessel’s transit fee when a vessel is passing the Suez Canal with cargo over 250t, floating cargoes, and cargo that extends beyond the vessel’s side, etc.

Clause 25 (Bunker Price Adjustment)

This optional Clause provides a mechanism for adjusting freight, either upwards or downwards, in relation to a change in the price of bunkers between the date of fixture and the date of the bill of lading. A method of adjustment of bunker costs is followed which reflects that part cargoes are carried for various merchants and over various stretches of the vessel’s total voyage.

At the time of concluding the contract the parties need to agree what bunker price should apply to the contract as a “benchmark” for the bunker price adjustment. It may be that they wish to refer to bunker prices quoted by Bunkerworld or Platts or similar organisation. The name of the bunker price source must be entered in Box 19 along with the name of the port to be used for the benchmark and the grades of bunkers. For example, a completed Box 19 could appear as follows:

19. Bunker price adjustment (Cl. 25)
  1. Source of bunker price: BUNKERWORLD 
  2. Bunker port: ROTTERDAM 
  3. Grade of bunkers (IFO 380/IFO 180/MDO/MGO): IFO 380 
  4. Freight adjustment percentage: 2% 

If the HEAVYLIFTVOY charter party was dated 24 July 2009 then the price for IFO 380 in Rotterdam quoted by Bunkerworld would be US 402.00 per metric tonne. 

To calculate any change in freight rate, the parties establish the Bunkerworld quoted price for the same grade of bunkers at the same port on the date of the bill of lading and work out the difference between the prices.

Example:

 Source   Port   Grade  Price at fixture date (24/7/09) B/L date price (12/11/09)  $ Difference  % Difference  
 Bunkerworld   Rotterdam  IFO 380   $402.00   $430.00   +$28.00   7.0% 

As can be seen from the table above the percentage difference for IFO 380 between the two dates is 7.0%. The adjustment mechanism contains a 5% buffer zone. So if the percentage difference is less than 5%, the freight is not adjusted. However, in this example the difference is greater than 5% and therefore the adjustment factor can be applied to increase the freight payable.

The point at which the adjustment factor applies is a figure 5% higher than the charter party price – in this case $402 + 5% = $422. For each $5 difference (or part thereof) between $422 and the bill of lading price ($430) the freight rate is to be adjusted by the agreed freight adjustment percentage (in this case 2%). The example below shows how the freight should be adjusted:

Original price plus 5% buffer = $402 + 5% = $422 (buffer price)

  • Difference between bill of lading price and buffer price = $430- $422 = $8 
  • Freight is to be adjusted by 2% for each $5 (or part thereof) increase above buffer price, so in total, 4%: 
  • So, if original agreed freight = $110, adjusted freight = $110 + 4% 
  • Conclusion: The freight rate is to be increased by $4.4 per tonne to $114.4 

Similarly, a reduction in bunker price more than 5% below the charter party price will result in a discount for the merchant in respect of a reduced freight rate.

 

Clause 26 (Deck cargo)

This Clause deals with the carriage of cargo on deck. It is important that the merchant indicates in Box 5 whether he accepts that the cargo may be carried on deck – either from the outset or as a result of re-stowing the cargo. If the merchant does not want his cargo on deck this must be clearly stated in Part I, otherwise the carrier will have the option to ship on deck but at the merchant’s risk.

For the sake of clarity, the bills of lading and deck cargo provisions have been separated.

Clause 26 has been split into two sub-clauses. Sub-clause (a) provides for the shipment of deck cargo in non-U.S. trades and Sub-clause (b) for shipment of deck cargo in U.S. trading. This important distinction has been made to reflect existing jurisprudence. The U.S. Harter Act prohibits the carrier from relieving itself of liability for its own negligence. COGSA’s exclusion of deck cargo from its coverage does not affect the applicability of the Harter Act in this respect to deck cargo. Although COGSA does not apply to deck cargo, the carrier may nevertheless include a clause in the bill of lading which makes COGSA applicable to cargo carried on deck. US courts have held that a clause making COGSA applicable to on-deck carriage does not violate the Harter Act and will be enforced. If the carrier does so, it will have the benefit of COGSA’s defences and limitation of liability, such as the one-year statute of limitation, the error in navigation defence, and the $500 per package limitation.

The wording of Sub-clause (a) or (b) is to be incorporated into the bill of lading specifying which cargo items are carried on deck.

Clause 27 (Bills of Lading)

This Clause incorporates in Sub-clause (a) the standard indemnity provision to protect the carrier in cases where a different and more onerous bill of lading is issued than the HEAVYLIFTVOYBILL. In such cases the merchant is liable to indemnify the carrier to the extent the terms and conditions of the issued bill of lading are more onerous than those of the pre-printed bill of lading. Although it is intended that bills of lading under HEAVYLIFTVOY are issued on its own named bill of lading it is felt to be prudent to include this extra safeguard for the carrier.

In Sub-clause 27(b) it is specified that, in order to motivate prompt payment by the merchant or shipper, pre-paid bills of lading will not be given to the merchant before the carrier has received the freight.

Finally, Sub-clause 27(c) provides that presentation of bills of lading is a condition for delivery of the cargo. Time lost waiting for bills of lading will be at the merchant’s risk (see clause 10(f)).

Clause 28 (Interest)

This Clause gives a contractual right to claim interest if sums due are not paid when due.

Clause 29 (Deviation)

Clause 29 provides the Vessel with a general liberty to deviate subject to the deviation being for “reasonable purpose”.

Clause 30 (Merchant’s option to terminate)

Under Clause 6 (Laydays/Cancelling) the merchant can cancel the charter party at the passing of the cancelling date if the vessel is delayed beyond that date without paying any fees. However, should the merchant wish to terminate the contract for reasons other than the vessel missing its cancelling date then under this optional clause the merchant has the option to terminate the contract no later than upon commencement of loading against an agreed termination fee (stated in Box 24). Provision has been made for damages for detention in addition to demurrage as well as for the payment of costs incurred by the carrier in preparing for the cargo. The carrier and the merchant may agree during the contract negotiations on a scale of termination fees depending on how far prior to the agreed laydays the merchant decides to terminate the contract.

If Box 24 is not filled in the termination fees are not set and, in case of termination, the carrier may claim against the merchant at law.

Clause 31 (Himalaya Cargo Clause)

This Clause protects the servants and agents of the carrier (including independent contractors) participating in the performance of the Transportation and is not limited to stevedores. It is designed to afford such servants or agents at least the same protection as the carrier has under bills of lading issued by them or on their behalf.

Clause 32 (Lien)

The main objective of this Clause is to preserve the carrier’s contractual right to lien the cargo and any of the merchant’s equipment.

Clause 33 (BIMCO Ice Clause for Voyage Charter Parties)

This Clause is the latest edition of the BIMCO General Ice Clause for Voyage Charter Parties, adopted by the Documentary Committee in November 2004.

Clause 34 (BIMCO General Clause Paramount)

As a part of the process of structuring the form as a voyage charter party, BIMCO’s standard General Clause Paramount has been added. It has the effect of incorporating the Hague/Hague-Visby Rules into the charter party, which would otherwise not normally be subject to those Rules.

Clause 35 (Both-to-Blame Collision)

This is a standard charter party clause providing for the distribution of liabilities in case of collision between the vessel and another ship where both vessels are at fault.

Clause 36 (General Average and New Jason Clause)

BIMCO’s General Average standard clause is inserted in HEAVYLIFTVOY.

If adjustment is made in accordance with US law and practice the New Jason Clause will apply.
Since the publication of HEAVYLIFTVOY a new set of York-Antwerp rules have been approved, the YAR 2016. BIMCO now recommends that general average is adjusted and settled according to these rules.

Clause 37 (War Risks (VOYWAR 2004))

This Clause is BIMCO’s VOYWAR 2004 War Risks Clause, adopted by the Documentary Committee in November 2004. The clause makes reference to, inter alia, acts of terrorism and piracy. The war risks clause was updated in 2013 and is now available as VOYWAR 2013. BIMCO recommends to replace Clause 37 with the latest version.

Clause 38 (BIMCO ISPS/MTSA Clause for Voyage Charter Parties 2005)

This Clause is the BIMCO ISPS/MTSA Clause for Voyage Charter Parties 2005, adopted by the Documentary Committee in May 2005. It was decided to use the terms “Carrier” and “Merchant” in this clause to maintain a familiar “booking note” flavour to the contract.

Clause 39 (BIMCO U.S. Customs Advance Notification/AMS Clause for Voyage Charter Parties)

This clause is the BIMCO U.S. Customs Advance Notification/AMS Clause for Voyage Charter Parties, approved by the Documentary Committee in 2004. This clause was updated in 2010 and is now available as the “BIMCO U.S. Census Bureau Mandatory Automated Export System (AES) Clause for Voyage Charter Parties”. BIMCO recommends to replace Clause 39 with the latest version.

Clause 40 (Brokerage)

This is a fairly standard brokerage clause as found in many charter parties. The parties should identify the names of the broker or brokers in Box 26 in Part I along with the amount of commission payable to each.

Particular attention should be paid to the second paragraph which makes liable for any loss of commission the party who breaches the contract resulting in the commission being lost.

Clause 41 (BIMCO Dispute Resolution Clause)

This clause is the latest edition of BIMCO’s standard dispute resolution provisions. The arbitration part of the Clause is identical to BIMCO’s Law and Arbitration Clause 1998 (which was the predecessor to the Dispute Resolution Clause). The difference is that the Dispute Resolution Clause incorporates a mediation provision. The mediation provision is designed to function in conjunction with the chosen arbitration option, whether that is English law, London arbitration; US law, New York arbitration; or law and arbitration as agreed. Mediation is a technique that is recognised as offering savings in costs and time over traditional methods of dispute resolution for certain types of disputes. BIMCO’s mediation provision is only triggered once arbitration proceedings have commenced and then runs in parallel with those proceedings, if the parties so choose. This has been done to ensure that one party cannot invoke mediation as a delaying tactic. It also provides for the parties to mediate on all or just some of the issues being arbitrated.

BIMCO’s dispute resolution clause has been updated since HEAVYLIFTVOY was published.

Clause 42 (BIMCO Notices Clause)

This is a standard BIMCO clause to ensure that all notices are given in an acceptable written format. Verbal notices should be followed up as soon as practicable with a written confirmation.

Clause 43 (Entire Agreement)

This is a normal provision in English Law contracts to avoid disputes as to whether any other terms (for instance in accompanying correspondence or verbal discussions) form part of the contract.

 

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