The Standard Naval Exercise Contract, NAVEXCON, was developed for the short-term charter of merchant ships to participate in military navigational exercises. In order to properly train military personnel in navigation techniques and to familiarise them with the handling of modern merchant tonnage, regular training exercises are conducted by many navies. This type of training is also useful for familiarising merchant navy personnel with the sort of pilotage techniques likely to be encountered in time of conflict. The latest edition of this contract is NAVEXCON, issued in 1996.
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The NAVEXCON Contract has been designed using the conventional BIMCO “box layout” format. The Contract is divided into two parts with Part I providing a means of entering the variable elements of the agreement such as names, dates and descriptions. Part II contains the standard terms, conditions and other clauses of the contract with the intention that these are left unaltered by the parties - unless they specifically wish to alter the careful balance of provisions.
The Contract is based on UTC (Universal Time Co-ordinated). UTC is the inter-nationally recognised standard of time keeping and is the time reference used by all modern navigational equipment such as GPS (Global Positioning System). UTC differs from GMT in being based on the output of a precision caesium clock rather than the less accurate astronomical observations based on the local time at Greenwich, England, of the latter method. For the purposes of this Contract, UTC and GMT can be considered to be equivalent.
As part of the on-hire certification process the Master is required to supply the Charterers’ Representative with an up-to-date copy of the crew list and also a list of any hazardous cargo onboard. Participation in military navigational exercises of this type is not generally precluded by the carriage of hazardous cargo, but it is essential that the charterers are fully advised of the nature, quantity and location of such material.
Because of the practical difficulty of anticipating the expected delivery draft of the vessel some time in advance of the performance of the Contract, Clause 7 provides that the charterers must stipulate, at the time of fixing, the maximum permissible draft for the exercise.
To ensure a consistent approach to defining the maximum parameters within which the vessel is expected to perform, but also to allow the parties to vary the figures by agreement for each contract, the specific maximum wave height and wind speed is to be entered in Box 13 of Part I.
The second paragraph of Clause 10 refers to the term “weather permitting”. Although this may appear at first reading to conflict with the owners warranty given in the first paragraph, the use of the term “weather permitting” in this context encompasses weather conditions other than the prevailing wind speed and wave height, such as dense fog, that might affect the performance of the vessel.
The reference to the owners providing space for the charterers’ navigation, communication and administration purposes should not be construed as indicating that space separate from and additional to other ship’s functions need be provided. The intention of this part of Clause 11 is only to ensure that the charterers’ personnel have at least “elbow room” within the normal navigation and communication working spaces of the ship during the exercise.
It may prove impractical, on occasion, for the charterers to remove their equipment at the end of the exercise when the vessel is redelivered. Consequently, Clause 16 provides for such equipment to remain in the custody, but not the responsibility, of the Master, until such times as a mutually convenient dropping-off point is reached.
It should be noted that the remuneration covers all expenses incurred whatsoever and is not limited to only crew costs, agency fees, fuel, insurance, port expenses, additional accommodation and victualling for charterers’ personnel.
The second paragraph of Clause 17 provides a mechanism for pro-rata compensation if the vessel is delayed beyond its re-delivery date, other than by delays due to the under-performance of the ship.
If the vessel is delayed less than 12 hours after the re-delivery date, then no compensation is due from charterers.
However, should the delay extend beyond 12 hours, then the owners will be entitled to compensation for the entire excess period (i.e. including the first 12 hours) based on a pro-rata of the original lump sum remuneration.
It should be noted that termination by the charterers is not an obligation on their part, merely an option which they may choose to exercise. In the event that the charterers terminate the Contract, remuneration will be paid to the owners only for that part of the contracted voyage that has been completed. The charterers are obliged to provide reasons in writing to the owners for the termination of the Contract.
The clause has been reviewed by a number of P&I Clubs from the International Group and they have confirmed that the wording is suitable for this type of contract and will not affect the owners’ P&I cover.
In keeping with earlier versions of the BIMCO Standard Law & Arbitration Clause, the clause has been designed for use with the BIMCO box layout format. Parties must select their agreed choice of law and place of arbitration by filling in Box 19 with the appropriate details. Should the parties omit to fill in Box 19, or complete it inappropriately, then the clause provides that English law and London arbitration will automatically apply by default.
Copyright in the NAVEXCON Standard Naval Exercise Contract is held by BIMCO.
(Printed in BIMCO Bulletin No. 4, 1998)
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