Background

BIMCO has developed the ROPAXTIME time charter party for passenger-carrying RoRo ferries. It was approved for publication by BIMCO's Documentary Committee on 3 June 2015 in Edinburgh.

Before the publication of ROPAXTIME, those involved in the RoPax trade were using heavily amended standard time charter parties such as NYPE, BALTIME and GENTIME which were not ideal for this specialist trade. The practice of amending standard forms of contract to use them for trades for which they were not designed can lead to inconsistencies and conflict between clauses resulting in disputes. By using a well-balanced, tailor-made and clearly written contract that deals comprehensively with issues in the RoPax trade, users will benefit from faster contract negotiations and reduced risk of disputes arising over contractual interpretation. ROPAXTIME is designed for worldwide use and can be easily adapted to address specific local regulations or conditions.

BIMCO is grateful for the hard work and commitment by the members of the ROPAXTIME subcommittee:

• Mr Robert Almström, Stena RoRo, (Chairman)
• Mr Fehmi Ülgener, Ülgener Law Office
• Ms Angelika Nieder, Macholl & Specht
• Mr Tommaso Scolaro, Enrico Scolaro Shipbrokers
• Mr Anders Leissner, Swedish Club

Explanatory notes

These notes are intended to provide an insight into the Sub-committee's reasoning behind the provisions of ROPAXTIME. The contract follows the usual BIMCO pattern of a Part I box layout where the parties will enter the variable information of the agreement; a Part II consisting of the standard terms and conditions; and one annex covering the vessel specifications.

• Preamble
• Definitions
• Clause 1 – Charter Period and Delivery
• Clause 2 – Redelivery 
• Clause 3 – On/Off-hire Surveys 
• Clause 4 – Trading Limits and Subletting
• Clause 5 – Vessel’s Condition
• Clause 6 – Cargo Operations and Stevedoring
• Clause 7 – Cargo – Restrictions and Exclusions
• Clause 8 – Livestock 
• Clause 9 – Reefer Plug-In Points and Reefer Units
• Clause 10 – Owners to Provide 
• Clause 11 – Master 
• Clause 12 – Conduct 
• Clause 13 – Charterers to Provide 
• Clause 14 – Hire
• Clause 15 - Off-Hire 
• Clause 16 – Maintenance and Drydocking
• Clause 17 – Bunkers
• Clause 18 – Spaces Available and Communication Facilities  
• Clause 19 – Charterers’ Crew 
• Clause 20 – Hotel Services Equipment 
• Clause 21 – Cleaning and Laundry, Catering and Victualling
• Clause 22 – Gaming Machines, Video and Communication Equipment 
• Clause 23 – Passengers 
• Clause 24 – Intensity of the Trade  
• Clause 25 – Garbage 
• Clause 26 – Fumigation
• Clause 27 – Flag and Funnel 
• Clause 28 – Contracts of Carriage 
• Clause 29 – Cargo Claims 
• Clause 30 – Indemnity and Limitation 
• Clause 31 – Both-to-Blame Collision Clause
• Clause 32 – Himalaya Clause
• Clause 33 – BIMCO General Clause Paramount 
• Clause 34 – Cargo Import-Export Permits, Taxes and Dues
• Clause 35 – Insurance  
• Clause 36 – Lien 
• Clause 37 – Smuggling and Possession of Illegal Substances 
• Clause 38 – Drugs and Alcohol Policy 
• Clause 39 – MLC 2006 Clause 
• Clause 40 – BIMCO Stowaways Clause for Time Charter Parties 2009
• Clause 41 – Salvage
• Clause 42 – General Average
• Clause 43 – New Jason Clause 
• Clause 44 – Force Majeure  
• Clause 45 – Early Termination 
• Clause 46 – BIMCO Standard ISM Clause for Voyage and Time Charter Parties  
• Clause 47 – BIMCO ISPS/MTSA Clause for Time Charter Parties 2005
• Clause 48 – Designated Entities Clause for Charter Parties 
• Clause 49 – BIMCO Sanctions Clause for Time Charter Parties 
• Clause 50 - War Risks Clause “CONWARTIME 2013”
• Clause 51 – BIMCO Standard Dispute Resolution Clause 2015
• Clause 52 – Commission 
• Clause 53 – Notices  
• Clause 54 – Entire Agreement 
• Annex A (Vessel Specification) 

Preamble

The opening paragraph identifies the parties and the Vessel by reference to Part I and sets out the parties’ intention to agree to the content of the subsequent paragraphs.

Definitions

The Definitions Section sets out the contractual meaning of important terms that appear in several places throughout the document.

“Owners’ Crew” and “Charterers’ Crew” – Since the Charterers in the RoPax trade often employ personnel on board to work, for example, in the restaurants and shops, a clear distinction has been made between personnel that is employed by the Owners and Charterers respectively. It will be the basis of the particular personnel’s employment that will determine which category it falls within. It is recognized that in certain trades personnel traditionally considered as the Charterers’ crew, for example, the catering crew, will be directly employed by the Owners for reasons of receiving state subsidies. This can be achieved with ROPAXTIME by adding wording to this effect and which also allocates the costs of such employments. If such an amendment is done the references to Charterers’ and Owners’ Crew may also need to be amended.

”In writing” or “written” – This is a very wide definition intended to include all possible means of communication as long as they are readable and understandable. This would include electronic forms of communication such as e-mail.

“Cargo Units” – The definition of the anticipated cargo on board RoPax ships are meant to reflect what is usually carried in practice, for example, cars, buses, trucks and trailers (either as one unit or separated, i.e. the front or back part only), and various other types of units on which cargo is carried. The words “storage units” is intended to cover different types of boxes that may be placed on board.

Clause 1 – Charter Period and Delivery

Sub-clause (a) describes the Owners’ obligation to provide the services of the vessel in exchange for the Charterers’ payment of hire. A standard provision has been included to rule out the scope for arguing that the Vessel is bareboat chartered. The Charterers can extend the charter period provided that advance notice is given. The Charterers also have the option of increasing or reducing the final period of the charter.

Sub-clause (b) requires the parties to agree and state the port or place of delivery in Box 9. If delivery should take place within a range it is for the Charterers to decide on the exact place for delivery.

Sub-clause (c) provides for the dates within which delivery must be effected. It should be noted that the times to be inserted in Boxes 10 and 11 are local times. Delivery should take place irrespective of whether it is the weekend or a holiday.

Sub-clause (d) contains a commonly used wording in standard charter parties which provides that if the Vessel is not presented for delivery at the end of the cancelling date the Charterers have the option to cancel the charter party. Furthermore, in the event of the late running of the Vessel, the Owners should notify the Charterers requesting them to declare if they intend to invoke their option to cancel the charter party or agree to a new cancelling date should it be obvious that the Vessel, despite the exercise of due diligence by the Owners, will not be able to reach the place of delivery by the cancelling date. The purpose behind this Clause is that a vessel at risk of arriving after the cancelling date/time, should not have to proceed on a long voyage towards the delivery place, not knowing whether or not the Charterers will accept the vessel once it has arrived. This is an important provision, since the basic position under English law is that unless there is a relevant clause in the governing charter party the Charterers can wait until the vessel tenders its notice of delivery before they decide whether or not to cancel. The Charterers will have to declare their option within 48 hours after the Owners have given the notice. If the Charterers choose to cancel, the Owners may save considerable costs by not bringing the vessel to the delivery port and may be able to fix it on another charter at an earlier time. If the Charterers choose not to cancel, the new cancelling date will be the new readiness date that the Owners have stated in their notification. However, to avoid that Owners do not do their utmost in trying to reach the place of delivery within the time agreed should a more lucrative fixture appear, the right of interpellation applies only once.

Sub-clause (e) obliges the Owners to keep the Charterers closely advised of possible changes in the Vessel’s expected date and time of delivery.

Sub-clause (f) confirms that the Charterers retain their rights against the Owners under the charter party even though they have taken delivery of the Vessel.

Clause 2 – Redelivery

Sub-clause (a) requires a port, place or range of ports of redelivery to be named, the exact place will be decided by the Charterers. The Vessel should, of course, be redelivered in the same good order and condition as it was delivered in, with an allowance for fair wear and tear.

Sub-clause (b) as opposed to the corresponding provisions of Sub-clause 1(e) in respect of delivery, Subclause (b) only requires one notice of the expected redelivery place and date to be given since the master in any event should keep the Owners properly informed of any possible changes in the Vessel’s expected date and time of redelivery.

Sub—clause (c) problems occasionally arise in respect of the Charterers’ orders for the last voyage. An unforeseen overrun before the commencement of the last voyage may result in the Charterers not being able to complete the last voyage within the agreed charter period. There is a conflict of interest in that the Owners have a vested interest in timely redelivery of the Vessel, but the time Charterers may be in breach of their contractual obligations towards their sub-Charterers if the Owners refuse to perform the order for the last voyage. Sub-clause (c) provides the Owners with a right to refuse to perform the last voyage if it cannot reasonably be expected that it will allow timely redelivery of the Vessel. The Charterers may, however, in most cases be able to alleviate problems associated with unforeseen overrun before the last voyage by carefully filling in the relevant boxes of Part I in respect of optional extensions to the charter period.

Sub—clause (d) mirrors Sub-clause 1(f) by stating that the Owners retain their rights against the Charterers under the charter party even though they have accepted the redelivery of the Vessel.

Clause 3 – On/Off-hire Surveys

Surveys of RoPax ships are more extensive than conventional vessels since there is the additional element of passenger cabins and other passenger related areas that have to be examined. The default position under this Clause is that each party appoints its own surveyor and pays for it. However, they may agree to jointly appoint one surveyor if this is preferred. The surveyors should produce a joint report with an objective description of the state of affairs in respect of the listed items in the Clause. The inclusion of inventories (passenger related items such as pots and pans and linens etc.) assists in establishing if something is missing at the time of redelivery. It will be for the Charterers to replace any lost or damaged items from the inventory. The on-hire survey should be conducted in the Owners' time, whereas the off-hire survey should be conducted in the Charterers’ time, before the charter comes to an end.

Clause 4 – Trading Limits and Subletting

Sub-clause (a) – provides for the trading limits within the International Navigating Limits and as set out in Box 15. The purpose of this Clause is to limit the geographical range of the voyages on which the Charterers may send the ship by excluding them from certain areas. Moreover, the Charterers warrant that the Vessel should only be used in safe ports or places.

Sub-clause (b) includes a warranty by the Owners that at the time of delivery the Vessel has not traded to any of the countries listed in Box 17. It is important that the Charterers should be sure that the Vessel’s previous trading will not impose any restriction in their commercial use of the Vessel.

Sub-clause (c) deals with trading in ice conditions.

Sub-clause (d) grants the Charterers the right to sublet the Vessel but emphasises that the Charterers’ obligations to the Owners under the charter party are not in any way diminished by the exercise of such a right.

Clause 5 – Vessel’s Condition

The Owners have an obligation to deliver the Vessel seaworthy and in every way fit for the service that it is going to undertake during the charter period. Thereafter, during the currency of the charter, there is a due diligence obligation on the part of the Owners to make sure that the Vessel remains seaworthy, in class and fit for service.

Clause 6 – Cargo Operations and Stevedoring

Incidents relating to the cargo and stevedoring operations may be a dispute breeder unless risk and responsibility is clearly allocated between the parties. This Clause provides in a detailed way what is expected from the parties in respect of the cargo and stevedoring operations.

The preamble states that it is the Charterers’ responsibility to keep and care for the cargo at the loading and discharging ports, and to be responsible for the stevedoring operations as detailed in Sub-clause (a).

Sub-clause (a) puts the responsibility for loading, stowing, lashing, unlashing and discharging of cargo on the Charterers. The performance of such operations will also be at Charterers’ risk, responsibility and cost. Since the stowage of cargo may affect the stability and seaworthiness of the Vessel, the cargo operations should be performed subject to the master’s satisfaction and supervision. It is important to note that the supervision is limited to the safe stowage of Cargo Units, trim, stability and seaworthiness of the Vssel only. Hence, the Owners or master are not responsible for the securing of cargo inside the Cargo Units.

If the cargo operations or the cargo itself should cause damage to the ship, passengers, crew, cargo or items that belong to the ship, then the Charterers will be liable for this. Three types of damage are envisaged, the most serious being damage which affects the Vessel’s seaworthiness. This type of damage should be repaired before sailing from the port where the damage occurred or was first discovered. The second type of damage is damage which affects the Vessel’s “trading capabilities”. This is intended to cover certain types of damage which although not affects the Vessel’s seaworthiness, but is of a sufficient seriousness to have an impact on the Vessel’s ability to comply with the trading requirements on a subsequent voyage. The third type of damage is any type of damage resulting from the cargo operations which does not affect the Vessel’s seaworthiness or trading capabilities. Such damage has to be repaired before the end of the time charter period or before sailing from the last discharge port, whichever applicable. If it is not practical or possible to achieve this then the Owners may effect repairs at a later date and invoice the Charterers for the cost. It is the Owners’ responsibility to mitigate such repair costs by providing the Charterers with supporting invoices. It is important that the Owners report damage as soon as possible so that the Charterers may take appropriate action against the stevedores. It would not be fair to hold the Charterers liable for stevedore damage if the Owners failed to inform them within a reasonable time.

Sub-clause (b) provides the Charterers with two options, both at their own cost. First, they may request the Owners to do the lashing with the Owners’ Crew, provided this is allowed by the port or local authorities and applicable local regulations. However, it is often the case that there is insufficient crew on board to carry out lashing and at the same time keep up with the other duties such as watch keeping and maintenance of the Vessel. Therefore, the Charterers have a second option to request Owners to place additional crew on board for lashing purposes. Such crew should be paid by the Charterers at the rate stated in Box 18, which should include the items listed in the Clause, for example salaries, victualling and lashing bonus. Furthermore, it has been made clear that when the Owners’ Crew perform lashing and unlashing they do it in the capacity as servants of the Charterers.

Sub-clause (c) builds on Clause 5 (Vessel’s Condition) that requires the Vessel to have at delivery lashing materials in accordance with the minimum requirements of the ship’s cargo securing manual. If lashing material should be lost or damaged during the charter period then it should be replaced by the Charterers before the ship is redelivered. Furthermore, during the charter, the Charterers need to ensure that the Vessel has the minimum amount of lashing as per the cargo securing manual. Any replacement lashing should also comply with the cargo securing manual in terms of quality and standards.

Clause 7 – Cargo – Restrictions and Exclusions

In common with other time charter parties, only lawful merchandise can be carried. Dangerous goods can be carried only with the necessary permission and under certain strict conditions of carriage set out in the International Maritime Dangerous Goods (IMDG) Code.

Clause 8 – Livestock

This provision takes into account that livestock is sometimes carried on RoPax Vessels, but always at the sole risk and responsibility of the Charterers and subject to the master’s approval. The words “which shall not be unreasonably withheld” is intended to prevent the master from refusing to carry live stock without reasonable grounds. The master may, without liability, dispose of any animal that pose a risk to other animals, persons or property, or cause the Vessel to be delayed. The Clause also contains an indemnity provision in respect of consequences from the carriage of live animals. Finally, if the ship’s decks require cleaning, this should be done by the Charterers, in their own time and at their own cost.

Clause 9 – Reefer Plug-In Points and Reefer Units

If the Charterers are carrying reefer units, they may connect them, with their own means of connection, to the ship’s reefer plugs. The carriage of reefer units and cargo inside them will be at the Charterers’ sole risk and responsibility. The Owners’ Crew should, on behalf of the Charterers, assist with checking the connections between the reefer units and plugs so that they work properly during the voyage. It is also the Owners’ responsibility to ensure that ship’s reefer plugs and power supply are in order during the charter.

The last sentence permits reefer units to be operated with diesel aggregates only where there is a failure in the electricity supply. Practice in respect of how reefer units are powered varies around the world so parties should address this point specifically and amend the last sentence if necessary.

Clause 10 – Owners to Provide

This Clause sets out in a straightforward way what the Owners must provide and pay for under the contract. Apart from the insurances of the ship as referred to in the preamble, wages and provisions for the Owners’ Crew, with the listed exceptions, should be for the Owners’ account.

Any vessel employed to trade internationally needs a substantial amount of documentation to operate. Subclause (c) states that the provision of documentation relating to the Vessel and as required by the Vessel’s flag state and classification society is the responsibility of the Owners. Documentation relating to the cargo will be the Charterers’ responsibility. However, any required certification to carry passengers is intended to be covered by this Sub-clause. The necessary documentation is limited by making reference to what is required to allow trading within the limits agreed in Box 15. This is to avoid a situation where Owners would have to comply with every single local certificate requirement around the world.

Sub-clause (d) requires the Owners to have in place at the commencement of the charter a Ship Sanitation Control Exemption Certificate/Ship Sanitation Control Certificate as required under the International Health Regulations (2005), and to renew it as required. However, if, in accordance with the Clause, the Charterers’ actions result in loss of the certificate due to, for example, the on-board presence of rats, responsibility for obtaining a new certificate will pass to the Charterers who will also be required to meet the associated costs.

Clause 11 – Master

This is a general Clause dealing with the master and the master’s obligations. It spells out that the master should be able to speak English and follow the orders of the Charterers in their commercial use of the Vessel. 

The English language should be the working language for bridge-to-bridge and bridge-to-shore safety communications as well as for communications on board between the pilot and bridge watch keeping personnel. Furthermore, the master must ensure that all voyages are prosecuted with due despatch and that the loading and discharging operations do not affect the seaworthiness of the ship.

The second paragraph of this Clause puts an obligation on the master to use reasonable endeavours to obtain pilot exemption since it is not cost-effective for RoPax ferries, which often call at the same ports several times a day, to take a pilot on every occasion. Since the Charterers save money by not taking a pilot, the Owners, who in effect does the job of the pilot, should be compensated for successfully obtaining pilot exemption at an agreed rate as per Box 19.

Clause 12 – Conduct

Since inappropriate behaviour on board could very easily compromise the safety of the Vessel and those on board, the master is, under Sub-clause (a), given the right to refuse to carry Charterers’ Crew or passengers if their conduct is unacceptable. On receiving a complaint from the Owners, the Charterers must undertake an investigation of the matter and take appropriate action. In the case of the Charterers’ sub-contractors, the Charterers are required to oblige their employers to take such action. Sub-clause (b) mirrors Sub-clause (a) by requiring the Owners to investigate and take appropriate action in respect of complaints received by the Charterers regarding the behavior of the Owners’ Crew.

Clause 13 – Charterers to Provide

This Clause sets out in a straightforward manner what the Charterers must provide and pay for under the charter party.

Clause 14 – Hire

As the Vessel may be delivered in one time zone and redelivered in another, the local times of delivery and redelivery, respectively, have to be converted to UTC (Coordinated Universal Time) to facilitate the accurate calculation of the total time on hire for hire payment purposes.

Sub-clause (a) specifically refers to the Charterers’ option in Sub-clause 15(c) to add any off-hire time to the end of the charter period. Especially in long-term charters where different rates apply over time, disputes may arise as regards which rate of hire shall apply for any additions to the charter period. In accordance with common practice it is specified that it is the rate of hire at the original time of redelivery which shall apply.

Sub-clause (b) provides when, where and how payment of hire takes place.

Sub-clause (c) contains very important provisions in relation to the Owners’ right to withdraw the Vessel from the service of the Charterers in the event they do not pay on time. The Owners should give written notice to the Charterers providing a grace period as agreed in Box 22 within which to make payment. If the Charterers fail to make payment within the grace period, the Owners can withdraw the Vessel immediately without further notice. It should be noted that a valid notice under this Sub-clause cannot be given until after midnight on the due day, which is when the Charterers become in default. Furthermore, the wording of the notice to the Charterers has to be absolute in terms – it has to make it clear that hire has not been paid punctually and that the Owners are giving an ultimatum that unless it is paid within the agreed number of days they will withdraw their ship. The Owners’ right to withdraw the Vessel under this Sub-clause will apply to each and every occasion hire is due. Hence, it is the intention that the Owners should be able to withdraw even if they have accepted late payment on previous occasions.

As long as the hire remains unpaid, the second paragraph of Sub-clause (c) entitles the Owners, without prejudice to the liberty to withdraw, to withhold the performance of any and all of their obligations under the charter. Thus, the grace period does not apply to suspension and the Owners’ right to suspend performance may be effected immediately after midnight on the due date. Although this provision may be of some comfort to Owners facing time Charterers who are unable or unwilling to pay, it should be emphasised that suspending services of the Vessel may be in conflict with the Owners’ obligations to third party cargo interests. Consequently, the Owners should never invoke this right before consulting their insurance providers.

Sub-clause (d) entitles the Charterers to deduct from the hire any expenditure which they may have incurred on behalf of the Owners and which is for the Owners’ account.

Clause 15 - Off-Hire

Sub-clause (a) deals with the traditional events leading to off-hire, i.e., defects affecting or preventing the operation of the Vessel due to damage, malfunction or lack of maintenance of the Vessel or due to deficiency of the Owners’ Crew. It is expressly stated that the Vessel should not be off-hire when time was lost due to damage, breakdown etc. which was caused by the Charterers or by someone who the Charterers would be responsible for. Moreover, the provision also specifically addresses the situations where the Vessel may have been arrested as a result of a claim by a third party. In this case the Vessel will be off-hire, unless the Owners can prove that the Charterers or any of their servants were the ultimate cause of the arrest.

Sub-clause (b) contains the usual provisions concerning deviation that if the Vessel deviates for other reasons than as ordered by the Charterers for reasons other than to save life or property the Vessel should be offhire. However, deviation to avoid bad weather will not put the Vessel off-hire.

Sub-clause (c) gives the Charterers the option to add to the charter period.

Clause 16 – Maintenance and Drydocking

Sub-clause (a) provides the Owners with a right to take the ship out of service for essential maintenance and repairs. In the event of emergency repairs, these can be done immediately, whereas the Charterers must be notified in accordance with the Clause of less urgent matters. The annual underwater survey that is conducted to keep the passenger certificate is intended to be covered by the word “survey” in this Clause.

Sub-clause (b) gives Owners a maintenance allowance of up to 24 hours per calendar month which must be used within the same month.

Clause 17 – Bunkers

Sub-clause (a) provides that the quantities of fuel at delivery and redelivery should be about the same, unless the parties have agreed otherwise, and subject to the Vessel on redelivery having enough fuel to safely reach the nearest port where bunkers of the required type are available.

Sub-clause (b) provides for the bunkering of the Vessel by the Charterers immediately prior to delivery or by the Owners prior to redelivery – provided the bunkering operation does not in any way interfere with or cause delay under the current charter (particularly in the case of bunkering prior to delivery). Each party is to bunker for their own account and indemnify the other for any delays, losses, costs and expenses that occur as a result of the bunkering. It should be noted that this is a mutual provision – each party consenting to the other party to allow bunkering prior to delivery/redelivery. Although the prior consent of the other party to bunkering before delivery needs to be obtained, this consent is “not to be unreasonably withheld” – i.e. it  should reflect common commercial practice – so any refusal by either party must be on “reasonable” grounds.

Sub-clause (c) the parties should agree and state the purchase prices for the fuels at delivery and redelivery respectively in Boxes 25 and 26. Furthermore, the Charterers should pay for the fuel on board at delivery together with the first instalment, and the fuel on board at redelivery should be adjusted in accordance with Sub-clause 14(e). In practice, charterers normally deduct the value of the bunkers on redelivery from the last hire instalment. A final adjustment will have to be made of the balance left that was not covered by the Charterers’ estimate.

Sub-clause (d)(i)sets out the co-operation between the ship’s personnel and the Charterers’ bunkering agent and supplier prior to, during and after delivery of fuels to the Vessel.
Sub-clause (d)(ii) deals with bunker sampling and requires a sample to be taken of each grade of fuel (a “primary sample”) delivered. The sampling procedure is to be conducted in accordance with the IMO Resolution MEPC. 182(59) Guidelines for the Sampling of Fuel Oil for Determination of Compliance with MARPOL 73/78 Annex VI or any subsequent amendment.

The “primary sample” is to be sub-divided into a minimum of five representative sub-samples to be taken from each grade of fuel loaded, one of which is the mandatory MARPOL sample and the others should be divided between the Owners, the Charterers and the bunker suppliers. The minimum number of samples has been chosen to reflect prudent commercial practice although it is acknowledged that in some cases more samples will be taken.

Sub-clause (d)(iii) requires the Charterers to warrant that the bunker suppliers they engage will comply with the MARPOL sampling procedures when delivering bunkers – which, if the bunker supplier is located in a MARPOL signatory State is, in any event, a mandatory requirement for the supplier.

Sub-clause (d)(iv) deals with the loading of different grades and specifications of bunkers into segregated tanks on board the Vessel. The segregation also includes separating fuel supplied by different suppliers, even if purportedly of the same grade and specification as other suppliers. Bunkers are to be segregated within the Vessel’s natural segregation even if this process results in a reduction in the Vessel’s overall bunker capacity.

Sub-clause (e)(i) requires that the fuels supplied should meet the specifications and grades as stated in Box 27, and should comply with ISO 8217:2012, or any later amendments, unless the parties have agreed otherwise because fuel of that specification are not available.

Sub-clause (e)(ii) deals with loss or damage suffered by the Owners (e.g., delay) or the Vessel (e.g., physical damage to or underperformance of the engines) caused by bad or off-spec fuel. The Charterers’ liability extends not only to the consequences of them loading bad fuel, but also to liability for the cost and expense of off-loading the bad fuel from the Vessel and replacing it with suitable fuel. As the unsuitability of the Charterers’ fuel may not be detected until actually burned in the Vessel’s engines, the Owners are protected against any potential claim by the Charterers for under-performance or increased bunker consumption which can be directly attributed to the bad fuel.

Sub-clause (f) provides that if the Owners have the fuel tested (at their expense) and it is found not to comply with the agreed specification then the Charterers have the right to seek a “second opinion” from another testing laboratory, mutually agreed by the parties. If the second laboratory confirms the sample of fuel to be off-spec then the Charterers are to pay for the analysis, otherwise the Owners must foot the bill. It should be noted that the Owners and Charterers will have mutually accepted the choice of laboratory for the “second opinion” and it is therefore assumed that they will agree to be bound by its findings.

Sub-clause (g) is the BIMCO Bunker Fuel Sulphur Content Clause published in 2005 which deals with the obligations of Owners, time Charterers and their bunker suppliers under the MARPOL regime in respect of sulphur content of fuels. The basic premise is that the Charterers must provide the Vessel with fuels of the necessary sulphur content to allow the Vessel to trade within the emission control areas ordered by the Charterers. The Charterers are also required to use bunker suppliers that operate in accordance with Regulations 14 and 18 of MARPOL Annex VI. The Clause gives emphasis to the provision of bunker delivery notes and sampling procedures. The Owners’ obligations are subject to the Charterers having fulfilled their obligation to provide fuel in accordance with the Clause. The responsibility for the storage, management and use of the fuels supplied rests with the Owners as does the emission control requirements of Regulations 14 and 18. The Owners warrant that the Vessel will comply with the emission control regulations of the places it is ordered to trade by the Charterers and that the Vessel is capable of consuming the fuels provided.

Clause 18 – Spaces Available and Communication Facilities

This Clause describes the on-board space available to the Charterers and that the Charterers may use the ship’s communication facilities.

Clause 19 – Charterers’ Crew

This trade specific Clause reflects that the Charterers employ their own crew for, inter alia, hotel and restaurant services. It is clearly stated that the Charterers’ Crew are employed solely at the Charterers’ risk, responsibility, cost and expense, and that they will adhere to the overriding authority of the master.* As with the crew provided by the Owners, the Charterers’ Crew must comply with the requirements of the ship’s flag state and other mandatory regulations. Any time taken for necessary training of such crew will be the Charterers’ account. In terms of the language requirements of the Charterers’ Crew, a common working language for the ship should be established to ensure effective crew performance in safety matters. This language may differ depending on where the Vessel is trading, but should always be decided in accordance with applicable rules and regulations.

* V. 1.1 – 14 Sep. 2015: error correction: “and responsibility” removed from end of first sentence.

Clause 20 – Hotel Services Equipment

The Vessel should be delivered with inventory in sufficient amount for the number of passengers as indicated in the Vessel specification. To keep track of the inventory, the parties should sign a list of the inventory at delivery, and prior to redelivery the charterers should send an inventory list to the Owners. During the contract, the Charterers should maintain, repair or replace the inventory whenever necessary, and the ship should be redelivered with all inventory in the same good order and condition as upon delivery, with the exception for fair wear and tear. The parties also have the option to agree on a lump sum should inventory be missing or defect.

Clause 21 – Cleaning and Laundry, Catering and Victualling

This Clause deals with cleaning, laundry, catering and victualling, all of which will be paid and performed by the Charterers. Owners should reimburse the charterers for such services performed in respect of the Owners’ Crew at a rate agreed in Box 20.

Sub-clause (a) provides that all areas on board the ship, except for the engine room and related areas, should be kept clean by the Charterers’ Crew to the highest standards of cleanliness. The cleaning products used should be approved by the master and supplied by the Charterers at their cost, except for the products used to clean the Owners’ Crew cabins, the bridge and engine room.

Sub-clause (b) puts the obligation to pay for and perform laundry services on the Charterers, including the laundry belonging to the Owners’ Crew.

Sub-clause (c) states that it is for the Charterers to victual all people on board the ship and to keep the Vessel stocked with beverages. As a basis for the Owners’ payment for the cleaning, laundry and victualling services, they should report to the Charterers in writing within the five days of the end of each month the number of crew members that were on board during the previous month. The Charterers may then deduct from hire the amount that the Owners should pay for the relevant services, provided they can present invoices and evidence of the number of crew. Invoicing by the Charterers should be done on a monthly basis.

Clause 22 – Gaming Machines, Video and Communication Equipment

As part of the services to passengers, the Charterers will want to fit the ship with gaming machines, TV screens, cash register systems etc. which have been termed “Equipment” for the purposes of this Clause.

Such installations should be done at the Charterers’ cost. However, the master should supervise and approve of the installations since it will be done to the property of the Owners and the master will know where it would be appropriate to place the Equipment. The Equipment will remain the property of the Charterers, who must restore the Vessel before it is redelivered, in their cost and time. Finally, the supply and the operation of the Equipment must be lawful under applicable rules and regulations. In case of violation, any losses or fines etc. should be for the Charterers’ account. The Charterers also assume responsibility for any applicable licensing, taxes copyright, repairs and maintenance.

Clause 23 – Passengers

As one of the central clauses to ROPAXTIME, this Clause deals with all passenger related issues. Its preamble makes it clear that passengers are on board the ship at the Charterer’s risk, responsibility, cost and expense.

This encompasses also the embarkation and disembarkation and the control of how many passengers are carried which is important since the number of passengers are not always known beforehand and passenger manifests may not be available. Furthermore, the Charterers are responsible for detention, fines or other losses that may occur due to their failure to comply with the provisions of this Clause, unless the loss was caused by the Owners’ Crew.

The second paragraph provides that the running of the on board bars, restaurants and shops etc, and the handling of all passenger cash transactions and safe keeping of cash on board will be the Charterers’ responsibility.
A very important provision of this clause is found in the third paragraph which states that all obligations under passenger tickets or contracts for other persons acting on behalf of the Charterers should be the Charterers’ responsibility and that no claims undersuch contracts should be the responsibility of the Owners.

In case a claim is made against Owners in this respect, the Charterers are required to indemnify the Owners, and the Vessel will remain on hire. Moreover, the Charterers undertake to take necessary steps to have the ship released should it be arrested because of claims by passengers or other persons that the Charterers may have a contract with.

The final paragraph provides that the ship should have a hospital, fully equipped with necessary medical disposables and stores. If the Charterers make use of any items from the hospital for their crew or the passengers they should reimburse the Owners. To keep track of items used, the master should keep a log of them in the hospital. The Charterers may, at their sole risk, responsibility, cost and expense, employ a doctor or medical staff to work on board the ship.

Clause 24 – Intensity of the Trade

This Clause takes into account situations where, for example, in the middle of a five year charter, more intense trading is required with the consequence that the Owners need to have more crew on board. To be able to measure if it is indeed a case of a more intense trade, the parties should describe the intended trade, for example, one round trip per day, in Box 16. The Owners may then claim reimbursement for the costs of any required additional manning.

Clause 25 – Garbage

The Charterers are required to keep garbage ducts and containers clean in their time and at their cost. Likewise, the removal and disposal of garbage, litter, sludge and other waste should be for Charterers’ account. However, garbage from the engine room and oily water should be removed by the Owners at their cost.

Clause 26 – Fumigation

Fumigation caused by the carriage of cargo, passengers or Charterers’ Crew, or because of ports visited, should be for the Charterers’ account, while fumigation for all other reasons will be for the Owners’ account.

Clause 27 – Flag and Funnel

This Clause provides the Charterers with the right to fly their house flag and paint the funnel with their house colours during the charter period, provided that all such “customisation” is done, and latterly restored on redelivery, in the Charterers’ time and at their expense.

Clause 28 – Contracts of Carriage

To reflect commercial practice in the RoPax trade, the responsibility for issuing bills of lading, passenger tickets and other contracts of carriage falls on the Charterers. It is rare for bills of lading to be issued in the RoPax trade, instead it is more common to use waybills or consignment notes. The cargo and passengers are carried on the Charterers’ terms, in no event on the Owners’ terms. If contracts of carriage are issued under ROPAXTIME, then they should identify the Charterer as carrier and be signed by the Charterers or their agents, or by the master on behalf of the Charterers. This clause also contain an indemnity provision for consequences that may arise from issuing contracts of carriage. Furthermore, the contracts of carriage should be in accordance with the charter party and all statements of facts should be consistent with mates’ or tally clerks’ receipts.

The last paragraph is meant to protect the Owners against any cargo liability in excess of the Hague or HagueVisby Rules in circumstances where the time Charterers for whatever reason have voluntarily applied the Hamburg Rules or similar legislation in their contract of carriage with the cargo interests. However, where the Hamburg rules or similar legislation are compulsory applicable as a result of the location of the port of shipment or in some jurisdictions because of the port of discharge, the Charterers should indemnify the Owners for the liabilities up to and in excess of the Hague or Hague-Visby Rules.

Clause 29 – Cargo Claims

This Clause is modeled on the Inter-Club New York Produce Exchange Agreement (the 1996 Agreement, as amended in 2011), which was drawn up between the International Group of P & I Clubs facilitate claims settlement as between Owners and time Charterers for third party cargo claims. This regime has been successful in keeping cargo claims down and thereby avoiding costly litigation. According to the Inter-Club Agreement, ultimate liability for cargo loss or damage is allocated in accordance with a widely accepted formula based on the cause of damage. The provisions of the Inter-Club Agreement have been amended to suit the practices of the RoPax trade.

Sub-clause (a) contains a definition of cargo claims which includes claims for loss, damage, shortage (including pilferage), overcarriage, delay, and any resulting custom dues and fines. Furthermore, claims by a third party claimant for legal costs or interests and defence costs are also included in the definition. 

Sub-clause (b) makes it a precondition to recovery of an indemnity under the Clause that the cargo claim should have been settled or compromised and paid. Hence, it is not sufficient that the claim had been ascertained or agreed.

Sub-clause (c) sets out the Owners’ liability – they are liable for cargo claims caused by unseaworthiness of the ship, unless the unseaworthiness was caused by the loading, stowage, lashing or other cargo handling operations, in which case the Charterers are liable in full. Furthermore, Owners are liable for cargo damage caused by Owners’ or their servants’ failure to care for the cargo while on board.

Sub-clause (d) states that the Charterers’ are liable for cargo claims caused by loading, stowage, lashing and other cargo handling operations, unless the Charterers can prove that the damage was caused by unseaworthiness, in which case the Owners will be liable in full.

Sub-clause (e) catches all other cargo claims, which are caused by other items than those listed in Sub-clauses (c) and (d), for example, claims for delay of cargo. They are to be apportioned equally between the Owners and Charterers, unless there is clear and irrefutable evidence that the claim arose out of the act or neglect of one or the other party or their servants or sub-contractors, in which case that party will have to bear the full claim.

Sub-clause (f) provides that if the Charterers’ cargo, or any incomplete or inaccurate documentation relating to such cargo, results in any fines or costs etc. to the Owners, then the Charterers must bear such fines and costs.

Sub-clause (g) provides for either party to bring indemnity claims against the other within two years from the day when the cargo was or should have been delivered. However, where the Hamburg Rules apply compulsorily the time bar has been extended to three years. This is to take into account the fact that cargo claims may be brought by third parties under the Hamburg Rules, which provides a two years’ time bar.

Sub-clause (h) states that if either party provides security to a cargo claimant, they are entitled to counter security from the other, provided that they have given written notification of the cargo claim within the time limit in Sub-clause (g), and they provide reciprocal counter security.

Clause 30 – Indemnity and Limitation

There are situations where the Owners or time Charterers will have to pay claims for which the other party is responsible. In such cases, the party that had to pay a claim in the first instance is entitled to an indemnity from the other party. As a means of mitigating their losses, both parties must always try to limit their liability in situations where they are entitled to seek an indemnity.

Clause 31 – Both-to-Blame Collision Clause

This Clause addresses the situation under American law whereby the Owners may become indirectly liable to Owners of the cargo that they have been carrying. Under U.S. law, cargo lost or damaged in a collision are allowed to recover in full from the non-carrying ship, which is entitled to an indemnity from the carrying ship in accordance with its proportion of blame for the collision. Thus, where both ships are to blame, the Owners will be indirectly liable to the owners of the cargo that they are carrying, even if direct action by them is prevented by the Hague Rules. This Clause aims to restore the position under the Hague Rules by giving the Owners a contractual right to recover against its own cargo Owners.

Clause 32 – Himalaya Clause

The aim of the Himalaya Clause is to extend the benefits under the charter party to third parties as listed in the Clause. In view of recent American case law, where ship managers were held not to be covered by a Himalaya Clause, reference to managers has been expressly included in Sub-clause (b). The purpose of the agency provision in Sub-clause (c) is to provide the mechanism whereby the protective clauses in the charter party will be applicable to the third parties listed in the previous Sub-clauses. In other words, the Himalaya Clause extends the protection afforded the Owners and Charterers under the charter party to those working on behalf of them, and the mechanism whereby this is achieved is via the agency device.

Clause 33 – BIMCO General Clause Paramount

This is BIMCO’s paramount clause incorporating the Hague or Hague Visby Rules into the charter party.

Clause 34 – Cargo Import-Export Permits, Taxes and Dues

This Clause puts the responsibility and liability in respect of export and import permits, and associated taxation and levies, on the Charterers. Similarly, taxes and dues on the cargo, freight, and on board cash transactions are for the Charterers’ account.

Clause 35 – Insurance

This provision states what types of insurance cover the parties should have in place during the charter party.

Owners should keep the Vessel insured for hull and machinery risks; basic war risks; and P&I risks. Conversely, Charterers should have in place Charterers’ liability risk, including liability for hull, and P&I cover. Insured values and risk covers should be agreed and stated in the relevant Boxes of Part I. The reference to cover equivalent to the cover provided by members of the International Group of P&I Clubs is intended to provide a benchmark guide indicating that the chosen insurers should be financially sound and have a good market reputation.

Clause 36 – Lien

The first paragraph is a non-lien provision whereby the Charterers undertake not to incur any lien on the Vessel for any services or supplies that are rendered to the ship. Before procuring any services or supplies, the Charterers must obtain from the suppliers a signed statement whereby they acknowledge that the supplies or services are provided solely on the credit of the Charterers and that no lien will attach to the ship in this respect.

The second paragraph of this Clause provides the Owners with a lien on all shipped cargo; freight; subfreights; sub-hire; and other amounts due under the charter, including disbursements made by the Owners that, under the charter party, are the responsibility of the Charterers. However, for the liens in this Clause to apply, the sums claimed must have fallen due for payment at the time when the liens are exercised. The Charterers should incorporate the Owners’ right to lien provision into any contracts of carriage that may be issued under the charter party.

Clause 37 – Smuggling and Possession of Illegal Substances

This Clause clearly allocates responsibility and liability between the parties in respect of smuggling and possession of illegal substances. Under Sub-clause (a), smuggling by the Owners’ Crew will amount to a breach of charter and the Owners will be responsible for any consequences and must hold the Charterers harmless in respect of, for example, fines that may be issued. The ship will be off-hire for any time lost due to such breach.

Conversely, Sub-clause (b) puts a similar responsibility on the Charterers in respect of their crew, passengers or if illegal substances are found in the Cargo Units. In addition to smuggling, this Sub-clause also covers possession of illegal substances. The reason for making a distinction between smuggling and possession of drugs or other illegal substances is that smuggling refers to the moving of goods illegally into or out of a country, while possession covers the situation where a ship is sailing within the same country, so that any drugs on board would not be smuggled, but would still be illegal to possess.

Clause 38 – Drugs and Alcohol Policy

The Owners and Charterers must have in place, and enforce, drugs and alcohol policies that, as a minimum, meet the standards in the latest edition of STCW 1978 (Standards of Training, Certification and Watchkeeping for Seafarers). The ban on drugs extends to prescription drugs if used or abused for purposes other than those for which they were medically prescribed. Alcohol sold to passengers on board the Vessel’s shops, bars and restaurants have been excepted from this Clause.

Clause 39 – MLC 2006 Clause

The ILO Maritime Labour Convention 2006 (MLC 2006) entered into force on 20 August 2013 with the aim to provide comprehensive rights and protection at work for seafarers. The MLC 2006 defines “seafarer” as “any person who is employed or engaged or works in any capacity on board”. This definition may create liabilities on the part of the ship Owners for any persons working on the Vessel, including crew employed by the Charterers who have not traditionally been regarded as seafarers, for example, concessionaires and entertainers. In the event of doubt whether a particular category of persons on board a Vessel is considered to be seafarers, the MLC 2006 provides for the question to be decided on a national basis by each flag state, which may give rise to inconsistencies. It is important to note that it is the shipowners who is ultimately responsible for compliance with the MLC 2006, even in respect of “seafarers” employed by the Charterers.

This Clause, which has been modelled on the MLC 2006 Clause for SUPPLYTIME, is designed to allocate responsibility as between the Owners and Charterers for personnel on board the Vessel not directly employed by the Owners.

The definition of “Charterers’ Personnel” is intended to identify clearly which persons on board the Vessel the Charterers are responsible for in respect of compliance with the MLC 2006.

Sub-clause (a) sets out the main obligations of the Owners and Charterers. The Owners are required to provide the Charterers with a copy of Part I of the Declaration of Maritime Labour Compliance (DMLC) for the Vessel. The DMLC sets out the Owners’ or operators’ plan for ensuring compliance with the MLC 2006 as implemented by the Flag State for the Vessel.

It is in the Owners’ interest to ensure the Charterer is aware of the applicable requirements of the MLC 2006.

The Owner is ultimately responsible for ensuring compliance of all those on board and it is the Owners’ ship that will be subject to delays in the event of non-compliance. The Owners are also in a better position than the Charterers to know what the applicable requirements are as those requirements are set out in the Vessel’s DMLC compiled by the Flag State and the Owner.

Based on the Vessel-specific DMLC provided by the Owners, the Charterers are obliged to comply with a 12 point list of MLC 2006 related requirements that fall within their control for the personnel they place on board the Vessel.

Sub-clause (b) states that prior to boarding any of their personnel, the Charterers are required to provide the Owners with written evidence of their compliance with their obligations under Sub-clause (a). The Owners may also request evidence of compliance from the Charterers at any time after the Charterers’ personnel have boarded the Vessel as part of the Owners’ responsibility to demonstrate continuing compliance.

Sub-clause (c) provides the Owners with an indemnity from the Charterers to protect them against the consequences of the Charterers failing to comply with their obligations under the Clause. Any time lost in this respect is for the Charterers’ account and the Vessel will remain on hire.

Clause 40 – BIMCO Stowaways Clause for Time Charter Parties 2009

This Clause clearly allocate responsibility and liability for costs for stowaways.

Sub-clause (a) places responsibility on the Charterers for stowaways that board the Vessel by hiding in containers or other goods, including stowaways who gain access to the Vessel by any means related to the cargo operation – not just by hiding in containers or other goods. The wording is intended to cover access to the Vessel by stowaways hiding in, for example, cargo grabs or other lifting gear in respect of all cargo shipped, not only that shipped by the Charterers themselves. The Charterers are liable for the consequences of their breach of charter and are obliged to indemnify the Owners of claims, costs, losses, fines and penalties that an Owner might be exposed to in resolving a stowaway situation. Whilst the practical responsibility for dealing with stowaways always rests with the Owners, their P&I Club cover them for the costs thereof; and the Clubs will generally have a recourse action against the Charterers if it can be proved that they were responsible for the stowaways gaining access to the Vessel. The indemnity provision is also intended to deal with the consequences of deviation and having to return to the port where the stowaways boarded the ship, whether due to the Owners’ or the Charterers’ breach. Furthermore, the Charterers are required to place the Owners in funds to put up bail or security. The final sentence of Sub-clause (a) makes it clear that the Vessel is to remain on hire for any time lost due to stowaways as a result of the Charterers’ breach. Sub-clause (b) is the reciprocal of (a) and deals with the Owners’ responsibility for stowaways who gain access to the Vessel by means other than hiding in cargo or through the cargo operation. If the Owners are responsible, the Vessel will be off hire for all time lost due to stowaways.

Clause 41 – Salvage

This Clause provides for an equal division of what is left of the salvage award after deducting that which Owners and Charterers have contributed or sacrificed to enable it to be earned, i.e. the master’s and crew’s proportion; any legal and other expenses, including hire during the salvage; the cost of repairs of damage to the ship caused by the salvage operation; and the cost of Charterers’ consumed fuel.

Clause 42 – General Average

BIMCO’s General Average Clause refers to the York-Antwerp Rules 1994 as the governing rules according to which the adjustment of general average between the parties should be made. Parties should agree the place where general average should be adjusted, stated and settled in Box 32.

Clause 43 – New Jason Clause

The New Jason Clause is aimed at avoiding the situation under U.S. law where the exemption from liability for negligence in the navigation and management of the ship have been held to not have the effect of enabling Owners to recover general average contribution where such negligence caused the casualty.

Clause 44 – Force Majeure

This Clause is modeled on the ICC (International Chamber of Commerce) model Force Majeure Clause 2003 which BIMCO has used to create a “standard” force majeure provision for its contracts. The Clause excuses the performance without liability of the party invoking force majeure if it can show that the alleged force majeure event falls within any of the listed event in the Clause; that its performance is prevented by that event; and that it has taken reasonable steps to avoid or minimise the consequences of the event. Courts tend to interpret force majeure clauses narrowly so that only the events listed or similar events will be considered to be force majeure events. In order for force majeure to operate, the event has to have been completely beyond the parties’ control and they could not have avoided its consequences, nor could it have reasonably foreseen by them. Parties cannot invoke force majeure if they are relying on their own acts or  omissions. A party wishing to invoke force majeure must give notice to the other party in writing within two days from when the event occurred. The Clause, combined with the provisions of Clause 45(a)(v), can give rise to a right of early termination by either party if the force majeure event continues for a period exceeding 15 consecutive days from the date of the event or notification to the other party.

Clause 45 – Early Termination

In line with other BIMCO contracts, the provisions allowing parties to terminate early have all been set out in one Clause.

Sub-clause (a) gives both parties the right to terminate the agreement if an event enumerated in the Clause takes place. These events are: requisition of the Vessel by the government of state of registry of flag; confiscation of the Vessel other than by way of arrest for security purposes; bankruptcy or similar of either party; loss of Vessel; and force majeure event as per Clause 44 lasting more than 15 consecutive days.

The party wishing to terminate must notify the other party. The notice should contain the party’s intention to terminate if the event does not cease within three days after the notice is given. If, after three days from such notice, the event has not ceased the contract can be terminated by following the notice procedure in Clause 53 (Notices). A party will not be able to terminate if it has caused the event. In the event of termination, other rights that the parties may have under the charter will remain. The Charterers will still be liable to pay hire and other payments that are due to the Owners under the charter party up to the date of termination.

Sub-clause (b) provides for immediate termination of the charter party in the event of a repudiatory breach.

The notice procedure under Clause 53 (Notices) must be observed.

Sub-clause (c) deals with maximum allowed periods of off-hire. If there is an off-hire event as per Sub-clause 15(a) or (b) that lasts longer than the agreed periods in Box 33, depending on whether single consecutive periods or combined periods are to apply, then the Charterers are entitled to terminate the contract. If the parties have not agreed and stated the off-hire period in Box 33 the default period will be 20 per cent of the total charter period in the case of a single consecutive period, and 25 per cent in the case of combined periods. Notice to such effect should be given in accordance with Clause 53 (Notices).

Clause 46 – BIMCO Standard ISM Clause for Voyage and Time Charter Parties

BIMCO’s standard ISM Clause.

Clause 47 – BIMCO ISPS/MTSA Clause for Time Charter Parties 2005

The BIMCO ISPS/MTSA Clause for Time Charter Parties 2005 contains all requirements in relation to Owners and Charterers in respect of the ISPS Code (the International Code for the Security of Ships and Port Facilities and amendments to Chapter XI of SOLAS).

Similarly, in case of trading to or from the U.S., the Owners are required to comply with the MTSA Act (US Maritime Transportation Security Act 2002). Relevant certificates are to be made available and presented to the Charterers upon request. Sub-clause (c) provides that delays, costs and expenses in relation to security measures required by the port(s) or relevant authorities are for the Charterers’ account.

Clause 48 – Designated Entities Clause for Charter Parties

The Designated Entities Clause applies in respect of persons or entities (including designated vessels), regardless of where they operate from, whose activities are restricted or prohibited and are identified under United Nations Resolutions, European Union laws and regulations or by the United States of America. It can be seen as a complement to the BIMCO Sanctions Clause for Time Charter Parties below which applies to sanctions imposed against a state. 

The Clause sets out a requirement for Owners and Charterers respectively to warrant that they are not designated entities. The warranty continues throughout the currency of the charter party.

Lists of designated persons and entities are liable to be updated and amended at frequent intervals; details are publically available and, as appropriate, can be monitored. In the event that a party is, or becomes, identified as a designated person or entity, or a designated Vessel, the Clause provides flexibility for the innocent party to act as necessary in the circumstances. It is assumed that, in most cases, guidance will be requested from regulatory authorities but, where this is not available, the charter party can be terminated forthwith or any offending cargo on board discharged.

The Clause contains the customary liberty and indemnity provisions. However, while Owners and Charterers each undertake to indemnify the other for any breach of warranty, this is unlikely to be enforceable where one of the two contracting parties is or becomes designated and, therefore, no longer able to receive or make  any payments. Nevertheless, the provision could have effect where, for example, a breach is attributable to Charterers’ cargo interests.

In contrast to international agreement on designated entities, some states apply their own anti-blocking or similar legislation to counter the effects of a boycott or other targeted action affecting their trading interests. The Clause therefore includes a provision that parties shall not be required to break their own laws. This is a potentially difficult area and legal advice is likely to be needed in the event of tension between regulatory obligations.

Clause 49 – BIMCO Sanctions Clause for Time Charter Parties

The purpose of the sanctions clause is to provide Owners with a means to assess and act on any voyage order issued by a time charterer which might expose the Vessel to the risk of sanctions. The test is one of “reasonable judgement” by the Owners in determining whether the risk of the imposition of sanctions is tangible. As sanctions are often brought into force within a short period of time, the Clause covers the application of sanctions after the Vessel has begun an employment under the charter. Whether the sanctions existed at the time the order of employment was issued or whether they were subsequently applied, the Owners will have the right not to comply with such orders or to refuse to proceed.

 The Owners must advise the Charterers promptly of their refusal to proceed with the voyage and the Charterers must provide alternative voyage orders with 48 hours of being notified by the Owners. Failure by the Charterers to issue alternative voyage orders will result in the Owners having the right to discharge any cargo on board at a safe port at Charterers’ cost. In all circumstances the Vessel will remain on hire and the Charterers will be obliged to indemnify the Owners against any claims brought by the cargo Owners or holders of bills of lading or subCharterers as a consequence of the change of orders or the Owners’ discharge of the cargo.

Clause 50 - War Risks Clause “CONWARTIME 2013”

This is BIMCO’s revised standard war risks clause for time charter parties.

Clause 51 – BIMCO Standard Dispute Resolution Clause 2015

The dispute resolution clause offers four options on arbitration: London (which applies by default if not other venue is agreed); New York; Singapore; and, finally, a free choice of venue as may be agreed between the parties. The mediation provision applies in all circumstances. It is very important that the parties agree which law and arbitration venue is to apply to their contract and that they clearly indicate their choice in Box 35. If you do not indicate your choice of law and arbitration venue, then English law and London arbitration will apply by default.

Clause 52 – Commission

It is the Owners’ obligation to pay commission on earned and paid charter hire to the brokers, the rate and identity of which should be stated in Part I. However, if hire is not paid due to a breach of charter, then the party in breach has to indemnify the broker for the loss of commission. Furthermore, if the charter is cancelled, the Owners have to indemnify the brokers for their lost commission up to a limit of the brokerage on one year’s hire. The final paragraph addresses the situation where, in certain jurisdictions, a party cannot exercise rights under a contract to which it is not a party. Since the brokers are not parties to the charter party, they may have difficulties in obtaining their commission. Therefore, it is expressly stated that the Owners acknowledge their agreement with the brokers to pay commission.

Clause 53 – Notices

This is a general notice provision dealing with how contractual notices should be given and when they should be treated as received.

Clause 54 – Entire Agreement

The purpose of this Clause is to limit the rights of the parties to the written terms of the contract. As such it is intended to exclude representations, written and oral, not intended to be part of the final concluded charter party. It does not mean that the charter party and annex overrides all other contracts that might exist between the parties, for instance contracts concerning other vessels.

Annex A (Vessel Specification)

The Annex to ROPAXTIME provides for the Vessel’s specifications and has been specifically developed to suit RoPax ships.