WINDTIME is a standard time charter party for the transfer of wind farm personnel and equipment to and from offshore wind farm installations. The latest edition of this contract is WINDTIME, issued in 2013.
Copyright in WINDTIME is held by BIMCO.
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The below explanatory notes are also available as an e-book from Witherbys.
Explanatory notes for Offshore Heavylift and Project Cargo Contracts are available as an e-book from Witherbys.
In the offshore windfarm sector, installation and support functions are entirely reliant on the use of specialised vessels ranging from jack-ups to small, high-speed passenger craft. Up until the publication of WINDTIME, offshore wind farm developers have contracted the services of these vessels using standard forms of contract written for the oil and gas sector which are not ideal for the purpose and often require heavy amendment to adapt them. In 2010 representatives of the wind farm sector operating small personnel transfer and support vessels approached BIMCO with a request for assistance in developing a standard contract specific to their needs. BIMCO discovered that there was considerable interest in this documentary project not only from the owners of these vessels, but also from the charterers who are reliant on these small craft during installation work and for ongoing support.
While this sector has become familiar with BIMCO’s widely used SUPPLYTIME agreement, it contains a number of provisions that are simply not relevant to wind farms while lacking specific clauses needed by the trade. This has resulted in an increased amount of work in preparing contracts and often widely varying sets of terms and conditions offered by charterers.
In response to a demand for an offshore wind farm specific time charter party, BIMCO has developed with the assistance of industry experts the WINDTIME Standard Offshore Wind Farm Personnel Transfer and Support Vessel Charter Party. The Charter Party is modelled on SUPPLYTIME 2005 to which the wind farm sector is already familiar, but applies common amendments and additional clauses to create a trade specific contract.
The scope of application of WINDTIME is limited to covering vessels used in the transfer of personnel and equipment to and from offshore wind farm installations. The contract has been developed over a period of two years by a Sub-committee drawn from owners and charterers operating in the wind farm sector, with the assistance of legal and insurance experts.
BIMCO is indebted to the WINDTIME Sub-committee for their considerable efforts in developing this new Standard Charter Party. The members of the Sub-committee are as follows:
At the latter stage of development the Sub-committee released a consultation draft of WINDTIME, inviting feedback from the industry. BIMCO is grateful to all those companies and individuals who took the time to provide the Sub-committee with useful and constructive comments which have been invaluable in finalising the contract for publication.
These notes are intended to provide some of the reasoning behind the provisions of WINDTIME. As WINDTIME has been modelled on SUPPLYTIME 2005 it has been noted in the text where any amendments go beyond a simple tidying up the wording. Cargo specific clauses from SUPPLYTIME that are not relevant to transfer vessel operations, such as the General Average and New Jason clauses, and the Both-to-Blame Collision Clause, have been removed altogether.
The contract follows the common BIMCO pattern of three parts: a Part I box layout where the parties will enter the variable information of the agreement; a Part II terms and conditions; and two annexes which cover the vessel specifications and insurance. All references to “Box” numbers in the explanatory notes mean the boxes in Part I of the contract. It is essential that all Boxes are properly reviewed by the parties and appropriately filled in when concluding the contract.
In common with other BIMCO contracts, a list of definitions is provided at the beginning of terms that have a specific meaning for the purpose of WINDTIME and which appear in several places in the contract.
The definitions section is more extensive than that of SUPPLYTIME with definitions of the terms “Banking Day”; “Day”; “Working Day” and “Working Hours”. Furthermore, the terms “Charterers’ Group” and “Owners’ Group” have been moved from the “Liabilities and Indemnities” Clause to the definitions section since they are referred to in other clauses of WINDTIME.
“Offshore Unit” –In WINDTIME the term has been redefined to refer to specific offshore wind farm related structures and craft.
“Working Day” and “Working Hours” – WINDTIME is a hybrid of a conventional time charter party in that the small crew transfer vessels used by the wind farm industry do not generally operate on a 24 hour basis as would a regular merchant vessel. The working day is commonly 12 hours. The parties are free to agree the number of hours per day in Box 24 that will constitute the Working Day. 24 hour working days are by special arrangement only.
Sub-clause (a) – The period of time that the charterers agree to hire the vessel from the owners should be stated in Box 9 of Part I. This period not only governs the contract period but is also used to determine the cap on the liability of each party to the other (see Clause 16(c)).
Sub-clause (b) – The charterers can extend the charter period provided that advance notice is given and that an applicable rate of hire for the extended period has been agreed. The period of extension and the number of days’ notice required to declare the option should be stated in Box 10.
Sub-clause (c) – In order to prevent a potential situation where the charterers may be forced to interrupt a task because the contract has come to an end, the charter period is automatically extended for the amount of time required to complete the immediate task, but not longer than stated in Box 11.
The rate of hire applicable to any automatic extension period is the rate of hire stated in Box 22 (Charter hire).
Sub-clause (a) (Delivery) – This Sub-clause deals with delivery. All the references to cargo and cleaning of tanks found in SUPPLYTIME have been removed as they are not relevant to wind farm transfer vessels.
The “delivery window” (the dates between the earliest date of delivery of the vessel and the latest date for delivery) and place of delivery should be stated in Boxes 5, 6 and 7 respectively.
To reflect the lengthy and costly project preparation in wind farm projects and the consequent critical importance of the vessel arriving when expected, the owners are required to exercise reasonable endeavours to keep the charterers informed of the vessel’s estimated time of arrival at the delivery place.
Sub-clause (b) (Mobilisation) – As is common practice in the industry, a mobilisation charge is payable by the charterers. The sum and when it is due should be stated in Box 12.
Sub-clause (c) (Cancelling) – This Sub-clause gives the charterers an entitlement to cancel the contract if the vessel is not delivered by the agreed cancelling date. However, the Sub-clause also recognises that cancellation is not always an optimal solution for the charterers as they may not be able to obtain a substitute vessel at short notice. To avoid unexpected delays and the potential overall consequence on the project, if the owners know or expect that the vessel will be late, they are obliged to notify the charterers and propose a new delivery date. The charterers do not have to accept the new delivery date and can choose simply to cancel the contract at that point. What is important is that they have been informed in advance of the delayed arrival of the vessel so that there is an opportunity to mitigate the delay either by adjusting their project schedule to take the new arrival date into account or by acquiring an alternative vessel available on the required date.
Sub-clauses (d), (e) and (f) provide the parties with three options as to how liability for late delivery and cancellation of the charter party should be dealt with under the contract.
Sub-clause (d) (which is the current position under SUPPLYTIME) provides that the charterers can cancel the contract without liability on either party for losses caused by reason of the non-delivery or
Sub-clause (e) provides that the parties retain their right to claim general contractual damages in the event of late delivery or cancellation.
Sub-clause (f) is the default option in the event the parties fail to state their preferred option in Box 15.
It provides for liquidated damages to be payable by the owners in case of late delivery of the vessel after the agreed cancelling date.
Although a liquidated damages provision for late delivery is a relatively novel provision in a BIMCO contract, it has been added to take into account the large stand-by costs and costs of hiring a substitute vessel (if one is even available) that the charterers face in the event the chartered vessel does not show up by the cancelling date. The objective is to provide a strong incentive to the owners to ensure timely delivery but at the same to strike a fair balance of risk allocation between the parties.
The parties are free to set the level of liquidated damages payable, but if no agreement is reached then a rate equivalent to the daily rate of hire will apply. Box 14 provides space for the parties to state the daily amount of liquidated damages payable as well as the maximum amount or number of days applicable.
Sub-clause (a) (Redelivery) – This clause deals with the redelivery of the vessel, either at the end of the agreed charter period or the earlier termination of the contract. The agreed redelivery notices to be given by the charterers should be stated in Box 8 (ii).
Sub-clause (b) (Demobilisation) – A lump sum demobilisation fee is payable either when charter reaches the end of the agreed period or on the earlier termination of the contract as per clause 31 (a) (Early Termination – At Charterers’ Convenience) or 31 (c) (Early Termination – Default).
Sub-clause (a) – The owners have an obligation to deliver the vessel in all respects fit for the service it will undertake during the charter period. Furthermore, the owners must ensure that at the time of delivery the vessel is classed as per Annex “A” and that it is in a thorough efficient state. Should the vessel not be classed, which is not always a mandatory requirement for small transfer vessels, approval by a relevant regulatory authority is necessary.
Sub-clause (b) – After delivery of the vessel and 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 in class and as specified in Annex “A” and fit for the intended services as per clause 7 (Employment and Area of Operation).
From time to time charterers may wish to make minor structural alterations to the vessel and place their own equipment on board. Since the owners often do not have the specialist knowledge required to maintain such equipment the responsibility for repairs and maintenance rests with the charterers.
However, the owners may, at the charterers’ expense, undertake repairs or maintenance work to the charterers’ equipment if necessary for the safe and efficient performance of the vessel. To avoid the possible duplication of work caused by the charterers sending teams on board to do work already undertaken by the owners, the clause requires the owners to notify the charterers about any repairs or maintenance that is needed and that the owners will do the work.
Sub-clause (a) –In order to reflect industry practice, WINDTIME incorporates a health, safety, quality and environmental (HSQE) vessel audit clause in conjunction with the traditional vessel survey clause. Care has been taken to provide that the carrying out of such audits and surveys will not interrupt or delay the working or operation of the vessel.
Sub-clause (b) – The parties should jointly conduct an in-water survey, or if stated in Box 17, appoint and share the cost of an independent surveyor, to determine the condition of the vessel, any equipment, and the quality and quantity of fuel, lubricants and water on delivery and redelivery.
This clause deals with how the vessel may be used and operated.
Sub-clause (a) – Reference is made to Boxes 18 and 19 where the parties should state which area the vessel will operate within and the nature of the agreed services. The term “offshore activities” used in SUPPLYTIME has been deleted since wind farm sites may be, strictly speaking, located “offshore”, “inshore” or “near-shore”.
Consistent with SUPPLYTIME, reference is made to the use of the vessel as a diving platform and for the operation of Remotely Operated Vehicles (ROVs), such as underwater cameras, as these are commonplace activities in the offshore wind farm sector. A box is included in Part I to indicate if diving and/or ROV operations are required. It is important to note that this means that unless Box 20 is completed, the charterers will not have permission to carry out diving or ROV operations from the vessel. This restriction is in place because when the vessel is used for diving/ROV operations additional insurance may be required.
Sub-clause (b) – It is up to the charterers to obtain and pay for the relevant permissions and licenses that are required for the vessel to operate in the given area.
Sub-clause (c) (The Vessel’s Space) – This Sub-clause deals with how the vessel’s space may be used during the currency of the charter party. While it is important that the charterers can make use of the whole chartered vessel, sufficient space needs to be allocated to the crew, and for stores, gear and equipment necessary to operate the vessel.
Sub-clause (c)(i) – If people other than the vessel’s crew are carried it is important that they are not paying fares since this could result in the vessel being considered a passenger ship with additional rules and regulations for the vessel to adhere to.
Sub-clause (c)(ii) – Goods belonging to the charterers may be carried on or under deck. Although reference is made to “cargo” in Clause 7, it is in the context of charterers’ own goods and equipment placed on board for transportation to or from offshore wind farm sites.
Sub-clause (c)(iii) – The charterers may carry explosives and dangerous goods provided they notify the owners; the owners have obtained any necessary approval from the relevant Flag State and that the charterers otherwise comply with applicable regulations in respect of the carriage of dangerous goods. If the charterers fail to notify the owners they will have to indemnify them in respect of any loss or damage that might occur. Any additional expenses that the owners may incur as a result of the carriage of dangerous goods will be for the charterers’ account.
Sub-clause (c)(iv) – The charterers may also carry toxic or noxious cargo if notification is given to the owners and applicable regulations are followed. Reference is made to Clause 16 (f) (Liabilities and
Indemnities – Toxic or Noxious Substances) whereby the charterers take the full responsibility and agree to indemnify the owners for losses, damages or liabilities which are caused by the charterers’ orders to carry such substances.
The “Laying-up of Vessel” provisions found in SUPPLYTIME have not been included in WINDTIME. The reason for this is there are such a great number of issues concerned with layup that if the parties want to do this they should deal with it on a case by case basis and in a much more elaborate way than the present clause in SUPPLYTIME does.
Sub-clause (a) (Working Hours) – One of the characteristics of the operation of personnel and equipment transfer vessels is that at present they do not commonly work 24 hours a day on a continuous basis. The practice of the trade is to agree shift periods and rates of charter hire for specifically agreed periods. The term “Working Day” that appears in this Sub-clause is therefore included in the definitions section where further reference is made to Box 24 where the parties should state the actual times and number of hours per day that should constitute a Working Day for the purpose of their agreement.
Sub-clause (a)(i) – The vessel and Master will be at the charterers’ service during the agreed working day of the contract.
Sub-clause (a)(ii) – Should the charterers wish to use the vessel outside the agreed Working Day in any one day they must notify the owners as soon as possible. The owners’ ability to agree to additional working hours is restricted by the crew working hours which must not exceed those permitted by any applicable laws and regulations. In contrast to SUPPLYTIME the charterers under WINDTIME have to pay an hourly rate as agreed in Box 22 for their use of the vessel in excess of the agreed Working Day. The time it takes to make the vessel ready at the beginning of a Working Day and vice versa to shut the vessel down at the end of the Working Day is included in the crew’s working hours.
Sub-clause (a)(iii) – To provide the parties with flexibility, the originally agreed Working Day can be extended to a 24 hour working day provided the charterers’ give sufficient notice to the owners as agreed in Box 25. However, it should be noted that for owners to provide 24 hour working, it will be necessary for them to obtain a second crew for the vessel. This means that “sufficient” notice may be in the region of two or three weeks.
Sub-clause (b)(i) – (iii) (Cargo Documents) – It is not intended that cargo belonging to third parties should be carried on board the vessel under WINDTIME in exchange for freight payments. Therefore, no bills of lading should be issued for any charterers’ cargo carried under WINDTIME and the Master should only sign cargo documents which function only as a receipt and are non-negotiable. The charterers are also required to indemnify the owners against any liabilities that could arise as a consequence of the Master signing such cargo documents, but only to the extent that the liabilities are greater than those assumed under WINDTIME.
Sub-clause (c) (Crew Tasks) – This Sub-clause sets out the various tasks which the vessel’s crew will undertake. If the vessel’s crew is prevented by port regulations or unions from performing the listed tasks then the charterers must make other arrangements at their own expense, but under the supervision of the Master so that nothing is done that may damage the vessel.
Sub-clause (d) (Vessel Operation) – In respect of the operation of the vessel the charterers should provide the Master with all instructions and sailing directions. The Master and engineer must make their logs available to the charterers. The operational control of the vessel remains with the owners throughout the charter party.
Sub-clause (e) (Offshore Accommodation and Meals) – A common issue of dispute in the wind farm sector relates to the payment of accommodation and meals for the Master, officers and crew should the vessel should remain offshore overnight at an accommodation facility. This Sub-clause has been included together with Box 16 to help resolve this issue. The parties should state who is to provide and pay for offshore accommodation and meals, failing which the responsibility will rest with the charterers.
In contrast to SUPPLYTIME which deals only with the conduct of the Master, officers and crew, the conduct of the charterers’ personnel while on board the vessel is dealt with in WINDTIME under a new sub-clause.
Sub-clause (a) – Since inappropriate behaviour on board could very easily compromise the safety of the vessel and those on board, the Master is given the right to refuse to carry charterers’ personnel 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) – This Sub-clause mirrors the SUPPLYTIME version by requiring the owners to investigate and take appropriate action in respect of complaints received by the charterers regarding the behaviour of the owners’ personnel.
This clause sets out in a straightforward way what the owners must provide and pay for under the contract. Compared with SUPPLYTIME, the provision of “lubricants” is for the owners’ account rather than the charterers. Furthermore, “de-ratisation certificates” has been amended to “sanitation certificates” to reflect current terminology. The owners are required to refund the charterers for any sums that they or their agents might have paid on their behalf in respect of the enumerated items in the clause.
The part of the equivalent clause in SUPPLYTIME that provides that the vessel should be equipped with towing and anchor handling equipment has been deleted since the vessels used in wind farm personnel transfer operations are neither equipped nor sufficiently robust to undertake towing and anchor handling operations.
This clause sets out in an equally straightforward manner what the charterers must provide and pay for under the charter party.
Sub-clause (a) – As mentioned above, in contrast to SUPPLYTIME lubricants has been moved to the owners’ list of items to provide and pay for. The wording “fire-fighting foam and transport thereof”, which appears in SUPPLYTIME but is not applicable in the context of WINDTIME, has been deleted.
Sub-clause (b) – This Sub-clause deals with what the charterers should provide and pay for in respect of loading and unloading of cargoes. It is the same as the wording in SUPPLYTIME but for a few amendments reflecting that although the charterers’ goods may be shipped under this contract, it is not the main purpose of the services. Accordingly, reference to bulk cargo discharge hoses has been deleted. The term “offshore works” has been changed to “services under this Charter Party” as a matter of clarification.
Sub-clause (c) – At the time of the agreement or latest by the time of delivery, the charterers should provide any necessary documents and operational plans to the owners relating to the safe and efficient operation of the vessel. On redelivery the owners must return these documents to the charterers. The parties are reminded of their confidentiality undertaking in Clause 33 (Confidentiality).
Sub-clause (d) – Costs relating to custom clearance and import duties are for the charterers’ account.
Sub-clause (e) – The replacement of lifting slings or wires and fuel transfer hoses, together with accessories, are for the charterers’ account, unless the damage or loss has been caused by the negligence of the owners.
Sub-clause (f) – This clause requires the charterers to provide and pay for visas and working permits for their own personnel and any costs relating to such personnel if they have embarked on the vessel without the necessary documentation in order.
Sub-clauses (g) and (h) have been improved over the SUPPLYTIME wording by dividing the financial responsibility for illegal smuggling into two sub-clauses clearly allocating responsibility between the parties in respect of costs and time lost.
Sub-clause (g) – Any fines or other related costs that would arise in connection with the discovery of contraband, un-manifested drugs or cargoes that have been shipped in the charterers’ cargo or in containers provided by the charterers will be for the charterers’ account. If there is a delay as the result of such a discovery the vessel will remain on hire.
Sub-clause (h) – If contraband, un-manifested drugs or cargoes are found on board the vessel in other places than as described in the previous Sub-clause this may be an indication that such items were placed there by the owners’ personnel. In such cases, the owners are required to provide financial security in respect of fines and other related costs and the vessel will be off hire for any time lost.
One of the distinctive features of WINDTIME is that charterers do not take over and pay for the bunkers as they would under a conventional time charter party. This reflects the practice of the trade and the fact that transfer vessels normally carry only a small quantity of fuel. Instead, the charterers will pay at the end of the charter period for the bunkers actually consumed. As a result there is no need in WINDTIME for a provision dealing with the minimum quantity of bunkers required on delivery and redelivery.
Sub-clause (a) – If the vessel is redelivered with a lesser quantity of bunkers than at delivery the charterers pay the owners for the shortfall. Conversely, if the vessel is redelivered with a greater quantity of bunkers than on delivery, the owners pay the charterers for the excess amount of fuel. The cost of any shortfall or excess payable by the parties is determined by the price prevailing at the port and at the time of redelivery.
Sub-clause (b) – This Sub-clause provides guidelines in respect of the supply of bunkers. Reference is made to Box 21 where the owners should state the required specifications and grades for fuel supplied by the charterers. Further reference is made to ISO standard 8217:2010 or subsequent amendments and applicable MARPOL provisions. The parties may wish to check beforehand that fuel supplies of ISO 8217:2010 are readily available in the area of operation. The crew must co-operate with the bunker suppliers during bunkering operations to render assistance where necessary.
Sub-clause (c) – Should the fuel supplied not be in accordance with Sub-clause (b) above the charterers will have to take full responsibility for any resulting loss or damage. Accordingly, the owners will not be responsible for any reduction in speed or increased bunker consumption that may occur as a result of the supply of unsuitable fuels and any time lost will be for the charterers’ account. The rationale behind this provision is that in practice it is the charterers who source and pay for the bunkers directly from the bunker suppliers and who should, therefore, assume the risk in respect of the quality of the bunkers. Should there be something wrong with the fuel, the charterers can claim under their bunker supply contract.
This is BIMCO’s standard ISPS/MTSA clause for time charter parties that was published on 15 June 2005 by Special Circular No. 5. The reason for including an ISPS Clause for such small vessels is that if they carry 12 or more charterers’ personnel and operate in international waters, they will be considered passenger vessels for the purpose of the ISPS Code.
Sub-clause (a) (Hire) – The parties should state the agreed hire rate and currency in Box 22. The hire rate is per Working Day or pro rata for part of the Working Day.
Sub-clause (b) (Extension Hire) – If the charterers want to extend the charter period in accordance with Sub-clause 1 (b) (Charter Period) the parties have to agree on the hire rate for the additional period, failing which the option to extend cannot be exercised. At the signing of the agreement the parties have the possibility to state the extension hire rate in Box 23 or it can be agreed later.
Sub-clause (c) (Adjustment of Hire) – The owners have the option to adjust the hire to reflect documented changes in the owners’ costs arising out of changes in the charterers’ requirements or laws and regulations governing the vessel, crew, charter party or its application. The changes that may be taken into account must have taken place after the date of the charter party or after the commencement of employment of the vessel, whichever is the earlier.
Sub-clause (d) (Invoicing) – This Sub-clause describes the invoicing procedure. Owners’ invoices to charterers should be issued in the charter hire currency stated in Box 22. The parties must specify in Box 26 if the monthly invoicing is to be done in advance or arrears; by whom and addressed to whom.
Sub-clause (e) (Payments) – This Sub-clause sets out the procedure for payment of the owners’ invoices in respect of hire and disbursements made for the charterers’ account. The parties should state the number of days within which such invoices should be paid in Box 28. Payment must be made in full in the currency and into the account as set out in Boxes 22 and 27 respectively. The charterers may only deduct from hire any advances made for disbursements on behalf of the owners and which have been approved by the owners. Interest on late payments will start to count on the sixth banking day after the agreed due date. If the charterers contest an invoice they must notify the owners before the due date and specify their reasons. The portion of the invoice which is undisputed should be paid as normal but the disputed amount may be withheld if the charterers can put forward reasonable grounds for their non-payment. Should the charterers’ claim be valid the owners must issue an adjusted invoice. If, however, the owners can prove that their claim was valid then the charterers must pay the balance within 5 days after the dispute is resolved. In such cases interest on the disputed amount will be charged at the agreed rate.
Sub-clause (f) (Suspension and Withdrawal) – This Sub-clause regarding suspension of performance and withdrawal of the ship mirrors the equivalent provision in SUPPLYTIME (with the exception of the indemnity provision for liabilities under bills of lading which is not applicable to WINDTIME). In this context it is important for the parties to be aware that in the absence of any indication to the contrary, the time for payment will expire at midnight on the due date and that it is necessary to make it clear when issuing a notice for late payment of hire that, in the absence of payment, the vessel will be withdrawn. Any owner contemplating withdrawing a vessel from a time charter would be well advised to first consult with their P&I Club or legal counsel because an incorrectly issued notice of withdrawal may result in the owners being in breach.
Sub-clause (f)(i) – This “anti-technicality” clause provides that where there has been a delay in the payment of hire the owners must send a notice in writing to the charterers of their failure to pay hire. The owners may then choose to suspend performance, either in total or selectively, until the due hire has been paid. During such suspension hire will remain payable. The owners are not required to give formal notice to the charterers that they are suspending performance. They are, however, required to let the charterers know that performance has been suspended if they choose to exercise their right. This is a very effective and flexible commercial tool that permits owners to bring pressure to bear on charterers to the extent necessary to respond to a particular non-payment event.
Sub-clause (f)(ii) – If after the five days of grace period the hire due has still not been paid the owners may withdraw the vessel and terminate the contract. Sub-clause (f) (ii) (1) makes it clear that the owners’ right to withdraw should be exercised “promptly” and in writing, and that it is not dependent upon a previous suspension of performance. In most cases this will mean that a notice of withdrawal should be given within a matter of days of the failure to pay following the grace period. If the owners take longer, say more than a week, to issue the withdrawal notice, it could be argued they have by their own delayed reaction waived their right to withdraw. According to Sub-clause (f) (ii) (2), if the charterers pay the outstanding hire after the grace period has expired but before the withdrawal notice, the option for the owners to withdraw the vessel remains open.
Sub-clause (f)(iii) – This Sub-clause is a “non-waiver” provision giving the owners right to apply the provisions of the clause to subsequent late payments even if the owners do not exercise their rights on an earlier default.
Sub-clause (g) – Finally, this Sub-clause provides the charterers with the opportunity to appoint an independent accountant to audit the owners’ books directly related to work performed under this charter party in order to determine the validity of the owners’ charges.
The equivalent clause in SUPPLYTIME is called “Suspension of Hire”. The name has been changed to “off hire” since this is the most common term for what the clause deals with.
Sub-clause (a) – No hire is payable if the vessel is prevented from working as a result of a number of incidents for which the owners are traditionally responsible. This includes for example deficiency or default of crew, breakdown of the vessel’s machinery (except machinery that has been installed by the charterers under the contract) and damage to hull. There are a number of exceptions to this rule enumerated in a list in the clause. The vessel will remain on hire if, for example, the vessel is prevented from working because of the carriage of dangerous or toxic cargo as per Clause 7 (c) (iii) – (iv); quarantine; deviation at charterers’ request; damage and detention by ice.
Sub-clause (b) (Liability for Vessel not Working) – The starting point of the clause is that the owners’ liability is limited to suspension of hire and that claims for other losses such as loss of profit etc. are excluded. However, and in contrast to SUPPLYTIME, the owners will be liable beyond the suspension of hire where they have not exercised due diligence to maintain the Vessel in accordance with Clause 4(b)(Condition of the Vessel) throughout the period of the charter party.
Sub-clause (c) (Maintenance) – Consistent with SUPPLYTIME, the owners are granted a regular monthly “maintenance allowance” during the charter period whereby the vessel will remain on hire while undergoing essential maintenance. The allowance under WINDTIME is equal to one “Working Day” (normally 12 hours unless otherwise agreed) per month. The maintenance allowance is accumulative, so any time not used in one particular month is carried over to subsequent months. If the maintenance allowance is used up but the owners have not yet completed the maintenance work, the vessel will immediately be placed off-hire.
In order to minimise the interruption of services, the owners should try to carry out maintenance work when the vessel is not immediately required for service by the charterers. Owners are encouraged to discuss their planned maintenance programme with charterers to help minimise any inconvenience to the charterers’ operations. The vessel remains on hire not only during the actual maintenance work (counted against the available allowance) but also while travelling to and from the port where the maintenance work will be carried out. Travelling time is not counted against the accumulated maintenance allowance, but the chosen maintenance port must be no more than a reasonable transit
time from the wind farm site.
Finally, if the owners don’t use their full maintenance allowance entitlement by the end of the charter period, the charterers are to pay the owners for the unutilised time at the charter hire rate. Sub-clause (d) – If the vessel deviates or puts back so that it becomes off hire in accordance with Subclause 15 (a) the off hire period is to be counted from when the deviation began until the time the vessel is again ready to resume the services required. When resuming services, the vessel must be in a position that is no less favourable to the charterers than where the deviation started.
The vessel will remain on hire if it has to take refuge in port or at anchorage due to bad weather or any cause for which the charterers are responsible.
Sub-clause (e) – This clause deals with off hire if the owners fail to obtain the required insurance policies or if such policies lapse during the currency of the charter party. In such circumstances the charterers will have the right to place the vessel off hire by giving notice to the owners of the lapse. The vessel will remain off hire until the owners provide evidence that the required insurance policies are in place, failing which the charterers will be entitled to terminate the charter party in accordance with Clause 31(b)(vi).
WINDTIME incorporates the knock for knock liability regime that provides the cornerstone of many BIMCO standard offshore contracts and which has proved so effective in the offshore oil and gas sector since its introduction in the mid-70s. The knock for knock principle provides a mechanism whereby each party is responsible for loss of/damage to any of its own property and death of/injury to any of its personnel or that of the entities within its “group” as per the definition section. This responsibility is without recourse to the other party. Each party indemnifies the other party in respect of the losses, damages or other liabilities for which it has assumed responsibility. This mechanism saves time and costs in connection with claims and avoids duplicate or overlapping insurances. The liabilities and indemnities clause in WINDTIME is closely modelled on the equivalent clause in SUPPLYTIME but with the aim to further improve the wording and tailor it to better suit the wind farm industry.
Sub-clause (a)(i) – (ii) (Knock for Knock – Owners/Charterers) – It should be noted that this Sub-clause is not an exclusion of liability. It is a contractual arrangement whereby two parties agree to hold each other harmless and indemnify each other for certain liabilities.
Certain enumerated clauses are excepted from the knock for knock liability regime. For example the charterers will be liable towards the owners for damage or loss caused by the charterers’ carriage of dangerous goods as per Sub-clause 7(c)(iii); and the owners will be liable towards the charterers in respect of pollution costs as per Sub-clause 17(a).
The reference to “neglect” (i.e. negligence) found at lines 637 & 660 of SUPPLYTIME 2005 has been amended in WINDTIME to “gross neglect” to clarify that the knock for knock indemnity expressly includes “gross neglect”, i.e. gross negligence. The position under English law is that the difference between “negligence” and “gross negligence” is one of degree, not kind.
Furthermore, it has been added that if the loss, damage, injury or death resulted from the charterers’ or owners’ group’s act or omission committed with intent or recklessly and with knowledge that such consequences would probably follow then the knock for knock liability regime will not apply. This amendment reflects the fact that due to public policy and general law in some jurisdictions it may not be possible to rely on the knock for knock provisions if there has been wilful misconduct.
Sub-clause (b) (Consequential Damages) – This Sub-clause is based on Clause 25(c) of TOWCON 2008.
When assessing a claim for loss, if the loss is of “profit”, “use” or “production”, whether such loss is direct or indirect arising out of the performance or non-performance of the contract and regardless of fault, the claim is excluded under Sub-clause (i). If the claim for loss does not fall under Sub-clause (i) but it is an indirect or consequential loss, then it will be excluded under Sub-clause (ii). If the party defending the claim for loss is unable to establish that the claim falls under the exclusions in Sub-clauses (i) and (ii) then damages for the loss will be recoverable by the claimant in principle.
Sub-clause (c) (Limitations) – It should be noted that although the number of events that give rise to liabilities under WINDTIME is greater than those under SUPPLYTIME, this has been counterbalanced by the introduction of a cap on certain contractual liabilities. The parties must agree a cap based on a percentage of the total sum of hire in Box 31 – otherwise the cap will be 20 per cent of the total sum of hire due under the charter period. The parties may still have the right to limit liability under international conventions and national laws. By way of mitigation of losses, the parties must always try to limit their liability in situations where they are entitled to seek an indemnity under WINDTIME.
Sub-clause (d) (Mutual Exclusion) – If a party is in repudiatory breach under WINDTIME any claims by the innocent party will not be excluded or limited under the contract.
Sub-clause (e) (Himalaya Clause) –The Himalaya Clause is a commonly used standard provision in BIMCO contracts and is designed to afford the various parties enumerated in the Sub-clause the same protection afforded to the owners and the charterers.
Sub-clause (f) (Toxic or Noxious Substances) – The charterers are responsible for and will hold the owners harmless for damage, loss and liability caused by the charterers’ carriage of toxic or noxious substances.
This clause mirrors the equivalent clause in SUPPLYTIME but has benefited from some tidying up of the wording. It provides a clean cut solution in respect of the parties’ liabilities for pollution.
Sub-clause (a) – This Sub-clause sets out that with the exception of the provisions found in Sub-clause 20(c)(iii) (Saving of life and salvage), in respect of pollution caused within the offshore site, the owners are liable for pollution damage whether actual or threatened when caused by the owners or their personnel.
Sub-clause (b) – In line with the knock-for-knock principle and mirroring Sub-clause (a), this Sub-clause sets out the charterers’ liability for pollution.
Sub-clause (c) – The Charterers have the right to place a representative on board the vessel or at the site of the pollution or threatened incident to monitor the owners’ and the authorities measures to prevent and minimise the pollution damage. A notice of such attendance should be given to the owners beforehand.
The responsibility for wreck removal and associated measures should the vessel become a wreck rests with the owners.
Sub-clause (a)(i) – It is the owners’ obligation to ensure that at the time of delivery and throughout the currency of the charter party the vessel is insured as stated in Annex “B”. The owners are required to insure the vessel with “reputable insurers” which is intended to provide a benchmark guide indicating that the chosen insurers should be financially sound and have a good market reputation. Adequate insurance is an essential aspect for the proper functioning of the knock for knock regime. Failure to obtain and/or maintain insurance cover may result in the charterers terminating the charter party in accordance with the early termination provisions of Clause 31(b)(vi).
Sub-clause (a)(ii) – The same co-insurance provisions found in SUPPLYTIME are used in WINDTIME. Charterers may wish to be named as co-insured on the owners’ policies because of the knock for knock regime on which the contract is based.
Sub-clause (b) – Upon request from the charterers the owners must provide evidence that they have complied with the insurance requirements of the charter party.
This provision deals with salvage and is taken from SUPPLYTIME.
Sub-clause (a) – The vessel has the right (and obligation) to deviate in order to save life at sea. No advanced notice to the charterers is required, but the owners should inform them of the deviation as soon as possible.
Sub-clause (b) – In respect of deviation for purposes other than saving life, the vessel may only deviate if the charterers have given their consent. If the vessel deviates for such other purposes the vessel will be off hire during the salvage operation, and the charterers will entitled to half the salvage award.
Sub-clause (c) – The owners waive their right to any salvage award for salvage of the charterers’ property if the vessel was chartered for that purpose. However, this does affect any entitlement of the Master, officers and crew. This Sub-clause is sometime considered contentious by charterers, but it is nevertheless needed because of the legal requirement to make payments to the crew in a salvage situation and it would not be balanced if owners were liable for this expense. A number of other costs and risks are for the charterers’ account including damage to the vessel, spills, seepage and emission of pollutants. Furthermore, since no salvage award will be due to the owners the vessel will remain on hire during the operation. Finally, the charterers are to indemnify owners for any liability in respect of damage, personal injury and death in connection with the salvage of charterers’ property.
This is the equivalent of Clause 19 (Liens) of SUPPLYTIME. The clause has been labelled “Liens and Claims” as this better reflects the purpose of the clause which, in addition to liens, deals with third party claims during the vessel operation and indemnities. The charterers undertake not to permit any lien over the vessel and, with exception of Clause 16 (Liabilities and Indemnities), to indemnify and hold the owners harmless should any lien or other claims arise due to the charterers.
It is for the charterers to secure the release of the vessel in case of an arrest, unless the arrest was brought about by an act or neglect by the owners.
This clause is based on Clause 20 of SUPPLYTIME. Wording has been added to Sub-clauses (a) and (b) to prevent delays in decision making by the relevant party in respect of the approval for subletting, assigning or loaning of the vessel.
Sub-clause (a) (Charterers) – After approval by the owners the charterers have the right to sublet, assign or loan the vessel to companies that are not competing with the owners. The original charterers will remain responsible to the owners under the charter party. The party to which the vessel is subletted, assigned or loaned will take the role of contractor to the charterer for the purposes of the charter party.
Additional hire is to be paid by the charterers to the owners in the amount agreed in Box 32.
Sub-clause (b) (Owners) – The owners cannot assign or transfer any part of the charter party to a third party without the written approval of the charterers. Even with such approval the owners remain responsible for the performance of the sublet or assigned services.
The owners can at any time substitute the vessel provided they receive prior approval from the charterers. In contrast to the equivalent clause in SUPPLYTIME the wording “of equivalent capability” has been inserted with a view to demonstrate more precisely the required particulars and characteristics of the substituted vessel. Wording has also been added to prevent the charterers from unduly withholding or delaying such approval.
This is BIMCO’s revised standard war risks clause for time charter parties.
The War Cancellation Clause provides the parties with the option to cancel the charter party if war breaks out between any of the countries stated in Box 33.
This is BIMCO’s standard ice clause for time charter parties. It is at the Master’s discretion to assess whether in the ordinary course of events the vessel will not be able to safely enter or remain in an ice bound port or area. Furthermore, the Clause provides that in the event there is a risk that the vessel may be frozen in, the master is free to sail to the nearest “ice-free place”. Finally, the Clause stipulates that any delay or deviation caused by ice does not place the vessel off hire.
This Clause is based on Clause 28 (Health and Safety) of SUPPLYTIME but with the addition of wording requiring the owners to comply not only with regulations relating to health and safety but also the environment.
This is a standard BIMCO wording used in many recently published contracts. The parties mutually agree not to do or permit anything to be done that could result in a breach or infringement of Flag State laws or the laws applicable to the area of operation. This general provision would extend to employment regulations in respect of the crew.
The owners must have a drug and alcohol policy in place which at least meets the standards referred to in the OCIMF (Oil Companies International Marine Forum) Guidelines for the Control of Drugs and Alcohol On board Ship 1995. More information can be found at www.ocimf.com. The ban on drugs extends to prescription drugs if used or abused for purposes other than those for which they were medically prescribed.
The parties pay taxes due on their own respective profits, income and personnel. All other taxes that will
arise out of the operation or use of the vessel during the currency of the charter party will be for the charterers’ account. Hire should be adjusted if there is a change in the owners’ tax burden by reason of change in the area of the vessel’s operation or change in the local regulations or their interpretation after the date of the charter party or the commencement of employment, whichever is earlier.
Sub-clause 31 (a) (At Charterers’ Convenience) – This is an optional clause that applies only if the parties have stated as such in Box 34(i). It provides the charterers with the right to terminate the contract before the end of the charter period, provided they give the owners the prescribed notice and pay the agreed early termination fee as per Box 34(ii) together with the demobilisation fee, and hire and other payments due under the contract at the time of termination.
Sub-clause (b) (For Cause) – This Sub-clause gives both parties the right to terminate the agreement if an event enumerated in the Clause takes place. These events are: requisition of vessel by government of state of registry or flag; confiscation of vessel other than by way of arrest for security purposes; bankruptcy or similar of either party; loss of vessel without substitution of it; force majeure event as per Clause 32 lasting more than 15 consecutive days; and owners’ lack of insurance for the vessel as per Annex “B”.
It should be noted that unlike SUPPLYTIME, breakdown of the vessel and repudiatory breach are no longer included in Sub-clause (b) as events which give “either” party the right to terminate following the stated grace period and the giving of appropriate notices. Repudiatory breach is dealt with in a new Subclause (c) (Default) which reflects the common law position that in the event of a repudiatory breach the ’innocent’ party may terminate immediately by giving notice – that party does not have to give a 3 day grace period as per SUPPLYTIME to permit the party in breach to “rectify”. Breakdown has been removed altogether from the Clause. Firstly, it was felt that the concept of a vessel breakdown under
Sub-clause (b) potentially giving rise to an entitlement by the owners to terminate the charter party was not as intended by the original draftsmen of SUPPLYTIME. Secondly, it was felt to be unclear as to how the provision for “reasonable steps…to remedy the non-performance” of the vessel and the alternative opportunity to provide a substitute vessel were intended to operate in practice. To resolve this matter, the draftsmen of WINDTIME have developed a new Sub-clause (d) (Off hire) of which more detail is set out below.
In respect of Sub-clause (b), 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 of Clause 35. 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 party 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 (c) (Default) – In the event of a repudiatory breach, the party not in repudiatory breach of its obligations may terminate the charter party immediately by following the notice procedure under Clause 35.
Sub-clause (d) (Off hire) – This new Sub-clause replaces the “Breakdown” provision found in Clause 31(b)(v) of SUPPLYTIME. Rather than attempting to deal with liability for breakdowns of equipment or the vessel that prevent the owners from providing the required services, the provision instead focuses on maximum periods of off hire. In the new provision, which is not subject to the 3 days’ notice/3 days’ grace requirements under Sub-clause (b), if there is an off hire event as per Sub-clause 15 (a) that lasts longer than the agreed periods in Box 36, depending on whether single consecutive periods or combined periods are to apply, and the owners have not provided a substitute vessel, then the charterers are entitled to terminate the contract. If the parties have not agreed and stated the breakdown period in Part I 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 the notice clause, Clause 35.
This Clause mirrors the equivalent clause in SUPPLYTIME with the addition of “liquidated damages” to the list of items that will be excluded if the clause is triggered. The Clause is based 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 requires the parties affected by a force majeure situation to make reasonable efforts to minimise the effect of the event. The Clause, combined with the provisions of Clause 31(b)(v), can give rise to a right of termination by either party should the force majeure event continue for a period exceeding 15 consecutive days from the date of
the event or notification to the other party.
This clause is designed to protect the parties from the disclosure of confidential information or data to third parties. The owners and charterers are bound by confidentiality in respect of all information and data that they receive in connection with the performance of the charter party. Both parties must try to ensure that any sub-contractors also abide by this confidentiality undertaking. The Clauses provides certain exceptions where the confidentiality undertaking does not apply, for example regarding information that has already been published in the public domain or which is requested by regulatory authorities.
This is the revised version of the BIMCO Dispute Resolution Clause offering the parties four options on arbitration: London (which applies by default if no 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 jurisdiction and arbitration venue is to apply to their contract and that they clearly indicate their choice in Box 39.
This is a general notice provision dealing with how contractual notices should be given and when they should be treated as received.
This is a standard clause which seeks to avoid a situation where the entire agreement is held to be invalid because a particular provision is deemed by an arbitrator or other competent authority to be illegal, void or unenforceable.
This is a standard wording found in a number of other BIMCO contracts. The purpose of the 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 contract. It does not mean that the charter party, annexes, etc., override all other contracts that might exist between the parties, for instance contracts concerning other vessels.
The purpose of this Clause is to ensure that the headings of the contract are not taken into account for the purpose of interpretation of the text of the clauses.
In most BIMCO contract the parties are labelled in plural, for example in WINDTIME they are labelled as “owners” and “charterers” which are merely labels that point to the identity of each of the parties to the contract. This is normally not an issue and there should be no need to amend the “owners” and “charterers” labels in a charter party to make them singular. However, in order to provide for situations where singular and plural terms need to apply in a particular context, such as the appointment and subsequent reference to one or more surveyors it has been included that the singular includes the plural and vice versa as the context admits or requires.
Annex A (Vessel Specification)
This Annex, which provides for the vessel’s specifications, has been specifically developed to suit offshore wind farm personnel transfer vessels.
Annex B (Insurance)
This Annex is taken from SUPPLYTIME and sets out the various insurance policies that the owners must procure and maintain as per Clause 19 and the cover that the parties have agreed upon. The motor insurance provision found SUPPLYTIME has been deleted as not being relevant under WINDTIME.
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