The latest edition of this contract is WRECKFIXED 2010.
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It should be noted that the nature of WRECKFIXED 99 as a Fixed Price - “No Cure, No Pay” Agreement means that there is no provision for weather delays, or other delay payments and that all Extra Costs are for the account of the Contractor.
Because of the payment structure in WRECKFIXED 99, there are no equivalent boxes to WRECKSTAGE 99 Box 13 (Delay Payment Rate), Box 14 (Security Requirements), and Box 16 (Number of Unworkable Days).
There are 17 clauses, all of which are derived from the original WRECKCON Agreement, but which have been specifically tailored to cater for the fixed price, “no cure, no pay” nature of WRECKFIXED 99.
The line numbering adopted in this article relates to the new WRECKFIXED 99 Agreement, unless otherwise stated.
Line 12 of this clause establishes the nature of the Agreement and expressly states that the “services shall be rendered under the principle of no cure, no pay”.
The original WRECKCON sub-clause 5.4 providing indemnity for the removal, disposal or jettison of property has not been included in WRECKFIXED 99, as it is considered that the “hold harmless” provisions of sub-clause 13.2.2 adequately deal with this matter.
The Clubs wanted to reverse the obligation in the new and revised Agreements by placing the burden on the Contractor to obtain any Permits, etc. However, the agreed wording of WRECKFIXED 99 leaves it to the parties to decide this matter on a case by case basis by nominating, in Box 9, the party who will be responsible for obtaining permits, licences, etc.
In particular, the clause has been drafted to reflect the fixed price, “no cure, no pay” nature of the Agreement.
It will be seen at lines 126 - 130 of WRECKFIXED 99 that it is for the Contractor to satisfy himself that his operations will not be subject to governmental control or interference, and this will clearly impose an additional burden upon the Contractor.
In sub-clause 8.2 there is provision for delivery by the Contractor at an alternative place, if the nominated place becomes impossible or unsafe to enter, and the Company is unable to nominate another place. However such delivery is subject to approval by governmental or other authorities.
Sub-clause 8.3 provides for delivery under control of pumps, generators, compressors, etc. and payment for same. The consequences of a failure by the Company to take delivery, and the right of the Contractor to sell the property in such a situation are dealt with under sub-clause 8.4. Finally, sub-clause 8.5 explains that references to the “Vessel” includes parts of the Vessel and/or its cargo and that delivery of such may take place at different times and at different places.
The clause establishes the position between the parties with regard to liability for their own personnel, craft and equipment. The Clubs raised objections to the wording of the WRECKCON Liabilities Clause, in particular to the indemnities in respect of wreck removal or third party claims. The Clubs reasoned that third party claims should be covered by the common law of negligence for which a Contractor can obtain suitable insurance cover, the cost of which will form part of his lump sum price, and that the party liable to remove a subsequent wreck should meet such claims through his own P&I Club cover, or other liability insurance. The result of the discussions with the Clubs is a new and much shorter clause which deals only with loss or damage to property of the Contractor/ Company.
It should also be noted that sub-clause 13.2.1includes the words “excluding portable salvage equipment, materials or stores which are reasonably sacrificed during the disposal or other operations on the Vessel”.
The P&I Clubs have expressed somewhat mixed views regarding this provision. They consider that a “Fixed Price” should be mean a fixed price, but they recognise that problems regarding the deliberate sacrifice of equipment might occur. They are unwilling to agree to a change which imposes a definite liability on the owner for such losses in this version, but the current wording does leave the door open for negotiation.
It is important to note that if it becomes apparent that the Vessel may have to be, for example, sunk with portable salvage equipment remaining on board, and this situation was not originally anticipated, then the details and costs of such equipment should be drawn to the attention of the Company at the earliest opportunity.
In addition, the Clubs requested that WRECKFIXED 99 should not have an equivalent provision to WRECKCON sub-clause 14.4, as it could be used to argue that if the Contractor is liable to a third party and is unable to limit his liability, then the Company should indemnify the Contractor for any excess liability. This could, potentially, result in the Company accepting liabilities in excess of his own limit of liability.
The wording of the clause has been slightly amended from that found in the WRECKCON Agreement in that a claim must be brought either within 12 months of completion or termination of the services, or within 12 months of notification of a claim by a third party, but any suit must be brought within one year of the notification to the party against whom the claim is made.
However, Clause 17 follows the traditional pattern of the BIMCO Law and Arbitration Clause in providing parties with the option to agree to a different jurisdiction and place of arbitration. In addition, should the parties fail to indicate their preference for a particular alternative jurisdiction and place of arbitration then, by default, the dispute will be referred to London arbitration subject to English law.
Copyright in WRECKFIXED 99 is held jointly by the ISU and BIMCO.
(Printed in BIMCO Bulletin No. 6, 1999)
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