Merete L. Greisen
Head of Support & Advice
- (+45) 4436 6863
During the summer of 2021, BIMCO published the latest version of Check Before Fixing, which can be purchased both in print and as an e-book. It has been a very popular tool for decades and it is easy to understand why. It provides the reader with highly practical guidance and tips for avoiding pitfalls when negotiating shipping contracts. It is meant to be a quick reference book for anyone involved with day-to-day commercial shipping. While it also serves as a guide in situations where disputes have already arisen, the aim is for it to be used proactively to evaluate the risk of terms and clauses commonly used in shipping contracts.
While the scope of the book is wide and the content includes both information related to “evergreen” discussions and more contemporary advice, here are just a few examples of how this book is of value when it comes to assessing the risk of agreeing to specific clauses.
A large part of the questions BIMCO’s Support and Advice department get from members relate in one way or the other to calculation of laytime and demurrage. Consequently, there are many references to this subject in Check Before Fixing as disregarding the general principles for how laytime is calculated can be extremely costly.
One particular topic which comes up frequently is when and where a valid notice may be tendered. This is such a crucial point in any laytime calculation as only a validly tendered notice can trigger the running of notice time upon the expiry of which laytime will commence to count.
The content in Check Before Fixing is based on English law and even if there is a strict approach as to when and where a valid notice may be tendered, it is not unusual that owners seek to rely on a notice of readiness tendered at a point in time when the vessel has not yet reached its destination. This can be costly – particularly if the vessel needs to wait for a berth due to congestion. The owners may have carefully negotiated the terms in a manner allowing laytime to commence from the waiting place in case of congestion but if the notice of readiness is not valid when tendered, the laytime may not start as anticipated. Imagine what that means if the vessel has to wait several weeks for a free berth…
Another common laytime discussion is the interrelation between the tendering of notice of readiness and the running of notice time on one hand and the terms agreed for laytime on the other. While it may appear promising that SHINC terms, for example, have been agreed for the running of laytime, it may be costly if the terms related to tendering of notice of readiness and commencement of laytime are NOT amended to cater for situations where ports work around the clock and/or any day of the week. BIMCO has on several occasions heard of situations where a vessel had completed loading or discharging before laytime had even commenced – perhaps also with the result that a large amount was payable as despatch.
When it comes to time charter, it is not surprising that owners and charterers sometimes disagree in relation to off-hire discussions. Another topic which may cause dispute can be where the vessel is to be delivered or redelivered. As with all other charter party terms, it is important that parties to the contract ensure clarity in respect of the terms agreed. It may appear quite easy to agree to terms in the first place, but there may not necessarily be a common interpretation of the clauses agreed.
Ignoring ambiguous terms in relation to off-hire may thus have unexpected consequences, just as you should always consider whether an off-hire provision is based on the “net loss of time” principle or on a “switch on/switch off” principle.
To avoid discussions about whether Indonesia, for example, falls within “Singapore/Japan range” when it comes to the place of delivery / redelivery, it may be necessary to specify exactly what parties are agreeing to. Owners and charterers may also disagree with regard to whether hire is based on local time or GMT/UTC – especially in a high market where each hour of hire makes a big difference.
The above are just examples of situations you can avoid having to discuss if you are aware of some of the pitfalls in commercial shipping. These may have a direct effect on the result of a voyage fixed and can be extremely costly. In Check Before Fixing there is something for everyone and in addition to crucial information related to voyage and time chartering generally, there are plenty of real life examples and valuable information and guidance on topics such as bills of lading and booking notes.
Besides the obvious main subjects mentioned above, Check Before Fixing also contains important guidance on other topics such as infectious or contagious diseases, sanctions, environmental issues, security and cyber security. It is a contemporary reference tool reflecting not just commercial developments but also important basic information about technical issues and other areas of relevance for anyone involved in chartering ships.
There are many more tips in Check Before Fixing and it provides a good foundation of knowledge which has become increasingly relevant in an industry which is developing at a fast pace yet is still based on decades and centuries of experience when it comes to the contractual aspects.
You can purchase a digital, e-reader edition for download or order a traditional paperback book from Witherby Connect. The digital edition includes an easy search tool.
The price for one user of the digital version is the same as one traditional book. Alternatively, you can get access for five digital users for the price of two traditional books. Please note that the multi-user option is not available for online purchase – for this option please contact Witherbys directly at email@example.com.