BIMCO has today published three standard novation agreements that provide a legal framework to change one of the original parties to a contract.
BIMCO has today published three standard novation agreements that provide a legal framework to change one of the original parties to a contract. Two of the agreements cover time charter parties; one provides for a change of charterer and the other a change of owner. The third agreement deals with a change of buyer under a shipbuilding contract.
Corporate changes such as restructuring, sale of a company or sale of part of a company’s interests may make it necessary to replace an original contracting party. This is achieved by substituting, or “novating” the contract. Until now there has been no standard form of contract for this purpose and parties have had to draft their own provisions. BIMCO’s new agreements provide a useful framework covering many of the legal and practical issues likely to be encountered when novating a contract.
The novation agreements were drafted by a team of legal and commercial experts headed by Francis Sarre of CMB and included Chris Kidd of Ince & Co, and Naoko Kaijo of Thomas Miller.
Francis Sarre, CMB, commenting on the publication of the novation agreements said:
“Having ready-made standard novation agreements available will help make the process of novating contracts a lot simpler and smoother and ensure that the basic legal infrastructure is in place”.
Links to sample copies of the novation agreements and explanatory notes are available online.
For further information, please contact:
Direct: +45 4436 6836
Direct: +45 4436 6811
Notes to Editors
- BIMCO is the world’s largest international shipping association, with 2,200 members in around 130 countries.
- We provide a wide range of services to our global membership – which includes shipowners, operators, managers, brokers and agents.
- BIMCO’s core objective is to facilitate the commercial operations of our members by developing standard contracts and clauses, and providing quality information, advice and education.
- BIMCO promotes fair business practices, free trade and open access to markets and we are a strong advocate for the harmonisation and standardisation of all shipping related activity.
- BIMCO actively promotes the application of globally agreed regulatory instruments – we are accredited as a Non-Governmental Organisation (NGO) with all relevant United Nations agencies and other regulatory entities.