Circular BIMCO Hull Fouling Clause for Time Charterparties - September 2013

Transcription

1 Background As charterers will be aware, in circumstances where a vessel trades in warm or tropical waters there can be a build-up of marine growth and other fouling organisms on the vessel s hull and underwater areas which may adversely effect the vessel s performance. The position under almost all standard form time charters is that the obligation to maintain the vessel in an efficient condition for the charter service lies with the owners who are obliged to exercise due diligence to ensure that such bottom fouling, or marine growth, will not affect the vessel s performance. The result of this obligation is that owners may from time to time need to dry dock the vessel in order to carry out bottom cleaning operations. The costs of such operations are normally regarded as falling for owners account in terms of risk, cost and time, as being part of the ordinary trading expenses of the vessel, such that owners will not be entitled to seek recovery of such costs from charterers. The position gained judicial authority in the case of the Kitsa [2005] 1 Lloyds Rep 432 where Mr Justice Aikens held that charterers were entitled to give an order concerning the employment of a vessel that involved the vessel trading in warm water ports, and that by doing so the charterer did not commit any breach of the charter. Further, that the risk of a vessel s hull fouling as a result of being inactive in a warm water port as a result of a legitimate order of the charterers was foreseeable by both sides at the time when the charter was entered into. Accordingly, any risk that the vessel s performance would suffer as a result of such hull fouling was a risk accepted by the owners, with the owners having the obligation to clean the hull as appropriate. Notwithstanding that such hull cleaning costs and expenses were incurred as a result of complying with a lawful order of the charterer they were not recoverable by way of an implied indemnity due to the foreseeability of the issue and the acceptance of the risk. This position was to be contrasted with the decision of the commercial court in the RIJN [1981] 2 Lloyds Rep 267 where Mr Justice Mustill found on the facts of that case that the marine growth was not a natural consequence of the vessel remaining in her contractual service but as a result of an abnormally long period which the vessel had spent waiting for cargo as a result of charterers orders leading to excessive growth and that as such it would be unjust if charterers could then seek financial relief for the consequences of the delay by placing the vessel off hire. The approach of the courts has therefore been one of consideration of allocation and acceptance of risk. Normal marine growth as a result of anticipated trade being for owners account, whereas excessive marine growth as a result of charterers orders (whether lawful or unlawful) being seen as an issue for which charterers would be responsible. BIMCO Clause In a circular letter to their members (Special Circular No.3 24 June 2013) BIMCO has suggested a new hull fouling clause (set out in Appendix 1) for time charterparties which aims to identify a point in time where responsibility for cleaning the vessel s hull due to fouling passes from owners to charterers. The clause sets out to differentiate between situations where a vessel is idle, or waiting, in tropical, or seasonal tropical zone waters, where significant marine 1 / 5

2 growth is generally expected, with those where the vessel is idling, or waiting outside such zones. The provision allows the parties to agree the number of days that will be allowed idling in each area before the clause is to take effect. In default a 15 day period will apply. Once the agreed, or default number of days, has elapsed then the vessel s performance warranties relating to speed and consumption, will be suspended until such time as the vessel s bottom can be inspected, and if required cleaned. The costs of the inspection are however for charterers account under the provisions of the clause, and further where it is discovered that the vessel has been fouled then cleaning will also be at charterers cost and time. Where a charterer decides that it is inappropriate to inspect the vessel s bottom, either at the port at which the vessel is currently waiting, or if for other reasons charterers decide that they wish to postpone the cleaning operation, the performance warranties will remain suspended until cleaning has been completed. It is only in circumstances where owners refuse to give permission for cleaning that the performance warranties will be reinstated. Alternatively, charterers obligation in relation to hull cleaning will not operate in circumstances where they can show that the vessel has continued to perform in accordance with the performance warranties. Commentary It is clear that the recommended BIMCO clause places charterers in a far less balanced position in relation to hull fouling than they would have been under the general operation of the common law. Rather than it being the case that the allocation and acceptance of risk in relation to a vessel trading in tropical waters, or seasonal tropical zones, (and indeed any other waters where bottom fouling may occur), is with owners, their having responsibility for the cleaning operations, the entire time, risk and cost is allocated to charterers, save for the limited exception in the amount of trading days agreed, or the 15 day default position. In circumstances where charterers are minded to accept inclusion of the new BIMCO clause specific attention should be given to the number of days set out in sub-clause (a) to ensure that the allocated period is sufficiently long to cover the normal trading history of the port/trade in question. It is further recommended that in circumstances where charterers are prepared to accept the clause, subclause (b) should be deleted as the clause as written allocates entire risk, cost, expense, and time for charterers account. The compromise position should be that all risk, cost, expense and time is allocated evenly between the parties (see further below in relation to a suggested alternative provision). So far as sub-clause (c) is concerned, save for circumstances where there has been an extraordinary delay such that charterers would have been prohibited from seeking to rely on the performance warranties of the vessel, or find themselves in breach, or in a position where any orders given to the vessel could be considered as illegitimate, it is the Club s position that charterers should not accede to the responsibility to cover cleaning costs at charterers risk, cost, expense and time. This is especially the position bearing in mind that the specific and individual nature of a vessel s anti-fouling system and specialist cleaning required could expose charterers to inordinate cost, expense and delay. Similarly the position as set out in sub-clause (c)(i) should not be readily accepted, namely that it will be for the Master to supervise the cleaning operation and for all cleaning to be carried out strictly in accordance with paint manufacturers guidelines, as this gives too wide an authority to owners and makes charterers subject to the requirements of third party coating manufacturers whose guidelines will no doubt be aimed at ensuring that they are protected against any liability suit in relation to the effectiveness of their product. Charterers of course need to be aware that the costs incurred in such cleaning operations, as 2 / 5

3 well as any loss of time, do not fall within the scope of cover provided by the Club and will be an uninsured risk as they have always been. Finally, while sub-provision (e) aims to state that the performance warranties will be reinstated and charterers obligations in respect of inspection and/or cleaning no longer applicable in circumstances where charterers can demonstrate that notwithstanding the exceeding of the limits set out earlier in the provision the vessel has continued to perform in accordance with the charterparty warranties, which at first blush appears to be fair, the reality is that clause (e) sets out no mechanism by which charterers are able to categorically demonstrate that the vessel is performing in accordance with the performance warranties, which could no doubt lead to protracted argument and discussion. Set out at Appendix 2 is a revised version of the BIMCO wording which the Club believes is more balanced. Appendix 1 - BIMCO Hull Fouling Clause for Time Charter Parties (a) If, in accordance with Charterers orders, the Vessel remains at or shifts within a place, anchorage and/or berth for an aggregated period exceeding: (i) a period as the parties may agree in writing in a Tropical Zone or Seasonal Tropical Zone*; or (ii) a period as the parties may agree in writing outside such Zones* any warranties concerning speed and consumption shall be suspended pending inspection of the Vessel s underwater parts including, but not limited to, the hull, sea chests, rudder and propeller. *If no such periods are agreed the default periods shall be 15 days. (b) In accordance with sub-clause (a), either party may call for inspection which shall be arranged jointly by Owners and Charterers and undertaken at Charterers risk, cost, expense and time. (c) If, as a result of the inspection either party calls for cleaning of any of the underwater parts, such cleaning shall be undertaken by the Charterers at their risk, cost, expense and time in consultation with the Owners. (i) Cleaning shall always be under the supervision of the Master and, in respect of the underwater hull coating, in accordance with the paint manufacturers recommended guidelines on cleaning, if any. Such cleaning shall be carried out without damage to the Vessel s underwater parts or coating. (ii) If, at the port or place of inspection, cleaning as required under this Sub-clause (c) is not permitted or possible, or if Charterers choose to postpone cleaning, speed and consumption warranties shall remain suspended until such cleaning has been completed. (iii) If, despite the availability of suitable facilities and equipment, Owners nevertheless refuse to permit cleaning, the speed and consumption warranties shall be reinstated from the time of such 3 / 5

4 refusal. (d) Cleaning in accordance with this clause shall always be carried out prior to redelivery. If, nevertheless, Charterers are prevented from carrying out such cleaning, the parties shall, prior to but latest on redelivery, agree a lump sum payment in full and final settlement of Owners costs and expenses arising as a result of or in connection with the need for cleaning pursuant to this clause. (e) If the time limits set out in Sub-clause (a) have been exceeded but the Charterers thereafter demonstrate that the Vessel s performance remains within the limits of this Charter Party the vessel s speed and consumption warranties will be subsequently reinstated and the charterers obligations in respect of inspection and/or cleaning shall no longer be applicable. Appendix 2 Hull Fouling Clause for Time Charter Parties (a) If, in accordance with Charterers orders the vessel remains at, or shifts within a place, anchorage and/or berth for an aggregated period exceeding: (i) a period as the parties may agree in writing in a Tropical Zone or Seasonal Tropical Zone*; or (ii) a period as the parties may agree in writing outside such Zones* any warranties concerning speed and consumption shall be suspended pending inspection of the Vessel s underwater parts, including but not limited to, the hull, sea chests, rudder and propeller. *If no such periods are agreed the default periods shall be 25 days (b) In accordance with sub-clause (a), either party may call for inspection which shall be arranged jointly by Owners and Charterers and undertaken at the joint cost and expense of Owners and Charterers, with all time to count as 50% off hire. (c) If as a result of the inspection either party calls for cleaning of any of the underwater parts, such cleaning shall be undertaken by the Owners and or Charterers at their cost, expense and time as follows: (i) Where such cleaning is as a result of the vessel following lawful orders of Charterers in the anticipated service, all cost, expense and time will be for Owners account and the service conducted at a time suitable and agreed by Charterers. (ii) Where such cleaning is as a result of the vessel following unlawful orders of Charterers, or where Charterers are in breach of the Charter Party, all cost, expense and time will be for Charterers account and the service conducted at a time suitable and agreed by Owners. (iii) Cleaning shall always be under the supervision of the Master and, in respect of the underwater hull coating, so far as reasonable and not resulting in excessive cost, in accordance with the paint manufacturers recommended guidelines on cleaning, if any. Reasonable 4 / 5

5 Powered by TCPDF ( Circular BIMCO Hull Fouling Clause for Time Charterparties - September 2013 endeavours shall apply in order that such cleaning shall be carried out avoiding damage to the Vessel s underwater parts or coating. (iv) If at the port or place of inspection cleaning as required under this Sub-clause (c) is not permitted, or possible, or if Charterers/Owners choose to postpone cleaning, speed and consumption warranties shall remain suspended until such cleaning has been completed. (v) If, despite the availability of suitable facilities and equipment, Owners nevertheless refuse to permit cleaning, the speed and consumption warranties shall be reinstated from the time of such refusal. (d) Cleaning in accordance with this clause shall always be carried out prior to re-delivery. If, nevertheless, Charterers are prevented from carrying out such cleaning, the parties may, prior to but latest on re-delivery, agree a lump sum payment in full and final settlement of Owners costs and expenses arising as a result of, or in connection with, the need for cleaning pursuant to this clause. (e) If the time limits set out in Sub-clause (a) have been exceeded but the Charterers thereafter demonstrate by reference to independent routing and performance analysis that the Vessel s performance remains within the limits of the Charter Party the Vessel s speed and consumption warranties will be subsequently reinstated and the Charterers obligations in respect of inspection and/or cleaning shall no longer be applicable. 65 Leadenhall Street, London EC3A 2AD charterers@themecogroup.co.uk Tel: / 5