Charterparty

Charterparty

A Charterparty is the written record of the commercial agreement by which a Shipowner, Disponent Owner, or Ship Operator places a ship, or the carrying capacity of a ship, at the disposal of a Charterer. It is one of the central contracts in shipping because it defines how the ship will be employed, what cargo will be carried, where the ship will trade, how freight or hire will be paid, and how risk will be divided between the parties.

In practical chartering, the Charterparty is much more than a standard printed form. It is the final contractual map of the fixture. It brings together the recap, negotiated amendments, rider clauses, protective clauses, typed additions, deleted printed wording, incorporated documents, and any special trade requirements. A well-drafted Charterparty prevents uncertainty. A poorly drafted Charterparty can turn an otherwise profitable fixture into a dispute over laytime, cargo claims, off-hire, performance, unsafe ports, late payment, or demurrage.

Shipbrokers must therefore understand the structure of Voyage Charterparty, Time Charterparty, and Bareboat Charterparty forms. A Shipbroker does not need to be a lawyer, but a competent Shipbroker must know which form is suitable for the trade, which clauses are commonly amended, which printed clauses may be dangerous, and which additional clauses must be inserted to protect the Principal’s position.

Many charterparty forms have been used for decades. Their age does not necessarily make them obsolete. Some old forms remain in daily use because the market understands them and because courts and arbitrators have interpreted their wording over many years. However, some older forms no longer fit modern trading practice, safety regulation, documentation standards, sanctions compliance, environmental obligations, electronic communication, or contemporary cargo-handling methods. For that reason, standard forms are periodically revised, updated, or replaced.

A Charterparty may be negotiated by telephone, email, messaging, broker recap, or other written exchanges. The binding contract may already exist before the formal Charterparty document is drawn up, provided that the parties have reached agreement on all essential terms and all subjects have been lifted. The document is therefore often a Memorandum of the Agreement, recording a contract that may already have been concluded. Nevertheless, the written Charterparty remains vital because it provides the document that the parties, ship agents, banks, cargo interests, insurers, and arbitrators will later examine.

In some short-sea or coaster trades, the ship may load, carry, discharge, and earn freight before the formal Charterparty is fully produced. In international cargo trades, this is dangerous. Documentary credit requirements, bills of lading, freight payment arrangements, port agency instructions, cargo insurance, and dispute resolution provisions may all depend on the Charterparty wording. For this reason, the Charterparty should be prepared promptly after the fixture is concluded.

Charterparty Forms and Market Practice

Charterparty forms are usually connected with particular trades, cargoes, ship types, or commercial practices. A grain cargo may be fixed on a grain form, coal on a coal form, phosphate on a fertilizer or phosphate form, iron ore on an ore form, and a general dry cargo fixture on a general-purpose form. The correct form matters because the form may contain trade-specific provisions that reflect the operational reality of the cargo.

For example, grain forms may deal with hold inspection, fumigation, cargo separation, shifting boards, trimming, and grain stability requirements. Coal forms may contain special loading customs or terminology. Ore forms may deal with moisture, weight determination, and loading terminal practice. Fertilizer forms may contain unusual loading cost provisions or scale rate language. If the wrong form is selected, the parties may spend much of the negotiation correcting a document that was never designed for the business.

Several international and national organisations have been involved in drafting, revising, approving, and recommending charterparty forms. Some private companies and trade associations have also developed forms for their own cargo programs. In many cases, the shipping market gradually decides which forms survive. A form that is commercially balanced, clear, and familiar is more likely to remain in use. A form that is too one-sided, outdated, or difficult to operate may gradually disappear or survive only with heavy rider amendments.

When selecting a form, the Shipbroker should consider the cargo, ship type, loading and discharging method, trade route, port practice, governing law, arbitration venue, documentary requirements, and the bargaining strength of the parties. The chosen form should support the fixture rather than create avoidable conflict.

Official Charterparty Forms

Official Charterparty Forms are forms that have been issued, agreed, adopted, recommended, or approved by a recognised organisation or trade body. These descriptions are not decorative. They may indicate how the form was created, whether it reflects agreement between owner and charterer interests, and whether the printed wording is expected to remain unchanged.

Agreed: An agreed form is normally the result of negotiation between representative bodies, such as a Shipowner organisation and a Charterer organisation. The printed text is intended to reflect a balanced bargain for a specific trade. In some trades, the printed wording should not be altered unless the bodies responsible for the form have consented or unless the trade practice allows particular amendments. An agreed form can carry strong market authority because it represents a negotiated compromise.

Adopted: A form may be adopted by a chamber of shipping, trade body, or other organisation. Adoption may apply to a form already agreed by other organisations, or to a form that the adopting body considers suitable for a particular trade. Adoption does not always mean the printed text cannot be amended. The practical effect depends on the form and the trade in which it is used.

Recommended: A recommended form is a form whose wording is considered acceptable by the recommending body. However, the printed text may still be amended in negotiation. Many widely used forms are recommended rather than strictly agreed. This means they provide a reliable base, but the parties remain free to delete, alter, or add clauses as the fixture requires.

Approved: Approved is often a general expression indicating that the form has received recognition by an organisation. It may overlap with agreed, adopted, or recommended. The exact meaning should be understood in the context of the form.

Issued: Issued means that the organisation or body has drafted and published the form for use. A form may be issued without necessarily being agreed by all market interests. Users should still review the wording carefully before relying on it.

Charterparty Library

A professional Shipbroker should maintain a Charterparty Library. This should include blank standard forms, current editions, older editions, negotiated examples, rider clauses, addenda, side letters, and final signed copies where available. The purpose is not only storage. A well-maintained library becomes a practical learning tool.

By reviewing past fixtures, a Shipbroker can see which printed clauses were commonly deleted, which rider clauses were inserted, which protections were negotiated, and which wording caused disputes. This is particularly useful for junior brokers who need to understand how market practice modifies standard forms. It is also valuable when a similar cargo, route, or Charterer appears again.

A Charterparty Library should be kept current. Older forms may remain useful, but the broker should know whether a newer edition exists. Modern clauses relating to sanctions, electronic bills of lading, cyber risk, emissions, piracy, war risks, ballast water, anti-corruption, and environmental compliance may be absent from older forms. Using an old form without appropriate rider clauses may expose the Principal to unnecessary risk.

Charterparty Forms Wording

Charterparty Forms Wording must be treated carefully. Except where the form is strictly agreed and not intended for alteration, most forms are used as a negotiating base. The printed clauses may be amended, deleted, or supplemented by rider clauses. The final Charterparty is therefore not only the printed form but the printed form as altered by all agreed additions.

Where printed wording and rider wording conflict, the rider clause may often prevail if it is later and more specific. However, this should not be left to chance. A broker should avoid contradictions between the printed clauses and additional clauses. If a printed clause is not intended to apply, it should be clearly deleted. If a rider clause modifies a printed clause, the relationship between the two should be clear.

Unnecessary clauses should not be inserted simply because they appeared in a previous fixture. A clause suitable for coal may be irrelevant for grain. A clause suitable for time charter may be unsuitable for voyage charter. A clause designed for United States trade may be unnecessary in another route. Copying old rider clauses without review is one of the most common causes of charterparty confusion.

Additional Clauses, Rider Clauses, and Side Clauses

Charterparty forms are commonly supplemented by Additional Clauses (Rider Clauses or Side Clauses). These clauses are typed after the main printed form and form part of the Charterparty. They usually contain negotiated provisions that are too detailed, too specific, or too modern for the printed form.

Additional clauses may cover matters such as laytime, demurrage, despatch, NOR, safe berth, port rotation, cargo operations, agency, bills of lading, cargo claims, sanctions, war risks, piracy, emissions, bunkers, stevedore damage, shifting, tallying, arbitration, protective clauses, commissions, and special cargo requirements.

The additional clauses should be numbered clearly and incorporated expressly. A common method is to state at the foot of the printed form that “Additional Clauses 31 to 60 inclusive, as attached, are deemed incorporated into and form part of this Charterparty.” The numbering should be consistent. Missing numbers, duplicated clause numbers, or unincorporated attachments can create avoidable disputes.

When rider clauses are used, every clause should be checked against the recap. The Charterparty must reflect the fixture, not the broker’s memory of a previous deal. If the recap and the final Charterparty conflict, the parties may later argue over which document prevails. The safest practice is to ensure the Charterparty accurately and completely records the recap terms and all later agreed amendments.

Addendum vs Side Letter

An Addendum is a document added to the Charterparty to record additional terms. It may be used where the parties want to add further clauses after the fixture or where certain commercial details are intended to remain confidential from third parties. For example, the main Charterparty may refer to freight or hire “as agreed,” while the actual figure is stated in an addendum shared only between the contracting parties and their authorised representatives.

An addendum is closely connected to the Charterparty. It should be dated, numbered, signed, and clearly linked to the main Charterparty. If several addenda are issued, they should be numbered in sequence. This prevents confusion over which addendum applies and whether a later addendum replaced or merely supplemented an earlier one.

A Side Letter is a separate document that may record a collateral or confidential arrangement connected with the Charterparty. It may deal with a guarantee, performance assurance, payment arrangement, indemnity, or another issue the parties do not want included in the main circulated Charterparty. A side letter may be commercially useful, but it should be drafted carefully because questions may arise about its legal status, enforceability, confidentiality, and relationship with the Charterparty.

The practical difference is that an addendum is usually treated as an integral addition to the Charterparty, while a side letter may be viewed as a related but more separate arrangement. If the parties want a side letter to have binding contractual effect, the wording should say so expressly. It should identify the Charterparty, the parties, the obligations, and whether it prevails over inconsistent terms.

Back-to-Back Charterparty

A Back-to-Back Charterparty is used when a head Charterer sub-lets the ship to a sub-Charterer on terms that are intended to mirror the head Charterparty. The purpose is to prevent the head Charterer from being exposed to obligations in one contract that cannot be passed down or recovered under the other.

Back-to-back drafting is particularly important for time charter trip and voyage sub-charters. If the head Charterparty contains a strict laytime regime, sanctions clause, cargo exclusion, safe port obligation, or bill of lading requirement, the head Charterer will normally want equivalent protection in the sub-charter. If the sub-charter is looser or inconsistent, the head Charterer may be caught between two different obligations.

True back-to-back drafting requires more than copying clauses. The broker or lawyer must check whether references to Shipowner, Charterer, cargo, ports, hire, freight, demurrage, notices, and arbitration operate correctly in the sub-contract. A clause copied without adjustment may produce an unintended result because the party positions differ.

Drawing Up Charterparty

Drawing Up Charterparty is usually the responsibility of the Charterer’s Shipbroker after negotiations have concluded, unless the parties agree otherwise. The broker should prepare the document promptly, using the agreed form, the recap, and all agreed clauses. The printed form must be amended where necessary, rider clauses attached, and any addendum or side letter prepared in accordance with instructions.

The broker must avoid inserting clauses that were not agreed. Equally, the broker must not omit clauses that were agreed. If a protective clause is to be incorporated, the full wording should normally be included rather than merely mentioned, unless the contract clearly incorporates a known wording by reference and the parties understand exactly what is incorporated.

The draft Charterparty should be checked before signature. Ideally, both Principals and both brokers review the document and confirm that it reflects the fixture. In practice, global time zones and operational urgency may make full review difficult. Even so, the broker should circulate the draft quickly and invite prompt comments. Errors discovered at this stage can be corrected before they become disputes.

Where the Shipowner’s broker identifies an error, it should be raised with the Charterer’s broker and corrected by agreement. No broker should unilaterally change the final agreement. The Charterparty is not a new negotiation. It is the written evidence of the agreement already reached.

Online Charterparty Form Editors

Modern chartering offices increasingly use digital charterparty editing systems. These tools reduce drafting time, preserve standard wording, allow electronic circulation, and make it easier to compare changes. They are useful in busy broking offices where many fixtures must be documented quickly.

Digital systems can store approved templates, prevent accidental changes to standard wording, and allow edited versions to be circulated by email. They can also help brokers maintain clause libraries and previous fixture records. However, software cannot replace commercial judgment. A broker must still know which clauses are required, which terms conflict, and which wording protects the Principal.

Electronic drafting also increases the need for version control. The parties should know which draft is current, which clauses have been agreed, and whether comments are accepted or rejected. The final signed or agreed version should be stored securely.

Signing Charterparty Forms

Signing Charterparty Forms must be handled carefully. A Shipbroker signing for a Principal should have authority and should state clearly the capacity in which the broker signs. If the broker signs without making the agency capacity clear, there is a risk that the broker may appear to be a contracting party.

The signature should identify that the broker signs for and on behalf of the named Principal, and should include wording such as As Agents or Brokers Only. This helps show that the broker is not assuming personal contractual liability. The authority to sign may come by email, written instruction, power of attorney, or established course of dealing, but the broker should not assume authority where none exists.

Addenda and side letters should be signed with the same care as the main Charterparty. If an addendum changes freight, hire, arbitration, guarantee, cargo obligations, or liability, it must be properly authorised and executed. A confidential document can still create major legal consequences.

Original Charterparty Forms

Original Charterparty Forms may be required for documentary credits, banking purposes, cargo sale contracts, or internal company records. If more than one original is issued, each should be clearly marked, such as First Original, Second Original, or Third Original. This helps avoid confusion over authenticity and prevents inconsistent versions from circulating.

In modern practice, scanned copies and electronic signatures are common, but original documents may still matter where a letter of credit, court, arbitration tribunal, or authority requires them. The parties should therefore agree whether electronic execution is acceptable and whether physical originals are needed.

Voyage Charterparty

A Voyage Charterparty is a contract for the employment of a ship for one voyage, or a series of voyages, usually in return for freight. The Shipowner provides the ship and crew, bears the operating cost of the ship, and undertakes to carry the agreed cargo from the loading place to the discharging place. The Charterer provides the cargo and pays freight according to the Charterparty.

Voyage chartering remains a major part of dry cargo shipping. Even where Time Charter Trip (TCT) employment has become more popular in some markets, voyage charters continue to dominate many commodity movements because they suit shippers and traders who want transport for a particular cargo without taking the wider operating risk of the ship.

In a voyage charter, the most important commercial issues include cargo quantity, loading and discharging ports, laydays and cancelling date, freight, loading and discharging costs, Notice of Readiness, laytime, demurrage, despatch, bills of lading, cargo claims, port safety, and protective clauses.

General Voyage Charterparty Clauses

1. Preamble
2. Cargo Description and Cargo Quantity
3. Loading Places
4. Loading Port Orders and Port Rotation
5. Discharging Places
6. Discharge Orders and Port Rotation
7. Laydays and Cancelling Day (LAYCAN)
8. Freight
9. Cost of Loading and Discharging
10. Notice of Readiness (NOR) and Time Counting
11. Loading and Discharging Rates
12. Excepted Periods
13. Demurrage and Despatch
14. Notices
15. Ship's Gear
16. Grab Discharge and Stevedore Damage
17. Overtime
18. Shifting and Seaworthy Trim
19. Cargo Separation and Tallying
20. Dues and Taxes
21. Port Agents
22. Bills of Lading
23. Cargo Lightening
24. General Average (GA)
25. Strikes
26. Exceptions
27. Commissions (Brokerages)
28. Protection Clauses
29. Lien and Cesser
30. Ice
31. War Risks
32. Signature

Voyage Charterparty Clauses

1- Preamble: The preamble usually records the place and date of the Charterparty, the names and domiciles of the contracting parties, and the name and description of the ship. The place of the Charterparty may have legal significance, but a properly drafted law and jurisdiction clause should remove uncertainty. If the parties want English law, New York arbitration, Singapore arbitration, or another forum, the Charterparty should state this clearly.

Place: The place stated in the Charterparty may influence interpretation if the law and jurisdiction clause is unclear. It is often the place where the broker prepared the document rather than where the Principals are based. The safer approach is to include a clear governing law and arbitration clause.

Date: The date should normally be the date when the fixture was concluded and all subjects were lifted. A wrong date can create confusion, especially where market conditions changed during negotiation or where notices depend on fixture date.

Names and Domiciles of Contracting Parties: The full legal names of the Shipowner or Disponent Owner and the Charterer should be stated. Abbreviated names, trading names, or informal descriptions should be avoided. The correct legal identity matters for enforcement, arbitration, sanctions checks, guarantees, and letters of credit.

Name and Brief Description of the Ship: The ship description is central. It may include name, flag, class, year built, deadweight, draft, grain and bale capacity, hatch and hold details, gear, speed, consumption, position, expected readiness, and other relevant particulars. If the ship’s position or expected readiness is materially wrong, the Charterer may have a claim for misrepresentation or breach depending on the circumstances.

Condition of Ship: The Shipowner usually undertakes that the ship is in a fit condition to perform the voyage. This includes seaworthiness, cargoworthiness, valid certificates, class status, proper crew, and suitability for the cargo.

2- Cargo Description and Cargo Quantity: The Charterparty should describe the cargo accurately. It should state whether cargo is bulk, bagged, baled, palletised, unitised, dangerous, heated, wet, dusty, corrosive, or otherwise sensitive. Quantity should be stated with any margin, such as 10% more or less in Shipowner’s option (MOLOO) or Charterer’s option (MOLCO). Stowage factor should be included where relevant.

3- Loading Places: The loading port, berth, anchorage, range, or geographical option must be clear. The clause should state the number of safe berths or safe anchorages, whether the ship must remain always afloat, whether NAABSA is permitted, and what draft restrictions apply. If a range such as ARAG is used, the parties should know exactly what ports are included.

4- Loading Port Orders and Port Rotation: Port rotation affects steaming distance, bunker consumption, laycan planning, and cargo availability. If the Charterer has the right to nominate port rotation, the Shipowner should understand the potential cost. If the Shipowner requires geographical rotation, the Charterparty should say so.

5- Discharging Places: The discharging place clause should identify the port, berth, anchorage, range, or options available to the Charterer. It should also deal with safe berth, safe port, draft, always afloat, lighterage, and discharge restrictions. Unclear discharge options can create disputes after the cargo has already been loaded.

6- Discharge Orders and Port Rotation: Discharge rotation may be commercially important where receivers, cargo parcels, or port congestion differ. The Charterparty should state when the Charterer must declare the discharge port or rotation and whether late orders create additional time or cost for Charterers’ account.

7- Laydays and Cancelling Day (LAYCAN): LAYCAN is the spread of dates during which the ship must be ready to load. The first day is the earliest date when the Charterer must accept the ship. The cancelling day is the last date by which the ship must be ready, failing which the Charterer may have a cancellation right. LAYCAN protects the Charterer’s cargo program and gives the Shipowner a realistic arrival window.

8- Freight: Freight should state the amount, currency, basis of calculation, payment timing, beneficiary bank, deductions, taxes, commissions, and whether freight is earned on shipment, on delivery, or at another stage. The Charterparty should also state what happens if the ship or cargo is lost before freight is paid.

9- Cost of Loading and Discharging: Cargo-handling cost allocation is fundamental. Terms such as gross terms, free in, free out, FIO, FIOS, FIOST, liner terms, or berth terms must be used accurately. The clause should state who appoints and pays stevedores, who bears trimming, tallying, lashing, securing, dunnage, separation, and shore gear costs.

10- Notice of Readiness (NOR) and Time Counting: NOR is central to laytime. The clause should state where NOR may be tendered, when it may be tendered, to whom it must be given, whether email is allowed, whether WIPON, WIBON, WIFPON, or WCCON applies, and when laytime starts after valid NOR.

11- Loading and Discharging Rates: Cargo-handling rates determine laytime. The clause should specify tonnes per day, weather working day, running day, hatch per day, workable hatch per day, or another formula. Ambiguity here can create large demurrage disputes.

12- Excepted Periods: Excepted periods identify when laytime does not count. Common expressions include SHEX, SHINC, SSHEX, SSHINC, FHEX, and FHINC. The clause should also say whether time used during excepted periods counts and whether exceptions apply once the ship is on demurrage.

13- Demurrage and Despatch: Demurrage is the agreed daily sum payable by Charterers if laytime is exceeded. Despatch is payable to Charterers if cargo operations finish before laytime expires, but only if agreed. The clause should state rates, currency, pro rata calculation, despatch basis, payment timing, and whether commissions apply.

14- Notices: The Ship Master may be required to give ETA notices before arrival. Failure to give proper notices can affect laytime or create liability. Notice clauses help shippers, receivers, terminals, and agents prepare for cargo operations.

15- Ship’s Gear: If the ship’s cranes, grabs, derricks, or other cargo gear will be used, the Charterparty should describe them and state their Safe Working Load (SWL). It should also state the consequence of gear breakdown and whether lost time counts.

16- Grab Discharge and Stevedore Damage: Where grab discharge is expected, the ship must be suitable for it. The Charterparty should require prompt notice of stevedore damage, allow inspection, and set deadlines for repairs and liability. Hidden damage discovered after discharge may be difficult to prove if notice procedures are not followed.

17- Overtime: The overtime clause states who pays extra cost outside ordinary working hours. The party requesting overtime may not always be the party benefiting from it. The clause should align cost responsibility with operational control.

18- Shifting and Seaworthy Trim: Shifting between berths or anchorages can involve pilots, tugs, mooring gangs, port dues, and lost time. The Charterparty should allocate time and cost. It should also make clear that the Ship Master has final authority over safe seaworthy trim.

19- Cargo Separation and Cargo Tallying: Where different parcels are carried, separation must be arranged. Natural separation may be possible by holds or tweendecks. Otherwise, tarpaulins, plastic sheets, dunnage, boards, or other separation materials may be required. Tallying responsibility should also be agreed, especially where shortage claims are likely.

20- Dues and Taxes: The Charterparty should allocate dues, taxes, port charges, cargo taxes, freight taxes, light dues, canal dues, and other official charges. Local taxes can materially affect voyage economics.

21- Port Agents: The Charterparty should state who nominates agents. Even if the Charterer nominates the agent, the agent may still act as ship’s agent in many respects, and the Shipowner may remain responsible for port disbursements. An efficient agent is important to both parties.

22- Bills of Lading: Bills of Lading provisions should state how bills are issued, who signs them, what form is used, whether freight is marked prepaid or payable as per Charterparty, and how Charterparty terms are incorporated. A mismatch between the Charterparty and Bill of Lading can create serious cargo liability issues.

23- Cargo Lightening: If the ship may need to lighten cargo because of draft restrictions, river limits, berth restrictions, or grounding risk, the clause should allocate cost, risk, time, lighter nomination, lighterage documentation, and cargo liability during transhipment.

24- General Average: The General Average clause should state where and how General Average will be adjusted and which rules apply. Where United States law or United States trade is involved, appropriate protective wording should be considered.

25- Strikes: Strike clauses allocate risk of labour disputes. The clause should distinguish strikes affecting cargo, port labour, transport, terminal operations, ship crew, and authorities. It should also state whether strike time counts as laytime or demurrage.

26- Exceptions: Exception clauses deal with events such as Acts of God, restraint of princes, fire, perils of the sea, force majeure, quarantine, and other events preventing performance. The clause should be modern enough to address current trading risks.

27- Commissions (Brokerages): Commission clauses state the percentage, beneficiaries, and amounts on which commission is payable. Commission may be payable on freight, deadfreight, and demurrage. It is usually not payable on despatch unless expressly agreed.

28- Protection Clauses: Protective clauses may include Clause Paramount, New Jason Clause, Both to Blame Collision Clause, war risks clauses, sanctions clauses, P&I bunkering clauses, and other standard protections. These clauses should be inserted in full or incorporated clearly.

29- Lien and Cesser: A lien clause gives the Shipowner rights over cargo for unpaid sums. A cesser clause may end Charterer liability at a certain point, often in exchange for a cargo lien. Shipowners should be cautious with cesser wording and ensure that the cargo receiver or Bill of Lading holder becomes responsible for relevant sums where intended.

30- Ice: Ice clauses protect the ship and Ship Master where ice makes port entry or departure dangerous. The clause should give practical alternatives and avoid forcing the ship into unsafe conditions.

31- War Risks: War risk clauses should cover war, hostilities, piracy, terrorism, mines, armed conflict, sanctions, blocked ports, crew risk, insurance premiums, deviation, cancellation, and refusal to proceed to dangerous areas. Outdated war clauses should be replaced or supplemented.

32- Signature: The Charterparty should be signed by the parties or by authorised brokers or agents. Authority and signing capacity must be clear.

Trade Voyage Charterparty Forms

Trade Voyage Charterparty Forms are designed for particular commodities or routes. Their value lies in the fact that they already contain clauses reflecting the cargo’s handling, risk, documentation, and trade custom. However, they must still be checked and modernised where necessary.

Coal Charterparty Forms: Coal forms may include provisions for loading by rail wagons, dumping, spout trimming, terminal practice, moisture, heating, dust, and discharge by grabs. Some coal forms contain old wording that remains familiar but may require modern rider clauses for safety, environmental, and sanctions issues.

Grain Charterparty Forms: Grain forms usually deal with hold inspection, cleanliness, fumigation, grain stability, self-trimming, wing tanks, bag bleeding, separations, securing, and freight payment before Bill of Lading release. Grain cargoes are sensitive to moisture, infestation, contamination, and regulatory inspection.

Ore Charterparty Forms: Ore forms may address moisture loss, weight determination, high-density cargo handling, terminal rates, shore breakdown, draft restrictions, and whether freight is based on Bill of Lading weight, out-turn weight, or an agreed in-lieu-of-weighing deduction.

Fertilizer Charterparty Forms: Fertilizer and phosphate trades may include unusual loading cost arrangements, scale rate loading, turn time, moisture sensitivity, contamination risk, and strict cargo condition requirements. These cargoes may also require careful hold preparation.

Voyage Charterparty Codename - Trade

Examples of voyage charterparty forms and trades include:

• AFRICANPHOS - Phosphates
• AMWELSH - Coal
• AUSTWHEAT - Australian Wheat
• C ORE 7 - Iron Ore
• FERTIVOY - Fertilizers
• GENCON - General Purpose
• GRAINVOY - Grain
• NORGRAIN - Grain
• NUBALTWOOD - Timber
• OREVOY - Iron Ore
• PANSTONE - Stone

Time Charterparty

A Time Charterparty is a contract under which the Charterer hires the commercial use of the ship for a period of time or for a trip measured by time. The Shipowner continues to provide the ship, crew, insurance, maintenance, and technical management. The Charterer directs the commercial employment of the ship within agreed limits and pays hire.

Ship time chartering may be divided into:

1- Period Time Charter: employment for months or years.

2- Time Charter Trip (TCT): employment for one or more voyages, but on time charter terms.

Time Charter Trip has become common because it gives Charterers operational flexibility without committing to a long period. However, most Time Charter Trips are still fixed on traditional time charter forms with amendments. There is no single perfect form for every TCT, so careful rider clauses are essential.

General Time Charterparty Clauses

1. Preamble
2. Ship Description
3. Duration of Period or Description of Trips
4. Trading Intention and Trading Limits
5. Cargo Intention and Cargo Exclusions
6. Ship Condition
7. Shipowners' Responsibilities
8. Charterers' Responsibilities
9. Ship Delivery and Ship Redelivery
10. Bunkers
11. Hire
12. Off-Hire
13. Ship Performance
14. Ship Maintenance
15. Cargo Claims
16. Ship Master and Ship Officers
17. Ship's Logbooks
18. Supercargo
19. Pollution
20. Ship Salvage
21. Ship Lay-up
22. Arbitration
23. Cargo Lien
24. Assignment and Ship Sub-let
25. Exceptions
26. Requisition
27. Bill of Lading (B/L)
28. Stevedore Damage
29. Commissions
30. Protective Clauses
31. Signature

Time Charterparty Clauses

1- Preamble: The time charter preamble usually contains more detail than a voyage charter preamble. It records the parties, date, place, ship identity, and sometimes major commercial terms. Because time charter employment may last for months or years, a clear opening structure is important.

2- Ship Description: The description must include speed and bunker consumption because hire economics depend on performance. The description should define good weather, sea state, wind force, current exclusion, and the method for assessing performance. Ship position and expected readiness should also be stated accurately.

3- Duration of Period or Description of Trips: A period charter should state the duration and any margin, such as 10 days more or less in Charterers’ option. A Time Charter Trip should describe the intended trip and approximate duration. Expressions such as About, All Going Well, and Without Guarantee should be used carefully because they affect redelivery expectations.

4- Trading Intention and Trading Limits: The Charterparty should define geographical trading limits, excluded countries, ice areas, war risk areas, sanctions restrictions, safe ports, safe berths, and always afloat requirements. International Navigating Limits may also be relevant.

5- Cargo Intention and Cargo Exclusions: Time charter forms should state permitted cargoes and excluded cargoes. Dangerous cargo, dirty cargo, steel, scrap, logs, livestock, coal, concentrates, and other special cargoes may need express treatment. Cargo exclusion clauses protect the ship from unsuitable employment.

6- Ship Condition: The Shipowner undertakes that the ship is in good condition and fit for the service. This includes class, certificates, cargo spaces, gear, machinery, and manning.

7- Shipowners’ Responsibilities: Shipowners usually provide the ship, crew, insurance, stores, maintenance, technical operation, class, certificates, and ordinary running expenses, except those allocated to Charterers.

8- Charterers’ Responsibilities: Charterers usually provide bunkers, port expenses, canal dues, cargo-handling arrangements, voyage orders, agency where agreed, and commercial employment within the charter limits.

9- Ship Delivery and Ship Redelivery: The Charterparty must state where and when the ship is delivered and redelivered, what notices are required, how bunkers are measured and paid, and what happens if redelivery is early or late.

10- Bunkers: Bunker provisions should state quantities on delivery and redelivery, grades, prices, specifications, sulphur requirements, sampling, testing, and consequences of off-spec bunkers. Bunker disputes can be expensive, especially where poor fuel damages machinery.

11- Hire: Hire clauses state the daily rate, currency, payment interval, bank details, due dates, grace period, anti-technicality notice, withdrawal rights, deductions, and permitted set-offs. Late hire payment can have severe consequences.

12- Off-Hire: Off-hire clauses define when hire stops. Common causes include breakdown, deficiency of crew, drydocking, detention by average accident, underperformance, or failure to perform the service required. The wording of off-hire clauses is often heavily disputed.

13- Ship Performance: Performance clauses deal with speed and consumption. They should define good weather periods, excluded currents, minimum duration of performance analysis, weather routing evidence, and calculation method. A clear performance clause prevents recurring hire deduction disputes.

14- Ship Maintenance: Maintenance clauses cover drydocking, repairs, cargo gear, hull cleaning, underwater inspection, and technical upkeep. For short TCT employment, scheduled drydocking is usually excluded unless an emergency arises.

15- Cargo Claims: Cargo claims under time charter require allocation between Shipowner and Time Charterer. Many forms incorporate or are supplemented by an inter-club style allocation clause. The clause should state who handles claims and how liability is apportioned.

16- Ship Master and Ship Officers: The Ship Master remains the Shipowner’s servant but must follow Charterers’ lawful employment orders. If the Ship Master or officers fail to cooperate reasonably, the Charterparty may give Charterers rights to complain or request replacement.

17- Ship’s Logbooks: Logbooks are important for performance, weather, routeing, cargo operations, and disputes. Charterers may compare logs with weather routing reports. The Charterparty should state which evidence prevails if reports differ.

18- Supercargo: The clause may allow Charterers to place a Supercargo on board. It should address accommodation, meals, safety, authority, conduct, and victualling costs.

19- Pollution: Time charter pollution clauses should allocate responsibility for pollution compliance, certificates, bunker quality, cargo-related pollution risk, fines, and clean-up costs. The ship must comply with international and national pollution rules.

20- Ship Salvage: Salvage clauses divide salvage awards, costs, and risks where the ship performs salvage service during the charter period.

21- Ship Lay-up: Lay-up clauses may be relevant for long-term charters where cargo scarcity or market collapse makes trading uneconomic. They are usually unnecessary for short Time Charter Trips.

22- Arbitration: Arbitration clauses should state the seat, rules, number of arbitrators, language, governing law, and procedure. Ambiguous arbitration clauses can delay dispute resolution.

23- Cargo Lien: Time charter lien clauses may give Shipowners a lien over cargo, sub-freights, or sub-hire for unpaid hire or other sums.

24- Assignment and Ship Sub-let: Charterers may want the right to sub-let or assign. Shipowners should ensure that sub-letting does not release the original Charterer unless expressly agreed.

25- Exceptions: Exceptions clauses deal with events preventing or delaying performance. The interaction between exceptions and off-hire must be checked.

26- Requisition: Requisition clauses address the effect of government requisition by the Flag State or another authority.

27- Bill of Lading (B/L): Time charter B/L clauses govern how bills are signed and protect Shipowners where bills issued under Charterers’ orders create liabilities beyond the Charterparty.

28- Stevedore Damage: The clause should require prompt notice, repair rights, time limits, and liability allocation for stevedore damage.

29- Commissions: Commission clauses state brokerage percentages and payment basis on hire, ballast bonus, or other sums.

30- Protective Clauses: Protective clauses include Clause Paramount, New Jason Clause, Both to Blame Collision Clause, war risk wording, ice clauses, sanctions clauses, and liberties.

31- Signature: Time Charterparty forms must be signed by authorised parties or authorised brokers.

Time Charterparty Codename - Trade

• ASBATIME - Dry Cargo
• BALTIME - Dry Cargo
• GENTIME - Dry Cargo
• LINERTIME - Dry Cargo and Liner
• NEW YORK PRODUCE EXCHANGE (NYPE) - Dry Cargo

Bareboat Charterparty

A Bareboat Charterparty is a contract under which possession and control of the ship are transferred to the Bareboat Charterer for a substantial period. The Bareboat Charterer operates the ship, provides crew, pays operating expenses, arranges commercial employment, and assumes many practical functions of Shipowner. The registered owner retains ownership title but steps back from day-to-day operation.

Bareboat chartering is often connected with ship finance. A financial owner, bank, leasing company, or investment structure may own the ship but place operational responsibility on the Bareboat Charterer. The Bareboat Charterer may use the ship as if it were the owner, without having to purchase the ship outright at the beginning of the arrangement.

Bareboat Chartering vs Demise Chartering

Bareboat Chartering vs Demise Chartering is sometimes explained by reference to crew. In common practical use, a bareboat charter usually means the ship is chartered without crew, while demise chartering may be used more broadly to describe a transfer of possession and control, sometimes with crew depending on the legal context. The essential point is whether the Charterer takes over possession, command, and operation to such an extent that the Charterer becomes owner pro hac vice.

Under a true bareboat arrangement, the Bareboat Charterer may select the flag, employ crew, arrange insurance, maintain the ship, and manage trading. To the outside commercial world, the Bareboat Charterer may appear as the operating Shipowner, although legal title remains with the registered owner.

Bareboat Charterparty forms should deal carefully with mortgage rights, insurance, maintenance, redelivery condition, class, flag, registration, sub-charter, purchase options, termination events, default, and repossession. Because bareboat charters often last for years, they require more detailed financial and technical provisions than ordinary voyage charters.

Conclusion

A Charterparty is the foundation document of ship employment. It records the bargain between Shipowner or Disponent Owner and Charterer, allocates risk, defines payment, and provides the legal structure for cargo operations, ship operation, bills of lading, disputes, and performance. Whether the contract is a Voyage Charterparty, Time Charterparty, or Bareboat Charterparty, the wording must be chosen carefully.

Shipbrokers play a critical role in this process. They must select the proper form, understand market wording, prepare rider clauses accurately, avoid contradictions, document addenda and side letters correctly, and ensure the final Charterparty reflects the fixture. A Charterparty is not a formality to be completed after the commercial work is done. It is the contract that determines how the commercial work will be judged if anything goes wrong.

In modern shipping, good charterparty drafting requires more than copying old forms. It requires awareness of cargo practice, legal interpretation, insurance, sanctions, safety, environmental regulation, electronic documentation, and dispute resolution. The best Charterparty is clear, complete, trade-appropriate, and commercially balanced. It should say exactly what the parties intend, before the ship sails, before the cargo is loaded, and before a dispute begins.