ExxonMobil Time Charterparty
The ExxonMobil Time Charterparty is a detailed tanker time-charter form designed for long-term employment of a ship in petroleum, petroleum products, and other suitable liquid bulk trades. Unlike many shorter dry-cargo forms, it does not leave the parties to fill wide gaps by custom or implication. It regulates the commercial life of the charter with careful provisions on hire, performance, off-hire, safety, fuel, cargo documentation, pollution control, war risks, insurance, and New York arbitration.
The form reflects the operational demands of modern tanker employment. It assumes that the charterer may require sophisticated cargo handling, lightering, ship-to-ship transfers, petroleum measurement procedures, vetting, pollution-prevention practices, and detailed reporting. At the same time, it preserves the fundamental character of a time charter: the charterer hires the commercial use and services of the ship, while the owner retains responsibility for navigation, management, maintenance, crew, and seaworthiness.
A central feature of the form is its strong separation between commercial employment and technical operation. The charterer may direct where the ship trades within the agreed limits, what cargoes are loaded, how the cargo programme is sequenced, and how performance claims are calculated. The owner remains responsible for providing a fit, certified, properly managed, insured, and crewed ship capable of performing the tanker service promised by the contract.
Commercial Setting and Cargo Description
The opening wording requires the parties to identify the owner, the charterer, the named motor tanker, and the cargo description. In practice, the cargo description is not a formality. It determines the range of products the ship may be ordered to carry and affects tank suitability, cleanliness, coating compatibility, pump capacity, heating ability, safety equipment, and operational planning.
The source material treats descriptions such as crude and dirty petroleum products or clean petroleum products as commercially significant. If the charterer loads a cargo outside the agreed category, the charterer risks a damages claim. The point is illustrated by The Witfuel, where loading a distillate clean product was treated as a breach where the charter was restricted to crude and dirty petroleum products. Conversely, if the ship cannot safely carry the cargo category promised, the owner may be in breach.
This approach is especially important in tanker trades because cargo compatibility cannot be treated in the same loose manner as ordinary bulk cargo substitution. Residues, temperature requirements, segregations, previous cargoes, vapour risks, cleaning time, and regulatory requirements may all affect whether the ship can properly perform the service required.
Charter Term, Optional Periods, and Off-Hire Extensions
Clause 1 establishes the charter term. The form uses a Firm Period and permits optional periods where they are inserted. It also gives a defined meaning to the word about, treating it as up to forty-five days more or less at the charterer’s option. This fixes the ordinary underlap and overlap tolerance instead of leaving the matter to implication or uncertain trade usage.
Under New York practice, the forty-five-day tolerance would usually be read strictly. The discussion in the source contrasts this with English principles, where circumstances beyond the charterer’s control may in some cases affect late redelivery analysis. The important commercial point is that the form seeks certainty: the parties know the primary period, the optional periods, and the contractual margin.
Clause 1 also permits the charterer to extend the charter for all or part of the time during which the ship has been off-hire. This is often called tacking. Without an express clause, a charterer cannot ordinarily add off-hire periods to the end of the charter. The ExxonMobil form therefore gives the charterer a valuable option to recover commercially useful time lost during the charter period.
Ship Particulars and Schedule A
Clause 2 places the ship’s particulars, capabilities, and capacities in Schedule A. Those details commonly cover dimensions, cargo capacity, pumping systems, heating arrangements, segregations, communications, management details, and other operational characteristics. If Schedule A conflicts with a specific clause in the charter, the clause prevails to the extent of the inconsistency.
The description of the ship is not merely background information. It functions as a contractual promise. Under English analysis, many such terms may be intermediate obligations; under United States law, they may be treated as warranties. In either case, a mismatch may give rise to damages, and in serious cases it may support termination or other substantial remedies.
The form recognizes that some capacities, especially pumping capacities, may be stated by reference to design capability rather than real performance in an older ship. That distinction matters because the owner is separately obliged to maintain the ship’s description, particulars, and capabilities during the charter term so far as possible by the exercise of due diligence.
Cargo-heating language must also be read commercially. In The London Confidence, a heating promise under a petroleum-products charter was not treated as an indiscriminate obligation to heat every cargo continuously and uniformly to the stated temperature. Heating undertakings depend on the cargoes to be carried, the instructions given, and the machinery fitted on board.
Hire Payment and Electronic Funds Transfer
Clause 3 modernizes the payment mechanism by requiring hire in United States dollars by electronic funds transfer. Hire is invoiced monthly, payable within the contractual period, and runs from delivery until redelivery or termination unless the charter provides otherwise. This wording reflects contemporary payment practice rather than older terminology such as cash payment.
Initial hire is not due before the ship is actually placed at the charterer’s disposal. Any hire paid in advance but not earned must be returned. The owner remains responsible, together with any permissive assignee of hire, for returning unearned hire. The charterer is not responsible for delay or error by the owner’s bank where proper and timely payment has been made by the charterer.
The form also defines the daily and hourly rates of hire. The hourly rate is one twenty-fourth of the prevailing daily rate. This is important because many later calculations, including off-hire, speed underperformance, pumping delays, and final voyage adjustments, use an hourly calculation.
Deductions from Hire
The deduction clause is one of the form’s most charterer-friendly provisions. It allows deductions for owner’s-account disbursements, lay-up savings, previous overpayments, past off-hire, anticipated off-hire during the relevant payment period, related off-hire expenses, performance claims, and other sums to which the charterer is entitled under the charter.
The clause permits deduction even where the right is disputed, provided the deduction is made in good faith within the categories stated. This is intended to reduce the risk that a disputed off-hire or performance deduction will expose the charterer to an immediate withdrawal claim. Adjustments are made later when the facts are established.
The source refers to The Cigale, where a New York arbitration panel rejected the owner’s balance-of-hire and withdrawal claim after finding that the charterer’s deductions appeared proper or at least estimates that could have been substantiated. The owner’s failure to produce logs and records led to an adverse inference. The case underlines the practical importance of keeping and producing accurate ship records.
The catch-all language still requires care. Where a deduction is only for a disputed sum outside the clearly protected categories, the charterer may deduct at its own risk. If the claimed entitlement is not later established, the deduction may amount to non-payment of hire and may support remedies available to the owner.
Final Voyage and Hire at the End of the Charter
Clause 3(c) deals with the final voyage. If the ship is on a final ballast voyage, laden voyage, or ship-to-ship transfer when the charter term expires, the charterer may continue using the ship under the same terms and the prevailing hire rate for the time necessary to complete the voyage or transfer and redeliver the ship.
The clause expressly treats the continued period as part of the charter term. This reduces disputes over whether an overrun is lawful and whether the owner may claim market damages for late redelivery. It also sets out how final hire should be estimated, allowing deductions for disbursements, off-hire, performance claims, and the expected value of fuel on redelivery.
The final voyage wording is more direct than many older charter forms. It recognizes that tanker employment often involves long passages, lightering operations, and cargo programmes that cannot always be completed exactly on the nominal expiry date. The clause therefore provides a contractual mechanism rather than leaving the issue solely to general law.
Loss, Missing Ship, and Constructive Total Loss
Clause 3(d) provides that hire ceases when the ship is lost, or when she was last heard from if the time of loss is unknown. If the ship becomes a constructive total loss, hire ceases at the time of the casualty that produced the loss. The clause also postpones hire payment while the ship is missing until her safety is ascertained.
Where a constructive total loss occurs, the charterer has an option to cancel. The form defines constructive total loss by reference to a reasonable estimate that the cost of recovery and repair exceeds either the current insured value or the fair market value of the ship when repaired, ignoring any value attached to the charter itself.
The clause also requires reimbursement of unearned hire and the estimated value of bunkers on board when the ship went off-hire. This is commercially logical because the charterer normally pays for fuel and should not lose that fuel value merely because the ship has been lost or has become a constructive total loss.
Reduction in Hire and Default
Clause 3(e) gives the charterer a reduction in hire if, for any reason during the charter term, the ship fails to meet the particulars, capabilities, capacities, or conditions promised in Clause 2, Clause 4, or elsewhere. Where the failure affects the time required to perform services or the availability of the ship, hire is reduced by the value of the time lost.
The default provision tempers the traditional strict withdrawal remedy. If hire is not paid punctually and regularly, the owner must notify the charterer and allow ten working days after receipt of the notice for payment. Only if the charterer fails to pay within that grace period may the owner withdraw by written notice before receiving the late payment.
This structure is designed to avoid the harsh consequences that can arise where a valuable charter is lost because of a minor or technical delay in hire payment. A valid withdrawal remains serious, however, and does not prejudice the owner’s accrued claims or the right to claim damages arising from the charterer’s default.
Taxes, Dues, and Gross-Up Issues
The tax clause allocates taxes on the owner’s income to the owner and allocates taxes and dues on the ship, cargo, freight, or port calls to the charterer where they arise because of the charterer’s orders or the service of the ship to the charterer. The clause also deals with withholding tax and the circumstances in which payment must be grossed up.
The charterer is not liable for taxes imposed at places where the ship calls solely for the owner’s purposes, or to the extent that taxes relate to periods when the ship has deviated from the ordered voyage or is off-hire. The charterer is also protected where a tax would not have arisen but for a matter belonging to the owner and not related exclusively to the charter service.
Owner’s Warranties on Condition and Equipment
Clause 4 is one of the most important sections of the form. It requires the ship, at delivery, to be tight, staunch, strong, thoroughly efficient, fit for the contemplated service, properly manned, equipped and supplied, seaworthy, clean in the cargo system, and capable of carrying the cargoes required by the charter.
The clause then requires the owner to maintain the ship’s description, particulars, and capabilities throughout the charter term so far as possible by due diligence. This is an important distinction. The delivery obligation is stringent, while the continuing maintenance obligation is framed around due diligence rather than an absolute guarantee that no deficiency will ever arise.
The warranty reaches machinery, pumps, boilers, inert gas systems, crude oil washing systems, navigational equipment, heating coils, manifolds, communications equipment, and other operational systems. It also links the physical condition of the ship with documentary, regulatory, and vetting requirements because tanker employment depends on both technical ability and commercial acceptability.
Management, Operation, and Quality Assurance
The form restricts changes in management and operation. The owner warrants that the ship will be managed and operated during the charter term by the companies named in Schedule A and may not transfer management or operation without the charterer’s prior written consent. An unauthorized transfer gives the charterer an express termination right.
The quality-assurance provisions go further. The owner must maintain the safety and quality-management profile reflected in the Tanker Management and Self Assessment information. The charterer may audit the operator’s systems after reasonable notice. If the operator fails to maintain the required standards and does not take acceptable corrective action, the charterer may require a change of operator.
If the owner fails to change the operator when required, that failure is treated as a fundamental breach and gives the charterer a termination option. This reflects the tanker industry’s reliance on operator standards, vetting, incident reporting, and management-system credibility, not merely on the physical condition of the individual ship.
Clause 4 also creates termination triggers where the owner fails to cure breaches of key warranties within thirty consecutive days after notice, where the ship is responsible for a significant incident, where pollution reaches the stated threshold, or where cumulative unplanned off-hire reaches 240 hours in a charter year. These rights are cumulative and do not exclude other remedies.
Evaporator, Stability, Heating, Manifolds, and Communications
Several owner’s warranties are highly practical. The ship must have a fresh-water evaporator capable of supplying the ship’s needs and maintained in good order. The ship must be suitable to carry cargo quantities from no cargo to a full cargo, within the relevant load line, and cargoes with relative density between 0.6 and 1.2 without operational restrictions caused by stability or structural problems.
If the ship is described as fitted with cargo heating coils or heat exchangers, the owner warrants that the ship can maintain cargo temperature or increase it by 4.0 degrees Celsius per day during the voyage up to a maximum of 57 degrees Celsius, as instructed, and maintain the temperature through discharge. Failure may entitle the charterer to delay berthing, delay discharge, stop discharge, remove the ship from the berth, and put the time and expense on the owner’s account.
The manifold clause requires pressure gauges outside the valve at each discharge manifold connection, valid test certificates, and adequate reducing pieces meeting OCIMF standards. The communications clause requires VHF, satellite communication, facsimile, radio teletype, email capability, and computer equipment able to transmit the charterer’s logs electronically.
Crew, Language, Drug and Alcohol Policy, and Compliance
The crew warranty requires a full and efficient complement of master, officers, and crew with adequate training and experience. The master and officers must hold valid and current certificates approved by the flag state. The deck officer complement may not fall below the stated level, and additional deck officer support is required during discharge to lighters.
Conversational English is expressly required for the master and for any officer in charge of cargo or bunker handling. In tanker operations, this is more than a comfort clause. Poor communication can affect cargo measurement, safety instructions, terminal coordination, emergency response, and the accuracy of letters of protest.
The drug and alcohol policy must meet or exceed the relevant OCIMF guidance. The form defines alcohol impairment by reference to blood alcohol content, requires testing of officers, includes unannounced testing, and requires removal of personnel who test positive, refuse testing, or are unfit for duty. An isolated finding of impairment does not by itself prove lack of due diligence, but the owner must exercise due diligence to maintain and enforce the policy.
The compliance warranty is broad. The ship must comply throughout the charter term with applicable international conventions, flag requirements, port-state rules, terminal requirements, and documentary requirements, including certificates needed for Suez and Panama Canal transit where such transit is possible. ITF documentation may also be required, and time lost because of ITF action falls off-hire with related expense for the owner.
Charterer’s Representatives and Operational Access
The charterer may send representatives on board as often and at such intervals as it elects. They may observe operations and may access pump rooms, engine rooms, cargo control rooms, the navigation bridge, deck areas, bunker tanks, and cofferdams for survey and sampling. They may also attend in connection with incidents involving cargo.
The exercise or non-exercise of these inspection rights does not reduce the owner’s or master’s obligations. The charterer’s presence on board is therefore a monitoring and information right, not a transfer of responsibility for the technical management, navigation, or safe operation of the ship.
Delivery, Laydays, and Readiness
Clause 5 provides for delivery at a specified place and requires the ship to be at the charterer’s disposal, ready to load, otherwise fully perform the charter, and ready for sea. The express words ready for sea are important because they prevent hire from beginning merely because the ship can load cargo if she cannot then safely sail or perform the intended service.
The laydays and cancelling clause gives the charterer an option to cancel if the ship is not placed at the charterer’s disposal by the cancelling date. The option must be declared within the stated time. Cancellation or acceptance of the ship’s services does not prejudice claims for late tender or other breach of the owner’s obligations.
If it becomes apparent before the cancelling date that the ship will not be ready in time, the charterer may cancel or require the owner to provide a new cancelling date, while preserving the right to cancel before the original date unless a new date is accepted in writing. This gives the charterer early commercial control instead of forcing it to wait until the cancelling date has already passed.
Fuel at Delivery and Space Available
The charterer accepts and pays for all fuel in the ship’s bunker tanks at delivery. The price is based on the last documented net price paid by the owner, excluding delivery charges. This aligns the fuel transfer with actual cost evidence rather than an uncertain market assessment.
The whole reach and burden of the ship is placed at the charterer’s disposal, but no more than the ship can reasonably stow and safely carry. The owner reserves proper space for crew, master’s accommodation, tackle, apparel, furniture, fuel, provisions, and stores. The clause preserves the commercial use of the ship while recognizing the owner’s operational necessities.
Trading Limits and Warranty-Limit Premiums
Clause 6 permits worldwide trading within the agreed lawful range, subject to British Institute Warranty limits and the specific exceptions and additions stated in the form. Certain passages or areas may be permitted without extra premium, while other trades outside the warranty limits may require the charterer to reimburse documented additional premium properly assessed and paid by the owner.
If the ship cannot be employed in a trade to a port or place not excluded by the trading clause, all time lost is for the owner’s account, and the charterer may terminate when the ship is free of cargo. This language reinforces the owner’s obligation to provide a commercially usable tanker within the permitted trading range.
Berths, Lightering, and Safe-Place Responsibility
The ExxonMobil form modifies the traditional safe-port and safe-berth warranty. It states that the charterer does not warrant the safety of any port, place, berth, dock, anchorage, submarine pipeline, ship, or lighter. Instead, the charterer’s liability is limited to loss caused by the charterer’s fault or neglect when directing the ship, or loss that could have been avoided by reasonable care on the part of the master or owner.
This is a major risk allocation. It moves away from strict safe-port responsibility and places greater exposure on the owner for tanker operations in open, exposed, or politically difficult places. The source compares this approach with decisions such as The Athenoula, where the charterer’s obligation under a tanker form was treated as one of due diligence rather than an absolute warranty of safety.
Lightering is separately regulated. The charterer may provide lightering advisers and gangs, but they work under the exclusive direction, supervision, and control of the master. The master and owner remain responsible for operation, management, and navigation. Lightering and ship-to-ship transfer operations must meet or exceed current OCIMF ship-to-ship transfer standards.
The practical risk is that tanker loading or discharge may occur at offshore facilities, single-point moorings, submarine pipelines, exposed anchorages, or alongside other ships. These places may not offer the traditional shelter associated with a port. The form deals with that commercial reality by setting a fault-based allocation rather than a broad guarantee of safety by the charterer.
Speed Orders, Controlled Passages, and SIRE
The charterer may order the master to slow down or speed up the ship, provided the order is consistent with safe operation of the ship and machinery. Copies of such orders are sent to the owner. This preserves the owner’s safety responsibility while allowing the charterer to manage scheduling, congestion, arrival windows, and bunker economics.
The controlled-passage clause prohibits navigation of named passages without the charterer’s prior written agreement, including the Strait of Messina, the Strait of Bonifacio, certain waters around the United Kingdom, the Old Bahama Channel, and other specified routes. The form also sets minimum distances off the Florida Keys and requires a wide berth off Cuba when transiting relevant waters.
The SIRE clause requires a complete and correct ship particulars questionnaire to be on file with OCIMF and requires best efforts to maintain a recent SIRE report from a qualifying major international oil company. Costs and time lost from non-compliance are for the owner’s account. The clause reflects the commercial reality that tanker employability depends heavily on vetting documentation.
Dry Cargo Option
Although the form is built for tanker employment, Clause 7 gives the charterer an option to ship lawful dry cargo in bulk if the ship and tanks are suitable, and lawful merchandise in packages in appropriate spaces. The master retains approval over the kind, character, amount, and stowage of such cargo.
The clause is limited and practical. It does not transform the tanker into a dry-cargo ship. It simply allows certain lawful dry cargoes or packaged merchandise where the physical configuration and safety position permit, with dunnage, loading, stowing, and discharging charges for the charterer.
Speed, Fuel, and Pumping Warranties
Clause 8 creates warranties for speed, fuel consumption, and pumping. The owner warrants that the ship will maintain the agreed average speed on sea passages from sea buoy to sea buoy in laden and ballast condition. Periods of wind exceeding Beaufort Force Six for more than twelve consecutive hours are excluded from speed and fuel warranty performance.
The fuel warranty applies to propulsion, auxiliaries, heating, tank cleaning, and port consumption through detailed tables and formulas. The form assumes the use of specified ISO-grade fuels when reasonably available and distinguishes between at-sea consumption, heating and tank cleaning fuel, and in-port consumption during idling, loading, and discharging.
The pumping warranty is equally detailed. The owner warrants minimum discharge rates for light, medium, and heavy petroleum products, or maintenance of a stated manifold pressure where the minimum rates are not achieved. The charterer may order crude oil washing, with an agreed allowance for all tanks or a pro rata allowance for part of the tanks.
The source notes that tanker forms traditionally moved toward an all-weather or guaranteed-speed concept, unlike many dry-cargo forms based on good-weather performance. ExxonMobil softens that approach by excluding sustained wind conditions above Beaufort Force Six. New York arbitration decisions such as The Golar Kansai, The Athenoula, and The Efplia show how performance clauses may be read with attention to moderate weather and practical proof.
Performance Reviews and Voyage-by-Voyage Calculations
Clause 9 provides for performance reviews approximately every six months and on a voyage-by-voyage basis. If the ship fails to meet speed, fuel, or pumping warranties, the charterer is compensated retroactively. The owner receives no credit or compensation for speed better than warranted or discharge faster than warranted.
For speed claims, compensation is based on the hourly rate of hire for each hour by which the ship takes longer than she would have taken at the warranty speed. Each laden and ballast sea passage is calculated independently. Over-performance on one voyage does not offset under-performance on another.
Fuel calculations are more nuanced. Each grade of fuel is assessed for each sea passage. Fuel saved on one voyage may be credited against excess consumption on other voyages within the same performance review period, including relevant in-port consumption. However, net fuel savings in one review period cannot be carried into another period, and the owner receives no payment for overall net savings.
The clause uses BP Shipping Marine Distance Tables and detailed adjustments for sea-buoy distances, restricted waters, stops at sea, deviations, ordered speed, and speed orders above or below the warranty speed. It also uses interpolation and extrapolation in the fuel table where the actual average speed falls between, below, or above tabulated values.
For pumping claims, the gross volume discharged is divided by the warranted rate, then crude oil washing allowances are added. Actual pumping hours, including crude oil washing and stripping, are compared with the contractual pumping hours. If actual hours exceed the allowed hours, the charterer is compensated at the hourly rate of hire unless the ship maintained the specified manifold pressure.
The master’s protest obligation is critical. If a terminal or discharge place prevents the ship from meeting the pumping warranty, the master must issue a letter of protest and notify the charterer promptly. If no protest is issued, the owner is deemed to waive the right to argue that time was lost because of shore conditions. The Stolt Capricorn illustrates the evidential burden on the owner where records and protests are inadequate.
Performance Claims and Supporting Records
The performance regime depends heavily on records. Sea logs, port logs, pump logs, letters of protest, bunker invoices, fuel samples, and operational emails all become part of the calculation. The form gives the owner an opportunity to review performance claims and requires a response within the stated period, after which the charterer may deduct the claimed amount without prejudice to the owner’s defence.
New York arbitration decisions underline that performance disputes are often evidential rather than purely legal. The Ionic considered restricted visibility and restricted waters, while The Northern Star and The Columbia Liberty show the difficulty of applying hire-adjustment mechanisms where slow steaming or lay-up affects the performance baseline.
A particularly important principle is that hire adjustment under a performance clause is not ordinary damages analysis. The issue is not necessarily mitigation in the usual contractual sense; it is whether the contractual formula has been triggered and how the agreed calculation should be applied. The Golar Kansai illustrates this formula-driven character of performance compensation.
Liens
Clause 10 gives the owner a lien on cargoes for amounts due under the charter. Unlike some dry-cargo forms, it does not expressly give the owner a lien on sub-freights, which may leave the owner’s security position less certain where cargo has been sold to a third party or where freight flows through another contractual chain.
The charterer receives a broad express lien on the ship for unearned advance hire, disbursements, amounts due under performance provisions, bunker value, and damages arising from the owner’s breach. Under United States law, such an express lien may support in rem proceedings, making this clause a strong charterer-security provision.
Off-Hire Under Clause 11
Clause 11 is a detailed off-hire clause. It covers loss of time from repairs, machinery breakdown, authority interference, collision, stranding, fire, accident, damage to ship or cargo, and other events preventing full and efficient working for more than three consecutive hours, provided the cause is not the charterer’s fault.
The clause also covers deficiency of men or stores, breach of orders or neglect of duty by the master, officers, or crew, illness or injury, strikes, refusal or inability to sail or work, labour-related picketing or boycott connected with the ship or crew union affiliation, medical deviation, landing persons, saving life or property, and going to the aid of a ship in distress. For several of these categories no three-hour franchise is required.
When off-hire applies, hire ceases for the time lost until the ship is again in an efficient state to resume her service and has regained an equivalent point of progress. The clause expressly includes return to the berth, queue position, or place occupied when off-hire began. This makes the clause more commercially protective for the charterer than clauses that measure only the period of mechanical incapacity.
Fuel consumed during off-hire and port charges, pilotage, and related expenses during that period are for the owner’s account. If the ship is driven into port or anchorage by stress of weather or accident to cargo, the loss of time remains for the charterer’s account. Ice delay and quarantine are generally for the charterer’s account, subject to specified exceptions tied to crew conduct or infected-port notice.
The clause also includes cumulative off-hire. Short delays of not more than three consecutive hours are aggregated in the charter year. If they exceed twenty-four hours, hire is not payable for the franchise time as well as the excess. This prevents repeated short breakdowns from escaping financial consequence merely because each individual stoppage falls below the initial threshold.
Detention by authorities due to legal proceedings against the ship, owner, operator, master, or crew, or by reason of strike or boycott against the ship, stops hire and puts related fuel, port, pilotage, and other expenses on the owner. If detention exceeds thirty consecutive days, the charterer may cancel while the ship remains detained.
The clause expressly states that off-hire and related expense provisions operate regardless of due diligence exercised by the owner. This is commercially important: off-hire is not necessarily a fault remedy. A diligent owner may still lose hire if the agreed off-hire event deprives the charterer of the contracted service.
Drydocking and Repairs
Clause 12 requires the owner, at its own expense, to drydock the ship, clean and paint the bottom, and perform overhaul and necessary repairs at reasonable intervals. Repair intervals may not be less than thirty months and drydocking intervals may not be less than sixty months unless flag or class requires a shorter interval.
For drydocking or repair, the charterer must allow the ship to proceed to an appropriate port. The owner is solely responsible for drydocking, repairs, and gas-freeing. Towage, pilotage, fuel, and all other expenses while proceeding to, waiting for, entering, remaining in, and leaving drydock or repair are for the owner.
If drydocking occurs at a port where the ship was already to load, discharge, or bunker under the charterer’s orders, hire is suspended from free pratique if ballast, or from completion of discharge if loaded, until the ship is again ready for service. If drydocking occurs elsewhere, the clause uses a comparison between the actual deviation voyage and the theoretical direct voyage to calculate time and bunker deductions.
The clause requires advance written notice except in emergency. Failure to give timely completion notice may place resulting lost time off-hire. The ship may only be drydocked or repaired within the current trading pattern or area unless the charterer agrees otherwise, and the owner may not trade the ship for its own account on the voyage to or from drydock.
Owner’s Account Items
Clause 13 requires the owner to provide and pay for provisions, deck and engine-room stores, galley and cabin stores, P&I, hull and other insurance except where the charter allocates extra premiums differently, crew wages, certificates, documents, fresh water, maintenance, operation, navigation expenses, and customs or import duties connected with owner’s-account items.
The reference to certificates is commercially broad. It includes documents necessary to employ the ship within the trading limits, such as financial responsibility certificates under oil pollution regimes and similar documents required in other jurisdictions. Wages, provisions, and stores for periods when the ship is on hire are not treated as general average expenditure.
The lubricants provision gives the charterer’s associated or affiliated companies an opportunity to supply lubricants at competitive prices. If a lower quote is obtained from another supplier, the owner must give the charterer’s affiliated supplier an opportunity to meet it.
Master’s Duties, Logs, and Conduct
Clause 14 keeps the master appointed by and employed by the owner, subject to the owner’s direction and control, but requires the master to observe the charterer’s orders concerning agencies, arrangements, and employment of the ship’s services. The clause confirms that nothing creates a demise charter or transfers management, operation, or navigation responsibility to the charterer.
The master must prosecute voyages with utmost dispatch and render reasonable assistance with crew and equipment, including hose handling where required or customary. If terminal orders conflict with the charterer’s orders, the master must stop cargo operations and seek instructions from the charterer by the fastest available means.
Logs are central to the form. The master and engineers must keep full and correct logs, sign them in time, make them open to the charterer and agents, and send abstracts or required electronic forms from each port of call. Performance, pumping, off-hire, fuel, cargo measurement, and protest issues all depend on accurate records.
If the charterer is dissatisfied with the conduct of the master, officers, or crew, the owner must investigate after receiving particulars and, where reasonably required, make a change in appointments. The source’s discussion of The Zacharia T shows that the master remains responsible for safe loading and draft control even where charter instructions and loading-master communications are involved.
Fuel, Port Charges, Tugs, Pilots, and Agents
Clause 15 places fuel costs on the charterer. The owner must arrange and retain sealed and identified fuel samples at each bunkering, subject to the charterer’s written instructions. The charterer also pays port charges, light dues, dock dues, canal dues, pilotage, relevant consular fees, tugs needed for the charter service, charterer’s agencies, and commissions incurred for the charterer’s account.
The owner must reimburse the charterer for fuel used or expenses incurred in making a general average sacrifice or expenditure, and for fuel consumed during or related to drydocking, repairs, and other off-hire periods. Those reimbursements are not treated as general average expenditure. This prevents the owner from shifting normal owner’s-account fuel back into a common maritime adjustment.
The charterer nominates port agents, but when those agents assist the ship, master, crew, or owner, the owner must instruct them and they represent the owner and ship for those purposes. This recognizes that the same local agent may serve different practical roles, depending on the service being performed.
Tugs, Pilots, Borrowed Servants, and Indemnity
The tug and pilot clause authorizes the charterer to engage pilotage and tug assistance on behalf of the owner on usual local terms, including terms making pilots, tug captains, or tug personnel borrowed servants of the owner. The clause is directed at local towage conditions that may transfer risk to the shipowner even when the charterer arranged the service.
The form then protects the charterer from responsibility for negligence, incompetence, incapacity, contractual terms, or insufficiency of tugs or pilots engaged by the charterer on behalf of the owner. The owner indemnifies the charterer and affiliated companies against such consequences. This is broadly consistent with the principle that navigation and marine operation remain owner responsibilities.
The source notes that such towing conditions may be void in the United States as against public policy but valid in England and other jurisdictions. This creates possible conflict-of-laws questions where the charter, the local towage contract, and the forum do not point in the same direction.
If the charterer uses its own or affiliated tugs or pilots, those providers receive the same exemptions and limitations that independent local tug owners or pilots would enjoy under prevailing port terms. The intention is to prevent the charterer’s corporate relationship with the tug provider from enlarging the charterer’s exposure merely because the service provider is affiliated.
The clause should still be read with the berth and port provisions. The charterer may not knowingly direct the ship to a place that lacks adequate towage or pilotage facilities where that fault causes loss. The source refers to The Agia Erini II in this context and also to Scholl v. Chuang Hui Marine Co. Ltd., where a claim against a charterer by an injured petroleum inspector was dismissed because the charterer had no duty to maintain the tanker deck.
Additional Equipment Installed by the Charterer
Clause 16 permits the charterer, with owner approval not to be unreasonably withheld, to fit additional pumps or gear for loading, discharging, or other purposes. The work is for the charterer’s time and expense, and the equipment remains the charterer’s property, removable during or at the end of the charter at the charterer’s time and expense.
The ship must be returned to her original condition to the owner’s satisfaction, ordinary wear and tear excepted. The owner must maintain equipment installed by the charterer at the owner’s expense. The source notes that such equipment may complicate performance analysis and, despite the property wording, could in some circumstances become exposed to maritime liens, as illustrated by Payne v. The Tropic Breeze.
Lay-Up
Clause 17 gives the charterer an option to lay up the ship for all or part of the charter term. Hire continues, but the charterer receives credit for savings that the owner makes or reasonably should make during lay-up, less extra expense caused by the lay-up. The place of lay-up requires owner approval, not to be unreasonably withheld.
The clause is commercially useful in depressed tanker markets, but its calculations can be difficult. Insurance savings, crew adjustments, maintenance reductions, preservation costs, reactivation expense, and the effect of prolonged idleness on future performance may all become contentious. The owner must restore the ship to service promptly after receiving written notice from the charterer.
Requisition
Clause 18 distinguishes requisition of title from other requisition or seizure. If title is requisitioned or the ship is seized in circumstances equivalent to requisition of title, the charter terminates automatically. If the ship is requisitioned for use or seized on a basis not amounting to requisition of title, the ship is off-hire during the requisition period and any compensation belongs to the owner.
If requisition of use continues for more than sixty days, the charterer may terminate by written notice. Off-hire during requisition of use may also be added to the charter term under the charterer’s off-hire extension option. The clause therefore provides an express solution to issues that might otherwise be argued under frustration principles.
Redelivery
Clause 19 allows redelivery free of cargo at the end of the charter term upon completion of discharge at a port or place worldwide in the charterer’s option. The charterer must give written redelivery notice and advance estimates at the stated intervals. The ship may be redelivered with tanks clean or dirty, and the charterer is not required to redeliver gas-free.
At redelivery, the owner accepts and pays for all fuel in the bunker tanks at the last documented net price paid by the charterer, excluding delivery charges. If the charter terminates early under the charter or by law, the owner must reimburse unearned hire, bunker value, other sums due to the charterer, and damages if termination results from owner fault or breach.
Bills of Lading and Cargo Carriage
Clause 20 requires bills of lading to be signed by the master as presented, with the master attending daily if required. At the charterer’s option, the charterer or its agents may sign bills on behalf of the master. All bills are to be without prejudice to the charter, and the charterer indemnifies the owner for consequences arising from inconsistencies or irregular documents supplied by the charterer or agents.
The form then incorporates a detailed cargo-carriage regime. The bill of lading is to have effect subject to United States COGSA unless another governing statute gives effect to the Hague Rules, Hague-Visby Rules, or Hamburg Rules at the place of issue. The applicable regime is deemed incorporated, and no wording is treated as surrendering carrier rights or immunities or increasing liabilities under that legislation.
This incorporation is clearer than many older forms. It makes the owner’s and carrier’s cargo liabilities more predictable where the charterer is also the cargo owner, and it requires similar wording to appear in bills of lading issued under the charter. Where a bill reaches a third-party holder, the effectiveness of charter incorporation depends on the bill’s wording and the applicable law.
New Jason, General Average, Both-to-Blame, and Deviation
The New Jason wording requires cargo interests to contribute in general average where the carrier is not responsible by statute, contract, or otherwise for the casualty or its consequences. This reflects the United States law background of The Jason, which permits contractual preservation of general average recovery where the carrier can validly rely on an exception.
General average is to be adjusted under the York-Antwerp Rules 2004 and, where those Rules do not deal with a matter, according to the law and usage of New York. The clause excludes certain pollution-prevention costs after an actual escape or release of oil or pollutant substances and excludes defined pollution-damage payments, but it may allow preventive measures taken before oil or pollutants have escaped.
The Both-to-Blame Collision Clause seeks to protect the carrying ship’s owner from indirect cargo recovery in a mutual-fault collision. The source notes that this clause has long been held invalid under COGSA in ordinary contexts, but American Union Transport Inc. v. United States upheld such a clause in private carriage. The ExxonMobil wording therefore raises technical questions depending on whether the carriage is private, whether COGSA applies, and who owns the cargo.
The limitation wording preserves any statutory or legal limits available to the owner or chartered owner. Under United States law, limitation is generally available to owners and bareboat charterers, not ordinary time or voyage charterers, and may not protect liabilities arising from a personal contract such as a charterparty. Pendleton Benner Line remains important in this area.
The deviation wording permits the ship to sail with or without pilots, tow or be towed, assist ships in distress, deviate to save life or property, land ill or injured persons, and call for fuel. In charterer-owned cargo carriage, such liberties may operate more freely than under a negotiated bill of lading held by a third party, where statutory limits may apply.
Delivery Without Original Bills and Letter of Indemnity
The form provides a carefully structured indemnity mechanism for delivery without presentation of original bills of lading or delivery at a place other than that named in the bills. If the charterer requests such delivery, the owner must comply only after receiving the required written indemnity in the prescribed form.
The indemnity is limited in value to 200% of the CIF value of the cargo and protects the owner, ship, chartered owner, master, operator, agents, and underwriters. It covers liability, loss, damage, costs, attorney-client expenses, defence funds, arrest or detention security, and related consequences arising from the requested delivery.
The indemnity terminates upon presentation of all original bills properly endorsed for the requested delivery, or after thirty-six months from completion of discharge, unless legal proceedings have been commenced within that period. The indemnity is governed by New York law, and proceedings may be brought in New York state or federal courts.
The bill-of-lading section also submits cargo claims by associated or affiliated companies of the charterer to the charter arbitration clause. This is a sophisticated attempt to keep intra-group cargo disputes within the same New York arbitration framework.
War Risks
Clause 21 is a broad war-risks clause. It prohibits contraband of war but states that petroleum and petroleum products are not contraband for the purpose of the clause. The ship is not required, without the owner’s consent, to enter a port, place, or zone involved in war, warlike operations, hostilities, civil strife, terrorism, politically motivated activity, or piracy where capture, seizure, arrest, or hostile act might reasonably be expected.
The owner’s consent may not be unreasonably withheld. It is unreasonable to withhold consent if insurance against the defined risks is commercially available or available through a government programme. If the owner consents, the charterer pays additional provable war-risk hull insurance costs above the cost level prevailing at the date of the charter, subject to the contractual limits.
The owner may also buy ancillary war-risk insurance, such as loss of hire, freight, disbursements, and total loss, if it carries equivalent ordinary marine insurance. Additional costs may fall on the charterer within the agreed limits. If insurance is not obtainable, the ship is not required to enter or remain in the relevant place or zone.
The owner must obtain from insurers a waiver of subrogated rights against the charterer and its affiliated parties for claims under war-risk insurance arising from compliance with the charterer’s orders. Additional crew wages, crew war bonuses, and crew insurance caused by the covered conditions are also for the charterer, where properly incurred.
The clause gives the owner control over timing, speed, and routing through hostile areas. The charterer issues voyage instructions, but the owner determines the level and nature of risk and sends cautionary sailing instructions to the ship, copying the charterer. This divides commercial destination control from risk-management navigation through dangerous waters.
Exceptions and Number of Grades
Clause 22 contains a cargo-loss exceptions clause and a mutual exceptions clause. The first protects the ship, master, and owner against cargo loss or damage caused by listed matters, including navigational fault, fire not caused by the owner’s personal design or neglect, collision, stranding, sea perils, boiler explosion, shaft breakage, and latent defects.
The mutual exceptions clause protects both owner and charterer against loss, damage, delay, or failure in performance caused by events such as act of God, act of war, pirates, assailing thieves, arrest or restraint, seizure under legal process if bond is promptly furnished, strikes, lockouts, labour stoppage, riot, or civil commotion. Under United States analysis, such a clause generally excuses only the party whose performance is affected by the excepted event.
The exceptions do not override the owner’s undertakings on condition, particulars, capabilities, payment and cessation of hire, cargo-care obligations, or the charterer’s termination options. This limitation prevents the exceptions clause from swallowing the more specific operational promises elsewhere in the form.
The number-of-grades clause warrants that the ship can carry the agreed number of cargo grades within her natural segregations. If the ship cannot load the required number of grades on arrival, the charterer must do its utmost to provide a suitable cargo consistent with the ship’s capabilities. If that cannot be done within a reasonable time, the ship proceeds to the nearest repair port in ballast, with time and expense for the owner.
Salvage, ITOPF, and Clean Seas
Clause 23 provides that all salvage money earned by the ship belongs to the owner. This is a concise allocation and differs from clauses under some other forms where salvage proceeds may be shared after deductions.
The owner warrants membership of the International Tanker Owners Pollution Federation and agrees to maintain that membership during the charter term. This reflects the special pollution-response environment of tanker operations.
The Clean Seas clause requires the owner to participate in the charterer’s oil-pollution avoidance programme and to comply with current IMO and port-state rules. It prohibits overboard discharge of oil, oily water, oily ballast, or oil in any form except as allowed by applicable rules or in extreme circumstances where safety of the ship, cargo, or life at sea is imperilled.
The programme regulates retention of residues, tank washings, demulsifier use, slop certificates, cargo-residue disposition, discharge into shore facilities, commingling, segregation, and additional anti-pollution precautions. Pump-room stripping line overboard discharges must be blanked off before port arrival and kept blanked while the ship is in coastal waters.
Cargo Measurement and Sampling
Clause 26 requires measurement and sampling to follow current API petroleum measurement standards or similar ASTM standards. Before loading, the master measures oil, water, and sediment residues in holding, slop, and cargo tanks. After loading, cargo quantities are calculated in barrels at 60 degrees Fahrenheit and recorded in a tank-by-tank ullage report.
If the master’s calculations, after applying the ship’s experience factor, show a deficiency from bill-of-lading figures and investigation confirms it, the master must issue a letter of protest to the supplier where practicable and notify the charterer immediately. Historical information must be available on board for calculating and applying the experience factor.
Before discharge, the master measures each grade on board using the same calculation procedures and cooperates with shore staff before and after discharge. The ship must discharge all liquid oil and, if ordered, oil, water, and sediment residues. The clause rejects any custom based on deemed in-transit loss that would otherwise excuse failure to discharge all liquid cargo and residues.
The charterer may appoint inspectors at its own expense to verify cargo and residue quantities and quality at loading and discharge. Where the ship has an inert gas system, tank depressurization for ullage measurements must follow current IMO guidance on inert gas systems.
Insurance Costs and Liability Levels
Clause 27 requires the owner to maintain full and valid P&I insurance with a club belonging to the International Group. Cover must include cargo liability and pollution liability at the maximum level made available by the International Group, subject to the stated pollution-liability requirement of US$ 1,000 million per incident if such cover is available.
The owner bears administrative expenses of placing and changing P&I coverage. The charterer may reimburse documented net surcharges for United States voyages ordered under the charter, but the obligation depends on the owner meeting the compliance requirements. Net surcharges are calculated after discounts and rebates.
The clause carefully addresses increased costs. Certain increases above defined historical or maximum surcharge levels may remain for the owner, although the owner may call for negotiations if the cost becomes burdensome. If no agreement is reached within sixty days, the owner may terminate when the ship is cargo-free unless the charterer elects to pay or provide a reasonable alternative.
The owner must give timely written notice of renewals or new insurance placements. If required insurance lapses, the charterer may terminate when cargo-free or procure replacement insurance at the owner’s cost, with the cost recoverable by invoice or deduction. The ship is off-hire from non-coverage until reinstatement or termination, without prejudice to charterer damages for owner fault.
The owner also warrants participation in TOPIA 2006, and, for smaller qualifying ships, STOPIA 2006, where the ship meets the relevant definitions and the agreements remain in force. These pollution-indemnification arrangements are important elements of the tanker insurance environment.
Parent Guaranty and Transfer Restrictions
Clause 28 permits the charterer to require a parent-company guaranty from the owner’s parent company or companies. The guaranty must be delivered when the owner signs the charter if required. This protects the charterer where the registered owner or contractual owner may not itself have the financial substance expected for a long-term tanker commitment.
The owner’s rights and obligations are not transferable by sale or assignment without the charterer’s prior written consent. The owner may not offer the ship for sale to a non-affiliated buyer without consent. Sale, assignment, or an unauthorized offer for sale gives the charterer an absolute termination option, without limiting claims for damages.
This provision restricts the owner’s ability to sell a valuable charter attached to the ship in a rising market. It does not necessarily prevent indirect changes in beneficial ownership through share transfers, but it sharply controls direct transfer of the charter or sale of the chartered ship.
Arbitration in New York
Clause 29 provides for arbitration in New York before a three-person panel, one appointed by each party and the third by the two party-appointed arbitrators. The decision of any two is final. The clause allows further disputes to be added before the hearing is finally closed.
The arbitrators may grant just and equitable relief within the scope of the parties’ agreement, including specific performance. Awards may include costs and a reasonable allowance for attorney’s fees, and judgment may be entered on the award in any court with jurisdiction.
This clause differs from the New York Produce form in important ways. It does not require arbitrators to be commercial men, so lawyers and commercial specialists may sit together. It expressly gives the panel authority to award equitable relief and attorney’s fees, reducing arguments over remedial power.
Assignment, Subletting, Business Policy, and Governing Law
Clause 30 permits the charterer to assign all rights and obligations to associated or affiliated companies and permits subletting, while keeping the charterer responsible for full performance of the charter. The provision reflects the operational structure of major oil-company groups, where different affiliated entities may be involved in trade execution, cargo ownership, or internal allocation.
Clause 31 requires the owner to comply with applicable laws and lawful regulations for activities carried out in the charterer’s name or on its behalf. It also requires accurate and fair financial statements, billings, and reports in reasonable detail. This is a corporate-compliance clause as well as a chartering clause.
Clause 32 provides that interpretation and the parties’ rights and obligations are governed by the federal maritime law of the United States and, where applicable, New York law. It also requires modifications, waivers, or discharges to be in writing and signed by the party to be charged. No provision is construed against a party merely because that party or its lawyer drafted it.
The same clause also protects both sides against obligations that would violate or cause loss of economic benefit under United States anti-boycott or export-control laws and regulations. It defines associated or affiliated companies by reference to Exxon Mobil Corporation and confirms that the charterer’s cancellation and termination rights are individual and cumulative.
Practical Meaning of the ExxonMobil Form
The ExxonMobil form is not a neutral short-form charter. It is a highly developed tanker contract that gives the charterer detailed operational rights, broad deduction rights, performance-review rights, inspection rights, quality-assurance rights, off-hire protections, and multiple termination options. Owners using the form must be prepared to prove compliance through records, certificates, logs, inspection history, and commercial responsiveness.
For owners, the largest practical risks are usually performance claims, off-hire accumulation, failure to maintain certificates or vetting status, non-compliance with management and safety standards, cargo-heating or pumping deficiencies, tanker measurement disputes, and unauthorized management or ownership changes. The form is particularly unforgiving where owner records are weak or where the master fails to protest terminal restrictions.
For charterers, the form gives substantial flexibility but also requires careful exercise of commercial orders. Fault or neglect in directing the ship, failure to issue clear voyage instructions, improper cargo orders, documentary irregularities, and inadequate indemnity handling may still produce liability. The broad deduction rights are powerful, but they must be used in good faith and supported by records.
The form’s United States-law and New York arbitration orientation also matters. It uses concepts familiar to American maritime practice, including COGSA incorporation, New Jason wording, the Both-to-Blame problem, broad arbitral remedial powers, and attorney-fee language. Parties familiar only with English-style tanker forms should read the ExxonMobil provisions carefully rather than assuming that standard dry-cargo principles apply unchanged.
Conclusion
The ExxonMobil Time Charterparty is a comprehensive tanker employment contract built around precision, documentary control, and operational accountability. It regulates not only hire and redelivery, but also the technical ability of the ship, cargo heating, pumping, fuel performance, vetting, pollution prevention, insurance levels, war-risk trading, cargo documentation, off-hire, and New York arbitration.
Its commercial strength lies in reducing uncertainty before disputes arise. It gives the charterer clear tools to measure performance, deduct claims, extend for off-hire, insist on quality assurance, and protect cargo operations. It gives the owner defined limits, war-risk insurance mechanisms, cargo documentation protections, and a structured arbitration forum. For both sides, the form demands disciplined drafting, accurate records, prompt notices, and a professional understanding of tanker operations.