Provisions of Voyage Charterparties
An agreement by the shipowner to provide a ship and a statement of her position, her capacity and status on the Register of a Classification Society. In relation to the preliminary voyage, the port of loading to which the vessel will proceed, and a promise by the shipowner that the vessel will proceed with reasonable despatch.
- Representations by the shipowner in relation to the condition of the vessel, that is, tight, staunch, and in every way fitted for the voyage.
- A promise by the shipowner to carry the goods to their destination, or as close as can reasonably be reached.
- A promise by the charterer to provide a full cargo.
- A promise by the charterer to pay freight and a method by which freight is to be calculated.
- A list of excepted perils
- Provisions governing the way in which cargo is to be loaded and discharged and also the period of time to be allowed for loading and discharge and, if applicable, the rate of demurrage.
- Cancelling Clause giving the charterer the right to cancel the contract in the event of non arrival of the ship by a certain date.
- Paramount Clause incorporating the Hague or Hague-Visby Rules.
- The Amended Jason Clause.
- Both to Blame Collision Clause.
- Law and Jurisdiction Clause, generally providing for arbitration in London in accordance with the LMAA Rules and, ideally, setting out the mechanism for the appointment of each party’s arbitrator and a default provision in the event of one party failing to appoint. Shipbroker’s commission.
- Cesser Clause.
- War Clause.
- The incorporation of the York Antwerp Rules in relation to General Average.
- Provision in relation to the Ship Master signing Bills of Lading (B/L).
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Provisions of Voyage Charterparty
Voyage charterparties are agreements between a shipowner and a charterer, where the shipowner agrees to carry goods from one port to another in return for a freight fee. Below are some of the standard provisions commonly included in voyage charterparties:
- Parties Involved: The agreement should clearly specify the identities of the shipowner and the charterer.
- Description of the Vessel: The contract will specify the details of the ship, including its name, weight, and any unique features that might impact the cargo’s transportation.
- Loading and Discharging Ports: The contract must specify where the cargo is to be loaded and where it is to be discharged.
- Cargo Description: The contract should detail the type and amount of cargo to be carried.
- Freight Rate: The contract will specify the rate of freight, either on a per-ton basis or for the entire cargo.
- Laytime and Demurrage: This refers to the time allowed for loading and discharging cargo. If this period is exceeded, the charterer must pay demurrage fees.
- Notice of Readiness (NOR): The time when the vessel is ready to load or discharge cargo. The NOR triggers the start of laytime.
- Free Pratique: This is a license given by a port’s health authorities to a ship, indicating that it is free from contagious disease. A vessel usually cannot begin loading or discharging until it has obtained free pratique.
- Loading and Discharging Methods: The charterparty will specify who will be responsible for loading and discharging, and the methods to be used.
- Payment Terms: The agreement will specify when and how the charterer will pay the freight.
- Cargo Damage: The agreement will outline the shipowner’s responsibilities regarding any damage to the cargo during transit.
- Safe Port/Safe Berth Warranty: The charterer often gives a warranty that the ports selected for loading and discharge are safe.
- Force Majeure Clause: A provision that releases both parties from liability if certain events beyond their control (like war or natural disasters) prevent the contract from being fulfilled.
- Dispute Resolution: The contract will specify how disputes between the parties will be resolved, such as through arbitration or in a particular jurisdiction’s court.
- War Risks and Ice Clauses: These clauses may relieve the shipowner from liability for losses caused by war or ice conditions.
- Bills of Lading: The contract should stipulate the conditions under which the carrier will issue bills of lading, which are essential documents in international trade.
- Deviation Clause: This clause allows the vessel to deviate from its course for reasonable purposes, like saving life or property at sea.
- Stowage and Segregation: The agreement will specify the details related to stowage and segregation of goods, if necessary. This could be important for the transport of certain types of commodities, like chemicals or hazardous materials.
- Cancellation Clause: This clause allows the charterer to cancel the charterparty if the vessel is not ready to load by a specified date.
- Lien Clause: The shipowner often reserves the right to a lien on the cargo for unpaid freight, demurrage, or other charges.
- Exception Clause: This includes exceptions where the shipowner is not liable for loss or damage to the goods, such as act of God, act of war, fire, etc.
- Indemnity Clause: The charterparty may include an indemnity clause where one party agrees to indemnify the other for specific types of losses or damages.
- Both-to-Blame Collision Clause: This is a standard clause in most voyage charterparties, stating that if both ships are to blame in a collision, the cargo owners will have to contribute to the shipowner’s liability towards the other ship.
- Salvage and General Average: The agreement will define the parties’ rights and obligations in case of salvage or declaration of general average, an ancient principle of maritime law where all stakeholders in a sea venture proportionally share any losses resulting from a voluntary sacrifice of part of the ship or cargo to save the whole in an emergency.
- Redelivery Clause: This stipulates the condition in which the vessel should be returned to the shipowner.
- Sanctions Clause: This relatively recent addition deals with compliance with international sanctions, ensuring that neither the vessel nor the cargo will violate any applicable sanctions regimes.
- Port Charges: The charterparty should outline who will be responsible for bearing any port charges incurred during loading and unloading operations.
- Despatch Money: In some instances, if the loading and/or discharging of the cargo is completed faster than the agreed laytime, the shipowner might have to pay despatch money to the charterer.
- Clean on Board Clause: In some cases, the charterer may require that the vessel is cleaned prior to loading the cargo.
- Prohibition Clause: The charterparty may include restrictions on certain actions by the shipowner or charterer. For example, it may prohibit the shipowner from using the ship for any purpose other than transporting the agreed-upon cargo during the period of the charter.
- Ice Clause: If the voyage is going to take place in a region where ice is common, there might be a specific clause that determines the responsibilities and risks associated with ice. This might include additional costs, rerouting decisions, and potential damages.
- Insurance Clause: The agreement should stipulate which party is responsible for insuring the vessel, cargo, and third-party liabilities. It will also specify the extent of the cover required.
- Ad Valorem Bill of Lading: In case the value of the goods being shipped is declared to be higher than the customary value, the shipowner may need to take out additional insurance to cover the potential additional liability.
- U.S. Trade Clause: If the ship is to visit U.S. ports, there may be additional clauses to comply with U.S. laws and regulations, such as the U.S. Carriage of Goods by Sea Act (COGSA) or the Jones Act.
- Himalaya Clause: This clause extends the defenses and limits of liability that the carrier has under the charterparty to the crew, agents, and any independent contractors involved in the shipment.
- Lighterage Clause: If lighters (barges) are to be used in the loading or discharging operations, a lighterage clause will outline the parties’ responsibilities and liabilities in this respect.
These are just some of the standard provisions included in a voyage charterparty, but every contract will vary depending on the specific needs and negotiations of the parties involved. Always consult with a maritime lawyer when entering into a voyage charterparty to ensure that your interests are protected.
What are the Main Clauses of Voyage Charterparty?
A voyage charter party is a contract for the hire of a ship for a specific voyage between the ship owner and the charterer. Some of the main clauses in a typical voyage charter party include:
- Parties: This clause identifies the shipowner and the charterer.
- Ship Details: Describes the ship, including its name, flag, gross and net tonnage, speed, fuel consumption, etc.
- Freight Rate: Details of the freight rate and terms of payment are usually included in this clause. It might also include provisions about when and how the payment should be made.
- Cargo: Details about the cargo to be loaded, including the type, quantity, and any special handling instructions.
- Loading and Discharging Ports: Specifies the port or ports where the cargo will be loaded and discharged. This clause often also details who pays for port fees and how long the ship is allowed to spend at each port (known as laytime).
- Laytime and Demurrage: Laytime is the amount of time agreed upon between the shipowner and charterer for loading and unloading of the cargo. If the loading or unloading takes longer than the agreed time, demurrage fees may be charged by the shipowner.
- Notice of Readiness (NOR): This clause contains provisions about when and how the shipowner should notify the charterer that the ship is ready to load or discharge cargo.
- Safe Port Warranty: The charterer usually warrants that they will only order the ship to safe ports, where the ship can safely reach, lie, and depart from.
- Deviation: This clause describes whether the ship is allowed to deviate from the planned route and under what circumstances.
- Liabilities and Indemnities: A description of the liabilities and responsibilities of both the shipowner and the charterer, and under what circumstances one party must indemnify the other.
- General Average: This clause relates to an ancient principle of maritime law in which all parties in a sea venture proportionally share any losses resulting from a voluntary sacrifice of part of the ship or cargo to save the whole in an emergency.
- War Risks and Sanctions: This clause covers the potential risks associated with the voyage if it includes areas of conflict, as well as any sanctions that might apply.
- Dispute Resolution: This clause specifies how disputes will be resolved, often stipulating arbitration in a particular location.
It’s important to note that these clauses can vary depending on the specific contract, as charter parties can be customized to the unique needs of the charterer and shipowner.
What are the obligations of a Voyage Charterer?
The obligations of a voyage charterer refer to the responsibilities and duties that the charterer undertakes when entering into a voyage charter contract. A voyage charterer is a party that hires or charters a vessel for a specific voyage or a series of voyages. Here are some common obligations of a voyage charterer:
- Payment of freight: The charterer is obligated to pay the agreed-upon freight or hire charges for the use of the vessel. This payment is typically based on the cargo quantity, the distance traveled, or a fixed rate per day.
- Cargo handling and stowage: The charterer is responsible for ensuring proper loading, stowage, and discharge of the cargo. They must provide accurate cargo details to the ship’s master and ensure compliance with relevant safety and security regulations.
- Cargo documentation: The charterer must prepare and provide all necessary documentation related to the cargo, such as bills of lading, cargo manifests, and customs documentation. These documents are crucial for the shipment and must accurately reflect the cargo’s nature, quantity, and other relevant details.
- Compliance with laws and regulations: The charterer must comply with all applicable laws, regulations, and international conventions related to the shipment of goods. This includes complying with customs procedures, trade sanctions, and any other legal requirements in the ports of loading and discharge.
- Nomination of loading and discharging ports: The charterer is responsible for nominating the ports of loading and discharging within the agreed geographical limits. The charterer should provide the vessel with accurate and timely information about the nominated ports and any specific requirements or restrictions associated with them.
- Safe and efficient voyage: The charterer has an obligation to ensure the vessel’s safe and efficient voyage. This includes providing accurate information about the cargo, its handling requirements, and any special considerations for the voyage. The charterer should also coordinate with the vessel’s master and provide necessary assistance to ensure the smooth execution of the voyage.
- Cargo insurance: Unless otherwise agreed, the charterer is responsible for arranging and paying for cargo insurance coverage for the duration of the voyage. This insurance typically covers risks such as loss, damage, or theft of the cargo during transit.
- Demurrage and despatch: Demurrage refers to the additional compensation payable by the charterer to the shipowner if there are delays in the loading or discharging operations beyond the agreed time. The charterer is responsible for avoiding demurrage charges by efficiently coordinating the cargo operations. Conversely, if the charterer completes the loading or discharging operations ahead of the agreed time, they may be entitled to despatch money, which is a form of compensation from the shipowner.
- Compliance with environmental regulations: The charterer must adhere to environmental regulations and ensure that the cargo comply with relevant environmental standards. This includes compliance with international conventions such as the International Convention for the Prevention of Pollution from Ships (MARPOL) and taking appropriate measures to prevent pollution during the loading, transportation, and discharge of the cargo.
- Payment of additional costs: The charterer may be responsible for additional costs incurred during the voyage that are not included in the original freight charges. These costs could include expenses related to bunkering (fuel), port fees, pilotage, tug assistance, or any other agreed-upon charges. The charterer should reimburse the shipowner for these costs as per the terms of the charter contract.
- Communication and coordination: The charterer is responsible for maintaining effective communication and coordination with the ship’s master, the shipowner, and any other relevant parties. This includes promptly providing necessary information, responding to inquiries, and ensuring smooth collaboration throughout the voyage.
These obligations may vary depending on the specific terms and conditions outlined in the voyage charter contract. It is crucial for both the charterer and the shipowner to clearly define their respective obligations in the contract to avoid any misunderstandings or disputes.
Typical Provisions found in a Voyage Charter Agreement for a Cargo Ship
Defining voyage charter provisions
A comprehensive dry cargo voyage charter agreement typically includes provisions encompassing the fundamental aspects outlined below. These provisions may vary in name or be indicated by numbered clauses without specific titles.
- Introduction: Identification of involved parties; vessel identification; warranty of seaworthiness; current position of the vessel; anticipated readiness date for loading; obligation to proceed to the loading port or location; identification and safety of the loading port or place; quantity and nature of the cargo to be loaded; obligation to proceed to the discharge port or place; obligation to deliver the cargo.
- Shipowners’ Responsibility: Accountability of the owners for loss, damage, or delay in delivering goods; exclusion of owner’s liability for loss, damage, or delay in delivering goods.
- Deviation: Vessel’s liberty to call at ports in any sequence; vessel’s liberty to tow and assist other vessels; vessel’s liberty to deviate for the purpose of saving lives, protecting property, or for other valid reasons.
- Freight: Rate and amount of freight payment.
- Loading/Discharging Costs: Responsibility for the expenses related to loading and/or discharging of cargo.
- Laytime: Duration of the permissible laytime; exceptions to laytime; initiation of laytime; timing and method of issuing notice of readiness.
- Demurrage: Duration of the demurrage period allowed; whether demurrage is applicable at loading and/or discharge ports.
- Lien: Whether the owners have the right to place a lien on the cargo for freight, deadfreight, demurrage, and/or damages incurred due to detention; whether the charterers are responsible for freight and demurrage expenses at the discharge port.
- Bills of Lading: Obligation of the vessel’s master to sign bills of lading.
- Laydays and Cancellation: Designated laydays; cancellation date; conditions under which charterers have the option to cancel the charter; charterers’ obligation to declare their intention to exercise the cancellation option, if applicable.
- General Average: Rules governing the settlement of any general average; cargo owners’ responsibility to contribute to the general average expenses.
- Agency: Shipowner’s or Charterer’s obligation to appoint agents at the loading and discharge ports.
- Brokerage: Amount of brokerage commission payable and the recipient(s) of the commission.
- Strikes: Allocation of liability for consequences arising from strikes or lock-outs that hinder the fulfillment of obligations.
- War Risks: Owner’s liberty to cancel the charter in the event of a war outbreak; master’s liberty to depart from the loading port before completion of loading in case of a war outbreak.
- Ice: Master’s privileges in case of inaccessibility or potential entrapment at the loading and/or discharge ports due to ice.
- Paramount Clause: Specification of the liability regime applicable to issued bills of lading.
- New Jason Clause: Protection of the owner against US lawsuits when adjusting the general average according to US law.
- Both To Blame Collision Clause: Safeguarding the shipowner against US law in collision cases.
- Law and Arbitration: Jurisdiction to which any disputes will be referred; location of arbitration proceedings; appointment of arbitrators.
- Rider Clauses: Additional clauses agreed upon between the parties, usually appended to the standard provisions.
BIMCO Just in Time Arrival Clause for Voyage Charter Parties 2021
The Just in Time Arrival Clause 2021 is intended for implementation in voyage charter agreements wherein shipowners and charterers have mutually consented to establish a just-in-time arrival system, granting charterers the authority to request shipowners to optimize the vessel’s speed to reach a specified destination at a predetermined time. This clause follows a comprehensive approach, allowing its integration into various vessel and port management frameworks worldwide. Furthermore, it can be utilized in conjunction with the BIMCO Port Call Data Exchange Clause 2021, which has been specifically developed to promote the widespread utilization of the IMO data model framework for the synchronized exchange of ship/port information.
We kindly suggest that you visit the web page of BIMCO (Baltic and International Maritime Council) to learn more about Charterparty Clauses and to obtain the original Charter Party forms and documents. www.bimco.org
What is Cancelling Clause in Voyage Charterparty?
In a voyage charterparty, a cancelling clause is a contractual provision that allows either the charterer or the shipowner to cancel the charterparty under certain specified circumstances. The cancelling clause provides a mechanism for terminating the contract before its completion, typically due to unforeseen events or changes in circumstances that make the charterparty no longer feasible or advantageous for one or both parties.
The specific conditions under which the cancelling clause can be invoked are typically outlined in the charterparty agreement. These conditions may include, but are not limited to:
- Force majeure events: If an unforeseen event occurs that is beyond the control of the parties involved and makes performance of the charterparty impossible or commercially impracticable, the cancelling clause may be invoked. Examples of force majeure events include natural disasters, war, government actions, or labor strikes.
- Delay or non-performance: If either party fails to perform their obligations under the charterparty within a specified timeframe, the cancelling clause may be used to terminate the agreement. This could be due to delays in vessel arrival or loading/unloading, failure to pay freight or hire, or breaches of other contractual terms.
- Sale of the vessel: If the shipowner sells the vessel prior to the commencement of the charterparty or during its duration, the cancelling clause may be triggered, allowing the charterer to terminate the agreement.
It’s important to note that the specific language and conditions of the cancelling clause can vary from one charterparty agreement to another. Parties involved in a voyage charterparty should carefully review and understand the terms of the cancelling clause to ensure they are aware of their rights and obligations in the event of contract termination
What is Paramount Clause in Voyage Charterparty?
In the context of a voyage charterparty, a paramount clause refers to a contractual provision that establishes the primacy of certain international conventions or laws over the terms and conditions of the charterparty itself. The purpose of the paramount clause is to ensure that the rights, obligations, and liabilities of the parties to the charterparty are subject to the applicable provisions of these conventions or laws.
Typically, the paramount clause incorporates by reference the provisions of specific international conventions that govern the carriage of goods by sea, such as the Hague Rules, the Hague-Visby Rules, or the Hamburg Rules. These conventions provide a standardized framework for the rights and responsibilities of the carrier and the cargo owner during the transportation of goods by sea.
By including a paramount clause, the charterparty recognizes that the terms of the international convention prevail over conflicting provisions within the charterparty. This helps to ensure uniformity and consistency in the interpretation and application of the contractual terms, especially in cases where the charterparty may be silent or ambiguous on certain matters.
It is important for the parties involved in a voyage charterparty to carefully review and understand the implications of the paramount clause, as it establishes the legal framework that governs their rights and obligations during the voyage.
The paramount clause is a significant provision in a voyage charterparty because it ensures that the parties are subject to the internationally recognized rules and regulations related to the carriage of goods by sea. These rules are designed to protect the interests of both the carrier and the cargo owner and provide a level playing field for all parties involved in maritime trade.
The specific international conventions referred to in the paramount clause may vary depending on the charterparty and the trade route involved. For instance, the Hague Rules, which were first introduced in 1924, established a set of standard provisions governing the rights and obligations of carriers and shippers in most international maritime transactions. The Hague-Visby Rules, adopted in 1968, built upon the Hague Rules and added additional protections for cargo owners. The Hamburg Rules, adopted in 1978, further expanded the rights of cargo owners and introduced more favorable terms for them.
The paramount clause incorporates the provisions of these conventions into the charterparty, making them an integral part of the contractual agreement between the parties. This means that any disputes or claims arising from the voyage will be interpreted and resolved in accordance with the relevant convention.
By adhering to the international conventions, the paramount clause helps to promote consistency and predictability in the interpretation and application of the charterparty terms. It ensures that the parties are aware of their rights and obligations and have recourse to established legal principles in case of any disputes.
It is important to note that while the paramount clause incorporates the provisions of the international conventions, it does not necessarily include all the clauses and conditions within those conventions. The charterparty may still contain additional clauses that are not covered by the paramount clause. Therefore, it is crucial for the parties to carefully review the entire charterparty to understand the full extent of their rights and obligations.
In summary, the paramount clause in a voyage charterparty establishes the supremacy of specific international conventions over the terms and conditions of the charterparty. It ensures that the parties are subject to internationally recognized rules and provides a framework for resolving disputes and determining liabilities in relation to the carriage of goods by sea.
What is Both to Blame Collision Clause in Voyage Charterparty?
In voyage charterparties, the “Both to Blame Collision Clause” is a contractual provision that addresses the allocation of liability in the event of a collision between the chartered vessel and another ship. It is also known as the “York-Antwerp Rules 1994 Clause.”
The clause is designed to determine the extent of liability for a collision and the apportionment of damages between the parties involved, specifically the shipowner and the charterer. It aims to provide a fair and equitable distribution of responsibility based on the degree of fault or negligence exhibited by each party.
Under this clause, if both the chartered vessel and the other ship are found to be at fault for the collision, the damages and liabilities resulting from the collision will be shared between the shipowner and the charterer in proportion to their respective degrees of fault. The specific allocation is determined based on the circumstances of the collision, including the extent of negligence or fault attributable to each party.
It is important to note that the Both to Blame Collision Clause may not apply in cases where one party can be held solely responsible for the collision, such as instances of willful misconduct or gross negligence.
The inclusion of this clause in a voyage charterparty helps to establish a fair mechanism for allocating liability in collision scenarios, promoting transparency and minimizing disputes between the parties involved.
The Both to Blame Collision Clause is a standard provision that is commonly included in voyage charterparties, which are contracts for the hire of a vessel for a specific voyage. The clause is typically based on the York-Antwerp Rules, which are widely recognized and accepted international rules governing the allocation of liability in maritime collisions.
The purpose of this clause is to provide a balanced approach to determine the liability and share the financial consequences of a collision between the chartered vessel and another ship. By using a proportionate allocation of liability, the clause aims to avoid situations where one party bears the entire burden of the damages resulting from the collision.
Under the Both to Blame Collision Clause, if both the chartered vessel and the other ship are found to have contributed to the collision through their respective negligence or fault, the damages and liabilities are shared between the shipowner and the charterer. The specific proportion of liability is determined based on the degree of fault attributed to each party, often taking into account factors such as the actions or omissions leading to the collision, adherence to navigational rules, and any other relevant circumstances.
By applying the Both to Blame Collision Clause, the financial consequences resulting from the collision are distributed more fairly between the shipowner and the charterer. This encourages both parties to exercise due diligence in the operation of the vessel and promotes a shared responsibility for safe navigation and collision avoidance.
It’s worth noting that the exact wording and application of the Both to Blame Collision Clause may vary depending on the specific terms agreed upon in the voyage charterparty. It is always advisable for parties involved in chartering arrangements to carefully review and understand the provisions of the contract, seeking legal advice if necessary, to ensure they are aware of their rights and obligations in case of a collision.
What is Law and Jurisdiction Clause in Voyage Charterparty?
In a voyage charterparty, the “Law and Jurisdiction Clause” is a contractual provision that determines the governing law and the jurisdiction in which any legal disputes arising from the charterparty will be resolved. This clause helps to establish the legal framework within which the parties’ rights, obligations, and potential disputes will be interpreted and addressed.
The Law and Jurisdiction Clause typically specifies two important aspects:
- Governing Law: This part of the clause determines which country’s laws will be applied to interpret and govern the charterparty. It establishes the legal system and principles that will be used to interpret contractual terms, resolve disputes, and determine the rights and liabilities of the parties involved. The chosen governing law is often based on the preferences and interests of the contracting parties.
- Jurisdiction: This aspect of the clause determines the jurisdiction or legal forum where any disputes arising from the charterparty will be resolved. It designates the court or arbitration tribunal that has the authority to hear and decide on the legal issues brought forward by the parties. The chosen jurisdiction is typically influenced by various factors, including the location of the vessel, the residence or place of business of the parties, and the legal expertise available in a particular jurisdiction.
The Law and Jurisdiction Clause is crucial in voyage charterparties as it provides certainty and predictability in case of disputes. By clearly stating the governing law and jurisdiction, the clause helps avoid conflicts and confusion regarding the applicable legal principles and the appropriate forum for dispute resolution.
It is important for parties entering into a voyage charterparty to carefully consider and negotiate the Law and Jurisdiction Clause. They should assess the potential risks and benefits associated with different governing laws and jurisdictions to ensure that the chosen provisions align with their interests and provide an efficient and effective mechanism for resolving disputes. Legal advice from maritime lawyers may be sought to ensure that the chosen law and jurisdiction are appropriate for the specific circumstances of the charterparty.
What is Cesser Clause in Voyage Charterparty?
In the context of a voyage charterparty, a “Cesser Clause” is a contractual provision that defines the circumstances under which the charterer’s responsibilities and liabilities cease. It outlines the conditions under which the charterer’s obligations to pay freight and hire come to an end.
Typically, a Cesser Clause states that the charterer’s obligations cease upon the completion of the agreed voyage or when the vessel reaches a specific destination. Once these conditions are met, the charterer is no longer liable for payment of freight or hire. The purpose of the Cesser Clause is to establish a clear point at which the charterer’s financial obligations are terminated.
It’s important to note that the specific details and wording of a Cesser Clause can vary depending on the terms negotiated between the parties involved in the charterparty agreement. Therefore, it is advisable to carefully review the exact language and provisions of the charterparty contract to understand the precise implications of the Cesser Clause in a particular agreement.
The Cesser Clause also addresses the termination of the charterer’s responsibilities beyond the payment of freight or hire. It typically specifies that once the obligations under the charterparty cease, the charterer is released from any further liability for expenses, such as port charges, fuel costs, or other expenses incurred during the voyage.
Furthermore, the Cesser Clause often includes provisions related to the transfer of responsibility for cargo. It may state that once the cargo is discharged from the vessel at the agreed destination, the charterer’s liability for the cargo also ceases. This means that any risks, losses, or damages to the cargo that occur after delivery are no longer the charterer’s responsibility.
In addition to defining the conditions for the termination of the charterer’s obligations, the Cesser Clause may also outline the consequences of non-compliance with the agreed terms. It could specify that if the charterer fails to fulfill their obligations, the Cesser Clause will not come into effect, and the charterer remains liable for any outstanding payments or other obligations.
It’s worth noting that the Cesser Clause is just one component of a voyage charterparty agreement. This type of agreement covers various aspects, including the rights and responsibilities of both the owner of the vessel (shipowner) and the charterer, the duration of the charter, freight rates, laytime, demurrage, and other important terms and conditions.
As with any contractual provision, it is crucial for both parties involved in the voyage charterparty to carefully review and understand the Cesser Clause, along with the entire agreement, to ensure compliance and avoid any misunderstandings or disputes regarding the termination of the charterer’s obligations. Consulting legal professionals or maritime experts is advisable to ensure clarity and accuracy in interpreting the specific provisions of the Cesser Clause within a given charterparty contract.
What is War Clause in Voyage Charterparty?
In a voyage charterparty, a “War Clause” is a contractual provision that addresses the implications and responsibilities of the parties involved in the charterparty agreement in the event of war or warlike hostilities. It aims to establish the rights, obligations, and potential adjustments that may arise when war-related circumstances impact the voyage or the performance of the charterparty.
The War Clause typically outlines the actions that should be taken by both the shipowner and the charterer in the event of war or the outbreak of hostilities. It may include provisions such as:
- Right to Evade: The War Clause might grant the shipowner the right to deviate from the agreed voyage and take alternative routes or make necessary diversions to avoid areas or ports affected by war or hostile activities. This provision allows the shipowner to prioritize the safety of the vessel, crew, and cargo.
- Suspension of Obligations: The War Clause may stipulate that the charterer’s payment obligations, such as freight or hire, are suspended during the period of war or hostilities. This recognizes that the ability to perform the charterparty as originally agreed may be significantly impacted during times of conflict.
- Termination of the Charterparty: The War Clause could specify that either party has the right to terminate the charterparty if the war or hostilities persist for an extended period. This termination clause allows the parties to dissolve the contract if the circumstances make it impractical or impossible to continue with the agreed voyage.
- Adjustments in Laytime and Demurrage: If war-related events delay the loading or unloading of the cargo, the War Clause may address the adjustments to laytime (the agreed time for loading/unloading) and demurrage (the compensation payable for exceeding the laytime). These adjustments recognize that war or hostilities may result in disruptions to the cargo operations.
- Insurance Requirements: The War Clause may specify the insurance coverage that the shipowner and the charterer must maintain to protect against war risks. This could include obtaining additional war risk insurance or adjusting the existing insurance policies to cover potential losses or damages caused by war or hostilities.
- Force Majeure: The War Clause might incorporate force majeure provisions that outline the rights and obligations of the parties in the event of war or hostilities. Force majeure refers to unforeseen circumstances beyond the control of the parties that prevent them from fulfilling their contractual obligations. The clause may address issues such as delay, suspension, or termination of the charterparty due to force majeure events caused by war.
- Communication and Notices: The War Clause may require the parties to promptly notify each other of any war-related events, such as the outbreak of hostilities, blockades, or embargoes. This ensures that both parties are aware of the situation and can take appropriate actions as specified in the clause.
- Arbitration or Dispute Resolution: In the event of disputes arising from the interpretation or application of the War Clause, it may outline the method of dispute resolution, such as arbitration or mediation. This provides a mechanism for resolving conflicts between the shipowner and the charterer concerning war-related issues.
It is crucial for both parties to thoroughly understand and negotiate the specific terms of the War Clause in the voyage charterparty agreement. This ensures that they are adequately protected and prepared for any war-related events that may impact the performance of the charterparty. Given the complexity of such provisions, seeking legal advice and guidance from maritime professionals is advisable to ensure that the War Clause effectively addresses the risks associated with war or hostilities and protects the interests of the parties involved.
It is important to note that the specific wording and provisions of the War Clause can vary between charterparty agreements. Therefore, it is essential to carefully review the exact language of the contract to understand the precise implications and responsibilities of the parties in relation to war or hostilities. Legal professionals or maritime experts can provide guidance in interpreting and negotiating the War Clause to ensure that the charterparty agreement adequately addresses the risks associated with war-related events.
What is BIMCO Piracy Clause in Voyage Charterparty?
The BIMCO Piracy Clause, developed by the Baltic and International Maritime Council (BIMCO), is a contractual provision that addresses the risks and responsibilities related to piracy attacks in voyage charterparty agreements. It specifically focuses on the obligations of the shipowner and the charterer in navigating high-risk areas and mitigating the impact of piracy on the voyage.
The BIMCO Piracy Clause typically includes the following key elements:
- Routing and Precautions: The clause may require the shipowner and the charterer to collaborate and agree on the routing of the vessel through areas prone to piracy. It may also specify the precautions and protective measures to be taken, such as the use of onboard security personnel, increased vigilance, and adherence to industry best practices for piracy prevention.
- Compliance with Industry Guidelines: The clause may reference internationally recognized guidelines and recommendations, such as those issued by the International Maritime Organization (IMO), the industry-led Best Management Practices (BMP), or specific regional authorities. These guidelines provide comprehensive advice on piracy prevention and response measures, and compliance with them is typically expected by the BIMCO Piracy Clause.
- Reporting Obligations: The clause may impose reporting obligations on the shipowner and the charterer regarding any piracy-related incidents or suspicious activities encountered during the voyage. This ensures that relevant information is promptly shared and appropriate actions can be taken to safeguard the vessel, crew, and cargo.
- Security Costs: The BIMCO Piracy Clause may address the allocation of costs associated with implementing additional security measures. It may specify whether these costs are to be borne by the shipowner or the charterer and provide guidance on the reimbursement process.
- War Risks Insurance: The clause may require the shipowner and the charterer to maintain appropriate war risks insurance coverage that includes piracy-related risks. This ensures that both parties are adequately protected financially in the event of piracy incidents.
- Alternative Route or Cancellation: The BIMCO Piracy Clause may provide provisions for alternative routes or the option to cancel the voyage altogether in the event of an escalation of piracy threats or a specific piracy incident. This allows the parties to assess the risks and make informed decisions regarding the safety and feasibility of continuing the voyage.
- Piracy Response and Cooperation: The clause may require the shipowner and the charterer to cooperate and coordinate their efforts in responding to piracy incidents. This includes promptly reporting incidents to relevant authorities, providing necessary information and support to facilitate response operations, and complying with any directives or instructions issued by the designated response agencies.
- Piracy-related Costs and Delays: The BIMCO Piracy Clause may address the allocation of costs and potential delays resulting from piracy incidents. It may specify which party bears the financial responsibility for additional expenses incurred, such as insurance deductibles, crew compensation, or vessel repairs. Additionally, the clause may provide guidance on laytime and demurrage adjustments if piracy-related events cause delays in loading or discharging the cargo.
- Termination of Charterparty: In extreme cases where piracy poses an ongoing and significant risk to the vessel, crew, or cargo, the clause may include provisions for the termination of the charterparty. This allows either party to dissolve the agreement if the circumstances make it impractical or unsafe to continue with the voyage.
- Indemnification and Liability: The BIMCO Piracy Clause may outline the indemnification and liability obligations of the shipowner and the charterer in relation to piracy incidents. It clarifies the extent of responsibility and potential claims that may arise from piracy-related losses, damages, or injuries.
It is crucial for both parties to thoroughly review and understand the specific terms of the BIMCO Piracy Clause in the voyage charterparty agreement. This ensures that they are adequately prepared to address piracy risks, comply with industry standards, and respond effectively in the event of piracy incidents. Given the complex nature of piracy-related issues, seeking legal advice and guidance from maritime professionals is advisable to ensure that the BIMCO Piracy Clause is appropriately incorporated and addresses the specific risks and responsibilities associated with piracy in the charterparty agreement.
It is important to note that the specific wording and provisions of the BIMCO Piracy Clause can vary between charterparty agreements, as it can be adapted and tailored to meet the specific needs and circumstances of the parties involved. Therefore, it is essential to carefully review the exact language of the clause within the contract to understand the precise obligations and responsibilities related to piracy mitigation and response. Consulting legal professionals or maritime experts is advisable to ensure that the BIMCO Piracy Clause is effectively incorporated into the voyage charterparty agreement and provides the necessary safeguards against piracy risks.
What is BIMCO Sanctions Clause in Voyage Charterparty?
The BIMCO Sanctions Clause in a Voyage Charterparty is a contractual provision that addresses the impact of sanctions imposed by governments or international organizations on the performance of the charterparty. BIMCO, the Baltic and International Maritime Council, is a prominent international shipping association that develops standard contracts and clauses widely used in the maritime industry.
The Sanctions Clause is designed to protect the interests of both the owners and charterers in the event that sanctions are imposed during the course of the charterparty. It provides a mechanism to deal with situations where the performance of the contract becomes illegal or prohibited due to the application of sanctions.
The clause typically specifies that if, during the charter period, the vessel becomes subject to sanctions that prevent its intended use or operation, both parties have the right to terminate the charterparty without penalty. The termination can be exercised by either the owners or charterers, depending on the specific wording of the clause.
The clause also addresses the financial implications of sanctions. It may state that, upon termination, the charterers are responsible for paying any outstanding amounts due to the owners up until the termination date, while the owners are obliged to refund any prepaid hire or other sums that the charterers have paid but are no longer applicable due to the termination.
The BIMCO Sanctions Clause aims to provide a fair and balanced approach for both parties in dealing with the impact of sanctions during a voyage charterparty. However, it is essential to consult the specific language of the clause in the charterparty to fully understand its terms and conditions, as variations and modifications may exist depending on the version or edition used.
In addition to addressing the termination and financial aspects, the Sanctions Clause may also outline the obligations of the parties regarding the vessel’s employment during a sanctions event. For example, it may require the charterers to take immediate steps to discharge any cargo subject to the sanctions or to divert the vessel to a safe port if the original port of call becomes inaccessible due to sanctions.
Furthermore, the clause often includes provisions regarding the allocation of costs and expenses incurred as a result of the sanctions. This can include costs associated with deviation, additional insurance, or legal fees. The allocation of such costs may vary depending on the specific wording of the clause, and parties are encouraged to negotiate these aspects beforehand to ensure a clear understanding.
It’s important to note that the BIMCO Sanctions Clause serves as a starting point for parties entering into a voyage charterparty. It provides a standard framework for addressing sanctions-related issues, but it is not a substitute for legal advice. Parties should carefully review the clause and consider seeking legal counsel to ensure that their specific circumstances and concerns are adequately addressed.
The BIMCO Sanctions Clause has become increasingly important in recent years due to the expansion of sanctions regimes by various countries and international bodies. These sanctions can have significant implications for the maritime industry, impacting vessel operations, trade routes, and commercial relationships. By incorporating the Sanctions Clause into their charterparty agreements, parties can proactively address potential disruptions and mitigate risks associated with sanctions-related events.
It is worth mentioning that BIMCO regularly updates its standard clauses to reflect changes in regulations and industry practices. Therefore, it is advisable to refer to the latest version of the BIMCO Sanctions Clause or consult with legal experts to ensure compliance with current requirements.
In conclusion, the BIMCO Sanctions Clause in a Voyage Charterparty provides a contractual framework for dealing with the impact of sanctions on the performance of the charterparty. It addresses termination rights, financial obligations, cargo discharge or diversion requirements, and cost allocations, aiming to provide a fair and balanced approach for both owners and charterers in navigating sanctions-related challenges in the maritime industry.
What is New Jason Clause in Voyage Charterparty?
New Jason Clause is included in the most of the bill of ladings. The purpose of New Jason Clause is to highlight the fact that no matter what, the General Average (GA) would apply to the charterparty. As per Rule D of the York Antwerp Rules, irrespective of the party at fault that led to an incident, General Average (GA) would apply. However, certain jurisdictions, such as the United States, have legislation that prohibits the application of General Average (GA) in situations where the fault lies with the navigational actions of the ship’s crew members.
Inclusion of New Jason Clause in the Bill of Lading protects the shipowners by having the General Average (GA) in these cases too.
The New Jason clause states that
“In the event of accident, danger, damage or disaster before or after the commencement of the voyage resulting from any cause whatsoever, whether due to negligence or not, for which, or for the consequence of which, the carrier is not responsible by statute, contract or otherwise, the goods, shippers, consignees or owners of the goods shall contribute with the carrier in general average to the payment of any sacrifices, losses or expenses of a general average nature that may be made or incurred and shall pay salvage and special charges incurred in respect of the goods.
If a salving ship is owned or operated by the carrier, salvage shall be paid for as fully as if the said salving ship or ships belonged to strangers. Such deposit as the carrier or his agents may deem sufficient to cover the estimated contribution of the goods and any salvage and special charges thereon shall, if required, be made by the goods, shippers, consignees or owners of the goods to the carrier before delivery
The New Jason Clause necessitates the contribution of the cargo owner to the General Average (GA). The cargo owner is obligated to bear the expenses incurred due to the shipowner’s (carrier’s) negligence. In such circumstances, the New Jason Clause should be included in the Bill of Lading (B/L).
The concept of General Average (GA) entails the equitable distribution of losses or damages sustained by both the shipowner and the cargo owner.
Hence, the New Jason Clause safeguards the interests of shipowners in instances where damage is caused by the carelessness of the shipowner or the crew.
Before the enactment of the Harter Act in 1893, shipowners received no recompense from cargo owners for losses resulting from the ship owner’s negligence. To establish a mechanism through which the negligent shipowner could recover in General Average (GA), shipowners incorporated a clause into their Bill of Lading. This clause stipulated that recovery would be allowed when the ship was released from claims under the Harter Act and had undergone a diligent process. Subsequently, the carrier immunities were revised in the Carriage of Goods by Sea Act of 1936, incorporating the new Jason clause.