Ship Sale & Purchase Documents
After the Ship Sale & Purchase procedure, when the time comes for delivery of the ship, this is carried out by the execution and delivery of a Bill of Sale, which under English Law, must be executed under seal.
The Bill of Sale
The Bill of Sale is handed over against a letter releasing the deposit and a Banker’s Draft for the balance of the price. If extra payment for bunkers and stores is provided for, this is dealt with at the same time. As insurance runs from noon to noon this is usually the time selected for delivery.
The shipbroker should make sure that the new owner has attached insurance and also ascertain whether the following documents are being handed over either on board or on shore:
- Certificate of Registry
- Load Line Certificate
- Deratization Certificate
- Safety Construction Certificate
- Safety Radio Certificate
- Safety Equipment Certificate
- Classification Certificates
Occasionally shipbrokers is asked to register the ship in the new shipowner’s name, in which case he has to go to the registrar with the following documents:
- Bill of Sale
- Declaration of Ownership
- Appointment of Managing Owner or Ship’s Husband
and in addition if the Buyer has not previously owned a ship:
- Articles of Association
- Certificates of Incorporation
- Appointment of Public Officer
The Bill of Sale must be signed before a Notary Public and bear the visa of the Buyer’s Consul.
Ship Sales for Demolition
Ship Sales for Demolition are, much simpler with no problems about dry-docking registration or classification, but may require the arrangement of towage contracts or cargo voyages to the ultimate port of destination.
Ship Sale & Purchase Documents
The sale and purchase of a ship involves various legal and contractual documents, each serving a specific purpose. While the actual documents required may vary depending on the specific legal jurisdiction and the exact circumstances of the transaction, the following list outlines some common documents involved in the ship sale and purchase process:
- Memorandum of Agreement (MOA): This is the principal document for the sale and purchase of a ship. It is a legally binding contract between the buyer and the seller that outlines the terms and conditions of the sale, including the price, the ship’s details, and the delivery date.
- Bill of Sale: This document acts as a receipt for the transaction. It provides proof of transfer of ownership from the seller to the buyer.
- Certificate of Ownership: This document proves that the seller is the legal owner of the ship and has the right to sell it.
- Deletion Certificate: The Deletion Certificate is needed for the ship’s removal from its previous register, which allows for its registration under a new flag state.
- Class Certificate: This is a document that verifies that the ship is classed and meets the safety and other standards set by the classification society.
- Certificate of Registry: Issued by the shipping registry of a country, this document proves the ship’s nationality.
- Commercial Invoice: This is used for customs purposes and includes a description of the ship, the price, the name and address of the seller and buyer, and other information required for import/export control.
- Ship’s Logbook: This is a record of important events in the ship’s journey, maintenance and repair records, and other details.
- Insurance Documents: These documents detail the insurance coverage of the ship.
- Certificates for Safety Management System (SMS) and International Safety Management (ISM): These certificates demonstrate that the ship has a safety management system in place and complies with ISM standards.
- Dry Docking Reports: Dry docking is a period during which a ship is brought to dry land so that the submerged portions of the hull can be cleaned and inspected. The reports from the most recent dry docking can provide a prospective buyer with valuable information about the ship’s condition.
- Seaworthiness Certificate: This document attests that the ship is fit to navigate and can safely carry goods or passengers.
- International Load Line Certificate: This indicates that the ship complies with the safety regulations regarding the minimum freeboard (the distance from the waterline to the lowest point where water can enter the ship).
- Certificates of Inspection: These are issued by various regulatory bodies and they confirm the ship’s compliance with safety, environmental, and other standards.
- Inventory of Hazardous Materials (IHM): This inventory is now mandatory for all ships and it identifies all potentially hazardous materials onboard.
- Technical Management Agreement: If the ship is to be managed by a technical management company, there will be an agreement specifying the services to be provided by the company.
- Crew Management Agreement: If the crew is to be provided by a separate crew management company, there will be an agreement outlining the services to be provided.
- Shipbuilding Contracts (If Applicable): If the ship was built to the seller’s specifications, the shipbuilding contracts can provide important information about the ship’s design and capabilities.
- Previous Charter Party Agreements: These are contracts for the hire of the ship and can give a buyer a good idea of the income potential of the ship.
- Maritime Lien Search: This is a search of the ship’s history to ensure there are no outstanding liens or encumbrances on the ship.
This list of documents further highlights the complexity and detail involved in the sale and purchase of a ship. Please note that the above list is not exhaustive, and there may be additional documents required for the sale and purchase of a ship depending on the local laws and regulations. Always consult with a maritime lawyer or a shipbroker specialized in ship sale and purchase to ensure that you have all the necessary paperwork for your transaction.
Bill of Sale in Ship Sale & Purchase
The Bill of Sale is a crucial legal document in the sale and purchase of a ship. It essentially serves as the official ‘receipt’ of the transaction and is evidence of the transfer of ownership from the seller to the buyer. The document typically includes the following information:
- Identifying Information: This includes the name and address of the seller and the buyer. It may also include other identifying details as required by local law or regulation.
- Description of the Ship: The Bill of Sale should include a full and detailed description of the ship, including its name, the shipyard where it was built, the year of construction, its official number, gross/net registered tonnage, main dimensions, class, and other relevant details. This ensures that the ship being sold is clearly and accurately identified.
- Sale Price: The document should clearly state the purchase price of the ship in the agreed currency.
- Warranties: The Bill of Sale may include warranties, such as the seller’s warranty that they are the legal owner, that the ship is free from encumbrances, or that they have the legal right to sell the ship.
- Signature of Parties: Both the seller and the buyer should sign the Bill of Sale. It may also require witnessing and notarization, depending on the laws of the jurisdiction in which the sale takes place.
- Date: The date when the document was signed is also mentioned.
- Witnesses: In many jurisdictions, the signatures of the seller and the buyer need to be witnessed. The names, addresses, and signatures of these witnesses will be on the document.
- Conveyance: This section of the Bill of Sale affirms that the seller is conveying all of their rights, title, and interest in the ship to the buyer.
- Jurisdiction: This section will usually declare the law that governs the Bill of Sale and the courts that have jurisdiction in the event of a dispute.
- Severability: This is a standard clause in many legal documents that states that if one part of the agreement is found to be invalid, the rest of the agreement still stands.
- Acknowledgment and Notarization: Depending on the requirements of the jurisdiction in which the sale is taking place, the Bill of Sale may need to be notarized. This means that a notary public will need to confirm the identities of the people signing the document, witness their signatures, and then stamp and sign the document themselves.
Once the Bill of Sale has been completed and executed, it becomes a binding legal document. This document, along with the deletion certificate from the seller’s registry and other necessary documents, is submitted to the buyer’s chosen ship registry.
The new ship registry will then issue a provisional certificate of registry, allowing the ship to operate under the new ownership and flag. The registry will then issue a permanent certificate of registry after all required documents have been submitted and all procedures have been completed.
In conclusion, the Bill of Sale is a pivotal document in the ship sale and purchase process, as it forms the legal foundation of the transfer of ownership. As the specific requirements and details can vary greatly depending on a variety of factors, it is crucial to seek legal advice when preparing and executing this document.
Once signed and executed, the Bill of Sale should be registered with the appropriate maritime or shipping registry. This provides public notice of the change in ownership and helps to protect the buyer’s rights in the ship.
BIMCO SHIPSALE 22 FORM
In contrast to SALEFORM 2012, yet resembling other BIMCO standard contracts, Part I of SHIPSALE 22 incorporates the standard box layout, delineating vital information such as the parties’ particulars, amounts, and inspection arrangements, thus enabling easy access to key data and minimizing the need for substantial changes to Part II text. The substantive provisions are presented in Part II, followed by two annexes containing the delivery documents and excluded items.
Furthermore, the clauses have been meticulously arranged to ensure that SHIPSALE 22 adheres to the customary chronology of a sale and purchase transaction, enhancing its readability and user-friendliness.
Apart from the layout modifications, SHIPSALE 22 introduces certain revisions to the existing language and incorporates new clauses in response to the latest developments in market practices. Below are some noteworthy changes:
Unlike SALEFORM 2012, SHIPSALE 22 addresses the issue of subjects governing the effectiveness of the agreement. Practically, parties often address conditions precedent before signing the memorandum of agreement (during exchanges on terms and the recap) to ensure that the deal becomes unconditional upon signing. One of the remarkable additions in SHIPSALE 22 is the subjects clause, empowering parties to specify any conditions in the agreement that must be fulfilled for it to take effect. In case any conditions remain unfulfilled by the specified date, the agreement will automatically become null and void. When incorporating subjects into the memorandum of agreement, it is crucial to clearly stipulate which party is responsible for fulfilling these conditions and how to confirm their fulfillment.
In ship sale and purchase transactions, it is not uncommon for the performance of one or both parties (especially the buyer-side) to be guaranteed by another entity, particularly when the concerned party is a single-purpose entity. To streamline the documentation of the performance guarantee within a single document, SHIPSALE 22 includes a signature field and a statement from each relevant guarantor, affirming their commitment to guarantee the performance of the seller’s or buyer’s obligations, as the case may be, in accordance with the agreement.
Deposit and Remittance
Modifications have been introduced to the deposit clause in SHIPSALE 22, specifically pertaining to a deposit holding agreement. This agreement shall delineate the underlying principles governing the receipt, custody, and release of the deposit by the deposit holder. Moreover, the notion of disruptive banking events has been incorporated into SHIPSALE 22. According to the deposit clause, the buyer will be granted a grace period of two banking days if the deposit holder’s receipt of the deposit is hindered by certain disruptive banking events. Such events may include delays due to bank sanctions checks, for instance. SHIPSALE 22 also encompasses a gross-up clause, which dictates that the party making the payment must augment the relevant amount to ensure that the other party receives and retains the full payment when required by applicable law to make any deduction or withholding.
SALEFORM 2012 allows the parties to choose between two options: an outright sale with a completed inspection of the ship and its classification records before the agreement is executed, or a sale subject to the buyer’s right to conduct a pre-delivery inspection. SHIPSALE 22 introduces a third option: an outright sale where the buyer waives its right to inspect the ship and its classification records. This option may be agreed upon in a seller’s market, certain types of sale and leaseback transactions, and distressed sales. However, the buyer may still wish to inspect the classification records.
In the case of option (ii) above, the buyer’s right of inspection is narrower under SHIPSALE 22. The inspection, as per SHIPSALE 22, is limited to examining the ship’s engines, machinery, equipment, and systems “without testing,” as opposed to “without opening up” under SALEFORM 2012. It is essential to note that while SALEFORM 2012 specifies a default position when the parties fail to make a selection, SHIPSALE 22 does not. Therefore, it is crucial for the parties to ensure that the relevant box is properly filled in.
We kindly suggest that you visit the web page of BIMCO (Baltic and International Maritime Council) to learn more about the Ship Sale & Purchase Standard Forms and to obtain the original BIMCO SHIPSALE 22 Form and other documents. www.bimco.org
Furthermore, please check BIMCO Standard Deposit Escrow Agreement for Ship Sale and Purchase. The Standard Deposit Escrow Agreement for Ship Sale and Purchase is a contract for depositing money in connection with ship sale and purchase transaction. The latest edition of this contract is the Standard Deposit Escrow Agreement for Ship Sale and Purchase, issued in 2017. www.bimco.org
What is the difference between Norwegian Saleform 1993 and Norwegian Saleform 2012?
A ship sale agreement stands as a document that records all the primary terms and particulars concerning the sale of a ship, as agreed upon by the contracting parties. It takes the form of a “Memorandum of Agreement,” which is widely recognized in the shipping market, offering various standard formats. Among these Standard Forms are:
- Norwegian Sale Form (Saleform 1993 and Saleform 2012)
- Singapore Ship Sale Form
- Baltic and International Maritime Council (BIMCO) Shipsale 22
Of these forms, the Norwegian Sale Form is the most prevalent in ship sale and purchase, while the Nipponsale caters primarily to the Japanese shipping market, and the Singapore Ship Sale Form occasionally sees use in the Asian shipping market. The Shipsale 22, being contemporary, accommodates users transitioning from other forms of ship trading and incorporates provisions like a virtual documentary closing and electronic contract signatures, adapted in response to the COVID-19 pandemic.
Nevertheless, these standard forms are not universally applicable. In many cases, adjustments must be made to suit the specific circumstances of each transaction.
This article is divided into two parts, with the purpose of highlighting key points that may prove valuable to lawyers or legally trained individuals involved in drafting ship sale agreements.
Now, let’s delve into the significant distinctions between the Saleform 1993 and Saleform 2012, as well as the differences between Saleform 2012 and the Shipsale 22:
- The Saleform 1993 prescribes a fixed deposit of 10% of the total purchase price. However, the Saleform 2012 allows for flexibility, enabling the parties to agree upon the deposit amount.
- Notice of Readiness:
- While the Saleform 1993 necessitates the ship to be “in every respect” physically prepared for delivery as a precondition for the seller’s tender of the Notice of Readiness (NOR), the Saleform 2012 omits the phrase “in every respect” from the equivalent provision.
- The Saleform 1993 contains two separate clauses for the payment of “deposit” and “purchase price.” In contrast, the Saleform 2012 consolidates these payments into a single clause, covering both the “deposit” and the “balance of the purchase price.”
- Underwater Inspection and Drydocking:
- The Saleform 2012 grants buyers the option to arrange for an underwater inspection, provided that the buyer declares the choice at least 9 days before the ship’s intended delivery date. This option is absent in the Saleform 1993.
- Alternatively, if the buyer chooses to inspect the ship through drydocking, and any damage is discovered in the underwater parts that affects the ship’s classification, the sellers bear the repair costs and the expenses associated with placing the ship in and out of drydock. This provision is also absent in the Saleform 1993.
- Cancelling Date:
- Under the Saleform 2012, if the buyers are informed that the ship will not be ready for delivery by the agreed Cancelling Date, the time frame for the buyers to accept or reject a new Cancelling Date is reduced from 7 running days (as per the Saleform 1993) to 3 banking days.
By understanding these distinctions, lawyers and legally trained individuals can make more informed decisions while drafting ship sale agreements.
What is the difference between Norwegian Saleform 2012 and BIMCO Shipsale 22?
The Shipsale 22 introduces a novel provision not present in the Saleform 2012, offering the option for a virtual documentary closing. This advancement in modern practice signifies the progressive nature of the Shipsale 22.
One significant departure from the Saleform 2012 is the acceptance of electronic signatures in the Shipsale 22. This allows the involved parties to conveniently sign not only the Shipsale 22 but also any related documents electronically, streamlining the transaction process.
Another noteworthy contrast between the two agreements lies in their approach towards sanctions and anti-corruption measures. While the Saleform 2012 lacks any explicit sanction and anti-corruption clause, the Shipsale 22 prudently includes such provisions, ensuring compliance with legal and ethical standards.
Confidentiality is a crucial aspect in any agreement, and both forms recognize its importance. However, the Shipsale 22 stands apart by already incorporating a comprehensive confidentiality clause, eliminating the need for parties to amend it separately, as often practiced with the Saleform 2012.
The differences between the Saleform 2012 and Shipsale 22 are apparent and significant. Notably, the Shipsale 22’s provisions address practical challenges brought forth by the Covid-19 pandemic, making it an appealing option for parties seeking modern and pandemic-responsive practices. However, each standard form possesses its own distinct features. Therefore, parties must be well-informed about these key distinctions to select the agreement that best suits the nature of their transactions.
What are the stages in buying and selling of ship?
Buying and selling a ship, whether it’s a commercial ship, a luxury yacht, or a small fishing boat, involves several stages. Here is a generalized process:
- Requirement Analysis: The buyer identifies their requirements such as type, size, capacity, and price range of the ship. On the other hand, the seller decides on the price, payment terms, and other conditions for selling the ship.
- Research and Listings: The buyer begins to search for suitable ships that meet their needs, typically through ship brokers, online platforms, or directly contacting sellers. The seller lists their ship for sale through similar channels.
- Preliminary Inspection: Interested buyers or their representatives conduct a preliminary inspection of the ship. This typically involves a review of the ship’s documents, certificates, maintenance records, and a visual inspection to assess its condition.
- Valuation: If the buyer is still interested, they might engage a marine surveyor or other expert to assess the ship’s condition in more detail, and provide an estimate of its market value.
- Negotiation and Agreement: The buyer and seller negotiate the terms of the sale, including the price and payment terms. If they reach an agreement, they draft a Memorandum of Agreement (MOA), which outlines the terms of the sale and the responsibilities of both parties.
- Detailed Inspection and Sea Trial: The buyer arranges a more detailed inspection of the ship, often involving a dry-dock examination and a sea trial to test the ship’s performance.
- Purchase Agreement: If the inspection and sea trial are satisfactory, the buyer and seller sign a formal purchase agreement. This contract binds both parties to the sale, and typically includes provisions for a deposit from the buyer.
- Financing and Payment: The buyer arranges financing, if necessary, and makes payment according to the agreed terms. This might involve a deposit, with the balance due at delivery, or other arrangements.
- Transfer of Ownership: Once the full payment is received, the seller transfers ownership of the ship to the buyer. This involves changing the ship’s registration and updating the records of the relevant authorities.
- Delivery: The seller hands over physical control of the ship to the buyer. This usually involves a delivery voyage, with the seller responsible for the ship until it reaches the agreed delivery location.
- Post-Sale Service: Depending on the terms of the sale, the seller might provide some post-sale services such as technical support, training for the buyer’s crew, or assistance with maintenance.
This is a complex process, often involving various professionals such as brokers, lawyers, surveyors, and financiers. It’s essential for both buyers and sellers to understand their rights and responsibilities at each stage, to avoid costly mistakes or disputes.
What is Norwegian Saleform?
Norwegian Saleform, also known as the Norwegian Sales Form for Ships (or NSF 2012 or 1993), is a standard contract used for the sale and purchase of secondhand ships. This contract was established by the Norwegian Shipbrokers’ Association and is widely used in international maritime law.
This form is considered a balanced contract as it contains provisions that are beneficial to both buyers and sellers. Some common sections include:
- Description of the Ship: The ship’s technical characteristics are detailed here.
- Deposit: The deposit amount the buyer has to pay upon signing the contract is specified.
- Payment: The remaining balance of the sale price and the method and place of payment are outlined.
- Delivery and Acceptance: The conditions for the delivery of the ship, including the location and time, are determined.
- Inspection and Drydocking: If there’s a need for the ship to be inspected or placed in dry dock, the specifics are clarified in this section.
- Default: This outlines what happens if either the buyer or seller fails to meet their contractual obligations.
- Arbitration: If a dispute arises, this section sets out the method for resolving it.
- Encumbrances: This section is about the legal and financial claims or liens on the ship. The contract normally stipulates that the ship is to be delivered free of encumbrances.
- Commissions: If any brokers are involved in the transaction, the contract will specify who will pay them and how much the commission will be.
- Documentation: This part outlines what kind of legal documents are to be provided by the seller, to prove things like ownership, sea-worthiness, and regulatory compliance.
- Passing of Title and Risk: This states when the ownership and risk will transfer from the seller to the buyer, which is typically at the time of delivery.
- Classification Society: The saleform may also contain details about the classification society the ship belongs to. A classification society is a non-governmental organization that establishes and maintains technical standards for the construction and operation of ships and offshore structures.
- Jurisdiction and Law: This section outlines the governing law of the contract and the jurisdiction in which any legal disputes would be settled.
- Notices: This part specifies how all notices, requests, demands, and other communication between the buyer and seller should be made.
- War Cancellation: In case of war or hostilities, this clause allows either party to cancel the contract.
It’s important to note that while the Norwegian Saleform is a comprehensive document, every ship sale is unique, and the specific terms will need to be negotiated between the buyer and seller. These are just a few examples of the contents in a Norwegian Saleform contract.
What constitutes a Ship Purchase Agreement?
A ship purchase agreement, also known as a boat purchase agreement, is a legally binding contract forged between the purchaser and vendor of a maritime ship. These agreements delineate the rights and obligations of both parties, alongside any specific provisions they mutually agree upon. For example, a provision may stipulate that should the ship fail to be delivered to the buyer within 180 days from the agreed-upon date, they retain the right to rescind their obligation to purchase it.
Furthermore, the buyer shall be entitled to the reimbursement of any upfront payments made for chartering agreements or other expenses incurred before the delivery date, as specified in advance under “condition precedent” clauses. Such clauses are commonplace in contracts where adherence to timelines is crucial – such as construction projects or film production deals involving actors with prior commitments on certain dates.
Given the substantial nature of these transactions, it is paramount to collaborate with legal counsel to ensure the establishment of an airtight agreement that safeguards your rights.
Prominent Sections in Ship Purchase Agreements
Below is an inventory of significant sections typically encompassed within Ship Purchase Agreements. These sections are interlinked with the sample agreement provided below for your perusal.
- Sale And Purchase Of The Ship
- Representations And Warranties Of Seller
- Representations And Warranties Of The Buyer
What is new in BIMCO SHIPSALE 22?
The Baltic and International Maritime Council (BIMCO) recently unveiled its own standardized ship sale and purchase contract, SHIPSALE 22. This novel form aims to upgrade and enhance the leading standard, SALEFORM 2012, which is the latest version of the Norwegian Shipbrokers’ Association’s agreement for ship sale and purchase.
Rather than being a response to specific legal developments, the new SHIPSALE 22 was meticulously drafted by a team of industry experts following extensive consultations. The primary goals were to formalize and elucidate the form, improve accessibility, and align more closely with the chronological aspects of a typical ship sale, with further updates to reflect modern market practices.
Format of BIMCO SHIPSALE 22
Those familiar with the box format found in other Baltic and International Maritime Council (BIMCO) contracts will be delighted to see its adoption in Part I of SHIPSALE 22. This section provides a concise summary of transaction information, including key dates, amounts, inspection arrangements, and more, allowing parties to grasp the commercial details at a glance.
Substantive clauses follow in Part II, while the additional annexes addressing delivery documents and excluded items are now standard inclusions. Many parties using SALEFORM 2012 were accustomed to adding annexes for these purposes, and some even had their own standard wordings covering these areas. However, the BIMCO SHIPSALE 22 annexes will serve as a useful foundation for those without pre-established terms concerning delivery documents and excluded items.
New “Subjects” Clause in BIMCO SHIPSALE 22
A key addition in BIMCO SHIPSALE 22 is the dedicated ‘subjects’ clause, which enables the parties to agree and document specific conditions that must be fulfilled before the agreement becomes effective. If these conditions are not met by the specified date, the agreement is automatically rendered null and void.
From a practical standpoint, many buyers and sellers may prefer to address such conditions before incurring the costs and time associated with negotiating and signing the agreement. In cases where subjects are included, it is crucial to clarify which party is responsible for addressing them and confirming their satisfaction.
Deposit and Purchase Price of a Ship in BIMCO SHIPSALE 22
The deposit clause in SALEFORM 2012 was amended from its previous version (SALEFORM 1993) to align more closely with market practices, specifically the increased use of a third-party deposit holder in lieu of a joint account in the name of the buyer and seller, held with either party’s bank. BIMCO SHIPSALE 22 builds upon this by making specific references to a separate deposit holding agreement among the buyer, seller, and deposit holder.
Another novel addition to the deposit clause is the concept of a ‘disruptive banking event.’ This refers to a specific event beyond the parties’ control that delays the deposit holder’s receipt of the deposit. If such an event occurs, the buyer is granted additional time to complete the transfer. The definition extends to a delay resulting from a ‘review’ by the deposit holder’s bank or a correspondent bank, likely encompassing anti-money laundering and sanctions checks, which are increasingly commonplace.
Regarding the payment of the balance on delivery, BIMCO SHIPSALE 22 does not specify the payment and release mechanisms to be employed. The ‘stand-off’ remains as to who takes the initiative: the buyer sending the balance of funds or the seller effecting delivery of the ship. This issue is particularly highlighted when one or more financing banks are involved, and the ship forms part of a security package.
The seller’s bank will desire receipt of the funds before releasing its mortgage, while the buyer’s bank will insist on ensuring the ship is delivered free of encumbrances before releasing the money. This is expected to continue being a case-by-case consideration, depending on various factors, including each party’s experience and bargaining power.
Inspection Clause in BIMCO SHIPSALE 22
One significant change from SALEFORM 2012 is found in the inspection clause. Previously, parties had only two alternatives: either the buyer had inspected and accepted the ship and her class records, or the buyer would have the right to inspect the ship and class records.
BIMCO SHIPSALE 22 introduces a third option, wherein the buyer expressly waives an inspection of the ship and class records and accepts them ‘as-is’. This may prove advantageous in certain transactions.
There are also separate clauses addressing underwater inspection and dry-docking, largely covering the same issues as before but in greater detail.
On-board Representatives in BIMCO SHIPSALE 22
Buyers now enjoy an automatic right to place representatives on board following the payment of the deposit. While this addition will be helpful in many transactions, if there is a significant gap between the payment of the deposit and the delivery of the ship, the seller, in particular, may wish to adjust this wording accordingly.
Dispute Resolution in BIMCO SHIPSALE 22
In SALEFORM 2012, parties had three choices concerning law and jurisdiction:
- English law and London Maritime Arbitrators Association (LMAA) arbitration;
- New York law and arbitration under the rules of the Society of Maritime Arbitrators, Inc; and
- An option for parties to specify their choice of law and arbitration venue.
In the absence of a specific choice, English law and arbitration would apply by default. The Japanese NIPPONSALE form and the Singapore Ship Saleform were developed in part to highlight their own respective dispute resolution centers instead, partly in response to the preference for English and New York law.
The new clause in BIMCO SHIPSALE 22 provides a more neutral option that affords parties greater freedom to include their own chosen procedure.
Sanctions and Anti-corruption in BIMCO SHIPSALE 22
Following industry practice, the new form now includes Baltic and International Maritime Council’s (BIMCO) standard wording on sanctions and anti-corruption. Many parties were already including their additional clauses to address this, especially in financed transactions, where suitable wording was often required to satisfy respective lenders. The inclusion of standard wording is a welcome addition, potentially saving time and costs during negotiations.
Electronic Signatures in BIMCO SHIPSALE 22
The accelerated use of electronic signatures in commercial contracts due to the COVID-19 pandemic has garnered widespread recognition, even if not fully tested in many jurisdictions. As a result, Baltic and International Maritime Council (BIMCO) developed and published the BIMCO Electronic Signature Clause 2021, which is now incorporated into BIMCO SHIPSALE 22 as standard wording, expressly confirming the validity of electronic signatures for the agreement and related documents.
The provision for ‘wet-ink’ signatures remains in the event that electronic signatures are not recognized by a particular party, authority, or jurisdiction.
While this update will be welcomed by many, parties will still need to consider specific requirements in their respective jurisdictions or the ship’s flag state, including any practical implications for documents requiring notarization and/or legalization.
Reference is now also made expressly to closing remotely, not just at a physical meeting, reflecting recent market trends since the introduction of SALEFORM 2012.
BIMCO SHIPSALE 22 primarily reorganizes SALEFORM 2012, with several practical updates to better reflect modern market practices. Although it is a lengthier document, the addition of various new clauses that parties often included themselves may save time and money during negotiations. For those familiar with SALEFORM 2012, the familiarity of the new form should prevent parties from feeling adrift at sea.
We kindly suggest that you visit the web page of BIMCO (Baltic and International Maritime Council) to learn more about the Ship Sale & Purchase Standard Forms and to obtain the original BIMCO SHIPSALE 22 Form and other documents. www.bimco.org
What is BIMCO Standard Deposit Escrow Agreement for Ship Sale and Purchase?
BIMCO Standard Deposit Escrow Agreement for Ship Sale and Purchase entails a contractual arrangement involving the deposit of funds in connection with a ship sale and purchase transaction. The most recent edition of this contract was issued in 2017.
We kindly suggest that you visit the web page of BIMCO (Baltic and International Maritime Council) to learn more about the BIMCO Standard Deposit Escrow Agreement for Ship Sale and Purchase and other documents. www.bimco.org