Types of Charterparty Forms

Types of Charterparty Forms

In dry cargo chartering members of BIMCO (Baltic and International Maritime Council) are expected to comply with the following:

An official charterparty form is a form that has been agreed and passed by an official body such as BIMCO, these are distinguished from other forms which are not considered to be as suitable for use, possibly because they unduly favour one or other of the parties involved.

The shipowner is advised whenever possible to use these forms because they are usually well drafted and balanced forms. The official forms may be described as:

  1. Agreed Charterparty: this is a form which has been agreed between BIMCO or another group of shipowners and charterers for the trade concerned, the terms must not be altered in any way. The use of this form is compulsory for that particular trade. Examples of agreed forms are Polcoalvoy and Sovcoalvoy.
  2. Adopted Charterparty: if a charterparty has been agreed by two organisations, and another organisation wishes to make use of it, they may then adopt the charterparty. Thus BIMCO may adopt a charterparty agreed by the Chamber of Shipping of the UK and a number of charterers. BIMCO members would then be expected to use this document whenever possible.
  3. Recommended Charterparty: is used where no specific charterparty exists for a particular trade and an organisation like BIMCO would recommend a particular charterparty, such as Gencon, for use by its members in that particular trade.

In practice, the choice of Charterparty Form is dictated by the charterer and not by the Shipowner.

Commonly Used Charterparty Forms

Various types of charterparty forms are used in the shipping industry to govern the contractual relationships between shipowners and charterers. These standard forms can be divided into three main categories: voyage charter, time charter, and bareboat charter forms. Some commonly used charterparty forms within these categories include:

1- Voyage Charter Forms:

Gencon: A general-purpose voyage charter party form commonly used for dry cargo shipments.

Asbatankvoy: A widely used standard tanker voyage charter party form for oil and other liquid cargo shipments.

Synacomex: A voyage charter form specifically designed for grain shipments.

Amwelsh: A charter party form typically used for bulk cargo shipments, especially coal and ore.

2- Time Charter Forms:

New York Produce Exchange (NYPE): A widely used time charter form for dry cargo ships, with the NYPE 1993 and NYPE 2015 being the most popular versions.

Baltime: Another common time charter form used for dry cargo ships, often chosen for its simplicity and shipowner-friendly terms.

Shelltime: A standard time charter form used for tanker ships, with multiple versions including Shelltime 4 and Shelltime 2005.

Asbatime: A time charter form introduced by ASBA (Association of Ship Brokers and Agents) for use with both dry cargo and tanker ships.

 

3- Bareboat Charter Forms:

Barecon: A widely used standard bareboat charter form developed by BIMCO, with the most recent version being Barecon 2017.

Demise Charter Party: A standard form for the bareboat chartering of ships.

Supplytime: A standard form designed for the bareboat chartering of offshore support ships, with the most recent version being Supplytime 2017.

These various types of charterparty forms have been developed to address the specific needs of different shipping sectors and types of ships. It is important to note that these standard forms can be amended and tailored to meet the unique requirements of the parties involved in a particular chartering agreement.

 

What is the most common form of charterparty used?

The most common form of charter party used depends on the type of charter and the specific cargo being transported. However, some of the most widely used charter party forms across the shipping industry include:

  1. Voyage Charters:
  • Gencon: This is one of the most popular general-purpose voyage charter party forms used for various types of dry cargo shipments, such as bulk commodities and general cargo.
  1. Time Charters:
  • New York Produce Exchange (NYPE): The NYPE is a widely used time charter form, especially for dry cargo ships. The NYPE 1993 and NYPE 2015 versions are commonly adopted by shipowners and charterers.
  1. Bareboat Charters:
  • Barecon: The Barecon charter party form, with its most recent version being Barecon 2017, is a prevalent standard form for bareboat charters across different types of ships.

It is important to note that the choice of the most common charter party form depends on factors such as the type of ship, cargo, trade route, and the preferences of the parties involved.

 

Outline of the most common Charterparty Forms

1- Gencon Charterparty Form
2- New York Produce Exchange (NYPE) Charterparty Form
3- Barecon Charterparty Form

1- Outline of Gencon Charterparty Form

The Gencon Charterparty Form is a widely used standard document in the shipping industry for voyage charter parties. The Gencon Charterparty Form is a contract between a shipowner and a charterer that outlines the terms and conditions for the transportation of cargo from one port to another. The Gencon Charterparty Form typically covers various aspects of the charter, including the cargo type, loading and discharging ports, freight rate, laytime, and demurrage provisions.

Simplified outline of a Gencon Charterparty Form:

  1. Date and Place: [Date and location where the agreement is being signed]
  2. Shipowner: [Name and address of the shipowner or their agent]
  3. Charterer: [Name and address of the charterer or their agent]
  4. Ship: [Name, type, and specifications of the ship]
  5. Cargo: [Description of the cargo to be carried, including quantity, weight, and any special handling requirements]
  6. Loading Port: [Name and location of the loading port]
  7. Discharging Port: [Name and location of the discharging port]
  8. Laydays: [Dates or range of dates during which the ship must be presented for loading]
  9. Cancelling Clause: [Date or range of dates after which the charterer may cancel the agreement if the ship is not presented for loading]
  10. Freight Rate: [Amount to be paid by the charterer to the shipowner for the transportation of the cargo, including any additional charges or commissions]
  11. Payment Terms: [Details of how and when the freight payment should be made]
  12. Laytime: [Amount of time allowed for loading and discharging operations]
  13. Demurrage: [Compensation payable to the shipowner if laytime is exceeded]
  14. Dispatch: [Compensation payable to the charterer if loading and discharging operations are completed within the allowed laytime]
  15. Notice of Readiness (NOR): [Requirements for the ship to give notice of its readiness to load or discharge cargo]
  16. Liability and Insurance: [Details of liability and insurance arrangements, including responsibilities of each party]
  17. Force Majeure: [Conditions under which either party may be excused from performing their obligations due to unforeseen circumstances beyond their control]
  18. Arbitration: [Procedure for resolving disputes between the parties]
  19. Governing Law: [The law governing the interpretation and enforcement of the agreement]
  20. Additional Clauses: [Any other terms and conditions agreed upon by the parties]

This Gencon Charterparty Form outline is only an example and should be adapted to suit the specific requirements of each charter party.

 

What is GENCON 2022?

GENCON, short for General Charter, is a widely used standard voyage charter party form for various types of dry cargo shipments, including bulk commodities and general cargo. The form has undergone several revisions in the past, such as GENCON 1976 and GENCON 1994. These revisions aimed to update the form to accommodate changes in shipping practices and legal issues. GENCON 2022 version has been developed or proposed to address new developments and challenges in the shipping industry.

BIMCO’s (Baltic and International Maritime Council’s) widely recognized contract, the “GENCON” general purpose voyage charter party, has become synonymous with BIMCO (Baltic and International Maritime Council) contracts since its inception in 1922. It has maintained its flagship status in the dry bulk sector and is the most widely used voyage charter party globally.

The most recent revision was published in 1994, largely due to significant English court cases that raised questions about important clauses in GENCON 76, such as the General Strike Clause, and the understanding and intention behind them. At that time, the intention was not to rewrite GENCON 76, but rather to clarify and update it where necessary. However, since then, the shipping industry has become increasingly complex and regulated, with both shipowners and cargo owners now subject to obligations that were not previously contemplated in 1994. Consequently, the drivers for revising GENCON 1994 were quite different from those three decades ago.

When the subcommittee tasked with revising GENCON 1994 convened, they considered whether their efforts should focus on a modest revision, maintaining the familiarity of the charter, or a more prescriptive and comprehensive rewriting of the charter. Ultimately, with the support of BIMCO’s Documentary Committee, the subcommittee opted for the comprehensive approach. Given the complexity of the shipping industry, the new edition of GENCON 2022 addresses most of the relevant issues from the outset, providing a solid commercial and legal basis for negotiation. As with other contracts from BIMCO, it is written in a clear and easily understood language, which has become the hallmark of our organization. To download a copy of GENCON 2022 Charter Form, please check www.bimco.org

 

2- Outline of New York Produce Exchange (NYPE) Charterparty Form

The New York Produce Exchange (NYPE) Form is a widely used standard document in the shipping industry for time charter parties. It is a contract between a shipowner and a charterer, outlining the terms and conditions for the charterer’s use of the ship over a specified period. The document typically covers various aspects of the charter, including hire rate, payment terms, ship description, trading limits, and maintenance obligations.

Simplified outline of an NYPE Charterparty Form:

  1. Date and Place: [Date and location where the agreement is being signed]
  2. Shipowner: [Name and address of the shipowner or their agent]
  3. Charterer: [Name and address of the charterer or their agent]
  4. Ship: [Name, type, and specifications of the ship]
  5. Duration of Charter: [Length of the charter period, with any options for extension or termination]
  6. Delivery and Redelivery: [Ports or locations where the ship is to be delivered and redelivered, and the required notice periods]
  7. Hire Rate: [Amount to be paid by the charterer to the shipowner for the use of the ship, typically expressed per day or per month]
  8. Payment Terms: [Details of how and when the hire payment should be made]
  9. Trading Limits: [Geographical areas where the ship is permitted to operate during the charter period]
  10. Ship Maintenance: [Responsibilities of the shipowner for maintaining the ship in good condition, including dry-docking and repairs]
  11. Bunkers: [Arrangements for the provision and payment of fuel, including any required specifications or standards]
  12. Subletting and Assignment: [Conditions under which the charterer may sublet or assign the ship to a third party]
  13. Owners’ and Charterers’ Liens: [Rights of each party to assert a lien on the cargo or the ship for unpaid hire or other amounts]
  14. Insurance: [Details of insurance arrangements, including hull and machinery, protection and indemnity, and war risk coverage]
  15. Indemnity: [Mutual indemnification provisions for losses or liabilities incurred by either party]
  16. Force Majeure: [Conditions under which either party may be excused from performing their obligations due to unforeseen circumstances beyond their control]
  17. Arbitration: [Procedure for resolving disputes between the parties]
  18. Governing Law: [The law governing the interpretation and enforcement of the agreement]
  19. Additional Clauses: [Any other terms and conditions agreed upon by the parties]

This outline is only an example and should be adapted to suit the specific requirements of each time charter party. To download a copy of NYPE 2015 (New York Produce Exchange) Charterparty Form, please check www.bimco.org

 

3- Outline of Barecon Charterparty Form

The Barecon Charterparty Form is a widely used standard document in the shipping industry for bareboat or demise charter parties. Barecon Charterparty Form is a contract between a shipowner and a charterer, outlining the terms and conditions for the charterer’s use of the ship without crew, fuel, or provisions. The Barecon Charterparty Form typically covers various aspects of the charter, including ship description, hire rate, payment terms, delivery and redelivery, maintenance obligations, and insurance.

Simplified outline of a Barecon Charterparty Form:

  1. Date and Place: [Date and location where the agreement is being signed]
  2. Shipowner: [Name and address of the shipowner or their agent]
  3. Charterer: [Name and address of the charterer or their agent]
  4. Ship: [Name, type, and specifications of the ship]
  5. Duration of Charter: [Length of the charter period, with any options for extension or termination]
  6. Delivery and Redelivery: [Ports or locations where the ship is to be delivered and redelivered, and the required notice periods]
  7. Hire Rate: [Amount to be paid by the charterer to the shipowner for the use of the ship, typically expressed per day or per month]
  8. Payment Terms: [Details of how and when the hire payment should be made]
  9. Inspections and Inventories: [Arrangements for inspection of the ship and inventory of equipment at the time of delivery and redelivery]
  10. Ship Maintenance: [Responsibilities of the charterer for maintaining the ship in good condition, including dry-docking, repairs, and compliance with regulations]
  11. Bunkers: [Arrangements for the provision and payment of fuel, including any required specifications or standards]
  12. Crew and Operations: [Responsibilities of the charterer for employing and managing the crew, as well as operating the ship in a safe and lawful manner]
  13. Insurance: [Details of insurance arrangements, including hull and machinery, protection and indemnity, and war risk coverage]
  14. Indemnity: [Mutual indemnification provisions for losses or liabilities incurred by either party]
  15. Mortgage: [Conditions related to any existing mortgage on the ship and any restrictions on further encumbrances]
  16. Subletting and Assignment: [Conditions under which the charterer may sublet or assign the ship to a third party]
  17. Force Majeure: [Conditions under which either party may be excused from performing their obligations due to unforeseen circumstances beyond their control]
  18. Arbitration: [Procedure for resolving disputes between the parties]
  19. Governing Law: [The law governing the interpretation and enforcement of the agreement]
  20. Additional Clauses: [Any other terms and conditions agreed upon by the parties]

This outline is only an example and should be adapted to suit the specific requirements of each bareboat charter party. To download a copy of Barecon Charterparty Form, please check www.bimco.org

 

 

Who prepares the Charterparty?

A charterparty is typically prepared by one of the involved parties or their representatives, such as shipowners, charterers, or shipbrokers. These individuals often have experience in the shipping industry and are familiar with the terms and conditions that need to be included in the document. In some cases, legal experts or maritime lawyers may also be involved in drafting or reviewing a charterparty to ensure that it complies with all applicable laws and regulations.

The preparation of a charterparty can be done by:

  1. Shipbrokers: Shipbrokers, who act as intermediaries between shipowners and charterers, may prepare the charterparty as part of their role in facilitating the transaction. They are typically knowledgeable about industry standards and practices and can help negotiate terms that are acceptable to both parties.
  2. Shipowners or Shipowners’ Shipbrokers: The owner of the ship or their representative may draft the charterparty, particularly if they have specific requirements or conditions that they want to include in the agreement.
  3. Charterers or Charterers’ Shipbrokers: The party seeking to hire the ship, or their representative, may also be responsible for preparing the charterparty. They may have specific requirements regarding the cargo, voyage, or payment terms that need to be included in the document.
  4. Maritime Lawyers: In some cases, a legal expert or maritime lawyer may be involved in drafting or reviewing the charterparty to ensure that it complies with all applicable laws, regulations, and industry practices. This is particularly important when the agreement involves complex or high-value transactions, or when the parties are from different countries with different legal systems.

Regardless of who prepares the charterparty, it is essential that both parties thoroughly review the charterparty and ensure that it accurately reflects their intentions and agreements before signing. In ship chartering world, usually, Charterers’ Shipbrokers drafts the Charterparty and submits to Shipowners or Shipowners’ Shipbrokers.