the nype 2015 time charter party

THE NYPE 2015 TIME CHARTER PARTY

Bachelor’s Final Degree Project

Barcelona School of Nautical Studies Universitat Politècnica de Catalunya · BarcelonaTech

Candidate:

Sergi Font Manzano

Supervised by:

Dr. Jaime Rodrigo de Larrucea

Bachelor’s Degree in Nautical Sciences and Maritime Transport

Barcelona, February 2021

Department of Nautical Sciences and Engineering

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Acknowledgments

May I start this paper by sharing my gratefulness with all those people who have accompanied

me through the journey of my life and who I hope can keep walking with me for many years to

come.

First of all, I would like to thank my family for always encouraging me to give my best in every

situation of my life and with whom I have been able to count on in both good and bad times.

To my father and my mother, whose love, tenderness and sacrifice have raised me since I was a

child to become a gentle person with strong principles. To my brother, whose advise may I always

follow to keep myself in the correct path, for being my first friend. To all of you, I hope this can

make you feel proud of who I have become.

I would also like to thank all my friends, who have always played a major role in my life. I shall

not say names just in case I miss someone. Your empathy and support during all these years have

made of you my second family. I hope to be worthy of your friendship for many more years.

To my colleagues of UASC and Hapag-Lloyd, again I would rather not say names so as not to forget

any of them, thank you for believing in me from the first moment and for giving me the

opportunity to develop myself and grow not only professionally but also personally.

To conclude, a special mention to Dr. Jaime Rodrigo de Larrucea, who I have been fortunate to

have as a teacher and who has guided and advised me to perform a project of which I feel proud

about. His lessons and lectures inspired me to focus on maritime law and the chartering business,

therefore I can only wish that he can keep inspiring the next generations of maritime students.

To all of you, thank you from the bottom of my heart.


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Resumen

Este trabajo de fin de grado trata sobre pólizas de fletamento por tiempo de buques mercantes,

más concretamente de la NYPE 2015. Viajando desde los términos más amplios del actual

mercado marítimo y de los tipos de pólizas de fletamento existentes en la actualidad, se realiza

un extenso y detallado análisis de la póliza NYPE, sus características y clausulas des de su primera

publicación relevante en el año 1946. Estudiando sus distintas versiones a través del tiempo y

consultando las informaciones facilitadas por las principales organizaciones mundiales del

negocio marítimo, se analiza su evolución y progreso hasta llegar a su última actualización en el

año 2015, constituyendo esta el capítulo principal de este proyecto.

Asimismo, y basándose en los análisis previamente mencionados, este trabajo de fin de grado

trata de proporcionar al lector una visión concreta sobre los elementos más importantes de la

NYPE 2015 y realizar una crítica constructiva y objetiva de los pros y los contras de su uso.

Finalmente, y des de un punto de vista personal, se concluye que dicha póliza debe ser tratada

con cautela debido a su complejidad, al cual sus usuarios pueden encontrar más útil de utilizar

como base adaptable a sus negocios marítimos particulares.

Palabras clave: Derecho Marítimo; Negocio Marítimo; Pólizas de Fletamento; Fletamento por

Tiempo; The New York Produce Exchange; Póliza NYPE; BIMCO; ASBA; y SMF.


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Abstract

This final degree project deals with time charter parties for merchant ships, more specifically the

NYPE 2015. Traveling from general terms of the actual maritime market and the types of charter

parties existing nowadays, an extensive and detailed analysis of the NYPE charter party is carried

out, including its characteristics and clauses since its first relevant publication in 1946. By

analyzing its different versions over time and consulting the information provided by the main

world organizations of the maritime business, this paper focuses on its evolution and progress

until reaching its last update in 2015, constituting this the main chapter of this project.

Likewise, and based on the previously mentioned analysis, this final degree project tries to

provide the reader with a concrete vision of the most important elements of the NYPE 2015 and

to make a constructive and objective review of the pros and cons of its use. Finally, and from a

personal point of view, it is concluded that said charter party should be treated with caution due

to its complexity, and in which its users may it find more useful to use as an adaptable base to

their particular maritime businesses rather than a full and ready-to-use contract.

Key words: Maritime Law; Shipping Business; Charter party; Time Charter party; The New York

Produce Exchange; NYPE Charter party; BIMCO; ASBA, and SMF.


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Table of contents

ACKNOWLEDGMENTS I

RESUMEN III

ABSTRACT V

TABLE OF CONTENTS VII

FIGURES IX

TABLES XI

ABBREVIATIONS XIII

INTRODUCTION XV

CHAPTER ONE. THE ACTUAL MARITIME MARKET: A GENERAL OVERVIEW 15

1.1 INTRODUCTION 15

1.2 GLOBAL ECONOMY 15

1.3 DRY BULK MARKET 19

1.4 TANKER MARKET 23

1.5 CONTAINER MARKET 26

CHAPTER 2. CHARTER PARTIES: NATURE AND TYPES 31

2.1 WHAT ARE CHARTER PARTIES? 31

2.2 TYPES OF CHARTER PARTIES: METHODS OF CHARTERING A SHIP 32

2.2.1 VOYAGE CHARTER 33

2.2.2 CONTRACTS OF AFFREIGHTMENT 35

2.2.3 TIME CHARTERS 36

2.2.4 BAREBOAT CHARTERS 39

2.3 THE TERMS OF A CHARTER PARTY 40

2.3.1 CLASSIFICATION BY STAGE OF THE TERMS 40

2.3.1.1 THE MAIN TERMS 40

2.3.1.2 THE CHARTER PARTY TERMS 40

2.3.2 CLASSIFICATION BY EXPLICITLY OF THE TERMS 41

2.3.2.1 THE EXPRESS TERMS 41

2.3.2.2 THE IMPLIED TERMS 42

2.4 KEY TERMINOLOGY OF TIME CHARTER PARTIES 42

2.5 INTERNATIONAL ORGANIZATIONS 44

2.5.1 THE BIMCO 45

2.5.2 THE ASBA 46

2.5.3 THE SMF 46


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CHAPTER 3. THE NEW YORK PRODUCE EXCHANGE CHARTER PARTY 48

3.1 THE NEW YORK PRODUCE EXCHANGE: HISTORY AND PURPOSES 48

3.2 THE NYPE 1946 51

3.2.1 THE PREAMBLE 51

3.2.2 THE MAIN TERMS 53

3.2.3 CONCLUSIONS 57

3.3 THE NYPE 81 (ASBATIME) 59



3.3.3 RIDER OF SUGGESTED ADDITIONAL CLAUSES 68

3.3.4 COMPARISON BETWEEN NYPE 46 AND ASBATIME 71


3.4 THE NYPE 93 76



3.4.3 COMPARISON BETWEEN ASBATIME AND THE NYPE 93 90


CHAPTER 4. THE NYPE 2015 101

4.1 THE PREAMBLE 103

4.2 THE MAIN TERMS 103

4.3 APPENDIX A (VESSEL DESCRIPTION) 131

4.4 KEY FEATURES OF NYPE 2015 132

4.5 CONCLUSIONS 136

CONCLUSIONS AND FINAL ASSESSMENT 141

SOURCES 147

BIBLIOGRAPHY 147

PUBLICATIONS 148

ONLINE SOURCES 149

CASE LAW 151

ANNEX 1. THE NYPE 2015 SAMPLE FORM 153

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Figures

Figure 1. Distribution of international seaborne trade, 2014. 15

Figure 2. Rate freight developments between the years 2014 – 2016. 17

Figure 3. Real GDP growth rate by country group, year by year. 18

Figure 4. Dry bulk ship fleet growth for the years 2016 to 2022. 20

Figure 5. Global steel production from January to September, years 2019 and 2020. 22

Figure 6.US soya bean export rates from 2017 to 2020. 22

Figure 7. Crude oil tanker fleet growth from 2016 to 2022. 24

Figure 8. Global oil demand rates from 2019 to 2021. 25

Figure 9. Inactive container ships from January 2014 to July 2020. 27

Figure 10. Container ship fleet growth from 2016 to 2022. 29

Figure 11. BIMCO's logo. Source: BIMCO's website. 45

Figure 12. ASBA's logo. Source: ASBA's website. 46

Figure 13. SMF's logo. Source: SMF's website. 46

Figure 14. The New York Produce Exchange building. 48


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Tables

Table 1. Charter parties obligations and responsibilities distribution. 33


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Abbreviations

ACI Automated Commercial Information

AES Automated Export System

AMS Automated Manifest System

ASBA Association of Ship Brokers and Agents

BDI Baltic Dry Index

BIMCO Baltic and International Maritime Council

CoAs Contracts of Affreightment

COFR Certificates of Financial Responsibility

CSO Company Security Officer

CVE Communications, Victualling and Expenses

ECA Emission Control Area

FDP Final Degree Project

FONASBA Federation of National Associations of Ship Brokers and Agents

GDP Gross Domestic Product

HMM Hyundai Merchant Marine

ICB International Carrier Bond

IMDG International Maritime Dangerous Goods

IMF International Monetary Fund

IMSBC International Maritime Solid Bulk Cargoes.

ISM International Safety Management

ISPS International Ship and Port Facility Security Code

ISSC International Ship Security Certificate

ITC International Tonnage Certificate

MARPOL International Convention for the Prevention of Pollution of Ships

MEPC Marine Environment Protection Committee

MTSA Maritime Transportation Security Act

NAABSA Not Always Afloat But Safely Aground

NYPE New York Produce Exchange

OPEX Operational Expenditure


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PTO Port Terminal Operations

SCAC Standard Carrier Alpha Code

SCMA Singapore Chamber of Maritime Arbitration

SMA Society of Maritime Arbitrators

SOLAS Safety Of Life At Sea

STCW Standards for Training, Certification and Watchkeeping for Seafarers

UASC United Arab Shipping Companies

ULCS Ultra-Large Container Ship

USA United States of America

UTC Coordinated Universal Time

VLCC Very Large Crude Carrier

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Introduction

Nowadays, it is commonly said by almost all statistics of different international bodies and

organizations that approximately between 80% and 90% of the cargo that needs to be moved

from one place on Earth to another is transported by sea.

This data provides us a very clear scenario of the importance of shipping transport in global

economy as well as in people’s life quality by supplying them with anything they may need all

over the world. Some experts may have said that this massive cargo movement has created

some unnecessary need of certain products and some others have said that it is environmentally

unfeasible to maintain this cargo flow through our oceans. However, if there is something we

can be sure about (and gives us a huge basis to work within this paper) is that shipping business

is one of the main pillars of global economy.

Throughout my whole degree on Nautical Sciences and Maritime Transport, I have been able to

study many subjects directly related to vessels such as ship’s construction, celestial navigation,

bridge management... On the other side, I have also attended other subjects much more related

to shipping business as maritime law, international trades and economy (among others),

providing a wide range and complexity to the term “shipping business” and making it very

abstract. It was precisely from among these lasts subjects that I found what I was most

interested about and where I could professionally develop myself deeper.

Furthermore, I had the chance to work in two different companies like UASC and Hapag-Lloyd,

where I have acquired a solid knowledge about liner shipping from the position of maritime

agent in the PTO Department. There, I dealt directly with the port operations planning the works

that our own vessels had to develop in Barcelona’s port, as well as other agents’ vessels, like

loading and discharging of containerized cargo and also giving assistance to the Captain and the

crew onboard, arranging berth line and port stay, etc. But I realized we were not the Owners of

all vessels I had to work with. Thereby I discovered that all the companies that worked into the

different liner services shifted their vessels depending on their interests, but I was eager to know

how they carried out these exchanges.


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All this along with my interest in developing and explaining a topical and useful issue brought

me to discover the NYPE 2015 Clauses, choosing it as the mainstage of my project from the first

moment on.

Purposes and structure

The exposition of this paper will follow a very strict process that ensures an easy comprehension

and efficient follow-up of all the concepts in order to approach the main target, which could not

be any different from explaining the NYPE 2015 clauses.

Firstly, we will start by giving a general overview about the actual maritime market, explaining

its behavior and its possible evolution in the near future as well as in a long term mainly basing

on BIMCO Reflections of the lasts five years. These publications are still on top of the maritime

scenario year by year and provide the readers with an easy reading way, even though they are

not experts in the displayed topics.

Secondly, we shall define what charter parties are and how we can sort them out depending on

their contractual basis (as we will observe, they can be classified as time charter, voyage charter,

etc.). Once these concepts and classification are clear, we will mention and briefly describe the

different international entities that have historically been on top of the development of these

documents and have contributed to create this new version of NYPE.

Thirdly, we will explain the basis and history of NYPE charter party, investigating about the

reasons why it was created and taking a look at the consequences it had on the maritime trade.

Furthermore, we should widely describe all versions of this charter party, looking at the main

changes done in each one and the reasons why they were updated until reaching the main target

of this announce: the 2015 version.

Fourthly, and profoundly digging into the main chapter of this FDP, we may also explain the whole

NYPE 2015 version, developing all its different sections and clauses and mentioning all the

differences to the previous version as well as how it was developed and which organizations

made it possible.

Finally, in the last chapter, we will extract the main conclusions of this whole paper to have a

general overview of everything explained and we will try to foresee what is going to happen in

the near future regarding this charter party.

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To sum up, this FDP aims to take a step into the maritime charter business by analyzing the launch

of this new NYPE charter party version. Additionally, as this paper links the evolution of the

maritime market with the evolution of the NYPE charter party along the years since it was first

issued, it could also be profitable to try guessing whether the NYPE 2015 will experience a general

acceptation of the maritime industry or its publication will not hold a real impact in the chartering

business.

Limits to the scope of the paper

On one side, shipping business is simply an international trade and consequently must be this

paper. For that simple reason, it will be entirely written in English, trying to provide a maximum

scope.

On the other side, this FDP is not planned to be completely understood by all the audience since

a minimum maritime and economical culture is required. However, many people could, with a

little effort, be able to get the context of the paper and comprehend all things explained on it.

Therefore, we can define the scope of this FDP within the limits previously displayed.


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Chapter one. The actual maritime market: a general overview

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Chapter one. The actual maritime

market: a general overview

1.1 Introduction

As previously explained in the general introduction, we will here take a general glance at the

actual situation of the maritime market based on the last five years’ BIMCO’s Reflections – from

2016 to 2020, since the NYPE 2015 was launched. Since these publications are the most reliable

and effective of the actual maritime panorama, their explanation will provide us a clear overview

and baseline to understand the following chapters.

In order to achieve this required level of comprehension, I shall write this summary splitting the

maritime market into four different parts as follows: the global economy, the dry bulk transport,

the tanker trade and the container cargo. Every section will be explained from the year 2016 to

the 2018 so that the evolution and changes can easily be found, with a little conclusion at the

end of each one.

1.2 Global economy

Looking back at 2015, it is easy to remember that the global economy was not experiencing its

best stage. Although noticing growth of the level for GDP, it was less crescent than the previous

Figure 1. Distribution of international seaborne trade, 2014. Source: UNCTAD secretariat “REVIEW OF

MARITIME TRANSPORT 2015”, based on Clarksons Research, Seaborne Trade Monitor, 2(5), May 2015.


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five years due to some striver emerging markets and the staking out of the China’s economy’s

focus, so we can conclude that the 2015 never lifted off as it was expected to do, maintaining the

bad scenario of the year 2014. BIMCO also warned the whole shipping community on 2016 that

the year 2017 would be another challenging year although the International Monetary Fund

forecasted a several growth of GDP rates.

On one side, the main factor of this mistrustfulness is the China’s reappraisal of its growth and

direction looking towards the future. This unpredictability, always currently found within some

Chinese industries, could bring uncertainty on shipping demand.

On the other side, it is also very wise to say that this re-evaluation of China’s growth and direction

of its economy was with the intention of turning the investment practiced during the last years

into more consumerism, ruining its economic growth. Furthermore, the continuous seeking of

Europe and Japan to boost their economies and the combination between the low

unemployment rates and the high GDP growth in the USA, joining the previous China’s changes

commented, could gather momentum to a more solid level of growth in shipping demand.

In reference to pure economic terms of 2016, Europe slightly improved its growth while the US

and Japan were completely paralyzed, so there was no real development of shipping demand on

global scale, not providing any change for economic growth.

The reason why economy did not raise was that, due to the financial market crash in 2008, not

all the mishaps were dealt in a proper way during the eight years of endeavors and strains,

therefore more years of improvements will be needed to lift the global economy growth. The

main focus to recover this level of growth should be to raise the rates of fleet utilization, reducing

the overcapacity of the sector.

Governments tried to heal this by supporting the industries, but in fact, these direct grants had

negative results for they did not allow free trades and conditioned the market to high pressures,

which was not able to hold up.


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Looking forward to the near future, it seemed almost impossible to discern if the GPD world

would grow or not because it depended on service sectors and emerging economies, both

providing a low GDP growth factor, resulting into a bass shipping level compared to the past.

Despite this, the shipping community always trusted that raw materials, energy and

manufacturing facilities would be helpful for the global developing, being China the main actor

of this reliance, something never very encouraging due to its volubility.

2017 was the first year of improvement after the low results on shipping trade experienced on

the past years since economic growth raised in Europe, Asia and America, expecting an upgrowth

of the 0,1% of the GDP growth rate. Despite that optimism, a careful forecast for 2018 had to be

taken into account still due to the fickleness of the shipping industry.

As it could not be in any other way, China is still the center of all shipping business. Although it is

the top driver of dry bulk shipping demand growth, it is also becoming one of the main exporter

of containerized cargo because of the introduction of robotics in the manufacturing sector. In

addition, China has also raised its level of oil import during 2017, becoming stronger in another

different market sector.

Figure 2. Rate freight developments between the years 2014 - 2016. Source: The Baltic and

International Maritime Council. The shipping market in 2015 and looking forward. BIMCO

Reflections 2016


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Regarding global economy terms, as long as the GDP growth rates seem to keep constant until

2022 the world trade volume growth rates are expected to lower (from 4.2% to 4.0%) so no big

changes will take place in only one year. The key to turn the situation around is to realize that as

the demand levels are not going to grow, the fleet should not be raised but adapted to this

smaller demand level in order to equate these both concepts.

Another revelation is made in 2019 Reflections, since according to the IMF the emerging

developing countries will be the ones experiencing the major growth and also balancing the

stacked downward trend suffered since the 2000 year of the advanced economies. Furthermore,

the ghost of the trade war between the USA and China as well as many other geo-political

obstacles must be considered as important facts that will, in a different way depending on the

sector, affect the global shipping industry.

Figure 3. Real GDP growth rate by country group, year by year. Source: The Baltic and International

Maritime Council. Global shipping scouts for future growth. BIMCO Reflections 2019.


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Regarding the aforementioned trade war, even though a phase 1 deal was achieved in December

2019, far more difficult agreements are yet pending to be reached by the USA and China in 2020,

in which the additional levies imposed to the EU and the trade tensions between Japan and South

Korea might be added.

However, more bad news were waiting to surprise the shipping business at the start of this

decade. Firstly, the slowing motion of the globalization and the raise of the protectionist

measures all over the world have turned out to develop into a drop of the trade-to-GDP.

Secondly, the balance between the supply and demand of ships was not reset to zero by the start

of 2020, contrary to the recommendations of BIMCO, worsening any provision for the

shipowners, who also had to deal with the compliance of the IMO 2020 Sulphur Cap.

To conclude, only good market conditions can improve freight rates, which will be the only

weapons in which the shipowners can lean on.

1.3 Dry bulk market

Although the level of iron remained as it was on 2014 and Chinas’ steel export reached its

maximum level, nothing offset the huge decrease of the coal import in China, so 2015 was

generally a very problematic year for dry bulk. The only opportunity to reach that market

recovery, as per BIMCO’s forecast, was to raise the level of Chinese steel mills.

There were two facts that made markedly evident this fearful first half of 2015: the lowest level

ever affected the Baltic Dry Index (hitting 498) and that the majority the companies suffered

financial losses since their vessels worked below OPEX levels. Because of these low levels in the

first half of 2015, the scrapping market attained a new record making the fleet growth reach the

twelve-year lowest level. It is also worth to say that the freight market improved a bit during the

last four months of 2015 so the scrapping market was diminished.

For 2016, BIMCO forecasted that the supply-side was going to grow 2% owing to scrapping, which

could reach a new record level. On the other side, demand level was not expected to grow since

some challenging market conditions in China were going to bring risk on inversions in dry bulk

market.

Although BIMCO predicted that 2016 would be a terrible year for the dry bulk shipping business,

no one could have ever imagined that it would be such a dilapidating year.


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The main fact for all this was the lowest level of BDI ever got on 10 February: 290. Even though

it improved until its highest point of 1261 in November (mainly due to the transport of iron to

China on Capesize vessels), the situation could not be totally countered. Fortunately, the

production of steel mills grew and coal mines reduced their operational days so much more

mineral and coal were needed and raised the demand side.

To redress this horrible situation, a level of scrapping of around 30 million DWT was needed to

obtain a zero-fleet growth. In order to gain it, BIMCO provided a market analysis called “Road to

recovery” for dry bulk, passing some useful information to shipowners about what to do and how

to act to return to profitability in 2019. Even that, BIMCO expected the supply-side to grow 1.6%

in 2017.

Figure 4. Dry bulk ship fleet growth for the years 2016 to 2022. Legend: A is Actual; F is Forecast; E is

Estimated. Source: BIMCO. Market Analysis. Dry bulk shipping: China remains the driving factor, but coal

policy is disrupting the market.


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Surprisingly, 2017 was a year of great improvements for the dry bulk market: on one hand,

Chinese demand grew above all expectations raising the global demand level up to a 5%, and on

the other, the fleet growth had a rate of 3.2%, which was lower than expected. As the whole

world usually maintains the level of dry bulk import, China becomes even more important for

example for iron imports, which grew up to a 7% on 2017.

Due to all these good events, BIMCO published the third update of “Road to recovery”,

announcing that 2018 would be the first year of profit since 2011. There was also highlighted that

shipowners had the most important role in their hands since it was fundamental that the fleet

growth did not overcome the 1%. If that condition took place, the dry bulk market would keep

improving slowly.

Nonetheless, the development during 2018 was slightly different than expected basically due to

two reasons. Firstly, Chinese steel mills’ seaborne import levels were lower than on previous

years during the first 10 months and its imported cargo heavily shifted from iron ore towards

scrap metal, threatening Capesize market.

Secondly, the outlook of 2019’s market was clearly under China’s hands – and influenced by the

USA as well – due to the trade war that both countries were carrying out between each other, in

which the Panamax and Handymax sectors are closely linked, being the soya bean exports taking

a leading role.

Further to the first reason, the trend on 2020 about the fall of iron ores for a third year in a row

was still a major concern for Capesize trade due to the change in China’s steel production. In

addition, soya beans imports to China played a major role on dry bulk shipping, therefore the

largest-ever culling of pigs – the main consumers of soya beans – will seriously lower its demand.

Finally, more pressure on the freight market will be put due to the widener of the gap between

the supply and demand of ships – a fleet growth of 4.1% was registered on 2019, being it too

high to compensate the abovesaid fall of the demand, concluding in an inexistent balancing of

the fundamental market


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Figure 6.US soya bean export rates from 2017 to 2020. Source: BIMCO. Market Analysis. Dry bulk

shipping: China remains the driving factor, but coal policy is disrupting the market.

Figure 5. Global steel production from January to September, years 2019 and 2020. Source:

BIMCO. Market Analysis. Dry bulk shipping: China remains the driving factor, but coal policy

is disrupting the market.


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1.4 Tanker market

Tanker market is divided into two enormous groups: crude oil and oil products. They both took

profit from a very strong freight market during the whole 2015 supported by two main factors:

the drop of the oil prices that started in the medium of 2014 and the low growth of the supply

side throughout 2015. That year was definitely the best year for all oil tankers since the market

suffered the big crash in 2008 - even though it is still not fully recovered. Furthermore, we can

ascertain that the level of demand was regularly high during the whole 2015 since refinery could

work with strong margins, even taking pauses for its maintenance.

Looking forward on 2016, BIMCO generally expected that the building of oil stocks that took place

in 2015 would slow the growth of tanker demand on 2016, something we will check when

analyzing the following years in this chapter. Another expectation from BIMCO to happen on

2016 was the reappearance of Iran in the crude oil export market in order to halt the current

trade patterns, bringing more competitiveness in supply terms. It could maybe develop a higher

tanker demand, but it was not very trustable to happen.

Nothing different from what BIMCO predicted, 2016 was not as good as the previous year for the

oil industry. The fleet grew by 6% in all tanker segments, decompensating the market since the

demand level was by no means raised even with the strong freight market in 2015 due to the low

supply side growth and the major demand of oil by refineries as a result of their increased yield.

As also told in 2015, Iran appeared back to the tanker market, making the global oil supply to

keep on ascending. Despite that, the West African exporters remained the strongest icon in the

market, and the tanker demand growth for 2017 was prevised to come mainly from China and

India.

BIMCO also expected both nets of fleet and supply side to grow between 2,5% and 3% in 2017,

much less than the previous years, and demolition of these vessels was expected to reach a five-

year high. However, these improvements were not going to be enough to bring the freight

market to the desired level. Thus, BIMCO planned to keep on developing its analysis known as

“Road to Recovery”, which handed the clues to raise the bulk sector to its best possible level.


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Although some experts thought (wrongly, of course) that the oil markets would be fully

recovered from one day to another and they suggested all tanker Owners not to demolish their

vessels, the slow reduction of global crude oil and oil product stocks was a ballast on tanker

demand during the whole 2017. Until those global stocks are massively decreased, there would

not be any interest in sea oil trading.

The fact that BIMCO Reflections 2019 started with the sentence “2018 has been a horrific year”

is pretty illuminating. As per 2018 market characteristics, it shews that lower earnings had been

achieved whether the ships were larger, evidencing its bad fundamental market balance. Thus,

the US sanctions in Iran would be everything but any help to improve this situation.

Figure 7. Crude oil tanker fleet growth from 2016 to 2022. A is Actual; F is Forecasted; E is Estimated.

Source: BIMCO. Market analysis. Tanker shipping: worst not yet over as industry pays for strong second

quarter.


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On the other side, a low fleet growth of crude-oil tankers in 2018 could balance the weak demand

side – helped with a massive demolition activity, even though the fleet growth of 5-6% from the

last two years was difficult to overcome. Due to this fact, earnings could look slightly improved

at the beginning of 2019, which mean that less ships would be sold for scraping, making fleet

expected to grow around a 2%. However, crude-oil tankers could see their market improved

thanks to new refineries demand in China and US exports.

Regarding oil-product tankers, a low fleet growth remarkably improved the market to face 2019

compared with the lows of 2018. One of its mains boosters would be the distribution of the IMO-

2020 compliant fuels – it would depend on the availability and production of fuels from the global

refineries.

One year later, the top results of crude-oil tankers due to geopolitical developments and the

record levels of freight rates surprised the whole tanker market. However, due to the worseness

of the market fundamentals in 2019 – with an eight-year-high fleet growth of 6.3% - and its

provisions to be unchanged in 2020, these high freight rates in VLCC market were most likely to

disappear after the first quarter of 2020.

Figure 8. Global oil demand rates from 2019 to 2021. F is Forecasted. Source: BIMCO. Market analysis.

Tanker shipping: worst not yet over as industry pays for strong second quarter.


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Due to the expectation of achieving high benefits due to the IMO 2020 Sulphur Cap complying

fuels transport from refineries to bunker spots, oil-product tanker industry experienced a high

fleet growth in 2019. Even though this boost would improve the earnings during the first half of

the 2020, this fleet growth would result in an over-supplied market.

However, the US was expected to become an annual net exporter of crude oil, giving a huge

improvement to the tanker industry market thanks to the long sailing distances to where the

major importers are located – the Far East.

1.5 Container market

Due to the volume growth of the Asia to Europe trading lane in the past years, a very high ship

capacity was forecasted to be needed in the near future, so more than 900.000 TEUS were

delivered during 2015, hitting a four-year high supply-side growth rate. On the other side of the

scale, no one predicted that European demand rate was going to fall to a three-year low rate, so

the combination of these two facts unbalanced the market to an unexpected level. The clue to

restore the market balance was clearly to raise the European imports of containerized goods,

and the way to get that was for the Euro to strengthen against the Renminbi, since it would mean

lower prices for European importers.

This increase of the demand-side was very difficult to manage, ships of all sizes were removed

from over-supplied trading lanes in November 2015, leaving 1.2 million of TEUS idled, reaching a

five-year high. However, this was again not sufficient to counter the drop in demand. Albeit the

record for new capacity achieved in 2015, the following year was predicted to obtain a lower

influx around a 3.5%. In any case, this will not assure container shipping turning back to a

balanced market conditions since its injury was quite digressive.

2016 could simply not have a good start with the conditions coming from 2015, becoming very

urgent to readjust the supply-side to the global demand. To each that, there were not many ways

left since some of them, as slow steaming or idling, were already used. However, there were

other kind of non-operational tools that might have been forgotten such as limiting new orders,

consolidation and scrapping.


27

Figure 9. Inactive container ships from January 2014 to July 2020. Source: BIMCO. Market Analysis.

Container shipping: a surprisingly profitable year during challenging times, but how long can it last?

In terms of consolidation, larger alliances had been created during 2016 (as UASC and Hapag-

Lloyd merge, where I found myself involved in), which had been able to cut cost and offer lower

freights. Regarding the other two topics, newbuilding rates were very low whereas there was an

all-time high of demolition, leaving the Panamax size ships out of fashion and facing a wider space

between feeders and very large ships. By using these three concepts, market conditions

improved considerably in 2016 since the demand growth was higher than fleet growth for the

first time since 2010.

Looking forward to 2017, BIMCO expected a net fleet growth between 3,1% and 3,4%, which

would neither improve nor worsen market conditions in 2017 but maintain them equal. Overall,

we can say that it was a much better year for container shipping than 2016 and obviously 2015:

freights increased, and idle fleet was again useful. The fundamental market was rebalanced

during 2016 since the demand growth rate raised to a +5% (the highest in six years) and there

were low fleet growth rates. However, this balancing was slowed down during 2017 due to the

reactivation of idle fleet, which increased the available TEUS in a 3.3%.


28

In September 2017, new twenty ships of 22.000 TEUS were ordered with a delivery date between

2019 and 2020, increasing the fleet rate for around 4% in the following years and reducing the

opportunity for fundamental market balance improvement. To fight against this fleet growth,

exercises like reducing costs and slow steaming must be kept on used, handing more operational

efficiency. There was also a great hope in some of the most necessary economies of scale for the

industry (like Asian market) to provide a positive demand growth (between 4-5%) making the

shipping industry more profitable.

Although having shiny moments, 2018 was definitely not a good year for container shipping

market. Even though the inbound-loaded container imports on the US east coast reached an

increment of the 8%, the development of fleet growth totally killed any rise for containerized

cargo market since almost no demolition took place, becoming a 10-year low.

Therefore, it was not strange to conclude that the aforementioned fleet growth was going to be

the centerpiece that would lead the development of the market fundamentals, where not only

new-buildings were present but also the 700.000 TEU idled must have been taken into

consideration – which were going to be reactivated as soon as freight rates rose.

On demand side, more difficulties for its development were found. Firstly, the volume on long-

distance trading lanes would be most likely compensated with the idled TEUS. Secondly, if the

transpacific tariff walls were maintained, the intra-Asian trades would be seriously affected – we

must not forget that this is the region where most containers are moved annually. Finally, to

achieve a prosperous container market on 2019, the advanced economies’ GDP growth and

China’s subsidy would be the main clues.

Taking one step forward to the next and last Reflection, we can find that 2019 was a worrying

and off-balanced year for container shipping. By the first nine months of the year, the global

demand grew just 1% whereas the fleet grew around a 3.7%. Furthermore, the intra-Asian trades,

which we mentioned before to be one of the hopes for the future of this market, remained plain

during 2019, meaning that they did not help in any way.


29

Figure 10. Container ship fleet growth from 2016 to 2022. A is Actual; F is Forecasted; E is Estimated.

Source: BIMCO. Market Analysis. Container shipping: a surprisingly profitable year during challenging

times, but how long can it last?

Additionally, some ULCS are to be delivered during 2020 (as the ordered by HMM), producing

the cascade effect for which other smaller vessels are going to be moved to another routes; the

problem about this effect is that those vessels are going to be too big for the services where they

will be moved to, falling into pressures to freight rates.

Taking a look into the future, BIMCO finds easy where to point at: only rolling the protectionist

measures – mainly imposed by the trade war between the US and the Asian countries of the

other side of the Pacific - and freeing the trade will be possible to let it develop at its natural pace

and heal the trade multiplier index.


30

Chapter 2. Charter parties: nature and types

31

Chapter 2. Charter parties: nature

and types

After the general overview of the maritime market explained in the Chapter 1, we will follow with

this FDP by defining what charter parties are, their scope within the maritime business and some

other aspects about them, such as the different types existing, the different classifications of

their terms and the international organizations that have historically developed them.

2.1 What are charter parties?

The nature of the maritime business is, by all means, transporting cargo from one place to

another by water. We may find this concept a bit obvious, but only keeping it in mind can provide

us an idea of its depth and complexity since it involves many different relationships between

many actors, with uncountable contracts among them.

One of these relationships is the one that embraces the Owner of the cargo and the Owner of

the ship that will transport said cargo – it is actually the most important for us within this

coursework. When there is an agreement between a cargo Owner and a buyer, it depends upon

many factors like the demand and supply of ships and cargo at that moment (as explained in the

previous chapter), the nature of the deal or the cargo involved, a suitable and in the right position

vessel should be employed to perform this transport – a job that will be arranged by the cargo

Owners through their brokers. This contract between the cargo Owners (Charterers from now

on) and the shipowners is named “charter party”, where both parties shall agree all details of the

sea transport of the cargo. Albeit under English law there is no requirement that a contract for

the services of a ship should be of any particular manner, it is normally embodied in - or based

on - a printed form of charter party1.

1 Lidgett v. Williams (1845) 4 Harc 456,462; The Epsilon Rosa [2002] 2 Lloyd’s Rep. 81, 86.


32

The reason why charter parties have experienced this standardization process is that it would be

too time-consuming and expensive to design a new contract every time a vessel is chartered, and

besides saving time and money, these standard forms of charter parties provide a very wide cover

of any unforeseen event during the duration of the contract. After centuries of shipping business,

it is well known that both uncertainty and improvisation play important roles in it, therefore

charter parties must ensure that all details and possible issues are totally previewed at their

maximum level providing liabilities to both parties.

Some of these standard forms have been issued by individual companies to protect their interest

and make businesses easier for their customers, such as Repsol or Shell. However, some

international organizations have also published other forms to help the shipping community and

improve all chartering processes, providing the most complete, used and impartial charter

parties to the industry. These organizations shall be widely explained into the following chapter,

but the most important ones are BIMCO, the ASBA and the SMF.

To sum up, charter parties can be defined as the proof of the conclusion of a fixture, for a specific

voyage or period of time, becoming the legal link between two contractual parties and requiring

the fulfilment of the mutually agreed terms, conditions and exceptions under the law in force.2

2.2 Types of charter parties: methods of chartering a ship

Once having an agreement between the cargo holder and the shipowner, they will both have to

choose the most suitable method to proceed with the chartering among the following ones3

• Voyage Charter;

• Contracts of affreightment (CoAs);

• Time Charter;

• Bareboat Charter (or Demise).

2 Tsoudis, George N. The shipbroker’s working knowledge. 1st Edition. St Peters Vicarage, Wightman Road, London N8 0LY, UK, 2015. ISBN: 978-1-910714-09-6. 3 See The Tichy ][1999] 2 Lloyd’s Rep. 11 and The Tichy (No. 2) [2001] Lloyd’s Rep. 10, reversed [2001] 2 Lloyd’s Rep. 403.


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In the following sub-sections, the differences and particularities of the aforementioned methods

of chartering a vessel will be explained, mentioning also the most current cases they are used to.

2.2.1 Voyage Charter

Voyage charters are those by which the Owners perform one or more designated voyages from

a load port to a discharge port in return of a payment of freight, generally calculated per metric

ton or cubic meter, depending on the nature of the cargo, transported. This kind of method also

allows to hire only a part of the vessel’s total capacity - most commonly known as “slot charter”

inside this category.

Table 1. Charter parties obligations and responsibilities distribution. Source:

Stopford, M. Maritime Economics.


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Regarding the responsibilities of the parties, the voyage charter sets most of them to the Owners;

therefore, all nautical and operating management, including capital, operating, port and bunkers

costs are on behalf of the Owners. Thus, the Owners are in charge of place a seaworthy4 vessel

in the identified by name port or range of load, loading the cargo and take reasonable care of it,

carry the intended voyage out with due despatch and deliver the cargo at the identified by name

port or range of discharge at the date agreed to the consignee - or its designated person.

On the other side, the Charterers are simply Owners of a cargo that needs to be shipped from

one port to another but do not have any responsibility nor bear the costs of such transport;

consequently, they are responsible to place the cargo agreed at the loading port at due date in

sound condition and to pay the hire - among other minor responsibilities which are detailed in

the charter party.

This contract implies a couple of concepts that are worth to be briefly mentioned: laytime and

demurrage. The laytime is the time agreed between the parties to carry out all loading and

discharge operations at port or region - further details of the exact place are to be made present

in the charter party. When these operations are carried out faster than the agreed time, then

Charterers may claim “despatch” to the Owners. Contrary to the previous explanation, when port

operations are made slower than expected, then Owners are able to claim to the Charterers a

“demurrage” as a penalty for the extension of the intended duration of the trip, which is usually

calculated by a lumpsum of money per day of demurrage.

The voyage charter is both the simplest and most used form in the ship chartering business due

to many reasons. Firstly, it has been mentioned the low responsibilities that the Charterers

assume when using a voyage charter, making it perfect for those cargo Owners who hold no

knowledge of maritime transport and its many legal issues that can arise during its performance.

As it has been previously explained, the nautical management of the vessel is an Owners’

responsibility, therefore the Master will receive trading instructions by the Owners and not by

the Charterers.

4 See NYPE 2015 Clause 2 (b). Delivery. NYPE 2015 sample copy available at: https://www.bimco.org/contracts-and-clauses/bimco-contracts/nype-2015


35

Secondly, this kind of form is used by Charterers when the freight market provides high freight

rates but it is expected to evolve to lower rates; even though the Charterers may have an

important quantity of cargo to ship to their consignees at the port of destination, they may prefer

to use voyage charters until the freight market goes downwards.

To conclude, another economic reason to use this form is when the future demand5 of the

commodities to ship becomes unstable and the Charterers have no certainty of the concurrence

of the trade.

2.2.2 Contracts of Affreightment

Contracts of Affreightment (also called “tonnage contracts”) are agreements that implicate

multiple voyage charters joined together in one single contract where the Owners are to carry a

specific amount of cargo (usually described in tons) during a period of time, in several voyages

and for a fixed price per ton. However, there are many different categories where voyage

charters for more than one voyage can be sorted out, such as “consecutive voyage charters”6 and

“intermittent voyage charters”7.

Regarding the duties and the responsibilities of each party, they are exactly the same as in the

voyage charters - we must remember that CoAs are only a succession of voyage charters.

However, there are some elements that need to be introduced due to the nature of the contract

itself, such as the period of validity of the contract, the total amount of the cargo to be carried

and the vessels that will participate to perform the transport of the goods, usually described in

the contract providing their main characteristics such as their measures, capacity, class, age, etc.

It is also worth to explain that, even though a general amount of cargo to be shipped is indicated

in the contract, not every voyage is planned to carry the same amount of cargo. In order to deal

with this, Owners may have a choice of the quantity of cargo loaded at every vessel within a given

range of maximum and minimum amounts.

5 Alderton, P.M. and Rowlison. Grammenos, C. Th. “The Handbook of Maritime Economics and Business”. 2nd Edition. London: Lloyd’s List, 2010. 6 E.g., Ambatielos v. Grace Bros. (1922) 13 Ll. L. Rep. 227; Suisse Atlantique v. Rotterdamsche Kolen Centrale [1967] 1 A.C. 361. 7 E.G., The Oakworth [1975] 1 Lloyd’s Rep. 581.


36

CoAs are usually employed in bulk trades like coal, potash, iron ore, sodium chlorides or many

other industrial trades. The main advantages for Charterers are that they ensure that the

transport of the trade will be covered until stocks are over and to keep lower hires in case the

markets experiences a raise of freight rates. Regarding the Owners, this kind of contract allows

them to optimize their fleet and perform an efficient management of the ships.8 In addition, it

also permits the Owners to keep high hires in case the freight market falls.

The two most used standard CoAs used nowadays in shipping business are the GENCOA,

published by BIMCO, and the INTERCOA 80, which is specific for tanker vessels and which was

published by the INTERTANKO and then adopted by BIMCO. Nevertheless, even though it is

common for single voyage charter forms to be adapted to multiple voyage contracts, this

adjustment can bring many complications in terms of cancellation, liens and the effect of the

Hague Rules - when incorporated.

2.2.3 Time Charters

Time Charters are those contracts under which the vessel’s employment is put under the

legitimate orders of the Charterers, having the right to utilize cargo spaces to carry any type and

quantity of goods permitted in the contract, while possession remains with the Owners, who

provide the crew and pay the ordinary costs of the ship. For that orders, Charterers are to pay an

agreed periodical hire and assume specific costs such as the fuel, port charges and cargo handling

operations. This is the nature of the NYPE charter party, hence a deeper explanation of this kind

of contract will be made in this sub-section by introducing other historical definitions .

The first one, provided by Donaldson, J., States that “under a time charter party (…) the shipowner

undertakes to make the vessel available to the Charterer for the purposes of undertaking ballast

and loaded voyages as required by the Charterer within a specified area over a stated period”.9

Similarly, Lord Diplock explained that “A time charter (…) is a contract for services to be rendered

to the Charterer by the shipowner through the use of the vessel by the shipowner’s own servants,

8 Stopford, Martin. Maritime Economics. 3rd Edition. Abingon, Oxon: Routledge, 2009. ISBN 0-203-89174-0. Page

183. 9 Donaldson, J., The Berge Tasta [1975] 1 Lloyd’s Rep. 422, page 424.


37

the Master and the crew, acting in accordance with such directions as to the cargoes to be loaded

and the voyages to be undertaken as by the terms of the charter party the Charterer is entitled to

give to them”.10

In addition, Diplock, J., pointed out that “A time charter is not a lease (…), the Charterers do not

acquire possession of the ship or any other right of property in her; they acquire, rather, the right,

within the limits set by the charter, to direct the use to which the Owners put their ship.”11, whilst

Lord Reid detailed that “ under a time charter there is no hiring in the true sense (…) the chartered

vessel remains in the possession of the Owners, and the master and crew remain the Owners’

servants. What the Charterer gets is a right to have the use of the vessel.”.12

In contrast with the Voyage Charters explained in the previous sub-section, Lord Hobhouse

explained that the Owner who fixes her vessel on voyage charters, “is using the vessel to trade

for his own account. He decides and controls how he will exploit the earning capacity of the vessel,

what trades he will complete in, what cargoes he will carry. He bears the full commercial risk and

expense and enjoys the full benefit of the earning of the vessel”13.

The main obligations of the Owners in Time Charters are to provide an accurate and true

description of the vessel that will be employed, with all valid and up-to-date certificates on board,

being her seaworthy at the commencement of the contract and throughout its duration and

deliver her at the agreed time and place to the Charterers. In addition, Owners do also promise

that the vessel will comply with due diligence with Charterers orders, co-operation with them in

loading and unloading cargoes and keeping her fit for services and duly supplied - nevertheless,

bunkers are not included.

On the other side, the main obligations of the Charterers are, first, to make punctual payment of

the hire from the time of delivery to redelivery. Moreover, the employment of the vessel shall be

made within the agreed trading limits, in safe places and not loading any cargo excluded in the

10 Lord Diplock, J., The Scraptrade [1983] 2 Lloyd’s Rep. 253, pages 256-257. 11 Lord Diplock, J.,Port Line v. Ben Line [1958] 1 Lloyd’s Rep. 290, page 299. 12 Lord Reid, The London Explorer [1971] 1 Lloyd’s Rep. 523, page 256. 13 Lord Hobhouse, The Hill Harmony [2001] 1 Lloyd’s Rep. 147, page 156.


38

contract. Furthermore, Charterers are to maintain the vessel duly supplied with bunkers and to

bear port charges and loading and unloading costs of the cargo. To conclude, they must also

redeliver the vessel at the fixed redelivery date and place, indemnifying the Owners against any

loss suffered whilst complying with their employment orders.

As it can be outlined from the previous paragraphs, Time Charter contracts are much more

complex than Voyage Charters, and special attention shall be paid to certain terms such as

delivery, redelivery, trading limits, hire payment dates and off-hire period - which can even imply

the withdrawal of the vessel14, cargo exclusions, etc. Due to this complexity, and even though

there is no legitimate law that sets any obligation, standard forms are very often used.

Nowadays, there exist many standard forms for all kind of Time Charter trades, such as

INTERTANKTIME 80 for tankers15, they SUPPLYTIME for offshore supply vessels or the

BIMCHEMTIME 2005 for liquid chemical tankers. However, there are some large and somehow

famous companies that, due to the volume of their trades, incorporate their own forms as Shell,

by using their SHELLTIME 4, Exxon by using their EXXONMOBILE TIME 2005 or BP with their

BPTIME 3. Nevertheless, the most commonly form used for Time Charter trades, together with

the BALTIME, is the NYPE charter party form, which latest 2015 revision constitutes the basis of

this FDP.

To conclude with the explanation of Time Charters, it might be worth to explain that this type of

contracts allows Owners to secure future income by having their vessels employed during large

periods of time. On the other side, Time Charters might also be useful for companies that need

to increase their capacity volume during a certain period of time but do not want to take the risk

of buying a brand-new or second-hand vessel due to the uncertainty of the trade in long term

future.

14 See NYPE 2015 Clause 11. Hire Payment, section (b) Withdrawal. NYPE 2015 sample copy available at: https://www.bimco.org/contracts-and-clauses/bimco-contracts/nype-2015 15 Issued by joint collaboration of BIMCO and INTERTANKO.


39

2.2.4 Bareboat Charters

Bareboat Charters, also known as “Demise”, are the last method of chartering a ship that will be

explained in this FDP. In these contracts the possession of the vessel is fully given to the

Charterers, who provide crew, pay all running costs, undertake the title of shipowner to any

further Charterer and bear the costs to supply her with all necessary.

To extend this definition, the UNCCRS stated that a bareboat charter “means a contract for the

lease of a ship, for a stipulated period of time, by virtue of which the lessee has a complete

possession and control of the ship, including the right to appoint the master and crew of the ship,

for the duration of the lease”.16 In contrast with Time Charters, Mackinnon, L.J. stated that their

difference was like the difference between “hiring a boat in which to row yourself about, in which

case the boat is handed over to you, and contracting a man on the beach that he shall take you

for a row, in which case he merely renders services to you in rowing you about”.17

Thus, it results very easy to define the obligations of the Charterers during a Bareboat Charter,

which are to pay an agreed hire rate, exercise the nautical and operating management and

maintenance of the ship and provide her crew, stores, supplies, fuels, etc. In addition, they are

also to comply safety and health standards and regulations as well as assume the costs of P&I

and insurances. Furthermore, the Charterers are also responsible to redeliver the vessel in the

same conditions of delivery, even though many Bareboat Charters frequently include a purchase

option at the end of the contract. By other words, Owners only undertake the responsibility of

paying the capitals costs of the vessel.

The main use of Demise Charters is the financing of new-build ships by financial organizations,

such as investment institutions or banks, through tools as Tax lease. In this case, these

organizations use to have no maritime business’ goals, therefore no other purposes than

investment are searched by them, eluding any shipping binding with the Ship through the use of

Bareboat Charters.

16 United Nations Secretariat. United Nations Convention on Conditions for Registration of Ships. Geneve, February 7th, 1986. Article 2. 17 Mackinnon, L.J., Sea & Land Securities v. Dickinson (1942) 72 Ll.L.Rep. 159, page 163.


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2.3 The terms of a charter party

Once the parties have agreed to work as per one of the three aforementioned methods, firm

negotiations shall be carried out fixing as much details as possible of the deal18. Even though

experts have performed many different classifications of the terms of charter parties, here will

be explained the two most widely used sorting.

2.3.1 Classification by stage of the terms

The first classification that will be explained in this paper is depending on the stage the terms are

agreed, being sorted out into “Main Terms” and “Charter party Terms”.

2.3.1.1 The Main Terms

These terms are those basic agreements between the parties before continuing to more specific

terms as the charter party terms. Even though there are no standard forms, these agreed

concepts are to define the peculiarities and the needs of the trade itself, being sometimes

modified or updated with the arbitration for additional protection for the parties.

Parallel to the previous explanation, these terms are usually formed from an initial offer set by

the Owners, having the Charterers a specified period of time to accept it or perform a counter-

offer by amending the terms where they do not agree. This process is repeated once and again

until a general agreement is achieved, and the parties can proceed to perform written contract.

2.3.1.2 The Charter party Terms

Once the previously explained Main Terms have been agreed and depending of the type of

contract the parties plan to set, a charter party proforma is usually chosen and fulfilled by the

parties, paying attention to the content of the clauses and adding those considered necessary to

protect their interests - with the consequent negotiations.

18 Tsoudis, George N. The shipbroker’s working knowledge. 1st Edition. St Peters Vicarage, Wightman Road, London N8 0LY, UK, 2015. ISBN: 978-1-910714-09-6.


41

Every charter party is divided into two parts:

The main body: it is the standard wording issued by a shipping organization or particular

company, which limits the obligations and responsibilities of each party. Nevertheless, they are

all negotiable, being able to be amended or deleted as the parties wish and agree.

Rider or additional clauses: these clauses cover omissions to the main body or regulate certain

aspects not recognized in the proforma contract, most likely to allocate liabilities and

responsibilities for specific risks. It must be considered that these additional clauses are usually

self-written by the interested party, therefore their addition shall be made very carefully trying

to make each case “crystal clear”19.

2.3.2 Classification by explicitly of the terms

The terms of a charter party can also be classified by their level of explicitly, dividing them into

“Express Terms” and “Implied Terms”.

2.3.2.1 The Express Terms

These terms are those which have been expressly agreed upon the parties, both orally or in

writing in a signed document, and which are regarded as a contractual term binding the parties

- not merely representations. Furthermore, a charter party is presumed, as any contract, to

contain all the express terms wished by the parties, therefore any term not included must first

rebut its presumption such as a collateral contract or warranty20.

Charter parties are to be interpreted to ascertain and give effect of the intention of the parties

in an objective manner, extracted from the ordinary and natural meaning of the wording of the

words used in the business context21 of the contract and its external evidence rather than any

technical sense22.

19 Tsoudis, George N. The shipbroker’s working knowledge. 1st Edition. St Peters Vicarage, Wightman Road, London N8 0LY, UK, 2015. ISBN: 978-1-910714-09-6. 20 See Heilbut. Symons v. Buckleton [1913] A.C. 30; De Lasalle v. Guildford [1901] 2 K.B. 215. 21 See Reardon Smith v. Hansen Tangen [1976] 2 Lloyd’s Rep. 621, 625, per Lord Wilberforce. 22 See Sailing Ship Garston v. Hickie (1885) 15 Q.B.D. 580 and The Aragorn [1977] 1 Lloyd’s Rep. 343.


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Nevertheless, as stated by Lord Hoffmann “The charter party must be construed as a whole”23,

depending all words and phrases upon their context to really understand their meaning and not

to be construed in a vacuum.

2.3.2.2 The Implied Terms

The Implied Terms of a charter party are these that, even though they are not written in the

contract and do not form part of the wording of the clauses, arise among the Express Terms to

provide business efficacy to the agreement. These terms have their function when the contract

leads to absurd consequences or do simply not work unless the term is implied. The process

whereby a term is implied is an exercise in the construction of the contract as a whole24.

However, courts have long stated that they will not be over-ready to imply terms or to make

presumptions about the intention of the parties.25

2.4 Key terminology of time charter parties

Before analyzing any charter party form, it shall be useful to define some key words that are

almost always found in the contracts to set a basic and solid knowledge that may help any reader

to reach a deeper understanding of the contracts. Even though many words could be highlighted

in this sub-section, a selection of a few has been made as follows:

The parties

Every contract is set between two parties: the Owners and the Charterers. A clear identification

is usually made right at the beginning of the form - in the preamble.

The Ship

One of the basic objects of the contract is the vessel that will be employed to carry the cargo

overseas. For that, not only the name of the vessel is provided in the form, but a brief description

and her characteristics is included – sometimes a full Appendix is destined for a wider description.

23 See Dreyfus v. Parnaso [1959] 1 Lloyd’s Rep. 125. 24 See Mediterranean Salvage Towage v. Seamar Trading & Commerce (The Reborn) [2009] 2 Lloyd’s Rep. 639. 25 See North West Metropolitan Regional Hospital Board v. Trollope & Colls [1973] 1 W.L.R. 601.


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The Owners of the vessel are responsible to ensure that the ship complies with the description

provided as well as her maintenance of condition and fitness for service during the duration of

the contract.

Employment

The employment is the right of the Charterers to exploit the ship within the trading limits, which

can be geographical, the types of cargo allowed to carry, etc. during the period of the contract.

Most of the time charter parties include provisions that permit the Charterers to sublet the vessel

or to carry cargo for third parties, which must be acknowledged by the issue of bills of lading that

regulate carrier’s responsibility and liability for loss or damage to the cargo.

The Hire

The hire is the regular and defined cash-flow the Owners are to perceive from the Charterers

because of the employment of the vessel, being one of the most basic obligation of the

Charterers is to make full and punctual payment of the hire. A vessel is “on hire” at any period of

the duration of the contract when the hire has been duly paid; however, any failure of the

payment can lead the vessel to be considered “off hire” - a concept included in a special provision

due to its delicacy.

Delivery

This term refers to the physical put of the ship at Charterers’ orders,26 usually defined to be in a

particular location and date, that triggers the start of the charter service. This concept is very

delicate since sets one of the most important events of the contract and includes several

cancellation provisions in many forms.

Redelivery

Contrary to the previous concept explained, the redelivery of the vessel happens when the

contract comes to an end, usually once the Owners have completed the last voyage orders of the

26 Mance, J., The Niizuru [1996] 2 Lloyd’s Rep. 66, page 68.


44

Charterers. Sometimes, this redelivery requires the vessel to reach a specific port or area,

whereas other provisions let the service to conclude once the last cargo is discharged.27

Indemnity

In favor of the Owners, many time charter parties contain specific clauses dealing with

indemnities against liabilities or other harmful consequences happened while complying with

Charterers’ orders.

Withdrawal

This concept allows the Owners to retire the vessel from the ordinary service of the Charterers

due to any specific reason included in the form - the most usual is the lack of payment of the hire.

Supplying the Vessel

As explained in the sub-chapter before, in time charters the nautical management of the vessel

remains under Owners’ responsibility, therefore it shall be obligation of the Owners to keep her

duly supplied to operate and to comply with the Charterers’ orders. Nonetheless, there exist

special clauses that, as an exception, state the Charterers to be in charge of supplying certain

aspects - being the most usual the fuel to run the ship.

2.5 International organizations

As explained in the sub-chapter “2.2 Types of charter parties: methods of chartering a ship”,

charter party standard forms can be developed by both public organizations and private

companies. Private companies have usually adopted the content of wider and more general

forms developed by public organizations and adapted it to their own interests depending on their

trades.

27 Donaldson, J., The Berge Tasta [1975] 1 Lloyd’s Rep. 422, page 424.


45

However, the international public organizations simply created these forms in order to help the

Industry and provide written versions of the most widely extended contracts to cover the

necessities of shipping business. Casually, the most important three organizations are those

which worked together to carry out the major revision of the NYPE charter party form, which will

be the ones that will be briefly described within this FDP: the BIMCO, the ASBA and the SMF.

2.5.1 The BIMCO

The first organization that will be explained in this sub-section is the Baltic and International

Maritime Council, the world’s largest entity formed by shipowners, Charterers, ship brokers and

agents and which include around the 60% of the current merchant fleet all around the world and

more than 1.900 members across 120 countries.

The organization, based in Copenhagen, Denmark, represents a large number of maritime

companies and many organizations to secure a level playing field for the global shipping industry.

For that, BIMCO continuously promotes the global standards and regulations of the maritime

industry by creating contracts and clauses to help the evolution of the business.

By the discussion of its committees, the organization develops flexible commercial agreements

widely used by the entire shipping Industry including containers, dry bulk, tankers… etc. For that,

the entity also considers the opinion of experts and tries to provide realistic and up-to-date

solutions to current shipping issues.

Furthermore, BIMCO acts as an advisory member at the IMO to facilitate the industry’s

experienced point of view of proposed regulations, their consequences and the suggestion of

solutions to make them workable and effective.

Figure 11. BIMCO's logo. Source: BIMCO's website.


46

2.5.2 The ASBA

The Association of Ship Brokers and Agents is an independent trade association founded in 1934

in North America which provides membership to ship brokers and agents of the United States

and Canada. Through their members, the ASBA promotes the ideals and procedures of

professional shipping practices to develop the common interests of the industry and push it

forward.

The ASBA members comprises many different maritime actors such as ship brokers, certified

agents, shipowners, operators, Charterers, etc.

In addition, the association provides the Industry of educational courses to broaden the

knowledge of their membership in many maritime business aspects and sponsors professional

documents for fairer practices.

2.5.3 The SMF

The Singapore Maritime Foundation is an organization established on January 27, 2004, in the

heart of the city of Singapore to mediate between the public and private maritime sectors and

to provide the industry support with new ideas and initiatives to benefit its shipping business.

In addition, the SMF also explains in its webpage the close relationship the entity holds with the

Singapore Government to position the city as an International Maritime Centre and its

continuous proposals to help the development of the sector and its growth.

Figure 12. ASBA's logo. Source: ASBA's website.


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Furthermore, the foundation also works to aware the students of maritime business of current

practices and to promote their interest on continuous education and develop their careers. As

the main Singapore pillar for economic growth, the SMF’s vision is to help the city to drive the

maritime sector to lead the Asian continent towards a stronger economic position through its

shipping business.

Figure 13. SMF's logo. Source: SMF's website.


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Chapter 3. The New York Produce

Exchange Charter party

This chapter will be focused on explaining what the NYPE Charter party form is. For that, I will

explain its basis, the reasons and purposes why it was created, its history and its evolution during

the years and through its updates. This exhaustive analysis will take us to a deep knowledge of

the NYPE topic and will drive us to the most important Chapter of this FDP: the Chapter 4, where

we will entirely analyze the NYPE 2015 form.

3.1 The New York Produce Exchange: history and purposes

The very first important thing we must keep in mind before explaining the NYPE charter party is

the fact that it was born in 1913, when the trade market customs and traditions were quite

different from nowadays. Therefore, it will be both essential and useful to explain the history of

the NYPE organization itself so that we can achieve a solid understanding of the basis and

purposes of the charter party.

A Produce Exchange - such as New York’s - was nothing but an organized market-place. It did not

have any purpose of making money and had nothing to deal with the prices of commodities; it

was simply and merely organized trade. These kinds of organizations enabled their members to

take decisions as what the prices of these commodities should be and to keep in touch each other

to share all useful trading information. Their quotations represented the average opinion of all

those interested in a particular item, the value these people decided it was worth. By doing that,

they did not exactly controlled trade, but they regulated it, preventing itself from congestion,

chaos and unfairness.28

The New York Produce Exchange was one of the oldest commercial institutions of the American

continent, having its origins on the agricultural trade of New York when trading in wheat by

cargoes at a price per bushel was inaugurated.

28 Carhart, E.R. The Annals of the American Academy of Political and Social Science, Vol. 38, Issue 2

Chapter 3. The New York Produce Exchange Charter party

49

It was a market-place where commodities were bought in any quantities: from single packages

to whole cargoes. There, any people traded with each other as principals or for others as brokers

and made arrangements for the care of all the details of the business transactions, and where

honesty must prevail. It was the outgrowth of the needs and necessities of the commerce of the

port of New Yok, with clear and concise purposes such as:

- Maintain a suitable room for such market-place

- Inculcate just and equitable principles in trade

- Establish and maintain uniformity in commercial usages

- Acquire, preserve and disseminate valuable business information, and;

- Adjust controversies and misunderstandings between persons engaged in business.

This organization was, as already explained above, represented by American shippers, Charterers

and traders. Therefore, it looks easy to find out the reason why they launched the New York

Produce Exchange charter party form: all existing forms (mainly issued by the English

organizations) empowered the Owners, so there was a lack of any charter party that defended

the interests of the Charterers,

Figure 14. The New York Produce Exchange building. Source: The New York Times. A brick

beauty bites the dust.


50

The NYPE charter party form is, particularly, a Time charter party form. The duties of each part

are explained in the second chapter of this FDP, but we can summarize them down below to keep

in mind a better idea of what the “Time chartering” implicates and the main reason why this was

the form that the NYPE created.

As in any charter party, there are two major figures to consider: the Owner and the Charterer.

Starting with the last one, the responsibilities of the Charterer are the followings:

- Employing the ship,

- Finding the cargo,

- Paying the port, canal, cargo handling, tanks and holds cleaning and the fuel costs.

These responsibilities lead us to conclude that the Charterer holds the commercial management

of the ship and gets the benefit from trading her during the period of the charter.

On the other side, the Owner responsibility is simple: the nautical management, which include

the capital and the operating costs.

To sum up, by launching this new charter party form, the members of the New York Produce

Exchange held the commercial management of the vessels, trading wherever they found any

interesting business and only giving the Owner the nautical management.

As mentioned in the beginning of this section, the first NYPE charter party form was drawn in

1913, more than hundred years ago. It has been updated many times since then: on 1921; on

1931; on 1946 – which has been widely used during decades; on 1981 – it was renamed as

ASBATIME, since BIMCO collaborated with the update; on 1993 – mixing past versions with

common additional clauses; and finally on 2015 – the major one, involving the three most

important maritime organizations nowadays.

All along the rest of this third chapter, we will analyze the different forms and its updates,

explaining the clauses changed and the meaning of them. It is necessary to point out that this

analysis will start with the 1946 form since the three before – 1913, 1921 and 1931 – are very

difficult to find and are not really worth to explain: they were not very commonly used in the

market field.


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3.2 The NYPE 1946

The NYPE 4629 was the very first successful time charter party amended by the American traders.

Although the following NYPE forms - 1981 and 1993 - have supposedly improved it, it is still the

most widely used in the dry cargo sector, and there are two main reasons that may make this

clear The first reason is that during over 50 years after the NYPE 46 was launched and before the

following version was published in 1981, many disputes arose from it, what gave the law

representatives the opportunity to explain and develop each clause of this charter party during

decades. The second reason is the mere conservative nature of the shipping business, which

states that if something is useful, it is not worth to be changed. As it can be seen in the Appendix,

the charter party is only three pages long but quite complete itself. As almost every charter party,

it is divided into three parts: the preamble; the main terms (or clauses) and the rider clauses.

In the following sub-sections, we will analyze the preamble and the main terms, since these two

parts always appear in the same way and order in the charter party, and only the details of every

contract, which are fulfilled by the Charterer – as explained in the lines 16 and 17 - change.

3.2.1 The preamble

The preamble of this charter party is made up of thirty-four lines. It is worth to explain all the

concepts outlined by these lines since they set the basis in which the form will be constructed:

- Line 1: states the date of the charter party.

- Lines 2 to 11: indicate the name of the Owner of the vessel and the description of the same.

This description is quite complete, since it details the name of the ship, the gross and net tons of

register, the power of the engines - measured in horse power, the bale capacity, the deadweight

capacity, the draft, the freeboard, the capacity of the bunker tanks and the type of bunker used

and the steaming capacity together with its consumption.

29 The New York Produce Exchange. The NYPE 46 Time Charter party. New York: October 3rd, 1946. Form available

at: http://www.fleetle.com/a/d/pdf/nype_46_portrait.pdf.


52

It is also worth to highlight the line number 5, which says that the vessel must present the hull,

the machinery and all equipment in a thoroughly efficient state and points out the class of the

ship.

- Line 12: specifies the name of the Charterer and the city he comes from.

- Lines 13 to 15: these are maybe the three most important lines of the form, since they constitute

the charter agreement of the two parts and the duration of this agreement, also pointing out the

trading limits it will have.

- Lines 16 to 17: these two lines outline that the vessel sublet during any time of the duration of

the charter by the Charterer and state that the he is responsible of fulfilling the form

“…Charterers remaining responsible for the fulfillment of this charter party”. This gives,

undoubtedly, many business possibilities to the Charterers, since they can act as intermediates

only by leasing back the vessel to another interested part. Here we can observe one of the keys

of the American traders when designing the NYPE charter parties and how they designed them

as “pro-Charterer”.

- Lines 18 to 31: in these lines it is specified the method and conditions of the delivery of the

vessel. It is stated where she must be delivered, “safely lying and always afloat at all times of

tide”. If it is not possible to be delivered in the required dock, then she must be delivered

somewhere else previously agreed by both parts but ready to be used for the service, with

enough ballast water and power to run all winches. It is worth to highlight that the vessel must

have full crew complements, which gives us a hint about the nautical management of the Owner.

Moreover, it details the cargo that the vessel can transport, and gives the Owner the opportunity

to specify any cargo he would like to exclude. In the final lines, the places where the vessel will

be able to operate, and some excluded places are enumerated in order to stablish the final

conditions of the agreement.

- Lines 32-34: these lines are left in blank, so that any part can add any additional clause or

condition before finishing the preamble.


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3.2.2 The main terms

The NYPE 46 charter party contains twenty-eight clauses which explain the obligations of each

part of the contract, limiting and explaining their responsibilities. The following lines will be useful

to get a deeper understanding of this charter party form, since all the clauses will be explained

one by one, trying to give a hint about their content and emphasizing on the facts that give the

“pro-Charterer” previously commented aspect to this form.

- Clause 1: this clause explains the duties of the Owner. We can easily find that the costs that he

must take care of are all regarding the nautical management of the vessel “…keep the vessel in a

thoroughly efficient state (…) during the service…” and the crew. It is also said the vessel must

“maintain her class” during the whole service for which she is chartered.

- Clause 2: this second clause explains totally the opposite than the clause number 1, since it

specifies the duties and expenses of the Charterer, which are the commercial costs. It is worth to

say that, in this clause, we can find several concepts protecting the interests of the Charterers

such as the possibility of the payment of the fuel by the Owner if “it has been previously agreed”

– which looks very unusual taking into account that this is a time charter party.

Other facts that evidence this protection of the Charterer can be observed in the specification

that any cost - such as consular charges, the extreme necessity to deviate the vessel to a port of

call or a fumigation on board - caused by any member of the crew, will be for Owner’s account.

- Clause 3: the Fuel clause. In these lines, it is specified the minimum and maximum level of fuel

the vessel must be returned with to the Owner. It must be outlined that this clause stablishes

that the remaining fuel must be paid back to the Charterer “…shall take over and pay for all fuel

remaining on board…”.

- Clause 4: this clause fixes the amount to be paid for the vessel from Charterer to Owner in

United States Currency per ton “on vessel’s total deadweight carrying capacity, including bunker

and stores on (…) summer freeboard…” and when and where to re-deliver her to the Owner.

- Clause 5: It is explained the way the payment must be done from Charterer, defining where

“…in New York…”, how “…in United States Currency…” and when “…semi-monthly in advance and

for the last half month or part of the same the approximate amount of hire…”. It is also mentioned

that “the Owners shall be at liberty to withdraw the vessel from the service of the Charterers,

without any prejudice to any claim they (the Owners) may otherwise have on the Charterers”.


54

This clause also mentions how to proceed with non-prevised expenses: “Cash for vessel’s

ordinary disbursements at any port may be advanced as required by the Captain , by the

Charterers or their Agents, subject to 2.5% commission and such advances shall be deducted by

the hire”. However, the next sentence points another clear advantage out for the Charterer, since

“The Charterers shall in no way be responsible for the application of such advances”, giving a

possibility never seen before to them.

- Clause 6: states that any port the vessel will call, as per Charterer or Agents decision, must

“provide the vessel can safely lie always afloat at any time of tide”. Nevertheless, it gives the

possibility to safely lie her aground if it is customary for similar size vessels in such place.

- Clause 7: this clause explains that all space destined to carry cargo must be at the Charterers’

disposal, but “not more that she can reasonably stow and carry”. It is also permitted to the

Charterer’s to carry passengers – if there is accommodation available for them – at their own risk

and expenses by “paying the Owner X per day per passenger for accommodations and meals (…)

and Charterers are to bear such risk and expense”.

- Clause 8: it is stated that the Captain “shall be under the Owners and directions of the Charterers

as regards employment and agency” – even though being appointed by the Owner -, “prosecuting

his voyages with the utmost dispatch” and “signing the Bills of Lading for the cargo”. The Captain

is also pointed to supervise the load, stow and trim of the cargo, even though the Charterer is

responsible to properly carry it out.

- Clause 9: if the Charterer notices that the premises established in the eighth clause are not

being accomplished and he “shall have reason to be dissatisfied”, this clause gives him the

possibility to protest to the Owner, who will “investigate the same, and, if necessary, make a

change in the appointments”.

- Clause 10: this clause enables the Charterer to “appoint a Supercargo”, if necessary, to supervise

the “utmost dispatch” of the crew, being freely accommodated on board. The Charterer to pay

at the rate of 1 USD per day for the Supercargo victual.

- Clause 11: it explains that the Charterer “shall furnish the Captain (…) all requisite instructions

and sailing directions in writing” and the Master must provide “the Charterers, their Agents or

Supercargo (…) with a true copy of daily Logs”. These logs must detail all data concerning “the

course of the vessel, the distance ran and the consumption of fuel”.


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These last four clauses (eighth, ninth, tenth and eleventh) give a huge scope of control to the

Charterer, providing him with some tools – as the nomination of a Supercargo or copies of the

Log of the voyages - about topics that are arranged by the Owner himself.

- Clause 12: makes the Captain responsible of the ventilation of the cargo when required.

- Clause 13: provides the Charterer the possibility to extend the charter contract “for a period of

X on giving written notice thereof to the Owners or their Agents X days previous to the expiration

of the first-named term…”.

- Clause 14: gives the Charterer the possibility to stablish a commence time of the charter. The

vessel must give written notice of readiness, enabling the Charterer “the option of cancelling this

Charter at any time not later than the day of vessel’s readiness”, providing somehow a clear

advantage to the Charterer.

- Clause 15: protects the Charterer by stating that “any extra expenses shall be deducted from the

hire” and “the payment of the hire shall cease for the time thereby lost” for any deficiency of the

vessel or the crew of which the Owner must have taken care.

- Clause 16: this clause insists on the navigation management, remaining on the Owner since “The

vessel shall have the liberty to sail with or without pilots, to tow and to be towed, to assist vessels

in distress, and to deviate for the purpose of saving life and property”. Nevertheless, it concludes

that if “should the vessel be lost, money paid in advance and not earned (…) shall be returned to

the Charterer at once”.

- Clause 17: in case of any dispute, this clause states that it “shall be referred to three persons at

New York, one to be appointed by each of the parties hereto, and the third by the two so chosen”.

After analyzing the case and taking a decision by simple majority, it “shall be final (…) and may

be made a rule of the Court”.

- Clause 18: exposes that the Owner “shall have a lien upon all cargoes (…) and all sub-freights”

and the Charterer “to have a lien on the Ship for all moneys paid in advance and not earned”.

Nevertheless, although this clause seems to treat both Owner and Charterer as equals, it ends

announcing “Charterer will not suffer (…) any lien or encumbrance incurred by them or their

agents, which might have priority over the title and interest of the Owners in the Vessel.” which

is again clearly favoring the Charterer.


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- Clause 19: this clause describes the actions that would need to be performed in case of derelicts,

salvages and General Average. It is included, among other topics, the proportion of benefits for

each part, the Rules to follow – generally the York-Antwerp Rules and the laws and usages at the

Port of New York – and the responsibilities that the carrier, the shipper and the consignee in

these circumstances.

- Clause 20: in one line and a half, it stablishes that “fuel used by the vessel while off hire (…) and

the cost of replacing the same, to be allowed by Owners”. Nonetheless, if this clause was written

the other way around, we would read that the Charterer would not pay the fuel while he is not

using the vessel, what gives even more evidence of the Charterer’s advantage in this contract.

It is interesting to explain that this Clause had its origin in the original NYPE 1913 version. At that

time vessel were generally coal powered, whereas lighting for the crew was by paraffin. The coal

was purchased by the Charterers and the paraffin by the Owners. If coal was also used for

domestic cooking and heating, for example in grates and stoves, the shipowners would pay for

the coal so used. This Clause provides for this, and its effect was that fuel used for domestic

consumption of the crew is paid for by the shipowner.

- Clause 21: when Charterer and Captain think necessary and “as the vessel may be from time to

time employed in tropical water during the term of this Charter”, she will be docked “at least once

every six months”. It is important to highlight that the “payment of the hire to be suspended until

she is again in proper state for the service”.

- Clause 22: as explained in this clause, the Owner must maintain all loading and discharge

equipment fit and operative at any time, providing “lanterns and oil for night work” if necessary.

With these lines, Charterers make sure that the vessel will be able to carry smooth operations

out whenever calling any port.

- Clause 23: the vessel must be ready to work at any time, with “all winches to be at Charterer’s

disposal” for the Charterer and enough crewmembers to handle them. The Charterer must pay

“overtime work done in accordance” for crew and shore winchmen in case that “…rules of the

port, or labor unions, prevent crew from driving winches”. If there is any required winch not fit

for working, “the Owner to pay for shore engines (…) and any loss of time occasioned thereby”.


57

- Clause 24: this clause explains that this charter party is subject to the terms of the “Act of

relating to Navigation of Vessels, etc.”, the Act of Congress of the United States approved on the

13th day of February,1893, making obvious the origin of the Charterer. Furthermore, there are

two special clauses added in which this NYPE charter party is subject to which “are to be included

in all bills of lading issued hereunder”.

The first one is the USA Clause Paramount - which talks about the bill of lading terms and the

rules they must follow; the second one is the Both-to-Blame Collision Clause – which specifies

about the responsibilities and liabilities about the cargo in case of a collision between the ship

and another different vessel. For a better comprehension of this clauses, shall redirect to the

Appendix of the NYPE 46 charter party included in this paper.

- Clause 25: the Ice clause - states that “The vessel shall not be required to enter any ice-bound

port (…) where there is risk (…) the vessel will not be able on account of ice to safely enter the port

or to get out…”

- Clause 26: here we can observe another clause protecting the Charterer, since it points out that

“Nothing herein stated is to be construed as a demise of the vessel to the Charterers”.

Furthermore, and just in case any line above has caused any misunderstanding in favor of the

Owner, his general responsibilities – the navigational management – are repeated with the

emphasis “same as when trading for their own account”.

- Clause 27: It is indicated that a commission of the 2,5% is to be paid from the vessel and Owners

to a specified actor “on hire paid and earned under this Charter, and also upon any continuation

or extension…”.

- Clause 28: Similar to the previous clause, it fixes another 2,5% of address commission and who

will earn it.

3.2.3 Conclusions

As it was previously explained at the beginning of this sub-chapter, this version of NYPE was the

very first successful amended by the American traders. After having analysed it, it turns very easy

to find out the reasons of its success, which was owned due to two main reasons.


58

The first reason was its simplicity. It is very well known that shipping – or any - contracts do

always have loads of clauses which need to be legally interpreted by experts, so the longer the

contract is, the more disputes can arise from it. In this case, with only 28 clauses written in 175

lines, issues have a certain limit, and after years and years of use – we must remember that the

next NYPE version was not launched until June 12th, 1981 – these disputes were continuously

dealt and all the maritime sector got used to its interpretation, easing the solving of any issue.

The second reason is the favourable, historic date it was issued. By the end of the 50s decade

and after the Second World War, trade started to grow exponentially, and economy

experimented its natural evolution. By that time – or ever after any war - the supply of existing

cargo vessels was much larger than the demand, so cargo Owners – also known as Charterers –

had a very valuable weapon in their hands among vessels’ Owners, which needed to accept

Charterers demands. In this case, and due to their war’s victory, most Charterers were American,

and this version of NYPE was issued and widely accepted.

This second reason leads us to point out the “pro-Charterer” previously commented aspect back

again. As it has been explained during the analysis of this charter party, it is nothing but easy to

find these characteristic details:

- In Lines 16 and 17, it is given the option to the Charterers to sublet the vessel and state

that the Charterer is responsible of fulfilling the form “…Charterers remaining responsible

for the fulfillment of this charter party”.

- In Clause 2, there exist the possibility of the payment of the fuel by the Owner if “it has

been previously agreed”, even though it is very uncommon to find this in any time charter

party.

- In Clause 5, the responsibility about advancing any non-prevised expense is withdrawn

from the Charterer, forcing the Owner or the crew to solve this issue.

- In Clause 10, the Charterer has the possibility of nominating a Supercargo to supervise

the utmost dispatch, being freely accommodated on board.

- In Clause 11, the Charterer or his representatives have the possibility to arrange a true

copy of the Daily Log wrote by the crew to supervise the same utmost dispatch.


59

- In Clause 15, the Charterer gets shielded by ceasing the hire for any time lost due to any

deficiency of the vessel. Furthermore, in the next Clause (16), it is stated that if the vessel

gets lost, all money paid in advanced and not earned by the Charterer must be returned

to him at once.

- The Clause 18 is one of the most revealing one. Even though a balance regarding liens is

set between the Owner and the Charterer, a final condition favouring the Charterer

stablishes a clear disequilibrium among them (see explanation of the Clause on the sub-

section before).

- In Clause 22, the Charterers make sure that the vessel is provided with all necessary tools

to carry smooth operations out.

- Finally, in Clause 26, the responsibilities of the Owner are stated again and the meaningful

sentence “Nothing herein stated is to be construed as a demise of the vessel to the

Charterers” is put as the icing on the cake.

At this stage, we can give this analysis of the NYPE 46 charter party as concluded. The following

sub-section will focus on the next version of the NYPE: the 1981 version – also known as

ASBATIME.

3.3 The NYPE 81 (ASBATIME)

Almost thirty-five years after the launching of the NYPE 46 charter party, the Association of

Shipbrokers and Agents of the USA (ASBA) published a new version of this document, renaming

it as ASBATIME.30 Nonetheless, and as explained in the introduction of this chapter, by the time

of publication of this new version of the NYPE charter party, the NYPE 46 had already become

very widely used, and despite the availability of a newer up to date version, it transpired that few

Charterers were prepared to abandon the use of the NYPE 46 and the additional side-clauses

(also known as rider clauses) added to it.

30 The Association of Ship Brokers & Agents (U.S.A.). The NYPE 81 Time Charter party or ASBATIME. New York: June 12th, 1981. Form available at: http://www.fleetle.com/a/d/pdf/asbatime_nype_81.pdf.


60

As explained in the NYPE 46 analysis, every charter party is divided into two parts: the preamble

and the main terms. Additionally, a third part can be found, which are the side or rider clauses,

which are different in every contract depending on the Charterers or Owners demands. In the

following sub-sections, as done with the NYPE 46 version, both preamble and main terms will be

analysed, drawing a conclusion and general overview of the entire charter party as well.

3.3.1 The preamble

The preamble of this charter party is made up of sixty-two lines. As in any other charter party,

these concepts set the basis in which the form will be constructed, so it is important to keep a

clear idea of them all:

- Lines 1-2: stablish the date when and the place where the charter party is “made and

concluded”.

- Lines 3-5: the gaps of these lines must be fulfilled with the name of the Owners and the name

of the vessel that will be employed.

- Lines 6-24: these lines are used to perform a precise and complete description of the vessel

before named. This description is quite similar as in the NYPE 46 preamble, since it also describes

the gross and net tons of register, the power of the engines - measured in horse power, the

class, the bale – or grain in this case as well - capacity, the deadweight capacity, the draft, the

freeboard, the capacity of the bunker tanks and the type of bunker used and the steaming

capacity together with its consumption.

However, we can find some slight changes trying to adapt it to the current times of this version

and to improve some characteristics as:

✓ The draft: in this version, it is specified to be measured in salt water. This specification

might have been done to spot the difference of the use of the charter party between

sweet-water rivers or lakes and salty-water seas or oceans, since a draft issue could arise

in case of mixed routes.

✓ The stores capacity: even though this characteristic appears to be limited as “not

exceeding one and one-half percent of ship’s deadweight capacity, allowing a minimum

of fifty tones” in the NYPE 46 version, it is simply indicated in the ASBATIME like a free gap

to fill.


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✓ The type of bunker product used: the difference in this characteristic is that in the NYPE

46 version, three different options could be chosen as “best Welsh-coal – best grade of

fuel – best grade Diesel oil”, whereas in the ASBATIME a free gap to fill is placed, showing

no limits in the type of bunker used.

- Lines 25-26: recognize the Charterers and their city of origin.

- Lines 27-30: stablish the agreement of both parts and the duration of the contract, always valid

“within below mentioned trading limits”.

- Lines 31-33: gives the Charterer the “liberty to sublet the vessel” during any part of the contract

and also states that “Charterers shall remain responsible for the fulfilment of this charter”. These

lines give a huge power to the Charterers, since they grant them to sublet the vessel to whoever

at any time, without any special permission from the Owner.

Furthermore, they also allow the Charterer to become a new Owner for the subsequent sub-

Charterer, being the responsible of filling the charter party as well. For all above, these lines act

as a “pro-Charterer” trait of this contract, since we shall never forget it was created by the ASBA.

- Lines 34-45: explains the delivery conditions of the vessel. These lines are quite similar as the

ones of the NYPE 46, since they also describe that the port of delivery must let the vessel “safely

lie, always afloat, at all times of tide”. It is also pointed out that, in case that place of delivery is

not available “time shall count as provided in Clause 5 – Hire payment and commencement”. In

the following lines, from 41 to 45, it is detailed the conditions of full readiness of the vessel as

“shall be ready to receive cargo with clean-swept holds and tight (…) and in every way fitted for

ordinary cargo service”. However, there are two main differences between the ASBATIMA and

the NYPE 46 in these lines:

✓ Whereas in the NYPE 46 it is stated that “…winches and donkey boiler with sufficient steam

power, or if not equipped with donkey boiler, then other power sufficient to run all the

winches at one and the same time”, it is written more generally in the ASBATIME as “with

sufficient power to operate all cargo-handling gear simultaneously”. This change may

have been done since, from the 1946 to the 1981 version, which involves 35 years of

vessel’s evolution, some cargo handling equipment changed, and it was necessary a more

general sentence.


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✓ Something quite similar is observed in the following lines: in the NYPE 46, it is stated

that the vessel must be fitted “with full complement of officers, seamen, engineers

and firemen for a vessel of her tonnage”, whilst in the ASBATIME this fact is written

as “with full complement of officers and crew for a vessel of her tonnage”, something

much more general. As in the change before explained, this may have been changed

due to the evolution of the ships and the maritime industry, which, after 35 years,

might require some more tasks that those described in the 46 version.

- Lines 46-50: explains that the vessel will be employed to carry lawful cargo, excluding any

dangerous or similar cargo “unless carried in accordance with the requirements (…) of the proper

authorities of the state of the vessel’s registry (…) ports of shipment and discharge or any

intermediate state”.

- Lines 51-56: enumerates the prohibited cargo to be shipped: “livestock, arms, ammunition,

explosives” and leaves some blank lines to include more banned cargo.

- Lines 57-62: in these final lines of the preamble are set the trading limits. This is quite different

that in the NYPE 46 version, in which there was a long list of allowed places and also “excluding

Magdalena River, River St. Lawrence between October 31st and May 15th, Hudson Bay, (…) and,

when out of season, White Sea, Black Sea and the Baltic.”. Still, in the ASBATIME, this is again

made shorter. Here, it is only written that “the vessel shall be employed in such lawful trades

between safe ports and places within…”, leaving blank spaces to be filled for the accepted trading

places, and then “excluding…” and more blank spaces to write down those banned locations.

Compared to the previous form on the NYPE charter party, dated on 1946, the concepts included

in the preamble of the ASBATIME are quite similar even though it appears to be a bit longer,

something that will be explained in the conclusion.


The NYPE 81 charter party contains twenty-seven clauses explaining the obligations and

responsibilities of each part. Even they are quite similar as well to the NYPE 46 main terms, the

small differences between each other will be explained in the conclusion.


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- Clause 1 – Owners to provide: this clause enumerates the aspects the Owner must take care of

and provide, being them no others than all those pertaining to the readiness of the vessel such

as “insurance (…), all provisions, cabin, deck, engine-room, (…) stores, including boiler water…”;

its maintenance “shall maintain vessel’s class and (…) efficient state in hull, machinery and

equipment…” and all crew expenses such as “wages, consular shipping and discharging fees (…)

and port services pertaining to the crew”.

- Clause 2 – Charterers to provide: aversely to the previous clause, here are stated everything the

Charterers take over, such as “fuel (…), port charges, pilotages, towages, agencies, commissions,

(…) and all other usual expenses except those stated in Clause 1”. Nevertheless, it is even more

important to point out everything outlined that the Charterers are not responsible of, such as

“consular charges pertaining to individual crew members or flag of the vessel”.

Furthermore, even though it is outlined at the right beginning of the clause the fact that “while

the vessel is on hire”, it is also noted that “when the vessel puts into a port for causes for which

vessel is responsible” or to carry out “fumigations ordered because of illness of the crew”, all such

charges shall be paid by the Owners.

- Clause 3 – Bunkers on Delivery and Redelivery: it is fixed the exact quantity of fuel and diesel oil

the Owner must deliver the vessel to the Charterers and the price per ton of each bunker type,

being the same applied to the Charterer when redelivering the vessel to the Owner. Quantities

can be defined in metric or long tones, but the same measurement unit must be used throughout

all the clause.

- Clause 4 – Rate of Hire: to detail the hire, two different options are given: a fixed rate per day

or a fixed “United States Currency per ton on vessel’s total deadweight carrying capacity,

including bunkers and stores, on (…) summer freeboard, per calendar month…”.

In this clause it is also included the Redelivery Areas and Notices, stating that “redelivery in like

good order and condition, ordinary wear and tear excepted, (…) at (place of redelivery) unless

otherwise agreed”. It is given the Charterer the odd to deliver the vessel in another “probable”

port, giving to the Owner the vessel’s expected date of redelivery with a fixed amount of notice

days in advance.


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- Clause 5 – Hire Payment and Commencement / Cash advances: the hire must be paid and

received in New York in United States Currency, and describes how “…semi-monthly in advance,

and for the last half month or part of the same the approximate amount of hire”. It is also pointed

out that if this payment “not cover the actual time, hire shall be paid for the balance day by day

as it becomes due, if so required by Owners”. On the other side, “failing the punctual and regular

payment of the hire, (…), the Owners shall be at liberty to withdraw the vessel from the service of

the Charterers”.

Regarding the commencement of the charter, the Charterers shall have liberty to employ the

vessel as soon as she gives a written notice of readiness or at 7 AM on the working day after,

depending on their interests.

This clause also mentions how to proceed with non-prevised expenses: “Cash for vessel’s

ordinary disbursements at any port may be advanced as required by the Captain, by the

Charterers or their Agents, subject to 2.5% commission and such advances shall be deducted by

the hire”. However, the next sentence points another clear advantage out for the Charterer, since

“The Charterers shall in no way be responsible for the application of such advances”, possibility

given in NYPE 46 and maintained in this version.

- Clause 6 – Berths: exactly as in the NYPE 46 version, it states that any port the vessel will call,

as per Charterer or Agents decision, must “provide the vessel can safely lie always afloat at any

time of tide”. Nevertheless, it gives the possibility to safely lie her aground if it is customary for

similar size vessels in such place.

- Clause 7 – Spaces available: it explains that all usual places of loading and also accommodations

for supercargo, if carried, must be at the Charterers’ disposal. On the other side, “sufficient space

for ship’s officers, crew, tackle, apparel, furniture, stores and fuel” shall be reserved.

- Clause 8 – Prosecution of Voyages: it is pointed out that, even though the Captain is “appointed

by the Owners”, he “shall be under the orders and directions of the Charterers as regards

employment and agency”, and “shall prosecute his voyages with due dispatch”. However, the

Charterers “are to perform all cargo handling at their expense under the supervision of the

Captain”, being also responsible to sign the bills of lading.


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There is also brand-new possibility here given to the Charterers in case they want to take its

odds.: “Charterers or their agent may sign bills of lading on behalf of the Captain”. However, “the

Charterers shall indemnify the Owners against all consequences (…) which may arise from any

inconsistency between this charter and any bills of lading” signed by the Charterers.

- Clause 9 – Conduct of Captain: exactly the same as written in the NYPE 46 version, if the

Charterer notices that the premises established in the eighth clause are not being accomplished

and he “shall have reason to be dissatisfied”, this clause gives him the possibility to protest to the

Owner, who will “investigate the same, and, if necessary, make a change in the appointments”.

- Clause 10 – Supercargo and Meals: this clause gives the Charterers the possibility to appoint a

Supercargo with the mission to “accompany the vessel and see that voyages are prosecuted with

due dispatch”, paying a rate left in blank per day.

On the other side, it is also stated that the “Owners shall victual pilots and custom officers”, but

also, if the Charterers give permission, “shall victual tally clerks, stevedore’s foreman, etc.” for a

rate left in blank per meal, which will be paid by the Charterers.

- Clause 11 – Sailing Orders and Logs: as in the previous version, it explains that the Charterer

“shall furnish the Captain (…) all requisite instructions and sailing directions in writing” and

provide “the Charterers, their Agents or Supercargo (…) with a true copy of daily Logs”. These logs

– both deck and engine - must detail all data concerning “the course of the vessel, the distance

ran and the consumption of fuel”. It is easy to identify the pro-Charterer facet of this clause,

where sometimes it is even included a wording allowing the Charterers to check the vessel’s

performance by reference to a specialised weather-routing company and, in case of

disagreement between the Logs and the independent reports, these last are to take precedence

over the Logs – which is vital in respect of off-hire and vessel’s performance.

- Clause 12 – Ventilation: makes the Captain responsible of the ventilation of the cargo when

required.

- Clause 13 – Continuation: gives the option to the Charterers to continue the Charter for the

desired period, without requiring any written option given in advance to the Owners.


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- Clause 14 – Laydays/Cancelling: as in the NYPE 46 version, it gives the Charterer the possibility

to stablish a commence time of the charter. The vessel must give written notice of readiness,

enabling the Charterer “the option of cancelling this Charter at any time not later than the day of

vessel’s readiness”, providing somehow a clear advantage to the Charterer.

- Clause 15 – Off Hire: it is explained that, during any loss of time due to any damage or deficiency

of the ship “unless resulting from inherent vice, quality or defect of the cargo, (…), the payment

of the hire and overtime (…) shall cease for the time thereby lost”.

It is also included that “should the vessel deviate during a voyage, contrary to the orders of the

Charterers, for any reason other than accident to the cargo, the hire is to be suspended (…) until

she is again in the same (…) position and the voyage resumed”. Furthermore, it is included that

all fuel used during this time is to be paid by the Owners, since the vessel is off hire, highlighting

the hardness of this conditions and the way the Charterers avoid any extra expense not caused

by them.

- Clause 16 - Total Loss / Exceptions / Liberties: as in the previous version of the NYPE, this clause

insists on the navigation liberties of the Owners, since “The vessel shall have the liberty to sail

with or without pilots, to tow and to be towed, to assist vessels in distress, and to deviate for the

purpose of saving life and property”. Nevertheless, it concludes that if “should the vessel be lost,

money paid in advance and not earned (…) shall be returned to the Charterer at once”.

- Clause 17 – Arbitration: in case of any dispute during the time of the charter, this clause explains

that it “shall be referred to three persons at New York, one to be appointed by each of the parties

hereto, and the third by the two so chosen”. After analysing the case and taking a decision by

simple majority, it “shall be final (…) and may be made a rule of the Court”. However, the only

imposition is that these men must be “conversant with shipping matters”.

- Clause 18 – Liens: as in the NYPE 46 version, this clause exposes that the Owner “shall have a

lien upon all cargoes (…) and all sub-freights” and the Charterer “to have a lien on the Ship for all

moneys paid in advance and not earned”. Nevertheless, although this clause seems to treat both

Owner and Charterer as equals, it ends announcing “Charterer will not suffer (…) any lien or

encumbrance incurred by them or their agents, which might have priority over the title and

interest of the Owners in the Vessel.” which is again clearly favouring the Charterer.


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- Clause 19 – Salvage: in this clause it is stated that “All derelicts and salvage shall for Owners and

Charterers equal benefit”. Furthermore, in case of General Average, the York-Antwerp Rules 1974

must be applied “at such port or place in the United States (…) selected by the Owner” and

whenever these rules do not apply, “according to the laws and usage at the port of New York”. It

is also pointed out that any disbursement must be done in the United States currency, explaining

the way the deposits for average agreements shall be made to ensure the correct refund to the

Owners.

Regarding the York-Antwerp Rules, it is specified that all bills of lading issued during the charter

contain a provision so that general average will be adjusted to these Rules, most specifically to

the 1974 update as well as “include the “New Jason Clause” as per Clause 23”.

- Clause 20 – Drydocking: at the beginning of this clause, there is a blank space where it must be

specified the date the vessel was drydocked. After that, it is given the option to drydock the

vessel during the charter for due reasons.

However, “Payment of hire shall be suspended upon deviation from Charterers’ service until

vessel is again placed at Charterers’ disposal”, and as if it was not enough preventive for the

Charterers, it is also appointed that the redelivery shall be made “at a point not less favorable to

Charterers than when the hire was suspended”.

- Clause 21 – Cargo Gear / Stevedores Stand-by: states how the Owners must maintain the cargo

gear with blank spaces to be filled up with its description. It also tells that Owners must provide

all lights on board for night work, but “additional lights (…) shall be at Charterers’ expense”.

It is important to highlight that if there is any cargo gear inoperative, whatever the reason might

be, “the vessel is to be considered to be off hire to the extent that time is actually lost”, being the

Owners responsible of any extra expenses that could arise from it.

- Clause 22 – Crew Overtime: for this extra work of the crew, the Charterers are to pay a fixed

amount of $ per month or pro rata.

- Clause 23 – Clauses Paramount: at the beginning of this clause, it is explained that all bills of

lading must include the “Clause Paramount” which bounds them to “the Carriage of Goods by

Sea Act of the United States, the Hague Rules, the Hague-Visby Rules, (…) or such other similar

national legislation” depending of the origin or destination of the bills of lading.


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Furthermore, it states that the charter will be subject to the following three clauses:

1. New Both-to-Blame Collision Clause: distributes indemnifying responsibilities with third

parties in case of losses or liabilities due to a collision during the charter.

2. New Jason Clause: states that, in case the carrier is not responsible to any damage

occurred before or after starting the voyage, any other part involved in the charter will

contribute with the carrier in general average expenses.

3. War Clauses: as per this clause, the vessel shall not navigate nor enter at any war zone,

except allowed by the Owner. If such allowance is received, Charterers are to pay for any

extra insurance as well as additional cost of wages and insurance for the crew.

- Clause 24 – Ice: in this clause, it is explained that the vessel “shall not be required to enter in

any icebound port or area (…) where there is risk (…) the vessel will not be able on account of ice

to safely enter or remain in the port or area or to get out”.

- Clause 25 – Navigation: to make sure anything above is taken as an exclusion of any obligation

from the vessel to the Charterers, it insists that “the Owners shall remain responsible” of

everything related to the nautical management – as it is, in fact, a Time charter party.

- Clause 26 – Commissions: it is fixed the exact quantity of commission the Owners and vessel

will pay to another specific actor “on hire earned and paid under this Charter, and also upon any

continuation or extension…”.

- Clause 27 – Address: fixes the amount of address commission and who will earn it.

- Rider: in these last two lines, the required Rider Clauses are included by only writing down their

number – since they are attached at the end of the charter party – previously agreed by both

parts.

3.3.3 Rider of Suggested Additional Clauses

One of the main updates of the ASBATIME is the Rider Clauses annexed at the end of the main

terms. In the attachment of two pages long, a total of eleven Additional Clauses can be found,

which are a compilation of all those mostly used since the launch of the NYPE 46 version. The aim

to annex these Clauses was no other than giving the possibility to the Owners and the Charterers

to add any of them, always previously agreed, in an ordered and regulated manner.


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- Clause 28 – Extension of Cancelling: this Clause gives the Owners the opportunity to “require

the Charterers to declare whether or not they will cancel the Charter” if they know that “the vessel

will not be ready for delivery by the cancelling date (…) and are able to state (…) the date on which

the vessel will be ready”. In case the Charterers are to still go on with the Charter or fail to reply,

then “the seventh day after the expected date of readiness for delivery (…) shall replace the

original cancelling date”.

This Clause was mostly introduced by Owners in order to minimize their losses in cases where,

even “the exercise of due diligence”, they could not accomplish with the delivery date due to

third party setbacks.

- Clause 29 – Grace Period: in this Clause it is stated that, in case the Charterers “fail to make

punctual and regular payment” of the hire, Owners are to give the Charterers “two clear banking

days (…) written notice to rectify the failure”. However, even though this Rider Clause favours the

Charterers and softens the punctual payment of the hire, it is also stated that “the payment

received (…) will bear interest at the rate of 0.1 percent per day”, in compensation to the Owners.

Furthermore, the last paragraph of this Clause is important to be remarked since it withholds the

Owners of any of their responsibilities among the Charter during the outstanding of the hire,

being the Charterers bounded to indemnify the Owners as per above specifications and also

stating that “any extra expenses resulting from such withholding shall be for the Charterer’s

account”.

- Clause 30 – Cargo Claims: this Clause distributes the damages and claim for the cargo between

the Owners and the Charterers depending on the cause of the alleged damage related to the

responsibilities of each part, sharing costs if only the claims are due to “shortage ex ship”.

- Clause 31 – War Cancellation: this Clause prevents the Charter if a war outbreaks between two

or more countries therein listed, with the possibility to add as many as accorded by both parts.

In case it happens, the vessel is to be redelivered by the Charterers depending whether she has

cargo on board or not. However, the hire must keep being paid and “except as aforesaid all other

provisions of this Charter shall apply until redelivery”.


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- Clause 32 – War bonus: it is stated that “any war bonus to officers and crew (…) shall be for

Charterers’ account”. Even though this is already mentioned in Clause 23 (c), it looks foreseeable

to include it again since if the trade of the Charter continues may be because of the Charterers’

interests.

- Clause 33 – Requisition: this Clause explains that in case “the vessel be requisitioned by the

government of the vessel’s flag during the period of this Charter”, the vessel is to proceed off

hire, which in case to be paid by the foresaid government, it will be “retained by the Owners”.

Nevertheless, the period of the Charter during the requisition will keep counting.

- Clause 34 – On/Off Hire Survey: at delivery and redelivery time, each part is to nominate a

surveyor, who will proceed to perform a joint survey of the vessel to evaluate her state and any

deficiencies so far appreciated. Once the survey is concluded, “a single report shall be prepared

on each occasion and signed by each surveyor”, filling a separate report in case of unagreed items.

It is also stated that in case of failing to the attention of the survey or the report’s signature,

“such party shall nevertheless be bound for all purposes by the findings in any report prepared by

the other party”. It is important to highlight as well that “on-hire survey shall be on Charterers’

time and off-hire survey on Owners’ time”.

- Clause 35 – Stevedore Damage: this Clause explains the specific actions the Captain must make

if any damage caused by stevedores ever happen. However, any “damaged involving

seaworthiness shall be repaired without delay to the vessel (…) in Charterers’ time”. On the other

side, “other minor repairs shall be done at the same time (…) or while vessel is in drydock in

Owners’ time”.

Nonetheless, any expenses and time spent in repairing stevedore damage “shall be for

Charterers’ account (…) whether or not payment has been made by stevedores to Charterers”.

- Clause 36 – Charterers’ colors: if desired by the Charterers’, they have the privilege of “flying

their own house flag and paint the vessel with their own markings”, repainting her prior

redelivery and assuming its expenses and time costs.

- Clause 37 – Return Premium: it is stated that “Charterers shall have the benefit of any return

insurance premium receivable by Owners (…) by reason of vessel being in port fir a minimum

period of 30 days” if she is on hire or pro rata for the time on hire.


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- Clause 38 – Water Pollution: as a matter of prevention for the Charterers’, the vessel is to be

set off hire “during any time lost on account of vessel’s non-compliance (…) pertaining to water

pollution”. It is also worth to highlight that the vessel is required “to have secured and carry on

board the vessel a Certificate of Financial Responsibility as required under U.S. law” in case of

calling any U.S. port.

3.3.4 Comparison between NYPE 46 and ASBATIME

Even though some changes have been found between the ASBATIME and the NYPE 46 version all

along this analysis, both clauses are quite similar from the first moment on.

Starting with the comparison of both preambles, we can find the ASBATIME’s quite longer than

the NYPE 46’s preamble – 62 lines versus 35. However, the main reason for that is no other than

a physical one: in the ASBATIME, all the text is organized by the concepts of the lines at their

sides, similar to a title.

For that reason, lines are simply shorter and therefore more lines are required. Nevertheless, this

organization makes the whole charter party easier to read and to find the concepts on it, a detail

which is quite positive.

The two main qualitative differences here are found in two ways: specification and synthesis.

Regarding the specification, a clear example is found in line 14, where it is emphasized that the

draft must be measured in salt water. Even though no explanation about this technicality is done,

it can be due to any issue arisen during the use of the previous version, since drafts change

significantly from sea to fresh water.

About the synthesis, several examples are found throughout all the preamble.

Firstly, some of the characteristics are left in a blank space to be fulfilled, as the stores capacity,

which shifts from being limited as “not exceeding one and one-half percent of ship’s deadweight

capacity, allowing a minimum of fifty tones” or the type of bunker to be used, which shifts from

having three different bunker options could be chosen.

Secondly, in lines 41 to 45, there is most likely a generational update rather than a synthesis,

since whereas in the NYPE 46 it is stated that “…winches and donkey boiler with sufficient steam

power, or if not equipped with donkey boiler, then other power sufficient to run all the winches

at one and the same time”, in ASBATIME it is simply indicate as “with sufficient power to operate


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all cargo-handling gear simultaneously”. This change might have been done because of the

evolution of the maritime industry, since we shall never forget that 35 years separate both

clauses.

Something quite similar is observed a couples of lines below, where it is stated that the vessel

must be fitted “with full complement of officers and crew for a vessel of her tonnage” rather than

“with full complement of officers, seamen, engineers and firemen for a vessel of her tonnage”

found in the NYPE 46 version.

To conclude, in the final lines of the preamble are set the trading limits which were widely listed

in the NYPE 46 version whilst, in the ASBATIME, it is only written that “the vessel shall be

employed in such lawful trades between safe ports and places within…”, leaving blank spaces to

be filled for the accepted trading places, and then “excluding…” and more blank spaces to write

down those banned locations.

Regarding the clauses, the changes are not very numerous or at least do not contribute to

improve this version above the NYPE 46 significantly – these differences are, however, mere

specifications of some terms which could have caused controversy during the use of the NYPE 46

or simply updates after nearly fifty years.

In Clause 1 of NYPE 81, where “Owners to Provide”, it is pointed out that any “port services

pertaining to the crew” are to be paid by the Owners. That is due to in Clause 2 of the NYPE 46,

where “Charterers to Provide”, it was written that “port charges” were to be paid by the

Charterers – in NYPE 81, with this addition, all those concerning the crew are not to be paid by

the Charterers anymore. In fact, it is also added that those “consular charges due to the flag of

the vessel” will not be held by the Charterers no more, avoiding them more less desired expenses.

Aversely to these additions, one more is done even though it is not in favour of the Charterers

interests since they are stated to pay for towages when necessary.

In Clause 3, “Bunkers on Delivery and Redelivery”, a generational change is found due to the

appearance of the Diesel Oil as a bunker on board. Furthermore, the number of tons of each

bunker type and its price, both on delivery and redelivery, are to be fixed prior the signature of

the contract, avoiding prices’ variation issues.


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In Clause 4, “Rate of Hire”, it is given the possibility of fixing a daily price for the vessel; however,

in Clause 5, “Hire Payment and Commencement”, the possibility previously given to the

Charterers to use a deposit or a bank guarantee in case of failing to the payment of the hire is

withdrawn.

In Clause 7, “Spaces Available”, another advantage is denied to the Charterers, since nothing is

written about their “privilege of passengers as far as accommodation allow”, nor any fee to be

paid for them, of course.

It is in Clause 8, “Bills of Lading”, where one of the most notorious changes – favouring the

Charterer – is found, since they hold the option to have the BLs sign from themselves or their

agents. Even though an extenuating charge of total responsibility is taken in case of using this

option, it still represents a great advantage of the Charterers.

In Clause 10, “Supercargo and meals”, another generational change is found, since the rate to be

paid by the Charterers for the Supercargo is left blank – in NYPE 46, the rate to be paid was of

“1.00 $ per day”.

Something quite similar happens in Clause 11, “Sailing Orders and Logs”, since from the NYPE 46

creation, vessels started to incorporate “Engine Logbooks” as well as the “Deck Logbooks”

already existing. Therefore, in this clause of the ASBATIME, it is stated that both must be

furnished to the Charterers if they are asked for.

Another clause altered to Charterers’ benefit is the Clause 15, “Off Hire”, since it indicates that

in case of loss of time due to vessel’s deficiency – or any cause related to any of the Owners’

responsibilities – not only the payment of the hire ceases, but also the overtime, if any.

Furthermore, it also included a paragraph stating that “should the vessel deviate during a voyage,

contrary to the orders of the Charterers, for any reason other than accident to the cargo, the hire

is to be suspended (…) until she is again in the same (…) position and the voyage resumed”,

including the cost of the fuel used during this time as well, which are hard conditions for the

Owners.

In Clause 17, “Arbitration”, a small technical change is done pointing out that “the arbitrators

shall be commercial men conversant with shipping matters”, making sure that these arbitrators

are experienced in the shipping business fields.


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Some other changes are also seen in Clause 19, in “General Average” section, since while in NYPE

46 the whole Clause talks about the “Carrier”, the ASBATIME always mentions the “Owners”,

preventing any exemption of their responsibilities. It also updates the York-Antwerp Rules to be

according to, from the 1024 to the newest 1974. To conclude with the changes in this Clause,

even it mentions the New Jason Clause, that is included in the Clause 23 instead of here.

In Clause 20, the “Drydocking”, some changes are notable too. Firstly, a place where the vessel

was last drydocked must be written down. Secondly, there is no “at least” indicated to drydock

the vessel, it must be always agreed between both parts; finally, at the most important change,

the place for the delivery of the vessel after her maintenance must be settled up.

In Clause 21, the “Cargo Gear”, a description of the same is to be freely included, without any

limitation of its lifting capacity. Then, another generational change is found, since “lanterns and

oil” are withdrawn – electricity is employed. Finally, it also states that any loss of time due to any

operative cargo gear will take the vessel off hire – protecting again the interests of the Charterer.

In Clause 22,” Crew Overtime”, the amount of $ to be paid for the crew overtime by the Charterer

must be specified.

In Clause 23, seen as “Clauses Paramount”, some notable changes are worth to be appreciated.

First, the subject of this charter party to “the Act of Congress of the United States of the 13th day

of February 1893 entitled “An Act relating to Navigation of Vessels, etc.”” is withdrawn due to its

old-fashioned aspect. Second, on the USA Clause Paramount, is stated that the Bill of Lading is

also subject to the Hague/Hague-Visby Rules – not created yet in 1946. Third, a bit small

paragraph is added at the end of the New Both-to-Blame Collision Clause. Fourth, the New Jason

Clause is included in this Clause 23, therefore is to be included in the Bill of Lading, something

that was not provided in the NYPE 46. Fifth, and last, War Clauses – not mentioned in the NYPE

46, are also described here and, as the New Jason Clause, to be added to the Bill of Lading.

In the Clause 25, it is stated that “the acts of pilots and tugs” are also Owners’ responsibilities,

among all the rest of them.

To conclude, the possibility to add some Rider Clauses is also observed at the end of the

ASBATIME, being those clauses attached at the end of the charter party. It is worth to say that

these collected Rider Clauses are those which were most frequently added in the NYPE 46,

written down and standardized.


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3.3.5 Conclusions

The ASBATIME was launched in June 12th, 1981 as a brand-new version of the NYPE charter party,

whose previous version dated from thirty-five years ago, on 1946, issued by the Association of

Shipbrokers and Agents of the USA (ASBA).

After analysing it, the first main visible update against the 46 version is its order and organisation.

In the ASBATIME, all lines in the preamble and all clauses are entitled to ease its recognition and

lecture.

Regarding the content of the charter party itself, even though some valuable additions are made

in many clauses, as for example in Clause 8 - “Bills of Lading”, in Clause 20 – “Drydocking” and

Clause 23 – “Clauses Paramount”, not many sonorous changes are found, following in the same

vein as in the NYPE 46. Nevertheless, small clarifications are made all along many clauses,

emphasizing some terms or even rectifying many others, most likely avoiding some

misinterpretations basing on past disputes.

On the other side, the addition of an appendix including the most Rider Clauses used until the

date, ordering and standardizing them, was a great update, since many other charter parties took

the benefit of this compilation to include it to them.

However, even these valuable additions and the inclusion of an appendix of Rider Clauses

seemed to be not enough to revendicate this version above the NYPE 46. The main reason for

that, as already explained at the beginning of this section of the ASBATIME, was that when this

new version was launched, both Owners and Charterers were used to another version for more

than thirty-five years, being available a huge scope of solved disputes which helped them to

perform a clear and concise interpretation of its clauses.

Even though many parties, as BIMCO and The General Council of British Shipping – known as The

Chamber of Shipping nowadays - of interest were consulted, its general pro-Charterer facet was

not altered. In addition, the goal of the ASBA was not to create a new entirely form but a revised

form, therefore clauses only occasionally negotiated were not included in the basic Charter

Clauses but in the attached Rider Clause attachment, which did not cover the real necessities of

the charter market.


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To sum up, the launch of the ASBATIME did not have the expected impact on the industry, not

because of its form or changes – some of them add valuable content, but because of the classical

– or conservative – mentality of the shipping industry, which was used to a simpler version with

similar characteristics, its additional clauses and its past disputes.

3.4 The NYPE 93

Even though the relative failure of the ASBATIME, the importance of the NYPE charter party as

one of the most commonly used time charters for dry cargo vessels was still present in the minds

of all brokers and shipowners all over the maritime market.

For that reason, on 1992, the Chartering and Documentary Committee of the ASBA decided that

a towering update this charter party was necessary. Therefore, together with BIMCO and the

Federation of National Associations of Ship Brokers and Agents (FONASBA), the mission of

undertaking a general revision of the ASBATIME – or NYPE 81 – was started considering the

market’s practice changes and the difference of ships currently used in order to create a workable

form that could have a positive reaction from the shipping business community.

Thus, the members of the ASBA, the BIMCO and the FONASBA worked together to improve this

new form, which main goal was to substitute the old and old-fashioned – even though still used

– NYPE 46, finally approving, on September 14th, 1993, and by all members involved in its

creation, the called NYPE 93.31

Regarding the form itself, it is easily noticeable that some changes are applied from the first

moment on. In this case, the charter party is divided into three sections: the preamble, the main

clauses and an Appendix A.

31 - The Association of Ship Brokers & Agents (U.S.A.); The Baltic and International Maritime Council; The Federation of National Associations of Ship Brokers and Agents. The NYPE 93 Time Charter party. New York: September 14th, 1993. Form available at: http://www.fleetle.com/a/d/pdf/nype_93.pdf.


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3.4.1 The preamble

The preamble of the NYPE 93 is quite shorter than the one of the previous NYPE form. In this

case, it is made up of only twenty-two lines organized into two clearly separate sections:

- Lines 1-8: stablish the date and place of conclusion of the contract and recognizes the Owners

and the Charterers that will be involved in this business.

- Lines 9-22: these lines are to perform a basic description of the vessel that will be employed.

Several terms are included in these lines as her name and flag, the year of building, number of

Registry and Class. It is also included her deadweight, measured in long or metric tons and limiting

the stores weight carried, on a saltwater draft indicated on summer freeboard. Furthermore, its

capacity is measured in both cubic feet grain and cubic feet bale space and its tonnage can be

chosen to be determined in GRT or, to conform to modern ship technology, in GT.

To conclude, the speed is measured in knots being the vessel “fully laden, in good weather

conditions up to and including maximum force (gap to be filled) on the Beaufort wind scale”,

detailing her consumption in long or metric tons and her combustible to be used.

The most interesting fact of this preamble is that, compared to the previous NYPE versions, it is

shorter and more synthesized. However, in order not to lose some further data about the vessel,

an Appendix A is provided. There, any required more detailed description of the vessel or

specification of the bunker oil to be supplied can be freely placed from line 530 on, right at the

end of the contract.


The NYPE 93 contains a total of forty-five clauses, much more than any other previous NYPE form.

The reason of this number of clauses increase simple, but quite effective somehow – something

that will be explained in the conclusions of this sub-chapter.

- Clause 1 – Duration: previously included in the preamble of the previous NYPE versions, this

clause determines the period of time that the vessel will be hired. To avoid any dispute, it is highly

recommended to clearly specify this period of hire with the minimum margin possible.

- Clause 2 – Delivery: it details where “The vessel shall be placed at the disposal of the

Charterers…” and points out that she “shall be ready to receive cargo (…) and in every way fitted

for ordinary cargo service”.


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Furthermore, it is determined the minimum “days notice of expected date of delivery” that the

Owners shall give the Charterers.

It is worth saying that, as well as the Clause 1, this clause always appeared in the preamble of the

previous NYPE versions.

- Clause 3 – On-Off Hire Survey: this clause, never included in the main terms of the NYPE but in

the Rider Clauses of the ASBATIME, explain that both at delivery and redelivery time “the parties

shall (…) each appoint surveyors”, whose mission is to perform a joint survey of the vessel to

evaluate her state, her deficiencies so far appreciated and the quantity of bunkers remaining on

board. Once the survey is concluded, “a single report shall be prepared on each occasion and

signed by each surveyor”, filling a separate report in case of any of the item have not been agreed.

It is also stated that in case of failing to the attention of the survey or the report’s signature,

“such party shall nevertheless be bound for all purposes by the findings in any report prepared by

the other party”.

- Clause 4 – Dangerous Cargo/Cargo Exclusions: as the Clause 1 and 2 of this NYPE 93, its terms

were always included in the preamble of the previous NYPE versions. However, this clause is

found split into two sections:

a) Corresponding to the cargo exclusions, this sub-clause states that the vessel shall be

employed to carry lawful cargo, excluding any dangerous or similar cargo “unless carried

in accordance with the requirements (…) of the competent authorities of the country of

the vessel’s registry and of ports of shipment and discharge and of any intermediate

countries or ports through whose waters the vessel must pass”.

In addition, the following cargo is excluded: livestock, arms, ammunition, explosives,

nuclear and radioactive materials, as well as leaving some lines to fill with more banned

cargo in this contract.

b) For cargo classified as IMO, this sub-clause gives the possibility of limiting the quantity to

be transported agreed between the parties, most likely due to hull insurances policies set

a limit on the amounts of this type of goods. Furthermore, it stablishes that “the

Charterers shall provide the Master with any evidence (…) to show that the cargo is

packed, labelled, loaded and stowed in accordance with IMO regulations”, giving the

Master the power to refuse or unload it at Charterer’s expenses.


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- Clause 5 – Trading Limits: this clause defines the trading limits within the vessel must operate,

leaving also blank line s to fill the excluded areas “as the Charterers shall direct”.

- Clause 6 – Owners to Provide: this clause states all the aspects the Owner must provide to the

Charterer in order to accomplish with the contract, all of them related to the readiness of the

vessel such as “insurance (…), all provisions, cabin, deck, engine-room, (…) stores, including boiler

water…”; her proper maintenance “shall maintain vessel’s class and (…) efficient state in hull,

machinery and equipment…” and other expenses such as “wages, consular shipping and

discharging fees (…) and port services pertaining to the crew”.

- Clause 7 – Charterers to Provide: opposite to the Clause 6, here are detailed every single duty

of the Charterers, who “shall provide and pay for all the bunkers (…) port charges (…), all

communication expenses pertaining to the Charterers’ business at cost, pilotages, towages,

agencies, commissions, consular charges (…), and all other usual expenses except those stated in

Clause 6…”.

However, it is pointed out that if “the Vessel puts into a port for causes for which the Vessel is

responsible (other than by stress of weather)” or any fumigation “because of illness of the crew”

will be for the Owners’ account. Regarding the aforesaid fumigations, if they are ordered

“because of cargoes carried or port visited while the vessel is employed under this Charter Party”

or any other fumigation if the vessel “has been on charter for (…) six months or more” shall be

into account of the Charterers.

In the final lines of this clause, it is explained that “necessary dunnage and also any extra fittings”

shall be provided and paid by the Charterers, “but the Owners shall allow them the use of any

dunnage already aboard the Vessel”. Nevertheless, the Charterers must remove all these

materials prior to redelivery.

- Clause 8 – Performance of Voyages: this clause, as the Clause 4, is divided into two subsections:

a) It is explained that “the Master shall perform the voyages in due dispatch and shall

render customary assistance with the Vessel’s crew”. In addition, it is pointed out that

he must be “conversant with the English language”, which was had never being seen

in any previous NYPE form. Furthermore, the Master is also appointed to supervise all

cargo operations – even though the Charterers are responsible to perform them.


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b) In this sub-clause, it is given the possibility to the Charterers to complain to the

Owners in case they “shall have reasonable cause to be dissatisfied”, being the

Owners obliged to investigate this issue.

- Clause 9 – Bunkers: this clause is again divided into two subsections as follows:

a) In this first subsection, it is fixed the exact quantity of fuel and diesel oil the Owner

must deliver the vessel to the Charterers and the price per ton of each bunker type,

being the same applied to the Charterer when redelivering the vessel to the Owner.

Quantities can be defined in metric or long tones, but the same measurement unit

must be used throughout all the clause.

b) This second subsection is used to point out that “the Charterers shall supply bunkers

of a quality suitable for burning in the Vessel’s engines and auxiliaries”, referring to

the specifications included in the Appendix A.

Furthermore, in this second subsection, it is reserved the right of the Owners “to

make a claim against the Charterers for any damage to the main engines or the

auxiliaries caused by the use of unsuitable (…) fuels not complying with the agreed

specification(s)”. Additionally, the Owners are not to be held responsible for any loss

of speed, consumption increase or time lost due to any unsuitable fuel supplied.

- Clause 10 – Rate of Hire / Redelivery Areas and Notices: in this clause, two slightly different

options are given to specify the hire: a fixed rate per day in US Dollars or a fixed “United States

Currency per ton on vessel’s total deadweight carrying capacity, including bunkers and stores, on

(…) summer freeboard, per 30 days…”.

After that, it is also stated that the “redelivery in like good order and condition, ordinary wear

and tear excepted, (…) at (place of redelivery) unless otherwise agreed”. It is given the Charterer

the odd to deliver the vessel in another “probable” port, giving to the Owner the vessel’s

expected date of redelivery with a fixed amount of notice days in advance.

To conclude, it is highlighted that for “hire calculations, the times of delivery, redelivery or

termination of Charter shall be adjusted to GMT”.


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- Clause 11 – Hire Payment: this clause is divided into four sub-clauses as follows:

a) Payment: it must be detailed where the hire shall be made and received as well as the

currency – even though the United States Currency is still provided. It is also described

how “…15 days in advance, and for the last half month or part of the same the

approximate amount of hire”. In addition, it is detailed that this payment should “not

cover the actual time, hire shall be paid for the balance day by day as it becomes due, if

so required by Owners” and “failing the punctual and regular payment of the hire, (…), the

Owners shall be at liberty to withdraw the vessel from the service of the Charterers”.

To conclude, this sub-clause states that once expired the grace period – which is provided

in the sub-clause 11 (b) – “the Owners shall (…) be entitled to withhold the performance

of any (…) of their obligations and shall have no responsibility whatsoever for any

consequences thereof”, adding that the hire must not be stopped and any extra expenses

due to this event shall be into account of the Charterers.

b) Grace Period: for the first time in any NYPE form, this term is included into a Main Clause

instead of a Rider Clause, as in the ASBATIME. Its meaning is no other than when there is

a failure of the punctual payment of the hire by the Charterers “due to oversight,

negligence, errors or omissions” an agreed amount of banking days are given on behalf

of the Owners to rectify this failure.

c) Last Hire Payment: it explains that, being the last voyage of the employed vessel before

redelivery, the penultimate payment of hire “is to be made for such length of time (…) as

being the estimated necessary to complete the voyage, (…) bunkers on board (…) and

estimated disbursements for the Owners’ account before redelivery”. In case of any

difference, the same must be balanced by the pertinent part.

d) Cash advances: regarding any non-prevised expenses, it is detailed that “Cash for vessel’s

ordinary disbursements at any port may be advanced as required by the Captain , by the

Charterers or their Agents, subject to 2.5% commission and such advances shall be

deducted by the hire”. However, it is pointed out that “The Charterers shall in no way be

responsible for the application of such advances” giving somehow an advantage to the

Charterers.


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- Clause 12 – Berths: it states that any place the vessel will call, as per Charterer or Agents

decision, must be safe and “provide the vessel can safely lie always afloat at any time of tide”.

- Clause 13 – Spaces available: this clause is again divided into two sub-sections:

a) This sub-clause explains that all usual places of loading and also accommodations for

supercargo, if carried, must be at the Charterers’ disposal. On the other side, “sufficient

space for ship’s officers, crew, tackle, apparel, furniture, stores and fuel” shall be reserved.

b) The second sub-clause is brand-new for the NYPE charter party, stating that in case of any

loss, damage or liability caused by cargo carried on deck, the “Owners are to be and are

hereby indemnified by the Charterers”.

- Clause 14 – Supercargo and Meals: this clause gives the Charterers the possibility to appoint a

Supercargo, whose aim is to “accompany the vessel at the Charterers’ risk and see that voyages

are performed with due dispatch”, paying an agreed rate left in blank per day.

In addition, it is also written that the “Owners shall victual pilots and custom officers”, but also,

if the Charterers give permission, “shall victual tally clerks, stevedore’s foreman, etc.” for a rate

left in blank per meal, which will be paid by the Charterers.

- Clause 15 – Sailing Orders and Logs: as in all previous versions of the NYPE, it explains that the

Charterer “shall furnish the Captain (…) all requisite instructions and sailing directions in writing”

and provide “the Charterers, their Agents or Supercargo (…) with a true copy of daily Logs”. These

logs – both deck and engine - must detail all data concerning “the course of the vessel, the

distance ran and the consumption of bunkers.”. It is important to remark that all copies and

extracts of the Logs must be written in English, as well as all instructions and sailing directions

given by the Charterers.

- Clause 16 – Delivery / Cancelling: in this clause, the Charterers must fill a blank space which will

indicate the commence time of the contract. Additionally, a cancelling option is also given to

them if the Vessel is not ready for delivery on or before an indicated time.

Moreover, another paragraph entitled “Extension of Cancelling” is included in this clause. Found

as the Rider Clause 28 in NYPE 81, it gives the Owners the opportunity to “require the Charterers

to declare whether or not they will cancel the Charter” if they know well in advance that “the

vessel will not be ready for delivery by the cancelling date (…) and are able to state (…) the date


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on which the vessel will be ready”. In case the Charterers do not cancel the charter before two

days after Owners’ advise – or they fail to reply, then “the seventh day after the expected date of

readiness for delivery (…) shall replace the original cancelling date”.

This kind of clause, commonly known as Interpellation Clause, was introduced to allow Owners

to minimize their losses in cases where, even “the exercise of due diligence”, they can ascertain

the vessel will not be ready in due time since they are legally obliged to tender their vessel to any

port only to be cancelled and avoid a spot prompt vessel.

- Clause 17 - Off Hire: this clause states that, during any loss of time due to any damage or

deficiency of the ship “unless (…) is caused by events for which the Charterers, their servants,

agents or subcontractors are responsible (…) or by average accidents to the vessel or cargo unless

resulting from inherent vice, quality or defect of the cargo, (…), the payment of the hire and

overtime (…) shall cease for the time thereby lost”.


Charterers, for any reason other than accident to the cargo, the hire is to be suspended (…) until

she is again in the same (…) position and the voyage resumed”.

Furthermore, it is included that all bunker – instead of the mentioned “fuel” detailed in the

ASBATIME, used during this time is to be paid by the Owners, since the vessel is off hire, being

appreciable the strong aim of the Charterers to avoid any extra expense caused by something

which is not under their responsibilities.

- Clause 18 – Sublet: as the first clauses of this charter party, the terms of this one where included

in the Preamble of the previous NYPE forms. However, the meaning does not change in any

sense, since it keeps giving the Charterer the “liberty to sublet the vessel” during any part of the

contract, stating also that “Charterers shall remain responsible for the fulfillment of this charter”,

hugely empowering this party by allowing them to become a new Owner for the subsequent sub-

Charterer, being the responsible of filling the charter party as well.

- Clause 19 – Drydocking: at the beginning of this clause, the last drydock date must be indicated.

Then, two options are given to the parties from where one must be chosen as follows:

a) It can be agreed between the Owners and the Charterers to “place the Vessel in drydock

(…) at a convenient time and place (…) for bottom cleaning and painting and/or repair as

required by class or dictated by circumstances”.


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b) No drydocking allowed during the contract – except in case of emergency.

- Clause 20 - Total Loss: in case of losing the vessel, “money paid in advance and not earned shall

be returned to Charterers”.

- Clause 21 – Exceptions: this clause, included in the “Total Loss Clause” in the previous NYPE

versions, enumerates several events, which are not possible to be predicted, to be “always

mutually excepted”.

- Clause 22 – Liberties: as the previous clause, this term was included in the “Total Loss Clause”

in the ASBATIME, giving the vessel the liberty “to sail with or without pilots, to tow and to be

towed, to assist vessels in distress, and to deviate for the purpose of saving life and property”.

Thus, the Owners have here allowance to perform the nautical management in special cases

without necessity of any express permission of the Charterers.

- Clause 23 – Liens: this clause, as in all previous NYPE forms here analyzed, exposes that the

Owner “shall have a lien upon all cargoes (…) and all sub-freights” and the Charterer “to have a

lien on the Vessel for all moneys paid in advance and not earned”.

In a second paragraph, it is announced that “The Charterers will not directly or indirectly suffer

(…) any lien or encumbrance, which might have priority over the title and interest of the Owners

in the Vessel.”.

Nevertheless, a protective measure for the Owners is found at the end of this clause by declaring

that “The Charterers will not procure any supplies or necessaries or services (…) on the credit of

the Owners or in the Owners’ time”.

- Clause 24 – Salvage: same as in the previous NYPE forms analyzed, this clause states that “All

derelicts and salvage shall for Owners and Charterers equal benefit”.

- Clause 25 – General Average: this clause is, compared to the previous NYPE versions, much

simplified, being the parties freer on their agreement. Even though the General Average is still

to “be adjusted according to York-Antwerp Rules 1974, as amended 1990, or any subsequent

modification thereof”, the place and the currency is left blank for its settlement.

In addition, it is pointed out that “all bills of lading issued (…) will contain a provision to the effect

that general average shall be adjusted according to York-Antwerp Rules 1974, as amended 1990,

(…) and will include the New Jason Clause as per Clause 31”.


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To conclude, it is detailed that the Hire “shall not to contribute to general average”.

- Clause 26 – Navigation: this clause insists that “the Owners shall remain responsible” of

everything related to the nautical management, something quite reasonable due to the nature

of the same charter party.

- Clause 27 – Cargo Claims: in case of any related to the cargo “shall be settled in accordance with

the Inter-Club New York Produce Exchange Agreement of February 1970, as amended May 1984,

or any subsequent modification”.

- Clause 28 – Cargo Gear and Lights: as in the ASBATIME, it states how the Owners shall keep the

cargo gear as in the blank spaces to be filled up with its description. It also tells that Owners must

provide all lights on board for night work, but “additional lights (…) shall be at Charterers’

expense”.

It is important to highlight that if there is any cargo gear inoperative, “the vessel is to be

considered to be off hire to the extent that time is actually lost”, being the Owners responsible of

any extra expenses that could arise from it. However, this would not apply in case that “such

disablement or insufficiency of power is caused by the Charterers’ stevedores”.

- Clause 29 – Crew Overtime: in case of any extra work of the crew, the Charterers are to pay a

fixed amount of $ per month or pro rata “concurrently with the hire”.

- Clause 30 – Bills of Lading: this clause is divided into three sub-clauses as follows:

a) It is explained that the Master is in charge of signing the bills of lading or waybills.

However, “with the Owners’ prior written authority”, the Charterers are also entitled to

sign them.

b) Following the line of the previous sub-clause, in case of “any inconsistency between this

Charter Party and any bills of lading or waybills signed by the Charterers or the Master at

their request”, the Charterers shall indemnify the Owners “against all consequences or

liabilities”.

c) This third sub-clauses basically frees the Owners and the ship of any responsibility

regarding the cargo carried on deck, quoting the exact clause the cargo documents must

have written.


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- Clause 31 – Protective Clauses: called “Paramount Clauses” in the ASBATIME, this clause

provides five clauses – listed from “a” to “e” – of which the charter party is subject to and which

must be included in all bills of lading and waybills as follows:

a) Clause Paramount: it is explained that all bills of lading must include a clause which

bounds them to “the Carriage of Goods by Sea Act of the United States, the Hague Rules,

the Hague-Visby Rules, (…) or such other similar national legislation” depending of the

origin or destination of the bills of lading.

b) New Both-to-Blame Collision Clause: distributes indemnifying responsibilities with third

parties in case of losses or liabilities due to a collision during the charter.

c) New Jason Clause: states that in case the carrier is not responsible to any damage

occurred before or after starting the voyage, any other part involved in the charter will

contribute with the carrier in general average expenses.

d) U.S. Trade-Drug Clause: this clause makes the Charterers responsible of the prevention of

“narcotic drugs and marijuana to be loaded or concealed on board the Vessel”, holding

the Owners and the crew indemnified at any claims and the release of the vessel in case

of any arrest. However, Owners shall be responsible if these substances are found in

possession of vessel’s personnel.

e) War Clauses: as per this clause, the vessel shall not navigate nor enter at any war zone,

except allowed by the Owner. If such allowance is received, Charterers are to pay for any

extra insurance as well as additional cost of wages and insurance for the crew.

Furthermore, and newly introduced in this NYPE 93 form, was bonuses to the crew are

on Charterers account.

Clause 32 – War Cancellation: this Clause prevents the Charter if a war outbreaks between two

or more countries that both parts can agree on. In case this situation takes place, the vessel is to

be redelivered by the Charterers depending whether she has cargo on board or not. However,

the hire must keep being paid and “except as aforesaid all other provisions of this Charter shall

apply until redelivery”.


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- Clause 33 – Ice: this clause explains that the vessel “shall not be required to enter in any icebound

port or area (…) where there is risk (…) the vessel will not be able on account of ice to safely enter

or remain in the port or area or to get out”. However, if the Owners approve, the vessel can follow

ice-breakers if required.

- Clause 34 – Requisition: this Clause states that if “the vessel be requisitioned by the government

of the vessel’s flag during the period of this Charter”, the vessel is to proceed off hire and, in case

of being paid by the foresaid government, it shall be “retained by the Owners”. However, the

period of the Charter during the requisition will keep counting, and if exceeds an agreed quantity

any of the parts can cancel the charter party with no claims.

- Clause 35 – Stevedore Damage: in case this situation happens, “the Charterers shall pay for any

and all damage to the Vessel caused by stevedores”. For that, the Master has 48 hours since it

has been produced to notify, in writing, the Charterers or their Agents of any damage so far

discovered, appointing a surveyor to assess the extent the damages if necessary.

After this, the clause is divided into two sub-clauses:

a) This first sub-clause specifies that, in case these damages affect anything related to the

nautical management of the ship or her “trading capabilities”, they must be repaired

immediately by the Charterers at their own expense keeping the vessel on hire until

b) Contrary to the previous point, any damage not specified above “shall be repaired at the

Charterers’ option, before or after redelivery concurrently with the Owners’ work”. In this

case, only the time and the expenses for the repairs “for which the Charterers’ are

responsible” will exclusively paid to the Owners.

- Clause 36 – Cleaning of Holds: in case that the holds need to be cleaned between voyages or

cargoes, Charterers are to pay an extra at a fixed rate per hold. However, the Owners are

exempted of any claim or responsibilities in case the holds are not accepted for loading any cargo.

To conclude, it is given the Charterers the option to redeliver the vessel “with unclean/unswept

holds” by paying a fixed rate to compensate the cleaning.


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- Clause 37 – Taxes: this clause obliges the Charterers to pay all taxes related to the vessel, the

cargo, the freights, the sub-freights and the hire during the duration of the contract as well as

after its currency. Nevertheless, “taxes levied by the country of the flag of the Vessel or the

Owners” are excluded to the Charterers.

- Clause 38 – Charterers’ colors: if required by the Charterers’, it is permitted the privilege of

“flying their own house flag and paint the vessel with their own markings”. However, the vessel

must be repainted prior redelivery at Charterers’ own expenses and time costs.

- Clause 39 – Laid Up Returns: it is explained that “Charterers shall have the benefit of any return

insurance premium receivable by Owners (…) by reason of vessel being in port fir a minimum

period of 30 days” in case the vessel is on hire or pro rata for the time on hire.

- Clause 40 – Documentation: the Owners’ are obliged to provide the Charterers any required

documentation to allow the vessels’ trading within the agreed limits of the contract, detailing –

but not limiting – some of them as the “certificates of financial responsibility for oil pollution,(…),

tonnage certificate,(…), certificate of registry…” etc.

- Clause 41 – Stowaways: this brand-new clause prevents the presence of undesired stowaways

in the vessel. For that, it is divided into two sub-clauses:

a) Divided into three different points:

i. Expresses that the Charterers must take care and all necessary means to avoid the

presence of the aforementioned stowaways.

ii. It basically points out that, in case any stowaway gains access to the vessel by

means of the cargo shipped on board, the Charterers are to be considered

responsible of any consequences , claims and fines, holding “the Owners harmless

and (…) indemnified against all claims” whilst “the Vessel shall remain on hire”.

iii. In case the above sub-clause takes place and the Vessel is arrested, “the Charterers

shall take all reasonable steps to secure that (…) the Vessel is released”.

b) Now divided into two points:

i. Contrary to the previous sub-clause, in case the stowaways gain access to the

vessel by different means of the ones mentioned above – nothing related to the


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cargo – the Owners shall be considered liable for “all time lost and all expenses,

(…), including fines (…) and the Vessel shall be off hire”.

ii. Exactly the contrary as the point “iii” of the previous sub-clause, in case the

situation above explained ever happened and the vessel is arrested, the Owners

shall be considered in charge of releasing her.

- Clause 42 - Smuggling: in case the crew commits any contraband, the vessel is to be considered

off hire for any time lost and the Owners “shall bear the cost of any fines, taxes or imposts”.

- Clause 43 – Commissions: it is fixed the exact quantity of commission the Owners and vessel

will pay to whichever broker “on hire earned and paid under this Charter, and also upon any

continuation or extension…”.

- Clause 44 – Address Commission: fixes the amount of address commission and who will earn it.

- Clause 45 - Arbitration: in addition to the city of New York, it is given the chance – never seen

before – to resolve any dispute in the city of London by choosing between one of the options:

a) NEW YORK: being subject to the US Law, three arbitrators are to be appointed – one of

each party and the third between the two so-chosen. It is also pointed out that “their

decision (…) shall be final and (…) this agreement may be made rule of the court”.

In addition, these men shall be commercial and “conversant with shipping matters”,

conducting the arbitration “with the Rules of the Society of Maritime Arbitrator Inc”.

To conclude, if the amount claimed does not exceed an agreed quantity, then “the

arbitration shall be conducted in accordance with the Shortened Arbitration Procedure of

the Society of Maritime Arbitrators Inc”.

b) LONDON: even though it gives the option to nominate a single arbitrator if the parties

agree, they can also nominate one arbitrator each who is to be “carrying on business in

London and who shall be members of the Baltic Mercantile & Shipping Exchange and

engaged in Shipping”. Its decision shall always be governed by the English Law.

As in the sub-clause before “a)” above explained, if the quantity claimed does not exceed

a fixed amount, “the arbitration shall be conducted in accordance with the Small Claims

Procedure of the London Maritime Arbitrators Association”.


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3.4.3 Comparison between ASBATIME and the NYPE 93

After having analyzed the whole NYPE 93, many changes and updates were made from the

previous NYPE form, dated from 1981 and also known as ASBATIME – as explained in the previous

chapter.

The first of these changes was the organizations that took part in the revision of the NYPE 81 to

produce the aforementioned NYPE 93 form. Whereas the previous NYPE forms were only

designed and approved mainly by Charterers association, a contrary-side organization was

involved in this revision: the BIMCO. Thus, the aim of the collaboration of the BIMCO in this

update was no other than a more well-balanced contract, far from any kind of abuse or clear

favoritism to any of the parts, to achieve a wider acceptation and use around the shipping

market.

Looking into the contract itself and beginning with the preamble, it is easily appreciable that the

NYPE 93’s is much shorter that the ASBATIME’s one. The reason for that was that, at the time of

the revision, it was found that many concepts were brought together in the preamble, being

some of them independent between each other, so the decision of taking them out, separating

them and sorting them into different clauses was taken. As a result of that, the NYPE 93’s

preamble includes a total of 22 lines whereas the preamble of the ASBATIME included a total of

62.

Nevertheless, this shortage of lines in the preamble did not mean a missing of important

information in the contract. Even though in the NYPE 93’s preamble only a summary of the date,

identification of the Owners and the Charterers and a brief – although quite complete –

description of the vessel is included, the line 22 refers to a so-called “Appendix A”, endorsed at

the end of the contract, where the parts can perform a further detailed description of the vessel

if it is required.

Regarding the main terms, there is also a clear difference of the amount of the clauses: the

ASBATIME included 27 clauses plus 11 more of the Rider Clauses Appendix whilst the NYPE 93

form had 45 clauses. To achieve this increase of clauses, three different methods were used:

transferring some of them from the preamble; moving some others from the Rider Appendix and

simply creating new ones.


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Starting with the first abovementioned method, the content of the Clause 1 “Duration”, the 2nd

“Delivery”, the 4th “Dangerous Cargo/Cargo Exclusions” the 5th “Trading Limits” and the 18th

“Sublet” was extracted from the preamble of the ASBATIME and sorted into those clauses. The

are only a couple of changes between them, both found in the Clause 4: the first one, in the

section “a”, the “nuclear and radioactive material” is included in the list of the cargo specifically

included; the second one is the whole section “b” of this clause, where the possibility to limit the

quantity of cargo classified as IMO to be transported between the parties is given - most likely

due to hull insurances policies set a limit on the amounts of this type of goods.

The second method, which was to move some clauses from the Rider Clauses Appendix,

concluded into a total of six new clauses and two sections of another already present clauses as

follows:

- Clause 3 – On-Off Hire Survey: being the Clause 34 of the Rider Clauses Appendix, not

much changes were made at the time of including it in the main terms of the NYPE 93

since it is only specified that the survey has “the purpose of ascertaining quantity of

bunkers on board and the condition of the Vessel”.

- Clause 11 – Hire Payment: the sub-section “b” of this clause corresponds to the Clause 29

of the Rider Clauses Appendix, called the “Grace Period”. However, some changes are

made in this clause in the NYPE 93 form: firstly, it is specified that the failure of the

payment of the hire shall be “due to oversight, negligence, errors or omissions”; secondly,

instead of two clear banking days to rectify the failure, a blank space is given so that the

parts can agree this number of banking days; thirdly, the 0,1% per day of commission to

be received by the Owners in case of using this grace period is removed.

- Clause 16 – Delivery/Cancelling: in this clause it is included a paragraph called “Extension

of Cancelling”, which corresponds to the Clause 28 of the Rider Clauses Appendix. There

is only one small change right at the beginning of the clause, where it is stated that the

Owners have to warrant the exercise of due diligence.

- Clause 27 – Cargo Claims: corresponding to the Clause 27 of the Rider Clauses Appendix,

this clause is widely changed from one form to the other since instead of distributing

responsibilities depending on the causes of the claims, states that it “shall be settled in


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accordance with the Inter-Club New York Produce Exchange Agreement of February 1970,

as amended May 1984, or any subsequent modification” which is self-explanatory.

- Clause 31 – Protective Clauses: in the section “e” sub-section “IV” of this clause, it is found

the “War Bonus” corresponding to the Clause 32 of the ASBATIME’s Appendix.

- Clause 32 – War Cancellation: being the Clause 31 of the Rider Clauses, this one allows

the Owners and the Charterers to agree between which countries the war must be

between, without involving the flag nation the vessel is navigating under.

- Clause 34 – Requisition: corresponding to the Clause 33 of the ASBATIME’s Appendix, this

clause was kept the same.

- Clause 35 – Stevedore Damage: even though this clause is included in the NYPE 81’s

Appendix as the Clause 35 as well, it is changed in many parts. First of all, makes the

Charterers to pay for all damages caused by stevedores and extends another 24 hours the

time the Master disposes to give them a written notice of these damages, providing also

the option to the Charterers to appoint a surveyor to determine the severity of the

damages.

Depending on this severity and how they affect the vessel, these damages are sorted into

two groups:

a) In case these damages affect anything related to the nautical management of the ship

or her “trading capabilities”, they must be repaired immediately by the Charterers at

their own expense keeping the vessel on hire until

b) Contrary to the previous point, any damage not specified above “shall be repaired at

the Charterers’ option, before or after redelivery concurrently with the Owners’ work”.

In this case, only the time and the expenses for the repairs “for which the Charterers’

are responsible” will exclusively paid to the Owners.

- Clause 38 – Charterer’s Colors: this clause corresponds to the Clause 36 of the Rider

Clauses Appendix and is kept equal.

- Clause 39 – Laid Up Returns: corresponding to the Clause 37 of the ASBATIME’s Appendix,

the only change made in this clause is the title since it was previously called “Return

Premium”.


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Regarding the third and last method, a total of five new clauses were added in this NYPE version.

Even though most of them were not brand-new in terms of invention – they came from other dry

cargo already existing contracts – they offered new perspectives and gave more inclusivity to

NYPE 93. This newly included clauses were the followings:

- Clause 36 – Cleaning of Holds: since the majority of the vessel which are supposed to be hired

under the terms of this contract shall be general cargo ships, the goods to be transported by

them can be very different from one voyage to another e.g. scrap metal, carbon, wood, etc. Due

to this cargoes’ diversity, holds must usually be cleaned between two subsequent voyages, and

since the Charterers’ are responsible about anything related to the cargo it shall also be their

responsibility to keep the holds clean – or pay for it.

It is also worth saying that most of the contracts nowadays detail the cargo carried in the last

three voyages of the vessel that will be hired.

- Clause 37 – Taxes: there is no mention in the ASBATIME nor NYPE 46 of this term, which is added

in this version in a far equidistant manner to deal between the Owners and the Charterers.

- Clause 40 – Documentation: even though this clause seems quite obvious, no obligation was

made to the Owners to provide any documentation of the vessel that Charterers may require for

trading. It is very interesting to mention that, as per this Clause, the vessel shall have valid “Suez

and Panama tonnage certificates”, since even they might be employed around these areas did

not mean that they are able to use the passage around this canals in the previous forms.

However, all these problems seem to be solved with the inclusion of these lines.

- Clause 41 – Stowaways: as an increasing problem around the shipping trade, which was by that

time reported by many of the contemporary press, a clause considering this problem was needed

to be incorporated in such a modern charter party. By the addition of this Clause, a well-balanced

dealing of risks and costs is made between both parts although these incidents shall be treated

case-by-case.

- Clause 42 – Smuggling: as a consequence of many contraband cases made by crews, this clause

needed to be added to prevent any damage to the Charterers and/or their interests.

By combining these three different methods above explained, eighteen new clauses and two sub-

clauses were included from the ASBATIME when developing the NYPE 93 form, completing its

widening and embracing more topics which had been left apart in the previous form.


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In addition to all the new clauses explained, almost all the rest of the shared clauses between the

ASBATIME and the NYPE 93 suffered changes. Whereas some of them were only small remarks

to precise the sense and avoid any misinterpretation, some others were highly remodeled to

update them according to the current and modern times – those clauses with bigger changes will

be explained herein after:

- Clause 7 – Charterers to Provide: some terms are added in this clause such as “The Charterers

(…) shall pay for port charges (including compulsory watchmen and cargo watchmen and

compulsory garbage disposal, all communication expenses pertaining to the Charterers’ business

at cost” and excludes the “stress of weather” as one of the causes for which the Vessel is

responsible to be put into a port.

It also points out that the Charterers, in addition to provide necessary dunnage for the cargo,

shall also “pay” for it, as well as that “Prior to redelivery the Charterers shall remove their dunnage

and fittings at their cost and in their time”.

After analyzing these changes involving the Charterers obligations, it is not difficult to conclude

that the participation of the BIMCO – and association basically formed by Owners – tried to

balance this charter party by hardening these clauses – between some others.

- Clause 8 – Performance of the Voyages: even though it is not a big change, it is added that the

Master “shall be conversant with the English language”, mainly included to ease the

communication between the Charterers and the crew due to, between other factors, the arose

of the third countries’ crew members.

It is also included that the Charterers, apart from performing all cargo handling, shall also perform

its “loading, stowing, trimming, lashing, securing, dunnaging, unlashing, discharging and tallying,

at their risk and expense” – something that can be related to the hardening explained on the

previous clause.

- Clause 9 – Bunkers: it is very important to take into account the sub-section “b)” of this Clause,

which had never been before included in any previous NYPE form. In it, it is explained that “The

Charterers shall supply bunkers of a quality suitable for burning in the Vessel’s engines and

auxiliaries” and basically holds them responsible for any damages of the engines due to the

supplying of any unsuitable bunker.


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- Clause 11 – Hire Payment: as explained in the analysis of the NYPE 93 form, this clause states

that being the last voyage of the employed vessel before redelivery, the penultimate payment of

the hire “is to be made for such length of time (…) as being the estimated necessary to complete

the voyage, (…) bunkers on board (…) and estimated disbursements for the Owners’ account

before redelivery” and in case of finding any difference, the same must be balanced by the

subsequent part.

To conclude, this clause basically tries to adjust the remaining hire to be paid by the Charterers

to the Owners with the duration of the last voyage the vessel will perform.

- Clause 13 – Spaces available: a “b)” sub-section is created due to the possibility of the vessel to

carry cargo on deck – as a container ship, for example, may be able to do.

- Clause 15 – Sailing orders and Logs: as in the clause 8, it is insisted in the English language to be

the communication channel between the crew and the Charterers, being a sign of internalization

of this charter party.

- Clause 17 – Off Hire: when enumerating the causes of any loss of time of the vessel, the “strike

of officers and crew” is added as well as the “detention by arrest of the Vessel” – even though it

is detailed that “unless such arrest is caused by (…) the Charterers”. In addition, the term “fuel”

in changed to “bunker” during the whole paragraph.

- Clause 20 – Total Loss; Clause 21 – Exceptions; Clause 22 – Liberties: this clauses are all extracted

of the three different paragraphs of the Clause 16, even though their content is exactly the same

as the included in the ASBATIME – proving the major organization of this form.

- Clause 30 – Bills of Lading: the term “waybills” is added to the paragraph every time the bills of

lading are mentioned as well as the sub-clause “c” – already explained before. It is also important

to highlight that, if the Charterers are to sign the bills of lading or waybills on behalf of the Master,

the authority must be written down.

- Clause 33 – Ice: at the end of this Clause, it is allowed that the Vessel follows the course of ice-

breakers – always with the vessel’s approval.

However, even these slight changes, five clauses are to be pointed out due to their huge reform:

- Clause 19 – Drydocking: even though the Clause starts similar as in the ASBATIME – indicating

when the vessel was last drydocked – then a choice between two sub-clauses must be done.


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The sub-section “a)” text is quite the same as in the NYPE 81, but the sub-section “b)” provides a

brand-new possibility of not allowing the drydocking during the charter.

Nevertheless, the hire suspension during any drydocking period is withdrawn, setting a more

unbalanced position between the two choices that can be made in this Clause.

- Clause 25 – General Average: first of all, it is important to remark that the text regarding

General Average is taken out of the “Salvage” Clause and set into its own clause.

Secondly, instead of widening this Clause, it is surprisingly highly simplified providing much more

understanding to the actions to be taken when a case of General Average happens. In this case,

it only mentions that any General Average case shall “be adjusted according to York-Antwerp

Rules 1974, as amended 1990, or any subsequent modification thereof”, leaving the place and

the currency in blank.

Furthermore, something quite similar is explained in the following paragraph since “all bills of

lading issued (…) will contain a provision to the effect that general average shall be adjusted

according to York-Antwerp Rules 1974, as amended 1990, (…) and will include the New Jason

Clause as per Clause 31”.

At the end of the Clause, it is pointed out that the Hire “shall not to contribute to general

average”.

To conclude, this Clause arose many disputes in the past mainly due to its mistakable and

confusing redaction, therefore a deep revision was needed to be done, finding its solution into

the worldwide accepted York-Antwerp Rules 1974 and their 1990’s amendment.

- Clause 31 – Protective Clauses: divided into five sub-clauses, this Clause is quite similar as in the

ASBATIME with, basically, two changes.

The first of these two changes was the inclusion of the protective clause “U.S. Trade – Drug

Clause”. After the publication of the U.S. Anti Drug Abuse Act 1986, five years after the

publication of the ASBATIME, and with the arose of these illegal substances’ trade by taking the

benefit of the many options that maritime transport offered, the inclusion of this Clause was

highly necessary in a modern form of charter party.


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Nevertheless, this Clause deals with the responsibilities of finding this kind of substances on

board in a very general but far effective way: if any narcotic drugs or marijuana is found in the

cargo transported by the vessel, Charterers shall hold all responsibilities; on the other side, in

case of being found in possession of any crew member, Owners are to deal with any legal claim.

The second change, explained a bit before in this comparison, is found in the section “e” sub-

section “IV” of this clause, where the “War Bonus” term, corresponding to the Clause 32 of the

ASBATIME’s Appendix is included.

- Clause 45 – Arbitration: this Clause is the last including major changes that will be explained in

this comparison.

Right at the beginning of it, two options are provided, where the parties shall choose among

them:

a) NEW YORK: this option is quite similar as the Clause 17 of the ASBATIME, only mentioning

that any Arbitration must follow the rules of the Society of Maritime Arbitrators and

including a final statement where, if the total claimed by either party does not exceed an

accorded amount of USD, the arbitration must be in accordance with the Shortened

Arbitration Procedure of the Society of Maritime Arbitrators Inc.

Summarizing, only some clues and small punctualities are made until this stage of this

Clause, easing its treatment.

b) LONDON: this is the most surprisingly part of this Clause: for the first time ever, the

possibility of the arbitration of any dispute of this contract can be done in London. The

arbitration process is quite similar as if done in New York, adapting its particularities as

the arbitrators must “carry on business in London and who shall be members of the Baltic

Mercantile & Shipping Exchange and engaged in Shipping” whose decisions must be

governed by the English Law.

As in the previous sub-clause, if the quantity claimed does not exceed a fixed amount, in

this case “the arbitration shall be conducted in accordance with the Small Claims

Procedure of the London Maritime Arbitrators Association”.


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It is easy to notice the important paper of the BIMCO in this Clause, which deeply insisted to

include the possibility to carry out any Arbitration in Europe – then London, of course – to balance

strengths between the parties and to achieve the level of internationalization that this contract

was intended to have.

Regarding the Clauses that included changes in this comparison between the NYPE 93 and the

ASBATIME, and even though practically all the clauses had alterations, a total of ten contained

changes worth to be explained due to their importance and another four were almost a hundred

per cent changes, meaning a total of fourteen clauses widely altered – almost a fifty per cent of

the total of the clauses contained in the ASBATIME form.

Furthermore, not all clauses were equally changed, since although some of them needed to be

widened and more explained, others needed to be shortened and specified – BIMCO, as per their

experience in the charter parties field, contributed to perform this task valuably.

3.4.4 Conclusions

The NYPE 93 was the result of the first collaboration of the three most important shipping entities

of the world at that time: the ASBA, the BIMCO and the FONASBA. The result was a far complete

and competitive form of time charter party, well-balanced between the parties – mainly due to

the nature of these different entities and their shipping philosophy, which endowed this contract

of a worldwide acceptance and internationalization.

In the NYPE 93, as recently mentioned, was the first NYPE form to offer a fair contract between

the Owners – represented by the BIMCO, and the Charterers – represented by the ASBA and the

FONASBA. With the modelling of some clauses as the Clause 45 – “Arbitration” and the Clause 19

– “Drydocking”, the pro-Charterer historic aspect of the NYPE charter party was lowered, bringing

the contract into a more compensated level between the parties.

Focusing into the content of the form, a deep reorganization can be easily noticed from the first

moment on compared to the ASBATIME. Firstly, the Rider Appendix was removed, and its most

used clauses were directly included as general clauses in the main terms. However, a couple of

lines are left at the end of the contract in case the parties wish to add any other non-prevised

clause. This fact provides and incredibly concise and certain aspect of the aim of the form to the

parties, with only a few and necessary gaps to be filled.


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Secondly, it is important to also mention the changes done in the content of the clauses itself.

Although some of these changes are seen in the contract as a wider explanation of some clauses

or by simply detailing shipping updates done from the ASBATIME’s date of issue, the most

important changes to highlight are those made to simplify some of the clauses, providing a better

understanding of them and avoiding possible disputes.

Thirdly, an Appendix A is included at the end of the form where a more complete description of

the vessel can be done – shortening the preamble and allowing the parties to perform a deeper

exposition of the vessel’s characteristics without deforming the other sections of the contract.

To conclude with this analysis of the NYPE 93 charter party, it is feasible to agree that it became

widely accepted by its time of issue, and even though the BALTIME form – issued by BIMCO in

1939 - was still the most commonly time charter party used in Europe, the NYPE 93 started to be

perceived as a quite complete effective form to be considered.


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Chapter 4. The NYPE 2015

101


As previously explained in the Introduction, a deep analysis of the New York Produce Exchange

charter party has been done during all this paper. Starting with the NYPE 46 version – which is

still the most used in the chartering business – all its changes and updates have been explained

all along its revisions, the NYPE 81 and the 93 versions.

Thanks to this NYPE timeline, it has been possible to reach a deep understanding of the

philosophy of this kind of contract, in which context took place its born, its strengths and

debilities, its development during the years - influenced by other organizations that took part in

its revision, and its acceptation in the maritime industry. All this process led to the fourth and

main chapter of this FDP: the explanation and analysis of the NYPE 2015. 32

It is well known by the entire shipping industry that the New York Produce Exchange charter party

is the most used time charter form in the dry cargo sector – even more than the well-known

BIMCO’s GENTIME. However, something strange happened until the publication of the NYPE

2015: even though the NYPE 93 version was available, there was a clear market tendency to keep

employing the NYPE 46 – although many of its twenty-eight clauses were altered or simply

substituted by rider clauses - in the chartering process, providing an idea of the conservative

mentality of the maritime sector.

Nevertheless, a decision to perform a general revision of the NYPE 93 version was taken by the

three most important shipping organizations of our times: the BIMCO, the ASBA and the SMF –

it is easily noticeable that they represent the three most important continents of the world in

pure shipping trade terms: Europe, America and Asia respectively. After twenty years of the issue

of the last NYPE edition, a feeling of an improving possibility led these three organizations to

carry out the major revision never done before of this charter party, involving directly both

Owners and Charterers to attain the best-balanced possible level of their respective interests.

32 The Association of Ship Brokers & Agents (U.S.A.); The Baltic and International Maritime Council; The Singapore Maritime Foundation. The NYPE 2015 Time Charter party. New York: June 3rd, 2015. Form available at: https://www.bimco.org/-/media/BIMCO/Contracts-and-Clauses/Contracts/Sample-copies/Sample-copy-NYPE-2015.ashx


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The committees of these three organizations to perform this revision was formed by the

following personnel:

BIMCO Sub-committee

Chaired by Mrs Inga Froysa (Torvald Klaveness), with John Freydag (Schulte); Jonathan Young

(Cargill); Lasse Brautaset (Nordisk); Paul Kaye (West of England P&I Club); Sun Jia Di (COSCO) and

Harry Fafalios (Greek Shipping Co-operation Committee).

ASBA Committee

Chaired by Nigel Hawkins (NW Johnsen & Co, Inc), with Soren Wolmer (Quincannon Associates);

Paul Hirtle (LB Chartering LLC); Gerry Desmond (Salient (Americas) Inc.); and Robert J Dillon

(John F. Dillon & Co., LLC).

SMF Committee

Chaired by David Chin (Chief Executive SMF), with Henry Mytton-Mills (Aries Shipbrokers); and

Gina Lee-Wan (Allen & Gledhill LLP).

The aim of this major revision was no other than providing the shipping industry of an updated

and modern form of the most used time charter party, which included the legal developments

and stepped into the contemporary commercial practices, having a worldwide reach and applied

the most common amendments done in its previous versions.

These three organizations also carried out, in their respective areas, a huge series of

consultations to the industry. By the formation of a drafting team, it was possible to present and

explain the main changes, characteristics and improvements of the NYPE 2015 form to the most

important companies and entities of the maritime industry, receiving their feedback.

Furthermore, a draft form after all these consultations was uploaded on the BIMCO’s website,

where all stakeholders and members could perform a review, providing their opinions and

suggestions. Consequently, the whole maritime industry saw itself involved in the update of the

New York Produce Exchange, creating a hand-to-hand work which shall benefit all parts.

Looking deeply into the content of the NYPE 2015, the first characteristic to be noticed is its

length: nothing less than 32 pages, being the first one for the preamble, the following twenty-

seven pages for the fifty-seven Clauses of the contract and the last four for the Appendix A.


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Once all this has been explained, we shall start with the analysis of the last and most important

form of this FDP.

4.1 The preamble

Being the NYPE 2015 the longest contract that will be analyzed in this paper, it is surprising to

find that its preamble is the shortest of them all, with only seventeen lines including the following

concepts:

- Lines 1-2: stablish the date of the charter party.

- Lines 3-6: used to identify the Owners. In this form, the parties shall also indicate if the Owners

are the “Registered Owners” of the ship, the “Disponent Owners” in case they are acting under

a bareboat charter or the “Time Chartered Owners” in case she is under another time charter. By

including these choices, it is clearly identified the real nature of the Owners, solving many legal

problems that may happen when vessels are sub-chartered under many contracts.

- Lines 7-12: some key information of the vessel is detailed within these lines such as her name,

her IMO number, her flag, her building year and deadweight – for more information, the parties

are redirected to the Appendix A of the contract, where a major description of the vessel is made.

- Lines 14-17: in these lines it is set a brief constitution of the terms and conditions of the contract.

It is interesting to highlight than, in case of any dispute, additional – or Rider – clauses may prevail

to any other clause of the main terms.

4.2 The main terms

The main terms of the NYPE 2015 form contain nothing else than fifty-seven clauses, with many

brand-new clauses and with an intended better organization among them.

- Clause 1 – Duration/Trip Description: this clause is divided into five different sub-clause:

a) It is indicated the duration of the contract, where a gap is left blank to be filled by the

total of time – being a time charter, or by a certain amount of voyages to be performed

– therefore forming a trip charter.


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b) Trading Limits: the parties shall here indicate the trading limits where the vessel is

allowed to operate between.

c) Berths: state that vessel’s load and discharge operations must always be performed “in

any safe anchorage (…) berth (…) or place (…), provided the Vessel can safely enter, lie

and depart always afloat”.

d) In this sub-clause are indicated the areas and ports were the vessel can safely lie aground

to carry out any cargo operations if requested by the Charterers. It is also stated that, in

case the vessel suffers any damage or loss “including any underwater inspection required

by class”, the Charterers are to indemnify the Owners.

The inclusion of this NAABSA provision is mainly made due to the grain trades, where it

is still common that vessel needs to be operated in these conditions. Nevertheless, this

must be carefully analyzed case-by-case since there would be many insurance and class

implications for the Owners in case they do agree.

However, this sub-clause is also omittable in case that not areas nor ports are defined,

being therefore understood that the vessel will not be claimed to operate lying aground.

e) Sublet: it is given the option to the Charterers to sublet the vessel to another party,

where they “remain responsible for the fulfillment of this Charter Party”. In cases this

ever happens, even though the Owners are not a party to the consequent sub-charter,

they still hold a contractual relation to the sub-Charterers due to the issuing of any bill

of lading.

- Clause 2 – Delivery: as the previous Clause, this one is also divided into five more sub-clauses:

a) It must be indicated where the Vessel must be delivered.

b) It is stated that, on her delivery, the Vessel must be “seaworthy and (…) fit to be

employed for the intended service”, with power enough “to operate all cargo handling

gear simultaneously” and full complement of crew complying with the STCW

requirements.

c) Regarding the holds state, they are required to be clean and ready to receive cargo in

one of the following places:

i. On delivery port


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ii. On the first loading port in case the place of delivery is not the first place where

she will receive cargo.

d) Regarding the exact date of delivery, the sub-clause 2(d) states that the Owners must

keep the Charterers informed of the Vessel’s itinerary and continuous notices of her

delivery. Finally, once the vessel is ready to come on hire, Owners must emit the well-

known “Notice of Readiness”.

e) If the Charterers refuse the acceptance of the delivery of the vessel in cases when she

is for example arriving after the cancellation date or the Charterers simply decide to

exercise their right to cancel the charter party, it “shall not prejudice their rights

against the Owners under this Charter Party”.

- Clause 3 – Laydays/Cancelling: this Clause defines the date the vessel is set on hire, and in case

she is not in the place of delivery in a stated date, Charterers “shall have the option of cancelling

this Charter Party”. However, if the aforementioned situation occurs, this cancelling option of

the Charterers is withdrawn if the vessel has already issued her notice of readiness.

- Clause 4 – Redelivery: this Clause is divided into three sub-clauses:

a) It must be detailed the place or redelivery “in like good order and condition ordinary

wear and tear excepted”.

b) Similarly to the sub-clause 2(d), in this sub-clause it is indicated that the Charterers

must inform the Owners about the Vessel’s itinerary so that they can secure the next

employment of the ship once this charter comes to its end, fixing a number of

approximate and definite days’ notices.

c) As in the sub-clause 2(e), the Owners’ acceptance of the redelivery does not mean

any loss of their rights to perform any claim against the Charterers.

- Clause 5 – On/Off-Hire Survey: maintained practically equal than in the NYPE 93 form, this clause

states that “the parties shall (…) each appoint surveyors” at the delivery and redelivery times,

whose mission is to perform a joint survey of the vessel to ascertain her general condition and

the quantity of bunkers remaining on board. Once the survey is concluded, “a single report shall

be prepared on each occasion and signed by each surveyor”, writing separated reports in case of

any disagreement. It is also explained that failing to the attention of the survey or the report’s

signature by any of the parties “such party shall nevertheless be bound for all purposes by the

findings in any report prepared by the other party”.


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At the end of the Clause, it is indicated that any loss of time at the on-hire survey “shall be for

the Owners’ account” but, in case of happening at the off-hire survey, that “shall be for the

Charterers’ account”.

- Clause 6 – Owners to Provide: this Clause is again divided into three sub-sections:

a) Following the duties of the nautical management of the Vessel, which are responsibility

of the Owners in this kind of contracts, this sub-clause stablishes everything the Owners

must take care of such as “the insurances of the Vessel, (…), all provisions, cabin, deck,

engine-room, (…), stores, boiler water and lubricating oil”, etc.

As in the previous forms, any expenses pertaining to the crew as well as the crew itself

are also under Owners responsibilities. In addition, the Vessel’s class and hull, machinery

and equipment’s state must also be kept efficiently.

b) This second sub-clause deals with the necessary documentation the vessel must have in

line “to trade within the agreed limits”. Some documents are specially mentioned, as the

ITC, the Suez and Panama tonnage certificates, the Certificate of Registry, etc. However,

it is pointed out that these documents are included “but not limited”, therefore more

certificates can be demanded to the vessel in case they are found necessary for the

trading.

The second paragraph of this Clause deals entire and uniquely with the Certificates of

Financial Responsibility (COFR) for oil pollution with allow the ship “to trade withing the

agreed limits as may be required at the commencement of the Charter Party”. However,

in case these certificates need to be renewed but its value has increased considerably or

it is simply not available in the market, both parties are to reach a solution otherwise “the

port(s) (…) are to be considered as added to the Vessel’s trading exclusions”.

c) This final sub-clause deals with a topic that had never been included in any previous NYPE

form which is the crew’s assistance in the opening and closing of the hatches. If this task

is ever not permitted “by shore labor regulations”, it would run on Charterers’ account.


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- Clause 7 – Charterers to Provide: as the previous Clause, this one is also divided into three sub-

clauses:

a) Contrary to the sub-clause 6(b), in this case the Charterers are responsible for all expenses

related to the cargo and everything necessary to trade it such as the bunkers, the port

charges, watchmen, pilotages, etc “and all other usual expenses except those stated in

Clause 6”. Nevertheless, if the Vessel goes into a port “for causes for which the Vessel is

responsible”, expenses shall be paid by the Owners.

b) This sub-clause deals with the fumigations’ responsibilities in a very balanced manner: in

case they are ordered due to any crewmember’s illness or “for infestations prior to

delivery under this Charter Party” they must be on Owners’ account; however, if they are

ordered “because of cargoes carried or ports visited” while being on hire, they shall be

under Charterers’ account.

c) To conclude with this Clause, it is mentioned that all “necessary dunnage, lashing

materials and also any extra fittings” shall be provided and paid by the Charterers, who

will be also allowed to use “any dunnage already aboard the Vessel”. Nonetheless, all this

lashing material and dunnage shall be removed by the Charterers prior to redelivery.

- Clause 8 – Performance of voyages: this Clause is divided into two sub-clauses:

a) It is indicated that the Master must perform the voyages “with due despatch” rendering

assistance with the crew except in those provision of the Clause 38 “Slow Steaming” –

which will be soon explained in this paper. It is also pointed out that he or she must be

“conversant with the English language and (…) be under the orders and directions of the

Charterers”. Furthermore, it is also a Master duty to supervise all cargo handling

operations, which are performed by the Charterers.

b) In this sub-clause it is given the possibility to the Charterers to complain to the Owners in

case they “shall have reasonable cause to be dissatisfied”, being the Owners obliged to

investigate this issue.

- Clause 9 – Bunkers: this is one of the most re-written clauses of the NYPE 2015. By this huge

update, dealt into seven separate provisions, this Clause tries to cover some matters absent in

many other standard time charter forms that will be explained below:


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a) Bunker quantities and prices: again, divided into three different alternatives:

i. Similarly to the NYPE 93 form, Charterers are to pay for bunker on board at

delivery and Owners at redelivery – meaning a change of property of the product,

fixing its price. It is worth to point out the words “or any other termination”, since

this change of bunker’s property can be also done when the charter party comes

to an end due to any other different reason than the redelivery time – as, for

example, due to a non-payment of hire.

ii. This sub-clause shall be applied in case of a trip charter, where the Owners are

required to “provide sufficient bunkers onboard to perform the entire time charter

trip”. In this case, Charterers are to pay “for the mutually agreed estimated bunker

consumption for the trip”, fixing how many metric tons and at which price.

Once the voyage is over, any difference of this bunker consumption must be

refunded by the party as the case may be.

iii. In this third alternative, no bunkers shall be paid by the Owners to the Charterers

at delivery, but the vessel must have “the same quantities and grades of bunkers

as on delivery”. This case provides an alternative to the risk of market’s price

fluctuations of these products, the Charterers’ paying only for the bunker so far

consumed and where any difference of quantity is determined by the price paid –

supported by a commercial invoice of the suppliers.

Finally, it is also important to remark that in case of no choosing any of the alternatives,

then the first one “i” shall apply.

b) Bunker Prior to Delivery/Redelivery: this sub-clause provides a reciprocal arrangement

for the Charterers to bunker the ship before delivery and for the Owners to bunker prior

to redelivery. This provision covers a common practice in the industry which consist in

allowing to bunker the vessels before their delivery since it may probably be not available

or its price can be much higher at that delivery place.

However, any losses or delays must be indemnified by the party that may be in case it

happens.


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c) Bunkering Operations and Sampling: another sub-clause divided into four different

points:

i. This first point claims the cooperation of the Chief Engineer during the bunkering

operations, including a series of technical actions to be carried out.

ii. Regarding the samples, it is stated that “a primary sample of each grade of fuels

shall be drawn” according to the IMO Resolution MEPC 182(59) “Guidelines for the

Sampling of Fuel Oil for Determination of Compliance with the MARPOL 73/78

Annex VI”. This primary sample must then be divided into five smaller samples:

one to be kept on board and the rest to be distributed to the Owners, the

Charterers and the bunker suppliers.

iii. This point expresses the Charterers warranty to accomplish the sub-clause (c)(ii)

above mentioned.

iv. It covers the possibility that different bunker grades need to be supplied and

segregated on board, exempting the Owners of any capacity restriction due to this

segregation.

d) Bunker Quality and Liability: divided into two sub-sections:

i. It must be detailed the bunkers’ specifications and grades that the Charterers

must supply, which must be in compliance with the latest ISO 8217 and “shall be

of a stable and homogeneous nature and suitable for burning in the Vessel’s

engines”.

ii. In case the vessel suffers any damage due to the bunkering of an unsuitable fuel,

Charterers are to be responsible of all losses and expenses to correct this failure,

keeping the Owners exempt at all time.

e) Fuel Testing Program: it is stated that if the Owners must assume the cost to send one of

the samples above mentioned for testing and, in case of failing to its compliance with the

latest ISO 8217, notify the Charterers and “provide a copy of the report”.

If the Charterers, once received this report questions its results, their sample “shall be

sent to a mutually agreed, qualified and independent laboratory”.


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f) Bunkers Fuel Sulphur Content: in order to meet with the Sulphur fuels in specific areas,

this sub-clause is introduced with two different sub-sections:

I. It is indicated that any fuels supplied by the Charterers must allow the vessel “to

comply with the maximum Sulphur content requirements of any ECA when the

Vessel is ordered to trade within that area”. It is also stated that any entity

involved in the bunkering operations in which the Charterers are responsible

“shall comply with Regulations 14 and 18 of MARPOL Annex VI”.

Finally, in case Charterers do not comply with any of the above statements, they

must indemnify the Owners and keep them harmless of legal claim that can arise.

II. When Charterers comply with the sub-section (f)(i), the vessel shall then comply

with the Regulations 14 and 18 of MARPOL Annex VI as well as “be able to

consume fuels of the required Sulphur content”, keeping the Charterers exempt of

any failure of the vessel in this respect

III. To conclude, a brief description of the term “ECA” is provided together with its

legal references.

g) Grades and Quantities of Bunkers on Redelivery: this last provision addresses the quantity

of bunker the vessel must have at redelivery, which “shall always be appropriate and

sufficient to allow the Vessel to reach safely the nearest port at which fuels of the required

types are available”.

- Clause 10 – Rate of Hire; Hold Cleaning; Communications; Victualing and Expenses: a deep

reorganization of this Clause has been made as it can be appreciable on its title, being divided

into two sub-clauses:

a) In this first sub-clause, the parties must specify the daily rate of the hire as well as its

currency – not USD by default., and, if agreed between them, the redelivery can be made

with “unclean/unswept holds” by fixing a lumpsum payment by the Charterers.

In addition, and only if authorized by the Charterers, “the Owners shall victual pilots and

such other persons”, paying also an agreed lumpsum payment for the CVE obligations.

To conclude this first sub-clause, it is pointed out that delivery, redelivery or termination

of this contact “shall be adjusted to UTC”.


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b) Hold Cleaning/Residue Disposal: divided into three sub-sections:

I. The parties agree a fixed rate per hold in case the Charterers request the Owners

“to sweep and/or wash and/or clean the holds between voyages and/or between

cargoes”. However, any time taken for cleaning “shall be for the Charterers’

account”, being the Owners exempted if, once cleaning operations have been

carried out, “holds are not accepted or passed”.

II. Any cleaning agent or additives used for the holds’ cleaning “shall be supplied and

paid for by the Charterers” and shall be “in accordance with IMO Resolution

219(63) Guidelines for the Implementation of MARPOL Annex V”.

III. In case of being necessary any removal of cargo related residues or cleaning

agents or waste, “the Charterers shall remain responsible for all costs and time”

and, as in the previous sub-section, “shall always be in accordance with (…)

MARPOL Annex V”.

- Clause 11 – Hire Payment: Another clause divided into six sub-clauses:

a) Payment: it is explained how the hire must be paid by the Charterers to the Owners

designated bank and “in the currency stated in Clause 10”. This hire must be free of bank

charges and “fifteen days in advance and for the last fifteen days or part of same the

approximate amount of hire”, being the first payment on delivery.

b) Grace Period: in case of any failure of the payment of the hire by the Charterers, Owners

shall give “three Banking Days written notice to rectify the failure”. Once it is rectified by

the Charterers, “the payment shall stand as punctual”.

c) Withdrawal: following the previous sub-clause, if the Charterers do not rectify the

payment during the three Banking Days aforementioned, the Owners shall have liberty to

withdraw the vessel and claim for any loss due to the earlier termination of the charter –

preventing them of any lower market rate than the charter Hire rate.

Nevertheless, the process of withdrawing a vessel before the redelivery date for a non-

payment of the Hire involves complicated commercial and contractual procedures, which

are always recommended to be consulted with the vessel’s P&I Club.


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d) Suspension: this sub-clause provides an alternative to the previous sub-clause in cases

where a withdrawal may not be commercially interesting for the Owners. With this

option, all Owners responsibilities are suspended until the hire is duly paid, with any extra

expenses for the Charterers’ account.

e) Last Hire Payment: the last payment of the hire shall be made “for such length of time as

the estimated time necessary to complete the voyage”, deducting estimated Owners’

expenses prior redelivery. Any difference in bunker shall be refunded by the

correspondent party.

This sub-clause includes a paragraph making reference to the Clauses 9 (a)(ii) and (iii),

since if the parties have agreed any of them “the Charterers shall have the right to deduct

the value of bunker on redelivery”.

f) Cash advances: any “cash for the Vessel’s ordinary disbursement at any port” can be

advanced by the Charterers with a 2.5% commission, being them “in no way responsible”

for what these advances are applied and which will be afterwards deducted from the hire.

- Clause 12 – Speed and Consumption: this Clause, newly included in this form, deals with the

speed and consumption obligations into five different sections:

a) This first section explains that “the Vessel shall be capable of speed and daily consumption

rates as stated in Appendix A”, always in good weather and with a wind up to Force four

of Beaufort Scale and Sea State three of Douglas Scale. However, any variation of this

speed “to comply with the Charterers’ orders (…) or for reasons of safety…” among other

exceptional cases “shall be excluded from performance calculations”.

b) The section “b)” of this Clause provides the option to the Charterers to use “their

preferred weather routing service”, which the Master will have the obligation to follow

except those cases where “the safety of the Vessel and/or cargo” is compromised.

c) This third section specifies that the route that the Vessel will finally follow “shall be used

as the basis of any calculation” of her performance.


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d) In case of any reduction of the speed or increasing of the consumption, the Charterers

are given the possibility to extent a claim “limited to the estimated time lost and/or the

addition fuel consumed”. However, any time lost shall compensate the value of the saved

fuel or vice versa.

e) The last section of this Clause explains that, in case of any dispute arises regarding the

performance of the voyages, “an independent expert or alternative weather service

selected by mutual agreement” shall study the case with all the tools provided by the

Owners, as the Vessel’s deck logs, “whose determination shall be final” and whose cost

shall be paid by both parts equally.

- Clause 13 – Spaces Available: remarkably similar as in the NYPE 93, this Clause is also divided

into two sub-clauses:

a) This first sub-clause explains that all usual places of loading, “as much as she can

reasonably and safely stow and carry” and also accommodations for supercargo, if

carried, must be at the Charterers’ disposal. On the other side, “sufficient space for ship’s

officers, crew, tackle, apparel, furniture, stores and bunkers” shall be reserved.

b) The second sub-clause acts in a protective manner for the Owners “in the event of deck

cargo being carried”. In case of “any loss and/or damage and/or liability of whatsoever

nature howsoever caused to the deck cargo” then “Owners are to be and are hereby

indemnified by the Charterers”.

- Clause 14 – Supercargo: this Clause gives provides the Charterers to appoint a supercargo “who

shall accompany the Vessel at the Charterers’ risk and see that voyages are performed with due

despatch”.

Even though the Vessel must provide the supercargo with all commodities while on board, both

the Charterers and the appointed supercargo “are required to sign the standard letter of waiver

and indemnity (…) before the supercargo comes on board the Vessel”.

- Clause 15 – Sailing Orders and Logs: unchanged from the NYPE 93 form, this clause explains that

the Charterer “shall furnish the Captain (…) all requisite instructions and sailing directions in

writing” and provide “the Charterers, their Agents or Supercargo (…) with a true copy of daily

Logs”.


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These logs must detail all data concerning “the course of the vessel, the distance ran and the

consumption of bunkers.” and must be written in English, as well as all instructions and sailing

directions given by the Charterers.

- Clause 16 – Cargo Exclusions: this new Clause, whose content is extracted from the sub-clause

4(a) of the NYPE 93, entitled “Dangerous Cargo/Cargo Exclusions”, states that the vessel shall be

employed to carry only lawful cargo, excluding any dangerous or similar cargo “unless carried in

accordance with the requirements (…) of the competent authorities of the country of the vessel’s

registry and of ports of shipment and discharge and of any intermediate countries or ports

through whose waters the vessel must pass”.

Furthermore, the following cargo is excluded to be carried during the charter: livestock, arms,

ammunition, explosives, nuclear and radioactive materials, also leaving some lines to fill with

more banned cargo in this contract.

- Clause 17 – Off-Hire: very similarly as in the NYPE 93, this clause the events that can set the

Vessel off-hire during the charter. In it, it is stated that any loss of time due to any damage or

deficiency of the ship “unless (…) is caused by events for which the Charterers, their sub-

Charterers, servants, agents or subcontractors are responsible (…) or by average accidents to the

vessel or cargo unless resulting from inherent vice, quality or defect of the cargo, (…), the payment

of the hire and overtime (…) shall cease for the time thereby lost”.

In the above events’ list of this Clause of this 2015 NYPE version, it is also added the “detention

by Port State control or other competent authority for Vessel deficiencies” and the drydocking for

anything related to “underwater parts”.


Charterers, for any reason other than accident to the cargo (…) the hire is to be suspended (…)

until she is again in the same or equidistant position (…) and the voyage resumed”.

Finally, it is also stated that, in order to clarify the Owners’ liability for fuel consumed during

these periods, all bunkers used during this period “shall be for the Owners’ account”, where they

can be deducted from the hire or simply taken into account at the final calculation of fuel used

depending on the agreement between the parties in the Clause 9 “Bunkers”.


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- Clause 18 – Pollution: this Clause, which is self-explanatory, deals with the coverage for oil

pollution the Owners must provide, which shall be “equal to the level customarily offered by the

International Group of P&I Clubs”.

- Clause 19 – Drydocking: it is clearly explained that “no drydocking shall take place during the

currency of this Charter Party”, detailing the last drydocking date. However, two exceptional

cases are mentioned which would allow to perform this action: in case of emergency or in the

case under the Clause 52 (b) - “Period Applicable Clauses”.

- Clause 20 – Total Loss: unchanged from the previous NYPE version, this Clause prevents the

refund of the money paid by the Charterers and not earned due to the total loss of the Vessel

employed.

- Clause 21 – Exceptions: same as in the previous Clause, no changes from the NYPE 93 have been

done in this Clause, maintaining the same list of events “always mutually excepted”.

- Clause 22 – Liberties: another Clause unchanged from the previous NYPE version – in this case,

unaltered even from the NYPE 46. Concretely, this Clause provides the vessel the “liberty to sail

with or without pilots, to tow and to be towed, to assist vessels in distress, and to deviate for the

purpose of saving life and property”, topics that are basically with the line of the Master’s

obligation to proceed with due despatch.

- Clause 23 – Liens: this Clause details that the Owners “shall have a lien upon all cargoes, sub-

hires and sub-freights (…) belonging or due to the Charterers or any sub-Charterers” and the

Charterers “shall have a lien on the Vessel for all moneys paid in advance and not earned”.

However, in the second paragraph, it is indicated that “The Charterers will not directly or

indirectly suffer (…) any lien or encumbrance, which might have priority over the title and interest

of the Owners in the Vessel.”.

Nevertheless, the same protective measure for the Owners is found, as in the previous NYPE

form, at the end of this clause by declaring that “The Charterers will not procure any supplies or

necessaries or services (…) on the credit of the Owners or in the Owners’ time”.

- Clause 24 – Salvage: in case of performing any salvage operation, this Clause states that all

benefits shall 4be distributed in the same proportion, taking into account “crew’s proportion”.


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- Clause 25 – General Average: even though the general concept of this Clause remains is kept in

the same line as in the NYPE 93, some details have been modified to duly update it to the present

times.

In this case, it is clearly mentioned that “General Average shall be adjusted according to York-

Antwerp Rules 1994 and settled in US dollars in the same place as stipulated in Clause 54 (Law

and Arbitration)”. Furthermore, it is indicated that all bills of lading issued under this charter

party must contain a provision mentioning the use of the York-Antwerp Rules 1994 to adjust any

General Average as well as the New Jason Clause

Finally, it is pointed out that “Time charter hire will not contribute to general average”.

- Clause 26 – Navigation: this clause insists on the fact that “the Owners shall remain responsible”

of everything related to the nautical management, something quite reasonable due to the nature

of the same charter party.

- Clause 27 – Cargo Claims: in case of any related to the cargo “shall be settled in accordance with

the Inter-Club NYPE Agreement 1996 (as amended 1 September 2011), or any subsequent

modification…”.

- Clause 28 – Cargo Handling Gear and Lights: this Clause states that the Owners shall keep the

cargo handling gear “as described in Appendix A (Vessel Description)”. It is also told that Owners

must provide all lights on board for night work, but “additional lights (…) shall be at Charterers’

expense”.

Additionally, it is also allowed to the Charterers to make the Vessel work “night and day and all

cargo handling gear shall be at the Charterers’ disposal”, being important to highlight that if there

is any cargo handling gear inoperative, “the vessel is to be considered to be off hire to the extent

that time is actually lost”, being the Owners responsible of any extra expenses that could arise

from it. However, this would not apply in case that “such disablement or insufficiency of power is

caused by the Charterers’ stevedores”.

To conclude, it is indicated that in case the Charterers required the Owners to “bear the cost of

hiring shore gear in lieu”, the Vessel must be set off-hire for the time lost.


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- Clause 29 – Solid Bulk Cargoes/Dangerous Goods: this Clause – as its own title clearly reveals –

deals with the requirements to the Charterers in case of carrying any of these goods. To explain

these special requirements, this Clause is divided into three sub-clauses:

a) Solid Bulk Cargoes: this first sub-clause indicates that the Charterers need to provide all

information, prior loading, of any solid cargo in bulk “in accordance with the requirements

of the IMO International Maritime Solid Bulk Cargoes (IMSBC) Code” in order to allow the

crew to prepare the Vessel’s holds and cargo spaces for the carriage and take any specific

required measure.

b) Dangerous Goods: in case any dangerous cargo is agreed to be carried, “the Charterers shall

provide a dangerous goods transport document” which must include a complete

description of the nature of the cargo, its packing, its labelling and many other

characteristics that certificate its “proper condition for transport according to (…)

regulations”.

c) This final sub-clause empowers the Master not only to refuse or discharge any of the above-

mentioned cargoes of sub-sections “a)” and “b)” in case of any failure to fulfil the required

documents on behalf of the Charterers, but to perform it in their own “risk and expense”.

- Clause 30 – BIMCO Hull Fouling Clause for Time Charter Parties: this Clause, which is sub-divided

into five different sub-clauses, explains the obligation of the Owners to maintain a “thoroughly

efficient state” of the ship’s hull and the cases in which this state can be affected by certain orders

of the Charterers as follows:

a) This first sub-clause deals with the limit of time the Vessel can be totally stopped, both

under operations or simply at anchorage, to not suffer any affectation to the hull’s state.

In case this limit is exceeded, it is stated that “any warranties concerning speed and

consumption shall be suspended pending inspection of the Vessel’s underwater parts”.

b) In case the above-mentioned limit is exceeded, any party may have the right to perform

an underwater inspection “at the Charterers’ risk, cost, expense and time”.

c) If a cleaning of the underwater parts needs to be done “as a result of the inspection” and

again “at Charterers risk, cost, expense and time”. This sub-clause is also divided into three

different points as follows:


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i. All cleaning must be “under the supervision of the Master” and “in accordance

with he paint manufacturers’ (…) guidelines”, without damaging any Vessel’s

underwater part.

ii. If such cleaning is not possible at the place of inspection or Charterers postpone

it, then “speed and consumption warranties shall be suspended” until it is

performed.

iii. Contrary to the previous point, if the Owners refuse to allow the cleaning, then

“speed and consumption warranties shall be reinstated”.

d) The fourth sub-clause states that the “cleaning (…) shall always be carried out prior the

redelivery”. However, both parties can agree a lump sum payment to be received by the

Owners so that they can perform the cleaning by their side once the vessel is redelivered.

e) This final sub-clause permits the Charterers to “demonstrate that the Vessel’s

performance remains within the limits of this Charter Party” even exceeded the time limit

of sub-clause (a), being therefore “Charterers’ obligations (…) of inspection and/or

cleaning” no longer applicable.

- Clause 31 – Bills of Lading: this clause is divided into three sub-clauses as follows:

a) It is explained that the Master is in charge of signing the bills of lading or waybills. However,

“with the Owners’/Master’s prior written authority”, the Charterers are also entitled to sign

them.

b) Following the line of the previous sub-clause, in case of “any inconsistency between this

Charter Party and any bills of lading or waybills signed by the Charterers or their Agents or

by the Master at their request”, the Charterers shall indemnify the Owners “against all

consequences or liabilities”.

c) Provides a specific wording that all bills of lading which cover cargo shipped on deck must

include, which basically exempts the Owners of any responsibility of that cargo carried on

deck.


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- Clause 32 – BIMCO Electronic Bills of Lading Clause: as the previous Clause, this one is also

divided into three sub-clauses:

a) Being self-explaining, this first sub-clause enables the Charterers to decide if the bills of

lading and other cargo related documents in this charter party are to be issued

electronically – in terms of paperless.

b) In case the Charterers take this decision, the Owners “shall subscribe to and use Electronic

(Paperless) Trading Systems (…) provided such systems are approved by the International

Group of P&I Clubs”. However, all expenses occurred due to this subscription must be on

Charterers’ account.

c) Nevertheless, the Owners are to be kept harmless of any problems “arising from the use

of the systems referred to in Sub-clause (b)”, in exception that these problems come from

their own negligence.

- Clause 33 – Protective Clauses: this Clause provides three clauses of which the charter party is

subject to and which must be included in all bills of lading and waybills issued as follows:

a) Clause Paramount: it is explained that all bills of lading must include a clause which

bounds them to “the Carriage of Goods by Sea Act of the United States, the Hague Rules,

the Hague-Visby Rules, (…) or such other similar national legislation” depending of the

origin or destination of the bills of lading. In this case, the wording “or if no such

enactments are mandatorily applicable, the terms of the Hague Rules shall apply” are

added to make sure that, in the absence of applicable rules in a particular trade, no doubts

about the applicable liability regime arise due to any uncertainty.

b) New Both-to-Blame Collision Clause: this clause distributes liabilities for a collision

between two vessels where both have acted negligently. This clause is very important to

consider when the law of the United States may apply and exempts the Owners from any

liability to the cargo for its loss or damage resulting from any “act, neglect or default”

during the sea trip.

c) New Jason Clause: states any other part involved in the charter will contribute to general

average expenses even though the Owners have failed to exercise due diligence to make

the ship seaworthy. Since P&I Clubs commonly request to have this clause within all bills

of lading it is recommended not to change its wording.


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- Clause 34 – War Risks: this Clause represent the latest edition of BIMCO’s standard War Risks

Clause, known as CONWARTIME, and deals with the risks of attack by pirates while the Vessel

under the charter party sails certain dangerous areas. It is divided into ten sub-clauses as follows:

a) This first sub-clause provides definitions for the words “Owners” and “War Risks” to avoid

any misinterpretation of the whole Clause. It is important to mention that the definition

of Piracy has been aligned with the provision in the Piracy Clause – which differs of its

definition under international law but adjusts it to insurance purposes.

b) This sub-clause provides the Master and the Owners to “reasonably judge” whether any

of these events may be dangerous for the Vessel, allowing the Vessel not to enter any of

these dangerous Areas or providing the possibility to abandon it.

c) In line with the previous sub-clause, it is here stated that “The Vessel shall not be required

to load contraband cargo” as well as to navigate in any dangerous Area.

d) In case the Vessel “proceeds to or through an Area exposed to War Risks”, any additional

insurances required by the Owners’ insurers must be sustained by the Charterers.

e) Following the previous sub-clause, it is stated that those payments “shall be settled within

fifteen days of receipt (…) or on redelivery, whichever occurs first”.

f) Similarly as the sub-clauses “d” and “e”, if the crew is to perceive “any bonus or additional

wages” for sailing these Areas, Charterers are to reimburse to the Owners “at the same

time as the next payment of hire is due, or upon redelivery, whichever occurs first”.

g) This sub-clause, which is widely divided into five different sections, provides the Vessel

liberty to comply with any order or recommendation given by any international body such

as the government of the flag the Vessel is sailing under, the Security Council of the United

Nations or even included their insurance’s requirements – even though they have no

authority to give any orders or instructions to the Vessel.

Furthermore, in the last two sections of this sub-clause, the Vessel is also allowed to

discharge at any port cargo “which may expose the Vessel to being held liable as a

contraband carrier” as well as “to change the crew (…) or other persons on board who

might “be subject to internment, imprisonment, detention or similar measures”.


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h) It is stated that in case of refusal by the Owners to load or discharge cargo at any port,

“they shall immediately inform the Charterers”. Once informed, Charterers are to have

forty-eight hours to nominate an alternative port to proceed, but their failure to this

nomination provides liberty to the Vessel to discharge the cargo “at any safe port of their

own choice”. However, “all costs, risk and expenses” for these facts “shall be for the

Charterers’ account”.

i) Any claims arising while the Vessel is subject to the previous sub-clauses of this Clause

must be indemnified to the Owners by the Charterers.

j) To end this Clause, this last sub-clause indicates that when any actions are taken following

this War Risks Clause they “shall be considered as due fulfilment of this Charter Party”,

which protects the rights of the Owners to act as per this Clause if needed.

- Clause 35 – Ice: this Clause explains that the vessel “shall not be obliged to force ice” but if the

Owners approve, the vessel can follow ice-breakers if required. However, she “shall not be

required to enter in any icebound port or area (…) where there is risk (…) the vessel will not be

able on account of ice to safely enter or remain in the port or area or to get out”.

- Clause 36 – Requisition: this Clause has been maintained mostly unchanged from the NYPE 93

version. Even though the requisitioning of merchant ships is a very rare occurrence nowadays, it

states that if “the vessel be requisitioned by the government of the vessel’s flag or other

government to whose laws the Owners are subject during the period of this Charter”, the vessel

is to proceed off hire and, in case of being paid by the foresaid government, it shall be “retained

by the Owners”. However, the period of the Charter during the requisition will keep counting,

and if exceeds an amount of ninety days any of the parts can cancel the charter party with no

claims.

- Clause 37 – Stevedore Damage: very similarly as in the previous NYPE form, this Clause explains

that “the Charterers shall pay for any and all damage to the Vessel caused by stevedores”. For

that, the Master has twenty-four hours since it has been produced to notify the damage, in

writing, to the Charterers or their Agents, but “in case of hidden damage latest when the damage

could have been discovered by the exercise of due diligence”. The option of appointing a

surveyor to assess the extent the damages if necessary is provided to the parts.


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The clause is then divided into two sub-clauses:

a) This first subclause specifies that, in case these damages affect anything related to the

nautical management of the ship or her “trading capabilities”, they must be repaired

immediately by the Charterers at their own expense keeping the vessel on hire until

b) Contrary to the previous point, any damage not specified above “shall be repaired at the

Charterers’ option, before or after redelivery concurrently with the Owners’ work”. In this

case, only the time and the expenses for the repairs “for which the Charterers’ are

responsible” will exclusively paid to the Owners.

- Clause 38 – Slow Steaming: this Clause is one of the clues of the modernisation of this contract.

Although the Owners are under obligation to prosecute voyages with due despatch, this Clause

provides the Charterers the possibility to request the Vessel to adjust speed to arrive at any port

at a specific time, avoiding the risk that Owners can face claims from third parties. From its

beginning, this Clause is divided into six sub-clauses:

a) The first sub-clause sets the basis of the orders from the Charters to the Master to reduce

the speed in purpose to reach a specific destination at a specified time. Then, two

different options, where one must be deleted, are given:

i. *Slow Steaming: the speed is adjusted “provided that the engine(s) continue(s) to

operate above the cut-out point of the Vessel’s engine(s) auxiliary blower(s)”.

ii. *Ultra-Slow Steaming: in this case, the Master is required to adjust the speed

“regardless of whether this results in the engine(s) operating above or below the

cut-out point of the Vessel’s engine(s) auxiliary blower(s)”. If this option is chosen,

the Master is not obliged to comply with these orders in case the engines need

any additional spares or equipment.

b) It is stated that the Owners must ensure “that the Vessel is operated in a manner which

minimises fuel consumption” by taking into account several items which must be kept,

such as warranties of the speed and consumption, the safety of the Vessel, crew and

cargo, etc.


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c) In line with the previous sub-clause, it is indicated that “the Owners shall exercise due

diligence to minimise fuel consumption” when carrying out tasks as planning voyages,

making use of the Vessel’s navigation equipment and the report of any data to the

Charterers to “further improve the energy efficiency of the Vessel”.

d) To improve the Vessel’s energy efficiency, both parties must “share any findings and best

practices”.

e) In cases where sub-clause “a” has been applicated, the procedure with utmost or due

despatch on behalf of the Master will be understood to have been exercised by the

compliance of such instructions.

f) To conclude this Clause, it is stated that the Charterers are obliged to incorporate this

Clause in any bills of lading issued under the time charter. In case it is not, the Owners are

to be indemnified by the Charterers against any consequences and liabilities.

- Clause 39 – BIMCO Piracy Clause for Time Charter Parties 2013: this Clause’s wording has been

taken from the BIMCO Piracy Clause for Time Charter Parties, which was revised together with

the CONWARTIME in 2013 to update it to modern industry practices as well as legal

developments. It is divided into seven sub-section:

a) This first sub-clause states that the decision to proceed to an Area affected by Piracy

remains in the Owners/Master of the Vessel, having plenty of liberty not to enter or to

abandon any zone with this kind of situation.

b) It is explained that in case the Vessel acts as per sub-clause “a”, the Charterers must be

informed immediately in order to “issue alternative voyage orders and (…) indemnify the

Owners for any claims from holders of the Bill of Lading”. Furthermore, no off-hire will be

considered for the time lost “as a result of complying with such orders”.

c) Contrary to the previous sub-clause, if the Vessel agrees to proceed to an Area affected

by Piracy, this sub-clause, which is divided into four different sections, starts by allowing

her to take all necessary navigational and protection measures. In addition, the Vessel is

also given the liberty to comply with the “requirements under the terms of the Vessel’s

insurance(s)” as well as any direction “given by the Government of the Nation under

whose flag (…) sails” or any other Government the Vessel is bound to.


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To conclude, it is exposed that the Vessel has also the liberty “to comply with (…) any

resolution of the Security Council of the United Nations, the (…) orders of any

Supranational body (…) and with national laws (…) to which the Owners are subject”,

being also the Owners indemnified by the Charterers in case of claims of any third party.

d) Divided into three sections, this sub-clause basically explains that any additional cost of

the Vessel for sailing through these Areas will be on Charterers’ account, including

additional personnel, preventive measures, bonus wages to the crew or any additional

premium insurances.

e) In case of lost of time due to any pirates’ attack, it “shall be for the account of the

Charterers and the Vessel shall remain on hire”.

f) Being the Vessel seized by pirates, she “shall remain on hire (…) and the Charterers’

obligations shall remain unaffected”, ceasing the hire payments the ninety-first day of

seizure “until release”.

Once the Vessel is released, “Charterers shall pay hire (…) for any time lost in making good

any damage or deterioration resulting from the seizure”, although Charterers are not to

be liable for late redelivery due to this conditioning of the Vessel.

g) To end this Clause, this last sub-clause indicates that when any actions are taken following

this War Risks Clause they “shall be considered as due fulfilment of this Charter Party”,

which protects the rights of the Owners to act as per this Clause if needed.

- Clause 40 – Taxes: this clause obliges the Charterers to pay all taxes related to the vessel, the

cargo, the freights, the sub-freights and the hire during the duration of the contract as well as

after its currency. Nevertheless, “taxes levied by the country of the flag of the Vessel or the

Owners” are excluded to the Charterers.

However, in case of exemption of any of these taxes, “no charges (…) shall be assessed to the

Charterers”.

- Clause 41 – Industrial Action: shielding the Charterers interests, this Clause states that if the

Vessel is delayed or inoperative by any strikes or any other difficulties “arising from the Vessel’s

Ownership, crew or terms of employment of the crew of the chartered Vessel”, she is to be set

off-hire.


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Furthermore, Owners must guarantee that the “terms and conditions of employment of the crew

(…) are in accordance with the International Labour Organization Maritime Labour Convention

(MLC) 2006”.

- Clause 42 – Stowaways: this Clause’s wording was slightly changed from the previous NYPE

form, which deals with the responsibility and liability for any costs regarding the presence of

stowaways on board by dividing it into two sub-clauses:

a) If the stowaways have gained access to the vessel by means related to the cargo

operations – which are Charterers’ duties – then they are to be considered liable for any

consequences and “hold the Owners harmless and keep them indemnified against all

claim; costs (…); losses; and fines or penalties”, keeping the Vessel on hire.

b) In case that stowaways have gained access to the Vessel in any means different than those

detailed on the previous sub-clause, then the opposite is considered in this second sub-

clause, being the Owners liable of all above explained.

- Clause 43 – Smuggling: this Clause deals with another serious issue of the maritime industry in

a very similar manner as the previous Clause:

a) If the smuggling is carried out by any crewmember, then “Owners shall be liable (…) and

hold the Charterers harmless (…) and indemnified against all claims, costs, losses, and

fines and penalties”, being the Vessel off-hire.

b) On the other hand, of the illegal substances are found related to the cargo, then the

Charterers are responsible of all consequences above mentioned and the Vessel is

remained on-hire.

- Clause 44 – International Safety Management (ISM): it is stated that “the Owners shall procure

that the Vessel (…) shall comply with the requirements of the ISM Code”. Furthermore, they are

also required to provide copies of the Document of Compliance (DOC) and Safety Management

Certificate (SMC) to the Charterers, being any failure on this Clause on the Owners account.

- Clause 45 – International Ship and Port Facility Security Code (ISPS Code) / Maritime

Transportation Security Act (MTSA): this Clause is divided into three sub-clauses:


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a) The first sub-clause deals with the requirements of the Owners and the Charterers to

comply with the ISPS Code “and the relevant amendments to Chapter XI of the SOLAS” as

well as with the MTSA when trading between US Ports or sailing through their national

waters.

Furthermore, it is indicated that Owners must provide the Charterers with the ISSC if

requested and the contact details of the CSO, adding the compliance of these

requirements is a strict obligation on the Owners, being them liable for loss, damages,

expenses or delays so far caused.

b) Contrary than in the previous sub-clause, it is here explained that Charterers must provide

the Owners with all necessary information to comply with the ISPS Code and the MTSA,

ensuring that any sub-Charterer, if “permitted under the terms of this Charter Party”, will

also provide all requested information to the Owners – there is even a special provision

to be added in all sub-charters.

Therefore, it is also detailed that Charterers are liable of any loss, damage, expense or

delay caused by failing on this sub-clause.

c) This last sub-clause deals with the responsibilities arising from the compliance of the ISPS

Code and the MTSA, being the Owners responsible for all ship-related matters and the

Charterers for all port-related matters.

- Clause 46 – Sanctions: this Clause is divided into four sub-clauses:

a) It is explained that the Owners “shall not be obliged to comply with any orders” from the

Charterers that can bring the vessel “to any sanction or prohibition” imposed by

whatsoever governmental organization basing on their “reasonable judgement”.

b) During any employment that carries a sanction to the Vessel, then Owners “have the right

to refuse to proceed with the employment”, having the Charterers forty-eight hours to

provide alternative voyage orders. In case of failure, then Owners “may discharge any

cargo already loaded at any safe port”, being the Charterers responsible of all extra-costs.

c) Following the same line of the previous sub-clause, it is here stated that Charterers have

to indemnify the Owners of “all claims (…) brought by the Owners of the cargo and/or the

holders of Bills of Lading and/or sub-Charterers” in case the sub-clause “b)” applies.


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d) To conclude, it is pointed out that Charterers are responsible to include this Clause “into

all sub-charters issued pursuant to this Charter Party”.

- Clause 47 – BIMCO Designated Entities Clause for Charter Parties: another Clause divided in

many sub-clauses – seven in this case:

a) It is specified that this Clause applies to persons or entities whose activities are restricted

and are identified “under United Nations Resolutions, (…) the European Union or the

United States of America”.

b) Further to the previous sub-clause, both Owners and Charterers are required to warrant

that “at the date of this fixture and throughout the duration of this Charter Party” they

are not subject to the designation specified in sub-clause “a)”.

c) It is pointed out that in case any of the parties breaks this warranty, the innocent party

“shall comply with the laws and regulations of any Government to which (…) is subject”

and any guidance provided. However, in case of lacking that directions, then there is

provided the flexibility to the innocent party to terminate the contract and discharge the

cargo.

d) It is specified that if any party ever acts as per this Clause, it does not mean a breach of

any other Clause of the contract.

e) This provision states that any party “shall not be required to do anything which

constitutes a violation of the laws (…) of any State to which either of them is subject”,

taking into account the difficulty of these cases where legal advice will be most likely

needed.

f) In case that any party breaches the warrant of the sub-clause “b)”, then it shall indemnify

the innocent party against “all claims, losses, damage, costs and fines”.

g) To conclude, it is pointed out that Charterers are responsible to include this Clause “into

all sub-charters issued pursuant to this Charter Party”.

- Clause 48 – BIMCO North American Advance Cargo Notification Clause for Time Charter Parties:

This Clause applies when the Vessel under the charter party carries cargo destined or passing

through US or Canada ports and is divided into four sub-clauses:


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a) This first sub-clause states that “the Charterers shall comply with the current US Customs

regulation (19 CFR 4.7) or the Canada Border Services Agency regulations (Memorandum

D3-5-2” as well as hold a Standard Carrier Alpha Code (SCAC) or the Canadian Customs

Carried Code and an International Carrier Bond (ICB).

Finally, it is also pointed out that all cargo must be declared “by Automated Manifest

System (AMS) to the US Customs or by Automated Commercial Information (ACI) to

Canadian customs”.

b) Since the Charterers are responsible for the cargo carried, this sub-clause then indicates

that they “assume liability for and shall indemnify, defend and hold harmless the Owners”

against any claim due to any Charterers’ failure to comply with the sub-clause “a)”.

c) In case the Charterers’ ICB is used for anything which is a clear responsibility of the

Owners, then the Owners are the party that shall assume the claim.

d) To conclude, it is stated that even though the Charterers assume the role of carriers for

this Clause, it “shall be without prejudice to the identify of carrier under any bill of lading”.

- Clause 49 – BIMCO U.S. Census Bureau Mandatory Automated Export System (AES) Clause for

Time Charter Parties: this Clause shall only apply when the Vessel loads cargo in a US port and is

divided into four sub-clauses:

a) It is indicated that “the Charterers shall comply with the current US Census Bureau

Regulations (15 CFR 30)” as well as hold a Standard Carrier Alpha Code (SCAC) and an

International Carrier Bond (ICB). To conclude, al cargo loaded must be submitted in an

“export ocean manifest by Automated Export System (AES)”.

b) With the same wording as in the Clause 48 “b)” , it is pointed out that the Charterers

“assume liability for and shall indemnify, defend and hold harmless the Owners” against

any claim due to any Charterers’ failure to comply with the sub-clause “a)”.

c) As in the Clause 48 “c)”, in case the Charterers’ ICB is used for anything which is a clear

responsibility of the Owners, then the Owners are the party that shall assume the claim.

d) To conclude this Clause, it is pointed out that even though the Charterers assume the

role of carriers for this Clause, it “shall be without prejudice to the identify of carrier under

any bill of lading”.


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- Clause 50 – BIMCO EU Advance Cargo Declaration Clause for Time Charter Parties 2012: this

provision represents the equivalent of the US customs notification for the European Union and

is divided into two sub-clauses:

a) The first sub-clause explains that, in case the Vessel carries cargo loaded, discharged or

in transit at or for any EU port, “the Charterers shall (…) comply with the requirements of

the EU Advance Cargo Declaration Regulations”, having in their own name an Economic

Operator Registration and Identification (EORI) number and arranging export and import

declarations.

b) As it is found in the Clause 48 “b)” and 49 “b)” , it is stated that the Charterers “assume

liability for and shall indemnify, defend and hold harmless the Owners” against any claim

due to any Charterers’ failure to comply with the sub-clause “a)”.

- Clause 51 – Ballast Water Exchange Regulations: it is explained that the Owners shall comply

with ballast water exchanges required by any coastal state “at the Charterers’ time, risk and

expense”.

- Clause 52 – Period Applicable Clauses: this Clause only applies if the period of the contract

exceeds five months, the following sub-clauses shall apply:

a) This sub-clause sets out that if Charterers provide instructions for a last trip “on a ballast

voyage to the place of redelivery” and during its duration the contract comes to its end,

then “Charterers shall have the use of the Vessel (…) at the same rate or the prevailing

market rate, whichever is higher” until the completion of this last voyage.

b) Drydocking: if mutually agreed between the parties, the Vessel will have the option to be

drydocked “for bottom cleaning and painting and/or repair as required by class” among

other possible works.

c) Off-hire: for any period the Vessel is considered off-hire, Charterers have then the option

to add it to the Charter duration by complying with some time conditions.

d) Charterers’ Colors: this sub-clause allows the Charterers to fly their own house flag and

paint the Vessel as they wish, having to repaint the Vessel “in the Owners’ colors before

termination of the Charter Party”.


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- Clause 53 – Commissions: this Clause sets out the two different commissions payable. The first

of them “is payable by the Vessel and the Owners to (…) on hire earned”; the second one, which

is called “address commission”, is stated to be deducted by the Charterers on payment of the

hire earned.

- Clause 54 – Law and Arbitration: the aim of this Clause is to provide, from the beginning of the

contract, the law that will be applied in case of disputes and the manner they will be resolved.

For that, four alternatives are provided:

a) New York: the option by default if the parties fail to agree. As in previous NYPE forms,

three persons – one chosen by each party and a third by the two so chosen – shall

arbitrate the dispute “in accordance with the rules of the Society of Maritime Arbitrators,

INC. (SMA)”. However, if the claim is made for less than 100.000 USD “the arbitration

shall be conducted before a sole arbitrator in accordance with the Shortened Arbitration

Procedure of the SMA”.

b) London: in this case, the contract “shall be governed (…) in accordance with English law

and any dispute (…) shall be referred to arbitration (…) in accordance with the Arbitration

Act 1996 or any statutory modification” and in accordance with the London Maritime

Arbitrators Association (LMAA) Terms.

Regarding the arbitrators, the process is slightly different than the New York’s. In this

case, the party that refers a dispute “shall appoint its arbitrator and send notice (…) to

the other party requiring the other party to appoint its own arbitrator within fourteen

calendar days”. If this other party fails to the appointment, then the first party “may

appoint its arbitrator as sole arbitrator”. Nevertheless, the parties can vary this wording

to appoint an agreed sole arbitrator if they wish so

To conclude, if the claim does not exceed the sum of 100.000 USD “the arbitration shall

be conducted in accordance with the LMAA Small Claims Procedure”.

c) Singapore: this place is newly introduced in this NYPE form due to the collaboration of

the SMF for its update, giving the choice to govern the contract in accordance with

Singapore or English law and resolving its disputes in accordance with the Singapore

International Arbitration Act and the Arbitration Rules of the Singapore Chamber of

Maritime Arbitration (SCMA).


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As in the London option, the party that refers a dispute “shall appoint its arbitrator and

send notice (…) to the other party requiring the other party to appoint its own arbitrator

within fourteen calendar days”. If this other party fails to the appointment, then the first

party “may appoint its arbitrator as sole arbitrator”. As aforesaid, the parties can vary this

wording to appoint an agreed sole arbitrator if they agree.

To finish the wording of this option, it is stated that if the claim does not exceed the sum

of 150.000 USD “the arbitration shall be conducted before a single arbitrator in

accordance with the SCMA Small Claims Procedure”.

d) A last option is provided to the parties, where they can agree a place whose laws and

procedures shall be applied to resolve any dispute.

- Clause 55 – Notices: this provision deals with how and where to any notice or communication

should be given between the parties, considering the option of using an email address – adapting

the Clause to modern times and stating that any communication will be considered to be given

“on the date of actual receipt by the party to which it is addressed”.

- Clause 56 – Headings: this Clause clarifies that all clauses’ headings are only labels that generally

describe the content of the clauses but are not subject to any interpretation of the contract.

- Clause 57 – Singular/Plural: this last Clause indicates that, depending on the context, any

singular term shall be made plural if required.

- Lines 101-102: these two final lines contain two blank spaces where the parties can introduce

the number of Clauses incorporated to the contract as “Rider Clauses”.

4.3 Appendix A (vessel description)

At the end of the main terms of the NYPE 2015 it is incorporated an Appendix A, entitled “Vessel

description”. The inclusion of this Appendix offers the Owners a full and easy to fill questionnaire

to provide the Charterers all necessary information about the Vessel which they may need during

the contract.

For that, the Appendix A is divided into seven different categories:

1. General Information: this section is used to indicate all basic information of the vessel,

from her name to his Call Sign and her Flag.


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2. Loadline Information: this second section is related to the maximum load lines of the

Vessel depending on its cargo condition – which can be found in the Plimsoll lines. In

addition, the Constant and the Freshwater Capacity are to be detailed in this section as

well.

3. Tonnages: the third category is destined to every considerable weight of the Vessel,

including the Gross and Net Tonnage, the Panama and Suez Canal Tonnage and the

Lightweight.

4. Dimensions: this fourth section of the Appendix is the most complete in terms of concepts

and length. In it, many characteristics of the holds of the Vessel are detailed to provide

the Charterers the maximum information to take into consideration when planning the

loading of any cargo. In addition, it can be also found some ballast condition details and

cranes specifications.

5. Bunkers, Speed and Consumption: this section is destined to define all necessary

particulars of the bunker spaces and the type of fuel used for the main and auxiliary

engines and well as the Vessels speed and consumption.

6. Crew: the sixth category of this Appendix is destined to detail the number and nationality

of Officers and Ratings, including the name and nationality of the Master.

7. Certificate Expiry Dates: this last section is destined to declare the expiry dates of the

main certificates of the Vessel such as the P&I, the SMC and the ISSC among many others.

4.4 Key features of NYPE 2015

After the extensive analysis of all the Clauses of the NYPE 2015 and its Appendix performed in

the previous sub-chapter, it is now time to carry out a summary of the main changes and the key

features of the major revision of the most commonly used time charter party form for the dry

maritime sector.

To achieve a strong level of global acceptance, the NYPE 2015 incorporates some of the most

frequently used rider clauses added to previous forms as well as some changes into the main

body of the contract to avoid the users the necessity to overlook key clauses or, on the other

side, to add some which may create conflict with other provisions.


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Therefore, even though almost all clauses’ wording has been revised, we shall focus on the most

important changes and additions of this form – which are mainly done due to the influence of

BIMCO and the SMF.

The first novelty to notice is the brevity of the preamble, which include only some of the main

characteristics of the Vessel and the identification of the parties. The reason for this short

preamble is that, at the end of the main terms of the contract, it is included an Appendix A whose

aim is to provide the Owners with a clear questionnaire to set out all characteristics of the Vessel

in a comprehensive way for the Charterers in order to perform a correct use of the ship.

Then, once the preamble is over, we shall go straight to the main updates and key changes of the

Clauses of this form that characterize the nature of this charter party.

The first of these characteristics, which is found in the title of the Clause 1 “Duration/Trip

Description”, is the option given to the parties to choose whether the agreement is for a period

or trip charter party. Furthermore, this first clause was expanded by joining some different

Clauses from the NYPE 93 such as Trading Limits, Berths and Sublet as well as the reintroduction

of an optional NAABSA provision, which was withdrawn at the previous form.

On Clause 2 “Delivery”, another key feature can be found in the split of the Owners’ obligation

to deliver the ship in a seaworthy condition from her cargo readiness condition, being amended

to reflect the common practice of the industry to deliver the Vessel in a different port different

from where she will first receive cargo. In addition, this Clause also deals in its sub-clause “d”

with the restriction of any further employment of the ship immediately prior her delivery as well

as in the redelivery (dealt in its reciprocal Clause 4 “Redelivery”) that can delay the dates

accorded by the parties.

The following novelty of this contract can be found in Clause 6 “Owners to Provide”, where a full

paragraph is exclusively destined to deal with the obligation of the Owners to provide and

maintain Certificates of Financial Responsibility for oil pollution. However, it is important to

consider that this obligation is only made at the start of the charter, being the parties intended

to find a common solution for its renewal.

Another Clause where plenty of changes are found is the Clause 9 “Bunkers”, which has been

adapted for both period and trip charter options covering many different details with the aim to

provide a modern and comprehensive Clause.


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Split into seven different provisions, this Clause deals with quantities and prices; bunkering

timelines, operations and sampling; quality and liability; ECA trading and redelivery’s quantities

and grades to adapt it to modern environmental rules – including low sulphur requirements.

In Clause 10, sub-section “b) Hold Cleaning/Residue Disposal”, another important update to

modern legal guidelines is able to be found with the accordance of the substances used to

perform the cleaning of the holds to MARPOL Annex V; in fact, something very similar happens

in Clause 29 “Solid Bulk Cargoes/Dangerous Goods” where it is mentioned the IMBSC in case of

loading any solid bulk cargo on board.

Moving to the Clause 11 “Hire Payment”, many clarifications were made in order to ease the

comprehension of some of the particularities of this Clause as well as to update it to recent legal

decisions.

The first of these changes is to leave open to the parties to agree the currency in which hire is to

be paid, reflecting a global use of the form. Then, another big change of this Clause is found in

the sub-section “b) Grace Period”, being no longer considered an “anti-technically” provision and

unqualifying the events by which this shall occur, meaning that any failure from the Charterers

to make punctual payment of hire will result in breach of the charter party.

Following the previous paragraph, the sub-section “c) Withdrawal” provides the Owners a more

balanced provision by making the Charterers to compensate the Owners of any loss suffered as

a result of the early termination of the contract, covering its remaining period. Finally, the sub-

section “d) Suspension” provides an effective method to bring commercial pressure to a

Charterers who might usually be late with hire payments by allowing the Owners to suspend the

performance of the ship until the Charterers obligations regarding those payments are fulfilled.

Clause 12 “Speed and Consumption” is another majorly reworded Clause, containing many

updates to adjust it to some market provisions and current practices, being some of the most

important features the inclusion of a continuous warranty of the capability speed performance

of the Vessel throughout the whole contract duration; the performance of the route according

to a weather routing service and the right of deviation of the Master and the limitation of the

Charterers’ claims to compensation for time lost as a result of the underperformance or the cost

of any additional fuel consumed.


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Moving forward to Clause 30 “Hull Fouling”, a special provision was included to this form and

destined exclusively to cover this event to sort out responsibilities of the maintenance of the hull

state depending on different issues. In this line, several responsibilities can be transferred to the

Charterers under some special circumstances – never considered before in any previous NYPE

form.

In Clause 32 “Electronic Bills of Lading” it is found one of the best examples of the modernization

of this NYPE form, considering the emission of these documents more practical than any printed

document – however it allows the Charterers whether this option shall be considered or not.

The next Clause that shall be taken into account is the Clause 34 “War Risks”, which has been

replaced from the NYPE 93 to this form by the BIMCO’s standard War Risk Clause, known as

CONWARTIME, which has its basis on whether an area is dangerous to be navigated and there is

existence of any attack – happening the war event before or after the signature of the contract,

dealing with premium insurances and the liberties of the Vessel as well. Something quite similar

is seen in Clause 39 “Piracy”, added to this form with its wording taken from the BIMCO Piracy

Clause from Time Charter Parties – revised in 2013 to reflect industry experience and legal

developments.

Moving back to Clause 38 “Slow Steaming”, here it is another example of the modernization of

this charter party. This Clause, as its own title reveals, deals with the possibility of the Charterers

to order the Vessel to navigate at a reduced speed considering any claim as well that Owners can

face from third parties due to their strict obligation to prosecute voyages with utmost despatch.

Through its six sub-clauses, this Clause deals with many details such as the condition of the

engines for operating at slow steaming, their consumption and the afore-mentioned risk of

further claims to the Owners.

Moving quite forward, in Clause 44 “ISM” and Clause 45 “ISPS/MTSA” it is found the introduction

of two of the most important legal regulations of international maritime law, such as the ISM and

the ISPS, which evidences the globality of the form in relation with the maritime industry.

Furthermore, and with the aim to conserve its North American essence, it is also introduced the

MTSA as one of the legal regulations to be considered.


136

In line with the previous Clause, some other American and European mercantile regulations are

introduced in Clause 48 “North American Advanced Cargo Notification”, Clause 49 “U.S. Census

Bureau Mandatory Automated Export System (AES)” and Clause 50 “EU Advanced Cargo

Declaration Clause for Time Charter Parties 2012”, which provides an idea of the legal links of this

charter party.

To conclude, due to the increasing problems of invasive marine species mainly carried in ballast

waters of merchant ships, this form includes a Clause 51 “Ballast Water Exchange Regulations”,

trying to adjust it to as much coastal states with ballast water regulations.

4.5 Conclusions

The New York Produce Exchange 2015 charter party is the most important section and the

centrepiece of this FDP - in fact, of its own title. Its analysis has taken nothing less than twenty-

five pages, added to all the analysis and comparisons of its three previous versions. However, all

this journey would not be complete if, after reaching in such a deep manner in this topic, useful

conclusions were not drawn.

The first concept that needs to be present during the whole summary is to consider the objective

of the update of the NYPE form, which was no other than to create an internationally accepted

and more balanced time charter party form between Owners and Charterers by reflecting

changes in commercial practices and legal decisions of the maritime sector. Furthermore, the

previous form of the New York Produce Exchange charter party, the NYPE 93, failed to become a

widely accepted form since Charterers still used the NYPE 46 form with many added rider clauses

depending on their trade.

In fact, in their own press release, BIMCO described the goal of the major revision of the NYPE

“to produce a dry cargo charter party that reflects contemporary commercial practice and legal

developments that have taken place in the past twenty years (…) which takes proper stock of the

most commonly Applied amendments and additional clauses used by practitioners in the dry

cargo sector”.

Summarizing, the promotion of such a huge revision was due to the lack of an intermediate form

between Owners and Charterers that protected their interests in a balanced manner. - therefore,

it is easy to identify the role of the ASBA (Charterers) and BIMCO (Owners) for this purpose.


137

In addition, a deep consultation with the shipping industry was performed during several years

to ensure that current commercial practices were reflected in the form.

However, there is something that cannot be forgotten when trying to create a charter party form

with global appeal. Even though that Europe and America were the two main engines of the

maritime industry in the past, a third wheel has become the main sponsor of the global trade in

the last decades: Asia. Thus, this major revision was going to be incomplete without its inclusion,

which was finally translated with the collaboration of the SMF in the project and the recognition

of Singapore as an official seat of arbitration - a defining milestone of its presence as a key node

of the global maritime network.

Moreover, it would be also worth to glance at the declarations made by the heads of the main

organizations that carry this revision out, which are collected below.

Starting with Mr. Søren Larsen, one of the BIMCO’s Deputy Secretary General, said that “We are

delighted that our close cooperation with ASBA and SMF has resulted in the completion of this

major project to produce a much improved NYPE that will be of great benefit to the industry."33

Then, his colleague Ms. Inga Froysa, Chairperson of the BIMCO NYPE revision sub-committee,

added that “Users of the current NYPE form will certainly still recognise and be familiar with the

core elements of the time charter party, but they can also expect to see some significant changes

and improvements.(…) Notably, the contract incorporates many of the rider clauses that are

routinely added to the existing NYPE – but we have made sure that any new clauses incorporated

into the new NYPE are relevant, balanced and consistent with the other provisions.(…) Overall,

our aim was to create a modern NYPE with global appeal – and I believe that this has been

achieved.”

33 The Baltic and International Maritime Council. Major revision of NYPE Time Charter Party. Copenhagen: October 15th, 2015.


138

On the other side, Mr. Nigel Hawkins, Chairman of the ASBA drafting committee, said that “The

1993 NYPE Charter Party was ripe for updating. ASBA is therefore pleased that with our friends

at BIMCO and the Singapore Maritime Foundation we have agreed the wording of a NYPE fit for

the present day. ASBA hope that the industry will find this new NYPE a clear and logical document,

and, that the industry will note some familiar language contained in past NYPE documents.”

To conclude, Mr. Michael Chia, Chairman of SMF explained “The revised NYPE is the first

international shipping form that is a collective effort spanning the globe involving ASBA, BIMCO

and SMF. With the extensive global industry stakeholder consultation, we believe that the end

product is a contact that better meets user needs and will see quick acceptance and adoption”.34

Nevertheless, not all the maritime industry’s organizations showed this well disposition towards

the updates of this revision. In fact, considering that many added clauses to the main body of the

form were BIMCO standard clauses, The Charterers P&I Club harshly criticized the NYPE 2015 in

its “Circular 004-2015”. 35 In this respect, the Club considered these clauses to be perceived in

the market as “Owner friendly”, which was translated as a step back for the Charterers’ interests,

pointing also out that careful attention shall be paid to them since their wording was not exactly

as those standard clauses.

Even though these additional clauses can help the Charterers to deal with many new issues arisen

over recent years which could be easily missed and build a quite up-to-date form, these kinds of

terms are usually updated so the NYPE 2015 can quickly become out of date, being easier to only

having to update rider clauses. Moreover, as commented on the paragraph before, some of these

clauses are BIMCO standard clauses which may benefit the common law position of the Owners,

having the Charterers to pay special attention to leave them out.

34 The Singapore Maritime Foundation. Launch of NYPE 2015 – A Joint Effort by ASBA, BIMCO and SMF on the Industry’s Most Widely Used Standard Form of Dry Cargo Time Charterparty. Press release. Singapore: October 16th, 2015.

35 The Charterers P&I Club. Circular 004 2015 – New NYPE 2015 – A Charterer’s Perspective – Circular to Assureds.

The MECO Group. London: December 2015.


139

Another disadvantage of the addition of these new clauses is that some of them could cause a

“Clause Clash” with other existing clauses already present into the main body of the form, leading

to confusions about which terms shall apply in case of disputes. On the other side, these

increment of clauses in the main body could give the parties a false impression of total coverage

of all possible issues when there may be some not prevised (e.g., bribery and corruption).

From a Charterers’ point of view, the Club is very reticent to recommend its customers the use

of this revision of the NYPE, justifying that Charterers shall negotiate to defend their trades but

including their own rider clauses con lead to conflicts and interpretation misunderstandings. In

addition, the objective of the new BIMCO standard clauses added to the form is no other that

creating “a modern NYPE with global appeal”, which are to Charterers’ detriment.

To sum up, the NYPE 2015 charter party form has many advantages and disadvantages depending

on the point of view, therefore anyone who intends to use it for its own business shall do it very

carefully in consultancy with experts.


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Conclusions and Final Assessment

141


This FDP shall be finished with a chapter dedicated to introducing and explaining the conclusions

extracted throughout the paper. The journey of this FDP has been done in a funnel-format as it

was stated in the Introduction: it started by performing a general overview about the actual

maritime market and its evolution over the last few years; the following chapter explained some

basic concepts about charter parties, their classification and some key terminology to consider

as well as a description of the three most important maritime organizations that contributed to

their development; the third chapter explained the basis and history of the NYPE charter party

and its evolution during its different versions; the final chapter was fully dedicated to the NYPE

2015 charter party, the heart of this paper, describing its key features and main changes and

trying to state its success or failure for the maritime industry.

Thus, the conclusions that this FDP has led to are the following:

✓ The results of the financial crash of 2008 were still present at the beginning of 2015, when the

economy’s situation was not at its best stage due to some strive markets and the unpredictability

of China’s economy, which has become the main actor of global trade and the major indicator of

shipping development – despite its volatility.

✓ The GDP growth rates are not forecasted to improve in the next years since demand is not

expected to increase; therefore, fleet utilization rates should be raised (e.g. with scrapping) to

lower the supply and strengthen freights. During the following years, shipowners will keep

finding strong opposition to find profitable the maritime freight market due to the unbalanced

supply and demand levels, added to the compliance of the new IMO 2020 Sulphur Cap.

✓Due to the historical horrible situation of the maritime economy, BIMCO provided a market

analysis called “Road to recovery” in May, 2016, to state the actions needed for the shipping

markets to recover and to track their progress. The model was revised and updated several times

to align it to contemporary market conditions, but a general emphasis on scrapping was always

highlighted.

✓ The tanker trade sector (which involves crude oil and oil products) experienced strong freights

due to the drop of oil prices and the low growth of the supply, resulting in a general profitable

period for this business in 2015. However, from 2016 to 2018, the demand fell heavily and the


142

supply side increased considerably, leading to horrific years for the tanker shipping market due

to the volume of the oil global stocks – until they were decreased and the over-supplied trade

lanes are not redressed, sea oil trading would not awake any interest and low freights are

expected to govern this business.

✓ In 2015, the container market faced a very unbalanced situation due to a four-year high supply-

side growth rate combined with a three-year low rate of demand, claiming for a severe

readjustment to overcome this situation. Nevertheless, the merge of large container vessels

companies combined with low newbuilding rates and an all-time high demolition of ships

improved the balancing of the marker. However, twenty new vessels of 22.000 TEUS were

ordered in 2017, heavily increasing the supply-side.

✓ To compensate this, BIMCO stated that the GDP growth of advanced economies plus China’s

subsidy are going to be the clues to stabilize this awful situation. In addition, it is also necessary

to free the trade to let it develop at its natural pace, contrary to the effects of the war between

the USA and some Asian countries.

✓ Even though charter parties can be defined in many different ways, they are nothing but the

proof of the conclusion of a fixture, for a specific voyage or period of time, becoming the legal

link between two contractual parties and requiring the fulfilment of the mutually agreed terms,

conditions and exceptions under the law in force, which will govern the deal. They can be divided

into voyage charters, contracts of affreightment, time charters and bareboat charters.

✓ Voyage charters are those in which the Owners perform one or more designated voyages from

a load to a discharge port (or facility) in return of a payment of freight. In these type of charters,

all nautical and operating management remain on the Owners, being the Charterers in charge of

placing the cargo at the designated place and paying the hire.

✓ Contracts of Affreightment are agreements including multiple voyages together in one single

contract in which Owners shall carry a specific amount of cargo during a period of time for a fixed

price per ton. Even though some elements may be introduced to distinguish it from voyage

charters, the responsibilities of each party are the same. These contracts allow the Owners to

optimize their fleet and achieve its best performance and efficiency level whilst permits the

Charterers to ensure that all cargo of a particular trade will be covered until stocks are over for a

invariable price.


143

✓ Time charters, such as the NYPE 2015, are those contracts under which the vessel’s employment

is set under the legitimate orders of the Charterers, who in return of an agreed periodical hire

and the payment of some specific costs, shall have the right to utilize all available spaces to carry

any type and quantity of goods permitted in the contract. However, the possession of the vessel

remains with the Owners, who provide the crew and pay the ordinary costs of the ship. In these

contracts, the nautical management is the responsibility of the Owners whilst the Charterers are

in charge of the commercial management of the Vessel.

✓ Time charters allow Owners to have their vessels employed during large periods of time,

securing future income, whilst Charterers who need to increase their capacity volume during a

certain period of time but do not want to purchase a Vessel might find these contracts

interesting.

✓ Bareboat Charter is a method by which the possession of the Vessel is fully given to the

Charterers, who provide crew, pay all running costs and undertake the title of shipowners,

leading to a lease of the Vessel for a stipulated period of time which sometimes include a

purchase option at its end. In return of a hire, Charterers assume all nautical and operating

management of the ship. The main use of this Charters is the financing of now-build ships by

financial organizations with no other interests in shipping business than investment.

✓ The terms of a charter party can be sorted out by many different criteria. Nevertheless, two of

the most widely accepted are by the “stage of the terms”, which include the “Main Terms” and

the “Charter party Terms”, and by their “explicitness”, which include the “Express Terms” and the

“Implied Terms”.

✓ The three main organizations who have historically contributed to the formation of charter

parties, including the NYPE 2015, are the BIMCO – with European origin and mainly representing

Owners, and the ASBA – from American and predominantly by Charterers. Nonetheless, the SMF

(from Singapore) shall be added to this team by representing the great continent of Asia to the

development of the latest revision of the NYPE.

✓ The New York Produce Exchange was an organized market place in the heart of the city of New

York, whose purpose was to provide a freely regulated trade of commodities far from any chaos

or unfairness. Mainly represented by American shippers, Charterers and traders who soon

became powerful in economic terms and tired of using old charter party form which were Owner-


144

friendly, a form that defended their interests was developed in the early 20th century, being born

the NYPE 1913 charter party, which has been revised many times during history: in 1921, 1931,

1946, 1981, 1993 and lately in 2015.

✓ The NYPE 46 was the very first successful time charter party amended by the American traders,

being yet widely used in the dry cargo sector due to the amount of the decisions that the courts

have made during more than seventy years as well as the conservative nature of the shipping

business community. The form is divided into a preamble, which includes thirty-four lines that

set the basis of the agreement, and twenty-eight clauses that develop the details of the contract.

✓ The NYPE 46 form is a simple and quite effective charter party that has been widely legally

interpreted by many law experts and which was issued in a historically favorable date for the

interests of Charterers worldwide, when trade started to grow and economy burst after the

Second World War.

✓ The first revision of the NYPE 46 form was launched on June 12th, 1981, under the name NYPE

81 or ASBATIME. Carried out by the ASBA, this version included a longer preamble with sixty-two

lines, twenty-seven clauses in the main body and an Appendix with eleven rider clauses that

could be added if the parties found it necessary.

✓ The form followed the same vein of the NYPE 46, with small clarifications in many clauses and

emphasizing or even rectifying some terms. However, by the time this revision was launched, the

industry was already used to its previous version, where the parties added their own additional

clauses in order to protect their interests and trying to minimize the risk of unforeseen events by

using a new form. To sum up, the ASBATIME did not have the expected impact on the maritime

industry.

✓ Since the NYPE form was the most commonly time charter party used in the maritime business,

the ASBA, the BIMCO and the FONASBA launched on September 14th, 1993, the following revision

of the form: the NYPE 93. This new version included a preamble of twenty-two lines, a main body

of forty-six clauses and an Appendix A to freely provide further data of the Vessel employed.

✓ The product was a competitive and well-balanced charter party form, offering a fair contract for

the parties involved thanks to the collaboration of three of the most important shipping entities

of the maritime business at that time.


145

✓Even though the NYPE 46 was still the most used version, the NYPE 93 set the basis of a charter

party form where parties with different interests could find a common solution.

✓ In 2015, the ASBA, the BIMCO and the SMF launched the latest update of the NYPE charter party

form, which was the major update ever done, which included many legal developments and

contemporary commercial practices.

✓ This version of the NYPE is the most complete in terms of length and clauses. It is divided into

three sections: a preamble of seventeen pages, a body with fifty-seven clauses and an Appendix

A, destined to provide a detailed description of the Vessel chartered.

✓ The objective of the launch of the NYPE 2015 was to create an internationally accepted and more

balanced time charter party form, trying to substitute the old-fashioned but most used NYPE 46.

For that, the three aforementioned organizations, which represent the three main continents

that rule the maritime economy, performed a huge consultation to the industry and produced

and up-to-date and modern form of the contract.

✓ Even though only time will provide an overview of the general acceptation of the NYPE 2015,

many organizations quickly informed their members or customers of the characteristics of this

new version and advised about the risks of using it for their trades.

After exposing the conclusions which I have been able to reach from the development of this

paper, I would not like to finish it without providing my personal opinion of the NYPE 2015 charter

party form. From my humble point of view, I would take the risk to state that, even though some

items are not included in this form and shall be considered to be added, the NYPE 2015 generally

meets its objective to become a well-balanced and up-to-date charter party since the

cooperation of the three aforementioned organizations make sure that all perspectives and

approaches are taken into account. However, this does not mean that it can be used as a

complete charter with no necessity to be reviewed and carefully treated, as any other charter

party form.

The best advise that can be given to chartering companies is, under my personal consideration,

to maintain their own specific rider terms that have worked for their services and which they feel

more comfortable with. However, they may find now in the NYPE 2015 a new tool to update

those specific rider terms to keep them up-to-date as well as to use this form as a crosscheck in

order to make sure that all important issues are duly covered to meet their specific needs.


146

Regarding the industry’s general acceptation of the NYPE 2015, only time will be able to provide

a clear answer. Even though it only depends on its uptake, it must be considered that the creation

of a complete charter party form that satisfies the needs of the whole maritime industry may be

a too challenging ambition since every organization will only care of its own interests. However,

even though it was not the main goal of the BIMCO, the ASBA and the SMF joint cooperation,

they may have provided a very powerful tool to any company or organization dedicated to the

chartering business that may help them to create their own specific terms and keep them

updated so that anyone can extract those that meet their interests in a most efficient way.

Sources

147

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< https://www.bimco.org/news/market_analysis/2020/20201125_tanker_shipping>

[43] BIMCO. Market Analysis. Dry bulk shipping: China remains the driving factor, but coal policy is

disrupting the market. Sand, Peter. Copenhagen: November 24th, 2020. Accessed: November

29th, 2020. Available at:

<https://www.bimco.org/news/market_analysis/2020/20201124_4_dry_bulk_shipping>

Sources

151

[44] The New York Times. A brick beauty bites the dust. Gray, Christopher. New York: August 21st,

2020. Accessed: March, 14th, 2020. Available at:

< https://www.nytimes.com/2014/08/24/realestate/new-yorks-produce-exchange.html>

Case Law

[45] Lidgett v. Williams (1845) 4 Harc 456,462; The Epsilon Rosa [2002] 2 Lloyd’s Rep. 81, 86.

[46] Ambatielos v. Grace Bros. (1922) 13 Ll. L. Rep. 227; Suisse Atlantique v. Rotterdamsche Kolen

Centrale [1967] 1 A.C. 361.

[47] The Oakworth [1975] 1 Lloyd’s Rep. 581.

[48] The Tichy ][1999] 2 Lloyd’s Rep. 11

[49] The Tichy (No. 2) [2001] Lloyd’s Rep. 10, reversed [2001] 2 Lloyd’s Rep. 403.

[50] Donaldson, J., The Berge Tasta [1975] 1 Lloyd’s Rep. 422.

[51] Lord Diplock, J., The Scraptrade [1983] 2 Lloyd’s Rep. 253.

[52] Lord Reid, The London Explorer [1971] 1 Lloyd’s Rep. 523.

[53] Lord Diplock, J.,Port Line v. Ben Line [1958] 1 Lloyd’s Rep. 290.

[54] Lord Hobhouse, The Hill Harmony [2001] 1 Lloyd’s Rep. 147.

[55] Mackinnon, L.J., Sea & Land Securities v. Dickinson (1942) 72 Ll.L.Rep. 159, page 163

[56] Heilbut. Symons v. Buckleton [1913] A.C. 30; De Lasalle v. Guildford [1901] 2 K.B. 215.

[57] Reardon Smith v. Hansen Tangen [1976] 2 Lloyd’s Rep. 621, 625, per Lord Wilberforce.

[58] Sailing Ship Garston v. Hickie (1885) 15 Q.B.D. 580 and The Aragorn [1977] 1 Lloyd’s Rep. 343.

[59] Dreyfus v. Parnaso [1959] 1 Lloyd’s Rep. 125.

[60] Mediterranean Salvage Towage v. Seamar Trading & Commerce (The Reborn) [2009] 2 Lloyd’s

Rep. 639.

[61] North West Metropolitan Regional Hospital Board v. Trollope & Colls [1973] 1 W.L.R. 601.

[62] Mance, J., The Niizuru [1996] 2 Lloyd’s Rep. 66, page 68.


152

Annex 1. The NYPE 2015 sample form

153

Annex 1. The NYPE 2015 sample form

NYPE 2015

TIME CHARTER New York Produce Exchange Form©

November 6th, 1913 – Amended October 20th, 1921; August 6th, 1931; October 3rd, 1946; Revised June 12th 1981; September 14th 1993; June 3rd, 2015.

THIS CHARTER PARTY, made and concluded in . this . day of 20

Between of

as *Registered Owners/*Disponent Owners/*Time Chartered Owners (the “Owners”) of the Vessel described below

*delete as applicable

Name:

IMO Number:

Flag:

Built (year):

Deadweight All Told: metric tons

(For Vessel’s charter party description see Appendix A (Vessel Description)),

and Charterers of (the “Charterers”)

This Charter Party shall be performed subject to all the terms and conditions herein consisting of this main body including any additional clauses and addenda, if applicable, as well as Appendix A attached hereto. In the event of any conflict of conditions, the provisions of any additional clauses and Appendix A shall prevail over those of the main body to the extent of such conflict, but no further.

1. Duration/Trip Description

(a) The Owners agree to let, and the Charterers agree to hire, the Vessel from the time of delivery, for . within below mentioned trading limits.

(b) Trading Limits - The Vessel shall be employed in such lawful trades between safe ports and safe places within the following trading limits . as the Charterers shall direct.

NYPE 2015 TIME CHARTER

(c) Berths - The Vessel shall be loaded and discharged in any safe anchorage or at any safe berth or safe place that the Charterers or their agents may direct, provided the Vessel can safely enter, lie and depart always afloat.

(d) The Vessel during loading and/or discharging may lie safely aground at any safe berth or safe place where it is customary for vessels of similar size, construction and type to lie at the following areas/ports (if this space is left blank then this sub-clause 1(d) shall not apply), if so requested by the Charterers, provided it can do so without suffering damage.

The Charterers shall indemnify the Owners for any loss, damage, costs, expenses or loss of time, including any underwater inspection required by class, caused as a consequence of the Vessel lying aground at the Charterers’ request.

(e) Sublet - The Charterers shall have the liberty to sublet the Vessel for all or any part of the time covered by this Charter Party, but the Charterers remain responsible for the fulfillment of this Charter Party.

2. Delivery

(a) The Vessel shall be delivered to the Charterers at (state port or place).

(b) The Vessel on delivery shall be seaworthy and in every way fit to be employed for the intended service, having water ballast and with sufficient power to operate all cargo handling gear simultaneously, and, with full complement of Master, officers and ratings who meet the Standards for Training, Certification and Watchkeeping for Seafarers (STCW) requirements for a vessel of her tonnage.

(c) The Vessel’s holds shall be clean and in all respects ready to receive the intended cargo, or if no intended cargo, any permissible cargo:

(i) On *delivery; or

(ii) On *arrival at first loading port if different from place of delivery. If the Vessel fails hold inspection then the Vessel shall be off-hire from the time of rejection until the Vessel has passed a subsequent inspection.

*(c)(i) and (c)(ii) are alternatives; delete as appropriate. If no deletion then Sub-clause (c)(i) shall apply.

(d) The Owners shall keep the Charterers informed of the Vessel’s itinerary. Prior to the arrival of the Vessel at the delivery port or place, the Owners shall serve the Charterers with days’ approximate and days’ definite notices of the Vessel’s delivery. Following the tender of any such notice the Owners shall give or allow to be given to the Vessel only such further employment orders, if any, as are reasonably expected when given to allow delivery to occur on or before the date notified. The Owners shall give the Charterers and/or their local agents notice of delivery when the Vessel is in a position to come on hire.

Vessel itinerary prior to delivery: .

(e) Acceptance of delivery of the Vessel by the Charterers shall not prejudice their rights against the Owners under this Charter Party.

3. Laydays/Cancelling

If required by the Charterers, time on hire shall not commence before (local time) and should the Vessel not have been delivered on or before (local time) at the port or place stated in Sub-clause 2(a), the Charterers shall have the option of cancelling this Charter Party at any time but not later than the day of the Vessel’s notice of delivery.


4. Redelivery

(a) The Vessel shall be redelivered to the Owners in like good order and condition, ordinary wear and tear excepted, at (state port or place)

(b) The Charterers shall keep the Owners informed of the Vessel’s itinerary. Prior to the arrival of the Vessel at the redelivery port or place, the Charterers shall serve the Owners with days’ approximate and days’ definite notices of the Vessel’s redelivery. Following the tender of any such notices the Charterers shall give or allow to be given to the Vessel only such further employment orders, if any, as are reasonably expected when given to allow redelivery to occur on or before the date notified.

(c) Acceptance of redelivery of the Vessel by the Owners shall not prejudice their rights against the Charterers under this Charter Party.

5. On/Off-Hire Survey

Prior to delivery and redelivery the parties shall, unless otherwise agreed, each appoint surveyors, for their respective accounts, who shall not later than at first loading port/last discharging port respectively, conduct joint on-hire/off-hire surveys, for the purpose of ascertaining the quantity of bunkers on board and the condition of the Vessel. A single report shall be prepared on each occasion and signed by each surveyor, without prejudice to his right to file a separate report setting forth items upon which the surveyors cannot agree.

If either party fails to have a representative attend the survey and sign the joint survey report, such party shall nevertheless be bound for all purposes by the findings in any report prepared by the other party.

Any time lost as a result of the on-hire survey shall be for the Owners’ account and any time lost as a result of the off-hire survey shall be for the Charterers’ account.

6. Owners to Provide

(a) The Owners shall provide and pay for the insurances of the Vessel, except as otherwise provided, and for all provisions, cabin, deck, engine-room and other necessary stores, boiler water and lubricating oil; shall pay for wages, consular shipping and discharging fees of the crew and charges for port services pertaining to the crew/crew visas; shall maintain the Vessel’s class and keep her in a thoroughly efficient state in hull, machinery and equipment for and during the service, and have a full complement of Master, officers and ratings.

(b) The Owners shall provide any documentation relating to the Vessel as required to permit the Vessel to trade within the agreed limits, including but not limited to International Tonnage Certificate, Suez and Panama tonnage certificates, Certificates of Registry, and certificates relating to the strength, safety and/or serviceability of the Vessel’s gear. Such documentation shall be maintained during the currency of the Charter Party as necessary.

Owners shall also provide and maintain such Certificates of Financial Responsibility for oil pollution to permit the Vessel to trade within the agreed limits as may be required at the commencement of the Charter Party. However, in the event that, at the time of renewal, a Certificate of Financial Responsibility is unavailable in the market place, or, the premium for same increases significantly over the course of the Charter Party, then Owners and Charterers shall discuss each with the other to find a mutually agreeable solution for same, failing such solution the port(s) that require said Certificate of Financial Responsibility are to be considered as added to the Vessel's trading exclusions. (See also Clause 18 (Pollution)).

(c) The Vessel to work night and day if required by the Charterers, with crew opening and closing hatches, when and where required and permitted by shore labor regulations, otherwise shore labor for same shall be for the Charterers’ account.


7. Charterers to Provide

(a) The Charterers, while the Vessel is on-hire, shall provide and pay for all the bunkers except as otherwise agreed; shall pay for port charges (including compulsory garbage disposal), compulsory gangway watchmen and cargo watchmen, compulsory and/or customary pilotages, canal dues, towages, agencies, commissions, consular charges (except those pertaining to individual crew members or flag of the Vessel), and all other usual expenses except those stated in Clause 6, but when the Vessel puts into a port for causes for which the Vessel is responsible (other than by stress of weather), then all such charges incurred shall be paid by the Owners.

(b) Fumigations ordered because of illness of the crew or for infestations prior to delivery under this Charter Party shall be for the Owners’ account. Fumigations ordered because of cargoes carried or ports visited while the Vessel is employed under this Charter Party shall be for the Charterers’ account.

(c) The Charterers shall provide and pay for necessary dunnage, lashing materials and also any extra fittings requisite for a special trade or unusual cargo, but the Owners shall allow them the use of any dunnage already aboard the Vessel. Prior to redelivery the Charterers shall remove their dunnage, fittings and lashing materials at their cost and in their time.

8. Performance of Voyages

(a) Subject to Clause 38 (Slow Steaming) the Master shall perform the voyages with due despatch and shall render all customary assistance with the Vessel’s crew. The Master shall be conversant with the English language and (although appointed by the Owners) shall be under the orders and directions of the Charterers as regards employment and agency; and the Charterers shall perform all cargo handling, including but not limited to loading, stowing, trimming, lashing, securing, dunnaging, unlashing, discharging, and tallying, at their risk and expense, under the supervision of the Master.

(b) If the Charterers shall have reasonable cause to be dissatisfied with the conduct of the Master or officers, the Owners shall, on receiving particulars of the complaint, investigate the same, and, if necessary, make a change in appointments.

9. Bunkers

(a) Bunker quantities and prices

*(i) The Charterers on delivery, and the Owners on redelivery or any termination of this Charter Party, shall take over and pay for all bunkers remaining on board the Vessel as hereunder. The Vessel’s bunker tank capacities shall be at the Charterers’ disposal. Bunker quantities and prices on delivery /redelivery to be .

*(ii) The Owners shall provide sufficient bunkers onboard to perform the entire time charter trip. The Charterers shall not bunker the Vessel, and shall pay with the first hire payment for the mutually agreed estimated bunker consumption for the trip, namely metric tons at (price). Upon redelivery any difference between estimated and actual consumption shall be paid by the Charterers or refunded by the Owners as the case may be.

*(iii) The Charterers shall not take over and pay for bunkers Remaining On Board at delivery but shall redeliver the Vessel with about the same quantities and grades of bunkers as on delivery. Any difference between the delivery quantity and the redelivery quantity shall be paid by the Charterers or the Owners as the case may be. The price of the bunkers shall be the net contract price paid by the receiving party, as evidenced by suppliers’ invoice or other supporting documents.

*(i), (ii) and (iii) are alternatives; delete as applicable. If neither Sub-clause (i), (ii) nor (iii) is deleted then Sub- clause (i) shall apply.


(b) Bunkering Prior to Delivery/Redelivery

Provided that it can be accomplished at ports of call, without hindrance to the working or operation of or delay to the Vessel, and subject to prior consent, which shall not be unreasonably withheld, the Owners shall allow the Charterers to bunker for their account prior to delivery and the Charterers shall allow the Owners to bunker for their account prior to redelivery. If consent is given, the party ordering the bunkering shall indemnify the other party for any delays, losses, costs and expenses arising therefrom.

(c) Bunkering Operations and Sampling

(i) The Chief Engineer shall co-operate with the Charterers’ bunkering agents and fuel suppliers during bunkering. Such cooperation shall include connecting/disconnecting hoses to the Vessel’s bunker manifold, attending sampling, reading gauges or meters or taking soundings, before, during and/or after delivery of fuels.

(ii) During bunkering a primary sample of each grade of fuels shall be drawn in accordance with the International Maritime Organization (IMO) Resolution Marine Environment Protection Committee (MEPC) MEPC.182(59) Guidelines for the Sampling of Fuel Oil for Determination of Compliance with the Marine Pollution Convention (MARPOL) 73/78 Annex VI or any subsequent amendments thereof. Each primary sample shall be divided into no fewer than five (5) samples; one sample of each grade of fuel shall be retained on board for MARPOL purposes and the remaining samples of each grade distributed between the Owners, the Charterers and the bunker suppliers.

(iii) The Charterers warrant that any bunker suppliers used by them to bunker the Vessel shall comply with the provisions of Sub-clause (c)(ii) above.

(iv) Bunkers of different grades, specifications and/or suppliers shall be segregated into separate tanks within the Vessel’s natural segregation. The Owners shall not be held liable for any restriction in bunker capacity as a result of segregating bunkers as aforementioned.

(d) Bunker Quality and Liability

(i) The Charterers shall supply bunkers of the agreed specifications and grades: The bunkers shall be of a stable and homogeneous nature and suitable for burning in the Vessel’s engines and/or auxiliaries and, unless otherwise agreed in writing, shall comply with the International Organization for Standardization (ISO) standard 8217:2012 or any subsequent amendments thereof. If ISO 8217:2012 is not available then the Charterers shall supply bunkers which comply with the latest ISO 8217 standard available at the port or place of bunkering.

(ii) The Charterers shall be liable for any loss or damage to the Owners or the Vessel caused by the supply of unsuitable fuels and/or fuels which do not comply with the specifications and/or grades set out in Sub-clause (d)(i) above, including the off-loading of unsuitable fuels and the supply of fresh fuels to the Vessel. The Owners shall not be held liable for any reduction in the Vessel’s speed performance and/or increased bunker consumption nor for any time lost and any other consequences arising as a result of such supply.

(e) Fuel Testing Program

Should the Owners participate in a recognized fuel testing program one of the samples retained by the Owners shall be forwarded for such testing. The cost of same shall be borne by the Owners and if the results of the testing show the fuel not to be in compliance with ISO 8217:2012, or any subsequent amendment thereof, or such other specification as may be agreed, the Owners shall notify the Charterers and provide a copy of the report as soon as reasonably possible.

In the event the Charterers call into question the results of the testing, a fuel sample drawn in accordance with IMO Resolution MEPC.96(47) Guidelines for the Sampling of Fuel Oil for Determination of Compliance


with Annex VI of MARPOL 73/78 or any subsequent amendments thereof, shall be sent to a mutually agreed, qualified and independent laboratory whose analysis as regards the characteristics of the fuel shall be final and binding on the parties concerning the characteristics tested for. If the fuel sample is found not to be in compliance with the specification as agreed in the paragraph above, the Charterers shall meet the cost of this analysis, otherwise same shall be for the Owners’ account.

(f) Bunker Fuel Sulphur Content

(i) Without prejudice to anything else contained in this Charter Party, the Charterers shall supply fuels of such specifications and grades to permit the Vessel, at all times, to comply with the maximum sulphur content requirements of any emission control area when the Vessel is ordered to trade within that area.

The Charterers also warrant that any bunker suppliers, bunker craft operators and bunker surveyors used by the Charterers to supply such bunkers shall comply with Regulations 14 and 18 of MARPOL Annex VI, including the Guidelines in respect of sampling and the provision of bunker delivery notes.

The Charterers shall indemnify, defend and hold harmless the Owners in respect of any loss, liability, delay, fines, costs or expenses arising or resulting from the Charterers' failure to comply with this Sub-clause (f)(i).

(ii) Provided always that the Charterers have fulfilled their obligations in respect of the supply of fuels in accordance with Sub-clause (f)(i), the Owners warrant that:

1. the Vessel shall comply with Regulations 14 and 18 of MARPOL Annex VI and with the requirements of any emission control area; and

2. the Vessel shall be able to consume fuels of the required sulphur content,

when ordered by the Charterers to trade within any such area.

Subject to having supplied the Vessel with fuels in accordance with Sub-clause (f)(i), the Charterers shall not otherwise bear any loss, liability, delay, fines, costs or expenses arising or resulting from the Vessel’s failure to comply with Regulations 14 and 18 of MARPOL Annex VI.

(iii) For the purpose of this Clause, "emission control area" shall mean an area as stipulated in MARPOL Annex VI and/or an area regulated by regional and/or national authorities such as, but not limited to, the European Union (EU) and the United States (US) Environmental Protection Agency.

(g) Grades and Quantities of Bunkers on Redelivery

Unless agreed otherwise, the Vessel shall be redelivered with the same grades and about the same quantities of bunkers as on delivery; however, the grades and quantities of bunkers on redelivery shall always be appropriate and sufficient to allow the Vessel to reach safely the nearest port at which fuels of the required types are available.

10. Rate of Hire; Hold Cleaning; Communications; Victualing and Expenses

(a) The Charterers shall pay for the use and hire of the said Vessel at the rate of . per day or pro rata for any part of a day, commencing on and from the time of her delivery, as aforesaid, including the overtime of crew; hire to continue until the time of her redelivery to the Owners as per Clause 4 (Redelivery) (unless Vessel lost).

Unless otherwise mutually agreed, the Charterers shall have the option to redeliver the Vessel with unclean/unswept holds against a lumpsum payment of in lieu of hold cleaning, to the Owners (unless Vessel lost).


The Owners shall victual pilots and such other persons as authorized by the Charterers or their agents. While on-hire, the Charterers shall pay the Owners along with the hire payments, per thirty (30) days or pro rata, to cover all Communications, Victualing and Expenses properly incurred by the Vessel under the Charterers’ employment.

For the purpose of hire calculations, the times of delivery, redelivery or termination of this Charter Party shall be adjusted to Coordinated Universal Time (UTC).

(b) Hold Cleaning/Residue Disposal

(i) The Charterers may request the Owners to direct the crew to sweep and/or wash and/or clean the holds between voyages and/or between cargoes against payment at the rate of per hold, provided the crew is able safely to undertake such work and is allowed to do so by local regulations. In connection with any such operation the Owners shall not be responsible if the Vessel's holds are not accepted or passed. Time for cleaning shall be for the Charterers’ account.

(ii) Unless this Charter Party is concluded for a single laden leg, all cleaning agents and additives (including chemicals and detergents) required for cleaning cargo holds shall be supplied and paid for by the Charterers. The Charterers shall provide the Owners with a dated and signed statement identifying cleaning agents and additives that, in accordance with IMO Resolution 219(63) Guidelines for the Implementation of MARPOL Annex V, are not substances harmful to the marine environment and do not contain any component known to be carcinogenic, mutagenic or reprotoxic.

(iii) Throughout the currency of this Charter Party and at redelivery, the Charterers shall remain responsible for all costs and time, including deviation, if any, associated with the removal and disposal of cargo related residues and/or hold washing water and/or cleaning agents and detergents and/or waste. Removal and disposal as aforesaid shall always be in accordance with and as defined by MARPOL Annex V, or other applicable rules.

11. Hire Payment

(a) Payment

Payment of Hire shall be made without deductions due to Charterers’ bank charges so as to be received by the Owners or their designated payee into the bank account as follows in the currency stated in Clause 10 (Rate of Hire; Hold Cleaning; Communications; Victualing and Expenses), in funds available to the Owners on the due date, fifteen (15) days in advance, and for the last fifteen (15) days or part of same the approximate amount of hire, and should the same not cover the actual time, hire shall be paid for the balance day by day as it becomes due, if so required by the Owners. The first payment of hire shall be due on delivery.

(b) Grace Period

Where there is failure to make punctual payment of hire due, the Charterers shall be given by the Owners three (3) Banking Days (as recognized at the agreed place of payment and the place of currency of the Charter Party) written notice to rectify the failure, and when so rectified within those three (3) Banking Days following the Owners’ notice, the payment shall stand as punctual.

(c) Withdrawal

Failure by the Charterers to pay hire due in full within three (3) Banking Days of their receiving a notice from Owners under Sub-clause 11(b) above shall entitle the Owners, without prejudice to any other rights or claims the Owners may have against the Charterers:

(i) to withdraw the Vessel from the service of the Charterers;


(ii) to damages, if they withdraw the Vessel, for the loss of the remainder of the Charter Party.

(d) Suspension

At any time while hire is outstanding, the Owners shall, without prejudice to the liberty to withdraw, be entitled to withhold the performance of any and all obligations hereunder and shall have no responsibility whatsoever for any consequences thereof, and Charterers hereby indemnify the Owners for all legitimate and justifiable actions taken to secure their interests, and hire shall continue to accrue and any extra expenses resulting from such withholding shall be for the Charterers’ account.

(e) Last Hire Payment

Should the Vessel be on her voyage towards port/place of redelivery at the time the last payment(s) of hire is/are due, said payment(s) is/are to be made for such length of time as the estimated time necessary to complete the voyage, including the deduction of estimated disbursements for the Owners’ account before redelivery. Should said payments not cover the actual time, hire is to be paid for the balance, day by day, as it becomes due.

Unless Sub-clause 9(a)(ii) or (iii) has been agreed, the Charterers shall have the right to deduct the value of bunkers on redelivery from last sufficient hire payment(s).

When the Vessel has been redelivered, any difference in hire and bunkers is to be refunded by the Owners or paid by the Charterers within five (5) Banking Days, as the case may be.

(f) Cash Advances

Cash for the Vessel’s ordinary disbursements at any port may be advanced by the Charterers, as required by the Owners, subject to two and a half (2.5) per cent commission and such advances shall be deducted from the hire. The Charterers, however, shall in no way be responsible for the application of such advances.

12. Speed and Consumption

(a) Upon delivery and throughout the duration of this Charter Party the Vessel shall be capable of speed and daily consumption rates as stated in Appendix A in good weather on all sea passages with wind up to and including Force four (4) as per the Beaufort Scale and sea state up to and including Sea State three (3) as per the Douglas Sea Scale (unless otherwise specified in Appendix A). Any period during which the Vessel’s speed is deliberately reduced to comply with the Charterers’ orders/requirements (unless slow steaming or eco speed warranties have been given in Appendix A) or for reasons of safety or while navigating within narrow or restricted waters or when assisting a vessel in distress or when saving or attempting to save life or property at sea, shall be excluded from performance calculations.

(b) The Charterers shall have the option of using their preferred weather routing service. The Master shall comply with the reporting procedure of the Charterers’ weather routing service and shall follow routing recommendations from that service provided that the safety of the Vessel and/or cargo is not compromised.

(c) The actual route taken by the Vessel shall be used as the basis of any calculation of the Vessel's performance.

(d) If the speed of the Vessel is reduced and/or fuel oil consumption increased, the Charterers may submit to the Owners a documented claim limited to the estimated time lost and/or the additional fuel consumed, supported by a performance analysis from the weather routing service established in accordance with this Clause. The cost of any time lost shall be off-set against the cost of any fuel saved and vice versa.

(e) In the event that the Owners contest such claim then the Owners shall provide copies of the Vessel's deck logs for the period concerned and the matter shall be referred to an independent expert or alternative weather service selected by mutual agreement, whose report shall take Vessel’s log data and the Charterers’


weather service data into consideration and whose determination shall be final and binding on the parties. The cost of such expert report shall be shared equally.

13. Spaces Available

(a) The whole reach of the Vessel’s holds, decks, and other cargo spaces (not more than she can reasonably and safely stow and carry), also accommodation for supercargo, if carried, shall be at the Charterers’ disposal, reserving only proper and sufficient space for the Vessel’s Master, officers, ratings, tackle, apparel, furniture, provisions, stores and bunkers.

(b) In the event of deck cargo being carried, the Owners are to be and are hereby indemnified by the Charterers for any loss and/or damage and/or liability of whatsoever nature howsoever caused to the deck cargo which would not have arisen had the deck cargo not been loaded. Bills of Lading shall be issued as per Clause 31(c).

14. Supercargo

The Charterers are entitled to appoint a supercargo, who shall accompany the Vessel at the Charterers’ risk and see that voyages are performed with due despatch. He is to be furnished with free accommodation and meals same as provided for the Master’s table. The Charterers and the supercargo are required to sign the standard letter of waiver and indemnity recommended by the Vessel’s Protection and Indemnity Association before the supercargo comes on board the Vessel.

15. Sailing Orders and Logs

The Charterers shall furnish the Master from time to time with all requisite instructions and sailing directions, in writing, in the English language, and the Master shall keep full and correct deck and engine logs of the voyage or voyages, which are to be patent to the Charterers or their agents, and shall furnish the Charterers, their agents or supercargo, when required, with a true copy of such deck and engine logs, showing the course of the Vessel, distance run and the consumption of bunkers. Any log extracts required by the Charterers shall be in the English language.

16. Cargo Exclusions

The Vessel shall be employed in carrying lawful merchandise, excluding any goods of a dangerous, injurious, flammable or corrosive nature unless carried in accordance with the requirements or recommendations of the competent authorities of the country of the Vessel’s registry, and of ports of loading and discharge, and of any intermediate countries or ports through whose waters the Vessel must pass. Without prejudice to the generality of the foregoing in addition the following are specifically excluded: livestock of any description, arms, ammunition, explosives, nuclear and radioactive material, .

17. Off-Hire

In the event of loss of time from deficiency and/or default and/or strike of officers or ratings, or deficiency of stores, fire, breakdown of, or damage to hull, machinery or equipment, grounding, detention by the arrest of the Vessel, (unless such arrest is caused by events for which the Charterers, their sub-charterers, servants, agents or sub-contractors are responsible), or detention by Port State control or other competent authority for Vessel deficiencies, or detention by average accidents to the Vessel or cargo, unless resulting from inherent vice, quality or defect of the cargo, drydocking for the purpose of examination, cleaning and/or painting of underwater parts and/or repair, or by any other similar cause preventing the full working of the Vessel, the payment of hire and overtime, if any, shall cease for the time thereby lost. Should the Vessel deviate or put back during a voyage, contrary to the orders or directions of the Charterers, for any reason other than accident to the cargo or where permitted in Clause 22 (Liberties) hereunder, the hire to be suspended from the time of her deviating or putting back until she is again in the same or equidistant position from the destination and the voyage resumed therefrom. All bunkers used by the Vessel while off-hire shall be for the Owners’ account. In the event of the Vessel being driven into port or to anchorage through stress


of weather, trading to shallow harbors or to rivers or ports with bars, any detention of the Vessel and/or expenses resulting from such detention shall be for the Charterers’ account. If upon the voyage the speed be reduced by defect in, or breakdown of, any part of her hull, machinery or equipment, the time so lost, and the cost of any extra bunkers consumed in consequence thereof, and all extra proven expenses may be deducted from the hire. Bunkers used by the Vessel while off-hire and the cost of replacing same shall be for the Owners’ account and therefore deducted from the hire.

18. Pollution

The Owners shall provide for standard oil pollution coverage equal to the level customarily offered by the International Group of P&I Clubs, together with the appropriate certificates to that effect. (See also Clause 6 (Owners to Provide)).

19. Drydocking

The Vessel was last drydocked .

Except in case of emergency or under Clause 52(b), no drydocking shall take place during the currency of this Charter Party.

20. Total Loss

Should the Vessel be lost, money paid in advance and not earned (reckoning from the date of loss or being last heard of) shall be returned to the Charterers at once.

21. Exceptions

The act of God, enemies, fire, restraint of princes, rulers and people, and all dangers and accidents of the seas, rivers, machinery, boilers and navigation, and errors of navigation throughout this Charter Party, always mutually excepted.

22. Liberties

The Vessel shall have the liberty to sail with or without pilots, to tow and be towed, to assist vessels in distress, and to deviate for the purpose of saving life and property.

23. Liens

The Owners shall have a lien upon all cargoes, sub-hires and sub-freights (including deadfreight and demurrage) belonging or due to the Charterers or any sub-charterers, for any amounts due under this Charter Party, including general average contributions, and the Charterers shall have a lien on the Vessel for all monies paid in advance and not earned, and any overpaid hire or excess deposit to be returned at once.

The Charterers will not directly or indirectly suffer, nor permit to be continued, any lien or encumbrance, which might have priority over the title and interest of the Owners in the Vessel. The Charterers undertake that during the period of this Charter Party, they will not procure any supplies or necessaries or services, including any port expenses and bunkers, on the credit of the Owners.

24. Salvage

All derelicts and salvage shall be for the Owners’ and the Charterers’ equal benefit after deducting the Owners’ and the Charterers’ expenses and crew’s proportion.


25. General Average

General average shall be adjusted according to York-Antwerp Rules 1994 and settled in US dollars in the same place as stipulated in Clause 54 (Law and Arbitration). The Charterers shall procure that all bills of lading issued during the currency of this Charter Party will contain a provision to the effect that general average shall be adjusted according to York-Antwerp Rules 1994 and will include the “New Jason Clause” as per Clause 33(c). Time charter hire will not contribute to general average.

26. Navigation

Nothing herein stated is to be construed as a demise of the Vessel to the Charterers. The Owners shall remain responsible for the navigation of the Vessel, acts of pilots and tug boats, insurance, crew, and all other matters, same as when trading for their own account.

27. Cargo Claims

Cargo claims as between the Owners and the Charterers shall be settled in accordance with the Inter-Club NYPE Agreement 1996 (as amended 1 September 2011), or any subsequent modification or replacement thereof.

28. Cargo Handling Gear and Lights

The Owners shall maintain the cargo handling gear of the Vessel providing lifting capacity as described in Appendix A (Vessel Description). The Owners shall also provide on the Vessel for night work lights as on board, but all additional lights over those on board shall be at the Charterers’ expense. The Charterers shall have the use of any cargo handling gear on board the Vessel. If required by the Charterers, the Vessel shall work night and day and all cargo handling gear shall be at the Charterers’ disposal during loading and discharging. In the event of disabled cargo handling gear, or insufficient power to operate the same, the Vessel is to be considered to be off-hire to the extent that time is actually lost to the Charterers and the Owners to pay stevedore stand-by charges occasioned thereby, unless such disablement or insufficiency of power is caused by the Charterers’ stevedores. If required by the Charterers, the Owners shall bear the cost of hiring shore gear in lieu thereof, in which case the Vessel shall remain on-hire, except for actual time lost.

29. Solid Bulk Cargoes/Dangerous Goods

(a) The Charterers shall provide appropriate information on the cargo in advance of loading in accordance with the requirements of the IMO International Maritime Solid Bulk Cargoes (IMSBC) Code to enable the precautions which may be necessary for proper stowage and safe carriage to be put into effect. The information shall be accompanied by a cargo declaration summarising the main details and stating that the cargo is fully and accurately described and that, where applicable, the test results and other specifications can be considered as representative for the cargo to be loaded.

(b) If a cargo listed in the IMO International Maritime Dangerous Goods (IMDG) Code (website: www.imo.org) is agreed to be carried, the Charterers shall provide a dangerous goods transport document and, where applicable, a container/vehicle packing certificate in accordance with the IMDG Code requirements. The dangerous goods transport document shall include a certificate or declaration that the goods are fully and accurately described by the Proper Shipping Name, are classified, packaged, marked and labelled/placarded correctly and are in all respects in proper condition for transport according to applicable international and national government regulations.

(c) The Master shall be entitled to refuse cargoes or, if already loaded, to unload them at the Charterers’ risk and expense if the Charterers fail to fulfil their IMSBC Code or IMDG Code obligations as applicable.


30. BIMCO Hull Fouling Clause for Time Charter Parties

(a) If, in accordance with the Charterers’ orders, the Vessel remains at or shifts within a place, anchorage and/or berth for an aggregated period exceeding:

(i) a period as the parties may agree in writing in a Tropical Zone or Seasonal Tropical Zone*; or

(ii) a period as the parties may agree in writing outside such Zones*

any warranties concerning speed and consumption shall be suspended pending inspection of the Vessel’s underwater parts including, but not limited to, the hull, sea chests, rudder and propeller.

*If no such periods are agreed the default periods shall be 15 days.

(b) In accordance with Sub-clause (a), either party may call for inspection which shall be arranged jointly by the Owners and the Charterers and undertaken at the Charterers’ risk, cost, expense and time.

(c) If, as a result of the inspection either party calls for cleaning of any of the underwater parts, such cleaning shall be undertaken by the Charterers at their risk, cost, expense and time in consultation with the Owners.

(i) Cleaning shall always be under the supervision of the Master and, in respect of the underwater hull coating, in accordance with the paint manufacturers’ recommended guidelines on cleaning, if any. Such cleaning shall be carried out without damage to the Vessel’s underwater parts or coating.

(ii) If, at the port or place of inspection, cleaning as required under this Sub-clause (c) is not permitted or possible, or if the Charterers choose to postpone cleaning, speed and consumption warranties shall remain suspended until such cleaning has been completed.

(iii) If, despite the availability of suitable facilities and equipment, the Owners nevertheless refuse to permit cleaning, the speed and consumption warranties shall be reinstated from the time of such refusal.

(d) Cleaning in accordance with this Clause shall always be carried out prior to redelivery. If, nevertheless, the Charterers are prevented from carrying out such cleaning, the parties shall, prior to but latest on redelivery, agree a lump sum payment in full and final settlement of the Owners’ costs and expenses arising as a result of or in connection with the need for cleaning pursuant to this Clause.

(e) If the time limits set out in Sub-clause (a) have been exceeded but the Charterers thereafter demonstrate that the Vessel’s performance remains within the limits of this Charter Party the vessel’s speed and consumption warranties will be subsequently reinstated and the Charterers’ obligations in respect of inspection and/or cleaning shall no longer be applicable.

31. Bills of Lading (a) The Master shall sign bills of lading or waybills for cargo as presented in conformity with mates’ receipts.

However, the Charterers or their agents may sign bills of lading or waybills on behalf of the Master, with the Owners’/Master’s prior written authority, always in conformity with mates’ receipts.

(b) All bills of lading or waybills shall be without prejudice to this Charter Party and the Charterers shall indemnify the Owners against all consequences or liabilities which may arise from any inconsistency between this Charter Party and any bills of lading or waybills signed by the Charterers or their agents or by the Master at their request.

(c) Bills of lading covering deck cargo shall be claused: “Shipped on deck at the Charterers’, Shippers’ and Receivers’ risk, expense and responsibility, without liability on the part of the Vessel or her Owners for any loss, damage, expense or delay howsoever caused.”


32. BIMCO Electronic Bills of Lading Clause

(a) At the Charterers’ option, bills of lading, waybills and delivery orders referred to in this Charter Party shall be issued, signed and transmitted in electronic form with the same effect as their paper equivalent.

(b) For the purpose of Sub-clause (a) the Owners shall subscribe to and use Electronic (Paperless) Trading Systems as directed by the Charterers, provided such systems are approved by the International Group of P&I Clubs. Any fees incurred in subscribing to or for using such systems shall be for the Charterers’ account.

(c) The Charterers agree to hold the Owners harmless in respect of any additional liability arising from the use of the systems referred to in Sub-clause (b), to the extent that such liability does not arise from Owners’ negligence.

33. Protective Clauses

The following protective clauses shall be deemed to form part of this Charter Party and all Bills of Lading or waybills issued under this Charter Party shall contain the following clauses.

(a) General Clause Paramount

This bill of lading shall have effect subject to the provisions of the Carriage of Goods by Sea Act of the United States, the Hague Rules, or the Hague Visby Rules, as applicable, or such other similar national legislation as may mandatorily apply by virtue of origin or destination of the bill of lading, (or if no such enactments are mandatorily applicable, the terms of the Hague Rules shall apply) which shall be deemed to be incorporated herein, and nothing herein contained shall be deemed a surrender by the carrier of any of its rights or immunities or an increase of any of its responsibilities or liabilities under said Act. If any term of this bill of lading be repugnant to said Act to any extent, such term shall be void to that extent, but no further.

And

(b) Both-to-Blame Collision Clause

“If the ship comes into collision with another ship as a result of the negligence of the other ship and any act, neglect or default of the master, mariner, pilot or the servants of the carrier in the navigation or in the management of the ship, the owners of the goods carried hereunder will indemnify the carrier against all loss or liability to the other or non-carrying ship or her owners insofar as such loss or liability represents loss of, or damage to, or any claim whatsoever of the owners of said goods, paid or payable by the other or non- carrying ship or her owners to the owners of said goods and set-off, recouped or recovered by the other or non-carrying ship or her owners as part of their claim against the carrying ship or carrier.

The foregoing provisions shall also apply where the owners, operators or those in charge of any ships or objects other than, or in addition to, the colliding ships or objects are at fault in respect to a collision or contact.”

And

(c) New Jason Clause

“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 consequences 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 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.”

34. BIMCO War Risks Clause CONWARTIME 2013

(a) For the purpose of this Clause, the words:

(i) “Owners” shall include the shipowners, bareboat charterers, disponent owners, managers or other operators who are charged with the management of the Vessel, and the Master; and

(ii) “War Risks” shall include any actual, threatened or reported:

war, act of war, civil war or hostilities; revolution; rebellion; civil commotion; warlike operations; laying of mines; acts of piracy and/or violent robbery and/or capture/seizure (hereinafter “Piracy”); acts of terrorists; acts of hostility or malicious damage; blockades (whether imposed against all vessels or imposed selectively against vessels of certain flags or ownership, or against certain cargoes or crews or otherwise howsoever), by any person, body, terrorist or political group, or the government of any state or territory whether recognized or not, which, in the reasonable judgement of the Master and/or the Owners, may be dangerous or may become dangerous to the Vessel, cargo, crew or other persons on board the Vessel.

(b) The Vessel shall not be obliged to proceed or required to continue to or through, any port, place, area or zone, or any waterway or canal (hereinafter “Area”), where it appears that the Vessel, cargo, crew or other persons on board the Vessel, in the reasonable judgement of the Master and/or the Owners, may be exposed to War Risks whether such risk existed at the time of entering into this Charter Party or occurred thereafter. Should the Vessel be within any such place as aforesaid, which only becomes dangerous, or may become dangerous, after entry into it, the Vessel shall be at liberty to leave it.

(c) The Vessel shall not be required to load contraband cargo, or to pass through any blockade as set out in Sub- clause (a), or to proceed to an Area where it may be subject to search and/or confiscation by a belligerent.

(d) If the Vessel proceeds to or through an Area exposed to War Risks, the Charterers shall reimburse to the Owners any additional premiums required by the Owners' insurers and the costs of any additional insurances that the Owners reasonably require in connection with War Risks.

(e) All payments arising under Sub-clause (d) shall be settled within fifteen (15) days of receipt of Owners’ supported invoices or on redelivery, whichever occurs first.

(f) If the Owners become liable under the terms of employment to pay to the crew any bonus or additional wages in respect of sailing into an Area which is dangerous in the manner defined by the said terms, then the actual bonus or additional wages paid shall be reimbursed to the Owners by the Charterers at the same time as the next payment of hire is due, or upon redelivery, whichever occurs first.

(g) The Vessel shall have liberty:

(i) to comply with all orders, directions, recommendations or advice as to departure, arrival, routes, sailing in convoy, ports of call, stoppages, destinations, discharge of cargo, delivery, or in any other way whatsoever, which are given by the government of the nation under whose flag the Vessel sails, or other government to whose laws the Owners are subject, or any other government of any state or territory whether recognized or not, body or group whatsoever acting with the power to compel compliance with their orders or directions;

(ii) to comply with the requirements of the Owners’ insurers under the terms of the Vessel’s insurance(s);


(iii) to comply with the terms of any resolution of the Security Council of the United Nations, the effective orders of any other Supranational body which has the right to issue and give the same, and with national laws aimed at enforcing the same to which the Owners are subject, and to obey the orders and directions of those who are charged with their enforcement;

(iv) to discharge at any alternative port any cargo or part thereof which may expose the Vessel to being held liable as a contraband carrier;

(v) to call at any alternative port to change the crew or any part thereof or other persons on board the Vessel when there is reason to believe that they may be subject to internment, imprisonment, detention or similar measures.

(h) If in accordance with their rights under the foregoing provisions of this Clause, the Owners shall refuse to proceed to the loading or discharging ports, or any one or more of them, they shall immediately inform the Charterers. No cargo shall be discharged at any alternative port without first giving the Charterers notice of the Owners’ intention to do so and requesting them to nominate a safe port for such discharge. Failing such nomination by the Charterers within forty-eight (48) hours of the receipt of such notice and request, the Owners may discharge the cargo at any safe port of their own choice. All costs, risk and expenses for the alternative discharge shall be for the Charterers’ account.

(i) The Charterers shall indemnify the Owners for claims arising out of the Vessel proceeding in accordance with any of the provisions of Sub-clauses (b) to (h) which are made under any bills of lading, waybills or other documents evidencing contracts of carriage.

(j) When acting in accordance with any of the provisions of Sub-clauses (b) to (h) of this Clause anything is done or not done, such shall not be deemed a deviation, but shall be considered as due fulfilment of this Charter Party.

35. Ice

The Vessel shall not be obliged to force ice but, subject to the Owners’ prior approval having due regard to its size, construction and class, may follow ice-breakers. The Vessel shall not be required to enter or remain in any icebound port or area, nor any port or area where lights or lightships have been or are about to be withdrawn by reason of ice, nor where there is risk that in the ordinary course of things the Vessel will not be able on account of ice to safely enter and remain in the port or area or to get out after having completed loading or discharging.

36. Requisition

Should the Vessel be requisitioned by the government of the Vessel’s flag or other government to whose laws the Owners are subject during the period of this Charter Party, the Vessel shall be deemed to be off-hire during the period of such requisition, and any hire paid by the said government in respect of such requisition period shall be retained by Owners. The period during which the Vessel is on requisition to the said government shall count as part of the period provided for in this Charter Party.

If the period of requisition exceeds ninety (90) days, either party shall have the option of cancelling this Charter Party and no consequential claim in respect thereof may be made by either party.

37. Stevedore Damage

Notwithstanding anything contained herein to the contrary, the Charterers shall pay for any and all damage to the Vessel caused by stevedores provided the Master has notified the Charterers and/or their agents in writing within twenty-four (24) hours of the occurrence but in case of hidden damage latest when the damage


could have been discovered by the exercise of due diligence. Such notice to describe the damage and to invite Charterers to appoint a surveyor to assess the extent of such damage.

(a) In case of any and all damage affecting the Vessel’s seaworthiness and/or the safety of the crew and/or affecting the trading capabilities of the Vessel, the Charterers shall immediately arrange for repairs of such damage at their expense and the Vessel is to remain on-hire until such repairs are completed and if required passed by the Vessel’s classification society.

(b) Any and all damage not described under Sub-clause (a) above shall be repaired, at the Charterers’ option, before or after redelivery concurrently with the Owners’ work. In such case no hire and/or expenses will be paid to the Owners except and insofar as the time and/or expenses required for the repairs for which the Charterers are responsible, exceed the time and/or expenses necessary to carry out the Owners’ work.

38. Slow Steaming

(a) The Charterers may at their discretion provide, in writing to the Master, instructions to reduce speed or Revolutions Per Minute (main engine RPM) and/or instructions to adjust the Vessel’s speed to meet a specified time of arrival at a particular destination.

(i) * Slow Steaming – Where the Charterers give instructions to the Master to adjust the speed or RPM, the Master shall, subject always to the Master’s obligations in respect of the safety of the Vessel, crew and cargo and the protection of the marine environment, comply with such written instructions, provided that the engine(s) continue(s) to operate above the cut-out point of the Vessel's engine(s) auxiliary blower(s) and that such instructions will not result in the Vessel’s engine(s) and/or equipment operating outside the manufacturers’/designers’ recommendations as published from time to time.

(ii) * Ultra-Slow Steaming – Where the Charterers give instructions to the Master to adjust the speed or RPM, regardless of whether this results in the engine(s) operating above or below the cut-out point of the Vessel's engine(s) auxiliary blower(s), the Master shall, subject always to the Master’s obligations in respect of the safety of the Vessel, crew and cargo and the protection of the marine environment, comply with such written instructions, provided that such instructions will not result in the Vessel’s engine(s) and/or equipment operating outside the manufacturers’/designers’ recommendations as published from time to time. If the manufacturers’/designers’ recommendations issued subsequent to the date of this Charter Party require additional physical modifications to the engine or related equipment or require the purchase of additional spares or equipment, the Master shall not be obliged to comply with these instructions.

*Sub-clauses (a)(i) and (a)(ii) are alternatives; delete whichever is not applicable. In the absence of deletions, alternative (a)(i) shall apply.

(b) At all speeds the Owners shall exercise due diligence to ensure that the Vessel is operated in a manner which minimises fuel consumption, always taking into account and subject to the following:

(i) the Owners’ warranties under this Charter Party relating to the Vessel’s speed and consumption;

(ii) the Charterers’ instructions as to the Vessel’s speed and/or RPM and/or specified time of arrival at a particular destination;

(iii) the safety of the Vessel, crew and cargo and the protection of the marine environment; and

(iv) the Owners’ obligations under any bills of lading, waybills or other documents evidencing contracts of carriage issued by them or on their behalf.

(c) For the purposes of Sub-clause (b), the Owners shall exercise due diligence to minimise fuel consumption:

(i) when planning voyages, adjusting the Vessel’s trim and operating main engine(s) and auxiliary engine(s);


(ii) by making optimal use of the Vessel’s navigation equipment and any additional aids provided by the Charterers, such as weather routing, voyage optimization and performance monitoring systems; and

(iii) by directing the Master to report any data that the Charterers may reasonably request to further improve the energy efficiency of the Vessel.

(d) The Owners and the Charterers shall share any findings and best practices that they may have identified on potential improvements to the Vessel’s energy efficiency.

(e) For the avoidance of doubt, where the Vessel proceeds at a reduced speed or with reduced RPM pursuant to Sub-clause (a), then provided that the Master has exercised due diligence to comply with such instructions, this shall constitute compliance with, and there shall be no breach of, any obligation requiring the Vessel to proceed with utmost and/or due despatch (or any other such similar/equivalent expression).

(f) The Charterers shall procure that this Clause be incorporated into all sub-charters and contracts of carriage issued pursuant to this Charter Party. The Charterers shall indemnify the Owners against all consequences and liabilities that may arise from bills of lading, waybills or other documents evidencing contracts of carriage being issued as presented to the extent that the terms of such bills of lading, waybills or other documents evidencing contracts of carriage impose or result in breach of the Owners’ obligation to proceed with due despatch or are to be held to be a deviation or the imposition of more onerous liabilities upon the Owners than those assumed by the Owners pursuant to this Clause.

39. BIMCO Piracy Clause for Time Charter Parties 2013

(a) The Vessel shall not be obliged to proceed or required to continue to or through, any port, place, area or zone, or any waterway or canal (hereinafter “Area”) which, in the reasonable judgement of the Master and/or the Owners, is dangerous to the Vessel, her cargo, crew or other persons on board the Vessel due to any actual, threatened or reported acts of piracy and/or violent robbery and/or capture/seizure (hereinafter “Piracy”), whether such risk existed at the time of entering into this Charter Party or occurred thereafter. Should the Vessel be within any such place as aforesaid which only becomes dangerous, or may become dangerous, after her entry into it, she shall be at liberty to leave it.

(b) If in accordance with Sub-clause (a) the Owners decide that the Vessel shall not proceed or continue to or through the Area they must immediately inform the Charterers. The Charterers shall be obliged to issue alternative voyage orders and shall indemnify the Owners for any claims from holders of the Bills of Lading caused by waiting for such orders and/or the performance of an alternative voyage. Any time lost as a result of complying with such orders shall not be considered off-hire.

(c) If the Owners consent or if the Vessel proceeds to or through an Area exposed to the risk of Piracy the Owners shall have the liberty:

(i) to take reasonable preventative measures to protect the Vessel, crew and cargo including but not limited to re-routeing within the Area, proceeding in convoy, using escorts, avoiding day or night navigation, adjusting speed or course, or engaging security personnel and/or deploying equipment on or about the Vessel (including embarkation/disembarkation);

(ii) to comply with underwriters’ requirements under the terms of the Vessel’s insurance(s);

(iii) to comply with all orders, directions, recommendations or advice given by the Government of the Nation under whose flag the Vessel sails, or other Government to whose laws the Owners are subject, or any other Government, body or group (including military authorities) whatsoever acting with the power to compel compliance with their orders or directions; and


(iv) to comply with the terms of any resolution of the Security Council of the United Nations, the effective orders of any other Supranational body which has the right to issue and give the same, and with national laws aimed at enforcing the same to which the Owners are subject, and to obey the orders and directions of those who are charged with their enforcement;

and the Charterers shall indemnify the Owners for any claims from holders of Bills of Lading or third parties caused by the Vessel proceeding as aforesaid, save to the extent that such claims are covered by additional insurance as provided in Sub-clause (d)(iii).

(d) Costs

(i) if the Vessel proceeds to or through an Area where due to risk of Piracy additional costs will be incurred including but not limited to additional personnel and preventative measures to avoid Piracy, such reasonable costs shall be for the Charterers’ account. Any time lost waiting for convoys, following recommended routeing, timing, or reducing speed or taking measures to minimise risk, shall be for the Charterers’ account and the Vessel shall remain on hire;

(ii) if the Owners become liable under the terms of employment to pay to the crew any bonus or additional wages in respect of sailing into an area which is dangerous in the manner defined by the said terms, then the actual bonus or additional wages paid shall be reimbursed to the Owners by the Charterers;

(iii) if the Vessel proceeds to or through an Area exposed to the risk of Piracy, the Charterers shall reimburse to the Owners any additional premiums required by the Owners' insurers and the costs of any additional insurances that the Owners reasonably require in connection with Piracy risks which may include but not be limited to War Loss of Hire and/or maritime Kidnap and Ransom (K&R); and

(iv) all payments arising under Sub-clause (d) shall be settled within fifteen (15) days of receipt of the Owners’ supported invoices or on redelivery, whichever occurs first.

(e) If the Vessel is attacked by pirates any time lost shall be for the account of the Charterers and the Vessel shall remain on hire.

(f) If the Vessel is seized by pirates the Owners shall keep the Charterers closely informed of the efforts made to have the Vessel released. The Vessel shall remain on hire throughout the seizure and the Charterers’ obligations shall remain unaffected, except that hire payments shall cease as of the ninety-first (91st) day after the seizure until release. The Charterers shall pay hire, or if the Vessel has been redelivered, the equivalent of Charter Party hire, for any time lost in making good any damage and deterioration resulting from the seizure. The Charterers shall not be liable for late redelivery under this Charter Party resulting from the seizure of the Vessel.

(g) If in compliance with this Clause anything is done or not done, such shall not be deemed a deviation, but shall be considered as due fulfilment of this Charter Party. In the event of a conflict between the provisions of this Clause and any implied or express provision of the Charter Party, this Clause shall prevail.

40. Taxes

Charterers are to pay all local, State, National taxes and/or dues assessed on the Vessel or the Owners resulting from the Charterers’ orders herein, whether assessed during or after the currency of this Charter Party including any taxes and/or dues on cargo and/or freights and/or sub-freights and/or hire (excluding taxes levied by the country of the flag of the Vessel or the Owners). In the event the Owners/Vessel/her flag state are exempt from any taxes, the Owners shall seek such exemption and filing costs for such exemption, if any, shall be for the Charterers’ account and no charge for such taxes shall be assessed to the Charterers.


41. Industrial Action

In the event of the Vessel being delayed or rendered inoperative by strikes, labor stoppages or boycotts or any other difficulties arising from the Vessel’s ownership, crew or terms of employment of the crew of the chartered Vessel or any other vessel under the same ownership, operation and control, any time lost is to be considered off-hire. The Owners guarantee that on delivery the minimum terms and conditions of employment of the crew of the Vessel are in accordance with the International Labour Organization Maritime Labour Convention (MLC) 2006, and will remain so throughout the duration of this Charter Party.

42. Stowaways

(a) If stowaways have gained access to the Vessel by means of secreting away in the goods and/or containers or by any other means related to the cargo operation, this shall amount to breach of this Charter Party. The Charterers shall be liable for the consequences of such breach and hold the Owners harmless and keep them indemnified against all claims; costs (including but not limited to victualing costs for stowaways whilst on board and repatriation); losses; and fines or penalties, which may arise and be made against them. The Charterers shall, if required, place the Owners in funds to put up bail or other security. The Vessel shall remain on hire for any time lost as a result of such breach.

(b) Save for those stowaways referred to in Sub-clause (a), if stowaways have gained access to the Vessel this shall amount to a breach of this Charter Party. The Owners shall be liable for the consequences of such breach and hold the Charterers harmless and keep them indemnified against all claims; costs; losses; and fines or penalties, which may arise and be made against them. The Vessel shall be off-hire for any time lost as a result of such breach.

43. Smuggling

(a) In the event of smuggling by the Master, other Officers and/or ratings, this shall amount to a breach of this Charter Party. The Owners shall be liable for the consequences of such breach and hold the Charterers harmless and keep them indemnified against all claims, costs, losses, and fines and penalties which may arise and be made against them. The Vessel shall be off-hire for any time lost as a result of such breach.

(b) If unmanifested narcotic drugs and/or any other illegal substances are found secreted in the goods and/or containers or by any other means related to the cargo operation, this shall amount to a breach of this Charter Party. The Charterers shall be liable for the consequences of such breach and hold the Owners, Master, officers and ratings of the Vessel harmless and keep them indemnified against all claims, costs, losses, and fines and penalties which may arise and be made against them individually or jointly. The Charterers shall, if required, place the Owners in funds to put up bail or other security. The Vessel shall remain on hire for any time lost as a result of such breach.

44. International Safety Management (ISM)

During the duration of this Charter Party, the Owners shall procure that both the Vessel and “the Company” (as defined by the ISM Code) shall comply with the requirements of the ISM Code. Upon request the Owners shall provide a copy of the relevant Document of Compliance (DOC) and Safety Management Certificate (SMC) to the Charterers. Except as otherwise provided in this Charter Party, loss, damage, expense or delay caused by failure on the part of the Owners or “the Company” to comply with the ISM Code shall be for the Owners’ account.

45. International Ship and Port Facility Security Code (ISPS Code)/Maritime Transportation Security Act (MTSA)

(a) (i) The Owners shall comply with the requirements of the ISPS and the relevant amendments to Chapter XI of

Safety of Life at Sea (SOLAS) (ISPS Code) relating to the Vessel and “the Company” (as defined by the ISPS


Code). If trading to or from the US or passing through US waters, the Owners shall also comply with the requirements of the MTSA relating to the Vessel and the “Owner” (as defined by the MTSA).

(ii) Upon request the Owners shall provide the Charterers with a copy of the relevant International Ship Security Certificate (ISSC) (or the interim ISSC) and the full style contact details of the Company Security Officer (CSO).

(iii) Loss, damages, expense or delay (excluding consequential loss, damages, expense or delay) caused by failure on the part of the Owners or “the Company”/“Owner” to comply with the requirements of the ISPS Code/MTSA or this Clause shall be for the Owners’ account, except as otherwise provided in this Charter Party.

(b) (i) The Charterers shall provide the Owners and the Master with their full style contact details and, upon request, any other information the Owners require to comply with the ISPS Code/MTSA. Where sub-letting is permitted under the terms of this Charter Party, the Charterers shall ensure that the contact details of all sub-charterers are likewise provided to the Owners and the Master. Furthermore, the Charterers shall ensure that all sub-charter parties they enter into during the period of this Charter Party contain the following provision:

“The Charterers shall provide the Owners with their full style contact details and, where sub-letting is permitted under the terms of the charter party, shall ensure that contact details of all sub-charterers are likewise provided to the Owners”.

(ii) Loss, damages, expense or delay (excluding consequential loss, damages, expense or delay) caused by failure on the part of the Charterers to comply with this Clause shall be for the Charterers’ account, except as otherwise provided in this Charter Party.

(c) Notwithstanding anything else contained in this Charter Party all delay, costs or expenses whatsoever arising out of or related to security regulations or measures required by the port facility or any relevant authority in accordance with the ISPS Code/MTSA including, but not limited to, security guards, launch services, vessel escorts, security fees or taxes and inspections, shall be for the Charterers’ account, unless such costs or expenses result solely from the negligence of the Owners, Master or crew or the previous trading of the Vessel, the nationality of the crew, crew visas, the Vessel’s flag or the identity of the Owners’ managers. All measures required by the Owners to comply with the Ship Security Plan shall be for the Owners’ account.

(d) If either party makes any payment which is for the other party’s account according to this Clause, the other party shall indemnify the paying party.

46. Sanctions

(a) The Owners shall not be obliged to comply with any orders for the employment of the Vessel in any carriage, trade or on a voyage which, in the reasonable judgement of the Owners, will expose the Vessel, Owners, managers, crew, the Vessel’s insurers, or their re-insurers, to any sanction or prohibition imposed by any State, Supranational or International Governmental Organization.

(b) If the Vessel is already performing an employment to which such sanction or prohibition is subsequently applied, the Owners shall have the right to refuse to proceed with the employment and the Charterers shall be obliged to issue alternative voyage orders within forty-eight (48) hours of receipt of the Owners’ notification of their refusal to proceed. If the Charterers do not issue such alternative voyage orders the Owners may discharge any cargo already loaded at any safe port (including the port of loading). The Vessel to remain on hire pending completion of the Charterers’ alternative voyage orders or delivery of cargo by the Owners and the Charterers to remain responsible for all additional costs and expenses incurred in connection with such orders/delivery of cargo. If in compliance with this Sub-clause (b) anything is done or not done, such shall not be deemed a deviation.


(c) The Charterers shall indemnify the Owners against any and all claims whatsoever brought by the owners of the cargo and/or the holders of Bills of Lading and/or sub-charterers against the Owners by reason of the Owners’ compliance with such alternative voyage orders or delivery of the cargo in accordance with Sub- clause (b).

(d) The Charterers shall procure that this Clause shall be incorporated into all sub-charters issued pursuant to this Charter Party.

47. BIMCO Designated Entities Clause for Charter Parties

(a) The provisions of this clause shall apply in relation to any sanction, prohibition or restriction imposed on any specified persons, entities or bodies including the designation of specified vessels or fleets under United Nations Resolutions or trade or economic sanctions, laws or regulations of the European Union or the United States of America.

(b) The Owners and the Charterers respectively warrant for themselves (and in the case of any sublet, the Charterers further warrant in respect of any sub-charterers, shippers, receivers, or cargo interests) that at the date of this fixture and throughout the duration of this Charter Party they are not subject to any of the sanctions, prohibitions, restrictions or designation referred to in Sub-clause (a) which prohibit or render unlawful any performance under this Charter Party or any sublet or any Bills of Lading. The Owners further warrant that the nominated vessel, or any substitute, is not a designated vessel.

(c) If at any time during the performance of this Charter Party either party becomes aware that the other party is in breach of warranty as aforesaid, the party not in breach shall comply with the laws and regulations of any Government to which that party or the Vessel is subject, and follow any orders or directions which may be given by any body acting with powers to compel compliance, including where applicable the Owners’ flag State. In the absence of any such orders, directions, laws or regulations, the party not in breach may, in its option, terminate the Charter Party forthwith or, if cargo is on board, direct the Vessel to any safe port of that party’s choice and there discharge the cargo or part thereof.

(d) If, in compliance with the provisions of this Clause, anything is done or is not done, such shall not be deemed a deviation but shall be considered due fulfilment of this Charter Party.

(e) Notwithstanding anything in this Clause to the contrary, the Owners or the Charterers shall not be required to do anything which constitutes a violation of the laws and regulations of any State to which either of them is subject.

(f) The Owners or the Charterers shall be liable to indemnify the other party against any and all claims, losses, damage, costs and fines whatsoever suffered by the other party resulting from any breach of warranty as aforesaid.

(g) The Charterers shall procure that this Clause is incorporated into all sub-charters, contracts of carriage and Bills of Lading issued pursuant to this Charter Party.

48. BIMCO North American Advance Cargo Notification Clause for Time Charter Parties

(a) If the Vessel loads or carries cargo destined for the US or Canada or passing through US or Canadian ports in transit, the Charterers shall comply with the current US Customs regulations (19 CFR 4.7) or the Canada Border Services Agency regulations (Memorandum D3-5-2) or any subsequent amendments thereto and shall undertake the role of carrier for the purposes of such regulations and shall, in their own name, time and expense:

(i) have in place a Standard Carrier Alpha Code (SCAC)/Canadian Customs Carrier Code;


(ii) for US trade, have in place an International Carrier Bond (ICB);

(iii) provide the Owners with a timely confirmation of (i) and (ii) above as appropriate; and

(iv) submit a cargo declaration by Automated Manifest System (AMS) to the US Customs or by ACI Automated Commercial Information (ACI) to the Canadian customs, and provide the Owners at the same time with a copy thereof.

(b) The Charterers assume liability for and shall indemnify, defend and hold harmless the Owners against any loss and/or damage whatsoever (including consequential loss and/or damage) and/or any expenses, fines, penalties and all other claims of whatsoever nature, including but not limited to legal costs, arising from the Charterers’ failure to comply with any of the provisions of Sub-clause (a). Should such failure result in any delay then, notwithstanding any provision in this Charter Party to the contrary, the Vessel shall remain on hire.

(c) If the Charterers' ICB is used to meet any penalties, duties, taxes or other charges which are solely the responsibility of the Owners, the Owners shall promptly reimburse the Charterers for those amounts.

(d) The assumption of the role of carrier by the Charterers pursuant to this Clause and for the purpose of the US Customs Regulations (19 CFR 4.7) shall be without prejudice to the identity of carrier under any bill of lading, other contract, law or regulation.

49. BIMCO U.S. Census Bureau Mandatory Automated Export System (AES) Clause for Time Charter Parties

(a) If the Vessel loads cargo in any US port or place, the Charterers shall comply with the current US Census Bureau Regulations (15 CFR 30) or any subsequent amendments thereto and shall undertake the role of carrier for the purposes of such regulations and shall, in their own name, time and expense:

(i) have in place a SCAC (Standard Carrier Alpha Code);

(ii) have in place an ICB (International Carrier Bond);

(iii) provide the Owners with a timely confirmation of (i) and (ii) above; and

(iv) submit an export ocean manifest by Automated Export System (AES) to the US Census Bureau and provide the Owners at the same time with a copy thereof.

(b) The Charterers assume liability for and shall indemnify, defend and hold harmless the Owners against any loss and/or damage whatsoever (including consequential loss and/or damage) and/or any expenses, fines, penalties and all other claims of whatsoever nature, including but not limited to legal costs, arising from the Charterers’ failure to comply with any of the provisions of Sub-clause (a). Should such failure result in any delay then, notwithstanding any provision in this Charter Party to the contrary, the Vessel shall remain on hire.

(c) If the Charterers' ICB is used to meet any penalties, duties, taxes or other charges which are solely the responsibility of the Owners, the Owners shall promptly reimburse the Charterers for those amounts.

(d) The assumption of the role of carrier by the Charterers pursuant to this Clause and for the purpose of the US Census Bureau Regulations (15 CFR 30) shall be without prejudice to the identity of carrier under any bill of lading, other contract, law or regulation.


50. BIMCO EU Advance Cargo Declaration Clause for Time Charter Parties 2012

(a) If the Vessel loads cargo in any EU port or place destined for a port or place outside the EU (“Exported”) or loads cargo outside the EU destined for an EU port or place or passing through EU ports or places in transit (“Imported”), the Charterers shall, for the purposes of this Clause, comply with the requirements of the EU Advance Cargo Declaration Regulations (the Security Amendment to the Community Customs Code, Regulations 648/2005; 1875/2006; and 312/2009) or any subsequent amendments thereto and shall, in their own name, and in their time and at their expense:

(i) have in place an Economic Operator Registration and Identification (EORI) number;

(ii) provide the Owners with a timely confirmation of (i) above as appropriate; and

(iii) where the cargo is being:

1. Exported: Submit, or arrange for the submission of, a customs declaration for export or, if a customs declaration or a re-export notification is not required, an exit summary declaration; or

2. Imported: Submit, or arrange for the submission of, an entry summary declaration.

Unless otherwise permitted by the relevant customs authorities, such declarations shall be submitted to them electronically.

(b) The Charterers assume liability for and shall indemnify, defend and hold harmless the Owners against any loss and/or damage and/or any expenses, fines, penalties and all other claims of whatsoever nature, including but not limited to legal costs, arising from the Charterers’ failure to comply with any of the provisions of Sub- clause (a). Should such failure result in any delay then, notwithstanding any provision in this Charter Party to the contrary, the Vessel shall remain on hire.

51. Ballast Water Exchange Regulations If ballast water exchanges are required by any coastal state where the vessel is trading, the Owners/Master shall comply with same at the Charterers’ time, risk, and expense.

52. Period Applicable Clauses

If the minimum period of this Charter Party exceeds five (5) months, the following Sub-clauses shall apply:

(a) Should the Vessel at the expiry of the described employment period be on a ballast voyage to the place of redelivery or on a laden voyage, reasonably expected to be completed within the employment period when commenced, the Charterers shall have the use of the Vessel on the same conditions and at the same rate or the prevailing market rate, whichever is higher, for any extended time as may be necessary for the completion of the last voyage of the Vessel to the place of redelivery.

(b) Drydocking

The Owners shall have the option to place the Vessel in drydock during the currency of this Charter Party at a convenient time and place, to be mutually agreed upon between the Owners and the Charterers, for bottom cleaning and painting and/or repair as required by class or dictated by circumstances. (See also Clause 19 (Drydocking)).

(c) Off-hire

The Charterers to have the option of adding any time the Vessel is off-hire to the Charter period. Such option shall be declared in writing not less than one (1) month before the expected date of redelivery, or latest one (1) week after the event if such event occurs less than one (1) month before the expected date of redelivery.


(d) Charterers’ Colors

The Charterers shall have the privilege of flying their own house flag and painting the Vessel with their own markings. The Vessel shall be repainted in the Owners’ colors before termination of the Charter Party. Cost and time of painting, maintaining and repainting those changes effected by the Charterers shall be for the Charterers’ account.

53. Commissions

A commission of per cent is payable by the Vessel and the Owners to on hire earned and paid under this Charter Party, and also upon any continuation or extension of this Charter Party.

An address commission of per cent on the hire earned shall be deducted by the Charterers on payment of the hire earned under this Charter Party.

54. Law and Arbitration

(a) * New York. This Charter Party shall be governed by United States maritime law. Any dispute arising out of or in connection with this Charter Party shall be referred to three persons at New York, one to be appointed by each of the parties hereto, and the third by the two so chosen. The award of the arbitrators or any two of them shall be final, and for the purposes of enforcing any award, judgment may be entered on an award by any court of competent jurisdiction. The proceedings shall be conducted in accordance with the rules of the Society of Maritime Arbitrators, Inc. (SMA) current at the time this Charter Party was entered into.

In cases where neither the claim nor any counter claim exceeds the sum of US$ 100,000 (or such other sum as the parties may agree), the arbitration shall be conducted before a sole arbitrator in accordance with the Shortened Arbitration Procedure of the SMA current at the time this Charter Party was entered into. (www.smany.org).

(b) * London. This Charter Party shall be governed by and construed in accordance with English law and any dispute arising out of or in connection with this Charter Party shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this Clause.

The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration proceedings are commenced.

The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint its own arbitrator within fourteen (14) calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice that it has done so within the fourteen (14) days specified. If the other party does not appoint its own arbitrator and give notice that it has done so within the fourteen (14) days specified, the party referring a dispute to arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on both parties as if he had been appointed by agreement.

Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.

In cases where neither the claim nor any counterclaim exceeds the sum of US$ 100,000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced. (www.lmaa.org.uk)


(c) * Singapore. This Charter Party shall be governed by and construed in accordance with Singapore**/English** law.

Any dispute arising out of or in connection with this Charter Party, including any question regarding its existence, validity or termination shall be referred to and finally resolved by arbitration in Singapore in accordance with the Singapore International Arbitration Act (Chapter 143A) and any statutory modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this Clause.

The arbitration shall be conducted in accordance with the Arbitration Rules of the Singapore Chamber of Maritime Arbitration (SCMA) current at the time when the arbitration proceedings are commenced.

The reference to arbitration of disputes under this clause shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint its own arbitrator and give notice that it has done so within fourteen (14) calendar days of that notice and stating that it will appoint its own arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice that it has done so within the fourteen (14) days specified. If the other party does not give notice that it has done so within the fourteen (14) days specified, the party referring a dispute to arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on both parties as if he had been appointed by agreement.

Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.

In cases where neither the claim nor any counterclaim exceeds the sum of US$ 150,000 (or such other sum as the parties may agree) the arbitration shall be conducted before a single arbitrator in accordance with the SCMA Small Claims Procedure current at the time when the arbitration proceedings are commenced. (www.scma.org.sg)

(d) * This Charter Party shall be governed by and construed in accordance with the laws of the place mutually agreed by the parties and any dispute arising out of or in connection with this Charter Party shall be referred to arbitration at a mutually agreed place, subject to the procedures applicable there.

*Sub-clauses (a), (b), (c) and (d) are alternatives; indicate alternative agreed. If alternative (d) agreed also state the place of arbitration. If no alternative agreed and clearly indicated then Sub-clause (a) shall apply by default.

**Singapore and English law are alternatives; if Sub-clause (c) agreed also indicate choice of Singapore or English law. If neither or both are indicated, then English law shall apply by default.

55. Notices

All notices, requests and other communications required or permitted by any clause of this Charter Party shall be given in writing and shall be sufficiently given or transmitted if delivered by hand, email, express courier service or registered mail and addressed if to the Owners, to or such other address or email address as the Owners may hereafter designate in writing, and if to the Charterers to or such other address or email address as the Charterers may hereafter designate in writing. Any such communication shall be deemed to have been given on the date of actual receipt by the party to which it is addressed.

56. Headings

The headings in this Charter Party are for identification only and shall not be deemed to be part hereof or be taken into consideration in the interpretation or construction of this Charter Party.


57. Singular/Plural

The singular includes the plural and vice-versa as the context admits or requires.

Clauses to , both inclusive, as attached hereto are fully incorporated in this Charter Party.

OWNERS: CHARTERERS:

Name: Title:

Name: Title:


NYPE 2015 APPENDIX A (VESSEL DESCRIPTION)

GENERAL INFORMATION

1.1 Vessel’s name

1.2 Type of vessel

1.3 IMO number

1.4 Year of build

1.5 Name of shipyard/where built /

1.6 Flag

1.7 Port of Registry

1.8 Classification Society

1.9 Protection & Indemnity Club – full name

1.10 Hull & Machinery insured value

1.11 Date and place of last drydock

1.12 Vessel’s Call Sign

1.13 Vessel’s INMARSAT number(s)

1.14 Vessel’s fax number

1.15 Vessel’s email address

LOADLINE INFORMATION

2.1 Loadline Deadweight Draft TPC

Winter

Summer

Tropical

Fresh Water

Tropical Fresh Water

2.2 Constant Excluding Fresh Water

2.3 Freshwater Capacity

TONNAGES

3.1 Gross Tonnage (GT)

3.2 Net Tonnage (NT)

3.3 Panama Canal Net Tonnage (PCNT)

3.4 Suez Canal Tonnage Gross (SCGT) Net (SCNT)

3.5 Lightweight

DIMENSIONS

4.1 Number of holds

4.2 Hold dimensions 1. 2. 3.

4. 5. 6.

7. 8. 9.

4.3 Height of holds

4.4 Number of hatches

4.5 Manufacturer and type of hatch covers

4.6 Hatch dimensions 1. 2. 3.

4. 5. 6.


7. 8. 9.

4.7 Is vessel strengthened for the carriage of heavy cargoes?

4.8 If yes, state which holds may be left empty

4.9 Main deck strength

4.10 Tanktop strength

4.11 Strength of hatch covers

4.12 Cubic grain capacity, by hold 1. 2. 3.

4. 5. 6. 7. 8. 9.

4.13 Cubic bale capacity, by hold 1. 2. 3.

4. 5. 6.

7. 8. 9.

4.14 Length overall

4.15 Length between perpendiculars

4.16 Extreme breadth (beam)

4.17 Keel to Masthead (KTM)

4.18 Distance from waterline to top of hatch coamings or hatch covers if side rolling hatches

No. 1 hatch Midships Last hatch

Ballast condition (ballast holds not flooded, basis 50% bunkers)

Full ballast condition (ballast holds flooded, basis 50% bunkers)

Light condition (basis 50% bunkers)

Fully laden condition

4.19 Vessel’s temporary ballast hold(s)

4.20 Vessel’s ballasting time/rate of ballasting

4.21 Vessel’s de-ballasting time/rate of de- ballasting

4.22 If geared state manufacturer and type

4.23 Number & location of cranes

4.24 If vessel has power outlets for grabs – state number and power

4.25 Maximum outreach of cranes beyond ship’s rail

4.26 Are winches electro-hydraulic?

4.27 If vessel has grabs on board, state:

Type

Number/Capacity

4.28 Are holds CO2 fitted?

4.29 Are holds vessel fitted with Australian type approved hold ladders?

4.30 Is vessel fitted for carriage of grain in accordance with Chapter VI of SOLAS 1974 and amendments without requiring bagging, trapping and securing when loading a full cargo (deadweight) of heavy


grain in bulk (stowage factor 42 cubic feet) with ends untrimmed?

4.31 Is vessel logs fitted?

4.32 If yes, state number, type and height of stanchions on board and which stanchions are collapsible. Also state number and type of sockets on board

BUNKERS, SPEED AND CONSUMPTION

5.1 What type/viscosity of fuel is used for main propulsion?

5.2 Capacity of main engine bunker tanks (excluding unpumpables)

5.3 Number of bunker tanks

5.4 What type/viscosity of fuel is used in the generating plant

Capacity of auxiliary (aux.) engine(s) bunker tanks (excluding unpumpables)

Speed on sea passage Knots ballast

Knots laden

On tons (main)

On tons (aux.)

Consumption in Port Tons (main) Tons (aux.) Working

Idle

CREW

6.1 Number of Officers

6.2 Number of Ratings

6.3 Name and nationality of Master

6.4 Nationality of Officers

6.5 Nationality of Ratings

CERTIFICATE EXPIRY DATES

7.1 P&I

7.2 H&M

7.3 Class

7.4 Gear

7.5 Document of Compliance (DOC)

7.6 Safety Management Certificate (SMC)

7.7 International Ship Security Certificate

the nype 2015 time charter party

Documents