Fill Barecon , download blank or editable online. Sign, fax and printable from PC, iPad, tablet or mobile with PDFfiller ✓ Instantly ✓ No software. Try Now!. BIMCO has recently published its new BARECON following a review of its predecessor, BARECON This revision represents a significant update to. Barecon Standard Bareboat Charter Part I filed by Horizon Lines on June 2nd,
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BIMCO introduced the first standard bareboat charter party 20001 the market in The result of the revision was an amalgamation of the two forms into a single document code named BARECON 89, containing separate alternative provisions to apply to new-buildings only. In the thirteen years that BARECON barrecon has been available, it has established itself as the industry’s standard bareboat charter form, enjoying widespread use throughout the world. With this enviable record for clarity very much in mind, BIMCO decided in to undertake a modernisation of BARECON 89 to ensure that the provisions of this popular standard document kept pace with commercial practice.
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Initially, the Sub-committee assigned to the task of reviewing and revising BARECON 89 sought only to add clarity to some of the more cumbersomely worded provisions of the form and to replace the standard BIMCO clauses with their latest published versions.
Closer examination of the form, however, led the Sub-committee to consider a more wide-ranging revision. It is hoped that the revised form, code named BARECON will provide users with an even more comprehensive bareboat charter that benefits from barecpn clarity and conciseness in its provisions.
A copy of the form is reprinted at the end of this article. Part II of the form contains the main terms barexon conditions of the Charter of which it should be noted that not all apply to new-building vessels. Parts III, IV and V are optional parts to be applied as appropriate to the nature of the specific agreement and cover new-building vessels, hire-purchase agreements and vessels registered in a bareboat charter registry.
The following Explanatory Notes are designed to provide some background information on the clauses of the various parts of the Charter and a general overview of the amendments made 20011 this revision. The definition of owners and charterers has been simplified to remove the description of each entity. The narrow definition of “owners” used in BARECON 89 did not barecob all types of owner and, as no suitable single definition could be found, it was agreed that the best solution would be simply to refer to the contents of the appropriate box in Part I.
It has also been assumed that bareboat chartering is now a sufficiently commonly practised contract form and that a distinction between it and voyage and time chartering is no longer required. Thus, the definition of “charterers” merely refers to the appropriate box in Part I. The Definitions Clause also introduces 2001 new definitions: The latter term has been created to avoid any potential ambiguity and to assist in simplifying the text of the “Mortgage” and “Insurance and Repairs” provisions.
In some jurisdictions, such as Panama and Liberia, covenants relating to the vessel are incorporated into the mortgage document. Consequently, a wide definition of “Financial Instrument” has been used. Although Clauses 3 Time for Delivery and 14 Redelivery of BARECON 89 together provided information about the charter period, it was felt that a logical and useful addition to the Charter would be a specific new clause stating the period. Clause 2 Charter Period has been introduced to perform this function.
It should be noted that the order of the two paragraphs in sub-clause 3 a has been reversed.
This has been done to clarify that the owners’ due diligence obligation applies to both the first and the second sentence. In the second sentence of sub-clause 3 athe charterers are now required to direct the owners to deliver the vessel to a prescribed ready “safe” berth. The delivery provisions of BARECON have been expanded to incorporate a requirement that the vessel be properly documented on delivery sub-clause 3 b. Documentation needs to comply with the requirements of the flag State and the classification society.
The provision also requires that the vessel’s survey cycles are up to date and that trading and class certificates are valid for an agreed number of months following delivery. This provision has been inserted to avoid a situation where the vessel is delivered in accordance with the Charter, but where certificates have insufficient time before expiry to allow the charterers to obtain renewals.
The Sub-committee agreed that the existing wording presented the best solution to this problem, but has reduced the time limit for the manifestation of such defects from 18 months to 12 months although the parties are still free to negotiate another period if they so choose. It should be noted that the 12 months period in the Delivery Clause of Part II is now consistent with the time period applying to latent defects in the new-building provisions of Part III sub-clause 1 d.
The Sub-committee has recognised that the charterers are exposed to a small but potential risk in the event the vessel sustains damage not affecting seaworthiness but nevertheless affecting class immediately prior to delivery. In such an event, under the present wording the charterers would be unable to reject the vessel and could be left to effect and pay for potentially expensive repairs to the vessel in order to maintain class requirements during the charter period. Strictly speaking, the charterers should not be liable for repairs to the vessel being delivered in a condition other than that agreed, although such damage could not be considered a latent defect.
In such circumstances the charterers should seek to negotiate an amenable settlement with the owners in respect of damage that has occurred between inspection and delivery. This Clause contains the usual provisions relating to the date before which the vessel cannot be delivered, but now also incorporates an obligation for the owners to exercise due diligence to deliver the vessel no later than the cancelling date.
The Cancelling Clause now incorporates a time limit of 36 running hours following the cancelling date during which the charterers must decide whether or not to exercise their option to cancel the vessel if it arrives late.
If the charterers fail to make a decision within that time, then they lose the right to cancel the Charter. The 36 running hours period is designed to deter the charterers from prevaricating unduly over the vessel and potentially preventing the owners from securing suitable alternative employment at the earliest opportunity. However, the provision in no way detracts from the owners’ obligation under Clause 4 Time for Delivery to exercise due diligence to deliver the vessel by the cancelling date, failing which the charterers’ right to cancel the Charter accrues automatically.
It should be noted that the Cancelling Clause has been spilt into three sub-clauses in order to emphasise that the interpellation provisions of Sub-clause 5 b can be invoked multiple times.
Sub-clause 5 aas discussed above, deals with the charterers’ option to cancel if the vessel arrives after the cancelling date. Firstly, the owners are no longer obliged to exercise the interpellation provision but are free to avail themselves of the option if they so choose. Secondly, the charterers’ reply time to the owners’ request regarding cancelling has been redefined as “running” hours as it was recognised that a long public holiday could substantially extend the time period.
Thirdly, an alternative notice period of 36 running hours beyond the original cancelling date has been inserted. This is designed to take care bafecon situations where the owners have given notice of an expected delay close to the agreed cancelling date and avoids the owners having to wait up to one week before being advised by the charterers whether or not they wish to cancel.
The purpose of sub-clause 5 c is simply to barecin clear that the exercise of the cancellation provisions does not prejudice any claims for damages the charterers might otherwise have on the owners. Although sub-clause 5 c may be unnecessary in many jurisdictions, it usefully clarifies for other jurisdictions that the charterers’ claims for damages survive cancellation. The title of this clause has been changed from “Trading Limits” to “Trading Restrictions” as it was felt that the original BARECON 89 title did not reflect the true scope of the clause as it covered matters other than geographical restrictions.
According to this Clause, the charterers undertake not to employ the vessel under terms that are not in conformity with varecon terms of the insurance without first obtaining the consent to such employment of the insurers.
There may also be situations where the owners’ prior consent should also be obtained when the charterers want to employ the vessel under terms which are not in compliance with the insurance policy, even though it may be the charterers who take out the insurance policy.
The term “instruments of insurance” previously found in the second paragraph has been changed to “contracts of insurance” in keeping with modern parlance. The requirement that the charterers should keep the owners and the mortgagees advised of the intended employment of the vessel has been deleted from the end of the second paragraph, as it was not felt to be appropriate to this specific clause. This provision has been moved to Clause 10 Maintenance and Operation as a new sub-clause c and now requires the charterers to report planned dry dockings and major repairs as well as the vessel’s intended employment.
This Clause deals with the usual on-hire survey and off-hire survey procedures and allocation of cost and time between the contracting parties. No provision is made in respect of dry-docking the vessel in relation to the on-hire or off-hire surveys as this is not considered normal practice in bareboat charters and should be left to the parties in each individual case to discuss and negotiate as appropriate.
This provision gives the owners the right to inspect or survey the vessel throughout the charter period. The Clause has been modified in the new version to require the owners to give the charterers “reasonable notice” of their intention to inspect or survey the vessel. The owners have the right to inspect the vessel for three express reasons that have been divided into three sub-clauses to properly allocate costs.
The first two reasons are taken from BARECON 89 and are 1 a survey to satisfy the owners that the vessel is being properly repaired and maintained and 2 a survey while the vessel is in dry dock if the charterers have not dry docked the vessel at the regular intervals agreed to in Clause 10 f. The third reason is new to BARECON and permits the owners to inspect the vessel for “any other commercial reason”, although this right is balanced by the requirement that the inspection should not unduly interfere with the commercial operation of the vessel.
This new provision has been introduced to permit, for instance, an inspection of the vessel pending a potential sale. It should be noted that consistent with the change made to the Trading Restrictions Clause, the final sentence of the Inspection Clause relating to the intended employment of the vessel has been removed and added to a new sub-clause 10 c.
To make it clear that under a bareboat charter time is never interrupted, a provision has been added to Clause 8 to state clearly that all time used in respect of inspections, surveys or repairs should form part of the contract period and therefore be for the charterers’ account. The word “consumable” has been removed from the heading of this Clause as “oil and stores” are considered by their nature to be “consumable”.
The reference to the vessel’s “outfit” has now been expanded to include “spare parts” and it has been made clear that such “spare parts” are not considered “consumable stores” within the meaning of the contract.
With respect to the items to be taken over and paid for at delivery and redelivery, the list has been revised to exclude “water” which the majority of vessels now produce themselves and “oils” as bunkers and lubricating oils are already included on the list.
A new final sentence requires the charterers to replace, at their expense, any spare parts listed in the inventory and used during the charter period, prior to redelivery. One of the most important consequences resulting from the bareboat chartering of a vessel is that during the entire period the vessel is in full possession and at the absolute disposal for all purposes of the charterers.
Consequently, the responsibility for maintenance and operation and all costs and expenses arising from these activities rests with the charterers. The Maintenance and Operation Clause has been restructured to provide, where appropriate, clear sub-heading titles to make the provision easier to read. Breach of the charterers’ obligation to maintain and repair may entitle the owners to withdraw the vessel if the charterers fail to effect repairs, etc. It should be noted that the obligation on the charterers to take immediate steps to have the necessary repairs done within a reasonable time, which appeared as the second paragraph of sub-clause 9 a in BARECON 89, has been removed from the Maintenance and Operation Clause.
It is felt that the precise timing of repairs is largely a matter for the charterers to decide in accordance with their planned maintenance schedule, provided such repairs do not compromise the vessel’s insurance cover.
The obligation to effect repairs within a reasonable time is provided for, in any event, by the phrase “in accordance with good commercial maintenance practice” found in sub-clause 10 a i. It is not the intention of this provision that the charterers should at all times keep the vessel classed without recommendations, provided that the recommendation’s expiry date does not pass without the charterers taking the necessary action to rectify the matter. The question of class is also dealt with in the Redelivery Clause Clause 15 in which the penultimate paragraph reads as follows:.
In order to minimise the risks of dispute it is clearly stressed that the charterers must redeliver the vessel with class fully maintained to the satisfaction of the classification society. As “fair wear and tear” could substantially affect class with all the expenses involved in this respect, it has been considered appropriate to cover this point by stipulating in Clause 15 “fair wear and tear not affecting class excepted”.
It is also in the context of class that the last paragraph of Clause 15 should be read, noting that BARECON also requires trading certificates to be valid for an agreed number of months following redelivery. The last paragraph of Clause 15 reads:.
Unforeseen important structural changes or requirements for new expensive safety equipment may arise under a long-term charter, especially due to the implementation of new International Conventions.
To place such a burden on the owners would be unfair unless the hire was to be renegotiated. On the other hand, such new requirements could also place a heavy burden on the charterers, for instance, in the case of compliance with the new requirements having to be made a short time before redelivery.
In order to solve this problem in a reasonable and equitable manner in the event of new important structural changes becoming necessary and costing more than an agreed percentage as per Box 23, or if left blank then 5 percent of the vessel’s marine insurance value, a door should be left open for the renegotiation of the Charter. Sub-clause 10 a ii provides for referral to the Dispute Resolution Clause of the Charter should the parties fail to reach an agreement.
It should be noted that sub-clause 10 a ii excludes the charterers’ loss of time arising from the implementation of new equipment from the sum calculated based on the agreed percentage of the vessel’s marine insurance value.
The word “expensive” has been removed from the reference to new equipment required for the continuing operation of the vessel, as the provision already adequately defines a threshold value for new equipment and the word “expensive” could, arguably, be used to qualify further that threshold. The scope of barrecon fourth paragraph of sub-clause 10 a of BARECON braecon has been extended to cover third party liabilities rather than specifically oil pollution damage.
Operation of the Vessel sub-clause 10 b. Under a bareboat charter, it is the charterers’ obligation not only to in all respects equip the vessel, but also to man her, pay the wages to the Master, officers and crew.
Thus, the charterers will normally have full freedom to choose and appoint personnel. However, the law of the country under whose flag the vessel sails, or any other applicable law, may be restrictive in this respect and it is important that such requirements be made known to the charterers.
Bimco Standard Bareboat Charter Code Name : “Barecon ” by Scorpio
For instance, many countries require the Master and chief officer to be nationals of the flag State and possess certificates from varecon own country. On the other hand, the country of the bareboat charterers may impose certain requirements with regard to nationality and certificates of officers, especially as far as the Master is concerned.
Whereas it is not possible to cover this subject in detail in a standard bareboat charter, the sub-clause at least serves to remind the parties of the problem and to try to implement some general provisions that take care of the matter in a reasonable manner, such as suggested in the last barecoj of sub-clause 10 b.
It should be noted that sub-clause 10 b expressly states that the charterers are responsible for annual flag State fees – this was not made sufficiently clear in BARECON In line with the provisions in Clause 10 under which the charterers bsrecon generally responsible for their servants, whether appointed by them or the owners, it also follows that full liability falls on the charterers as regards liability under bills of lading or other documents signed by the Master or officers whether appointed by the owners or the charterers.
It is in this context that the last paragraph of sub-clause 17 a Indemnity barecom be read. Sub-clause 10 c provides a requirement for the charterers baercon keep the owners and the mortgagees advised of the vessel’s intended employment, planned dry-docking and major repairs.