Standard Cruise Voyage Charter Party Code Name: "CRUISEVOY"
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Printed in BIMCO Bulletin No. 2, 1998)
The cruise industry has undergone a rapid and dramatic period of growth in the last two decades, starting in the United States and now spreading worldwide. With the standard of living increasing in many countries, more and more people have both the disposable income and the time to take two or more vacations a year. Many are choosing to replace the traditional package holiday with a cruise of similar duration. The average size of cruise ships on order is increasing, allowing the cruise operators to achieve economies of scale that permit greater variations in their programmes at rates which come within reach of ordinary people.
Against this background it was almost inevitable that BIMCO would be asked to develop a charter party for use in this growing cruise market. Two years ago BIMCO's Documentary Committee decided at the request of Owner members, to go ahead with this project. A sub-committee was established consisting of executives active in the cruising industry assisted by legal expertise from various jurisdictions including the USA where, after all, the major share of the cruising industry takes place.
The sub-committee started with a review of a large number of contracts used by the bigger cruise operators. At an early stage it was decided to concentrate initially on what can be regarded as a voyage charter; a long term time charter for cruise ships was considered to be of less urgency, although it may be developed at a later stage. These voyage or trip charters are of relatively short duration and are intended to cover the relationship between the owners of a cruise ship and, for instance, a tour operator, travel bureau or even a large corporation arranging a bonus cruise for its staff. It was recognised, however, that a direct comparison with normal voyage charters could not be made, due to the essential factor that passengers expect not only to be taken on a certain itinerary but also need to feel good about the cruise.
After a number of meetings, a first draft was presented for consideration to the Documentary Committee at its meeting in November 1996. This draft was then circulated to a number of trade organisations, individual operators and charterers for their appraisal. Having taken a number of their comments into account the revised document was finally adopted by the Documentary Committee at its meeting in November 1997.
In accordance with standard BIMCO practice the Charter Party is laid out in two parts. Part I is a box-layout and contains all the variable information, whilst Part II contains the standard terms and conditions. Part I together with 5 Annexes forms the actual Contract of Carriage and in the event of any conflict in conditions between the two parts the conditions of Part I and the Annexes will prevail.
The main idea behind this division is that it is made convenient for the users to do all the filling in, amendments and special provisions in Part I leaving the printed text of Part II unaltered. In this context it should be emphasised that a standard contract constitutes an integrated whole and that any changes to one or more of the clauses may upset the intended balance of the contract. This fact should never be lost sight of when attempting to introduce changes or amendments to the standard clauses in Part II which have been carefully drafted to take care of the contractual and legal aspects.
The following five Annexes are added to the Charter Party and, in order to leave the parties free to attach the information contained in these Annexes in their own format, it was decided not to prescribe the layout.
Annex 1 - sets out the Itinerary of the Cruise
Annex 2 - will be a layout of the Vessel showing public rooms and cabins with number of berths.
Annex 3 - deals with agreed catering arrangements
Annex 4 - will be a payment schedule and guarantee arrangements.
Annex 5 - a specimen of the Owners' Passage Ticket is to be attached.
All variable details pertaining to the particular voyage are to be entered in the boxes provided. Each box contains a short description of the intended contents and a cross-reference to the relevant clause or clauses in the printed body of Part II.
Although some of the boxes in Part I may call for special comments in these Notes, it has been considered more practical to make such comments when dealing with the relevant clauses in Part II.
Apart from the date of the Contract, the Preamble sets out the names of the parties to the contract, the Vessel's name, place and date of beginning and end of the cruise and reference to the Itinerary contained in Annex 1.
Clause 1 - Vessel's Class and Condition
In this clause the Owners warrant that they shall exercise due diligence to make timely delivery of the vessel in a seaworthy and clean condition, properly manned, equipped and supplied for the intended cruise. Furthermore that the vessel is fully classed with the named Classification Society and is in possession of the necessary certificates including a Passenger Certificate authorising the carriage of a specified number of passengers. The Charterer is thus assured that the vessel in all respects complies with safety requirements. The clause further provides that the Charterer will have the opportunity to inspect the vessel before accepting her.
Clause 2 - Vessel's Accommodation
This clause describes the areas of the vessel which are at the disposal of the Charterer. It refers to detailed lists of cabins and berths contained in Annex 2 which will usually be in the form of a vessel accommodation plan. Also available for Charterers use are the public rooms and those parts of the deck space normally allowed to passengers. Other spaces are out of bounds, except with approval of the Master, who may for instance wish to regulate the popular visits to bridge and engine-room spaces during the cruise.
With the increasing appeal of cruising, it is inevitable that people with handicaps or a medical condition will want to take part. Most cruise operators will try to accommodate such passengers but obviously this requires that they be informed beforehand of such cases. Based on the extent of the disability they can then either confirm or reject such bookings. Babies under 12 months old and women who are more than 7 months pregnant are usually not accepted.
Clause 3 - Owners' and Master's Authority
Perhaps unnecessarily, but to avoid any misunderstanding, the next clause spells out the unfettered authority of the Master to act in his discretion to ensure the safety and security of the vessel, the comfort and well-being of the passengers, as well as to comply with requirements of local and flag state law, to safeguard the environment and to maintain order on board. This entails that he also has the authority to refuse passage, or to remove during the cruise, persons who are or become unfit to travel, endanger themselves or the vessel or jeopardise the safety, health, or well-being of other persons on board.
Clause 4 - Embarkation of Passengers
This clause deals with various aspects in connection with the commencement of the cruise. It states that the Owners will us their best efforts to make the vessel available at the agreed embarkation port or place and at the agreed date and time. They will not be responsible if this is not possible due to circumstances beyond their control, including but not limited to war and force majeure situations. In case the vessel is delayed beyond an agreed number of hours, both parties shall have the right to cancel the contract in accordance with the pro-visions of Clause 22. The reason behind this is that cruise schedules are usually very tight. If there is a substantial delay in commencing the voyage it would throw off not only the timing of the cruise itself but also the subsequent employment of the vessel. Of course in practice the parties often agree to a change in itinerary rather than a complete cancellation but this will depend on circumstances and the extent of the delay.
The Charterers are responsible for all arrangements prior to boarding, including the timely arrival of passengers and their luggage at the port of embarkation. Although the time required for embarkation will of course vary according to local circumstances and the number of passengers it was felt that 6 hours represented a fair average and the clause states that the itinerary is based on this. In the event that passengers arrive late, it may be necessary to adjust the itinerary but in such case the Owners will be indemnified for any additional costs of such a change.
The clause also obliges Charterers to inform passengers that at embarkation they and their luggage may be subjected to security inspections which could involve a physical search.
Clause 5 - Hire
Hire is calculated on a minimum number of passengers and an additional amount is payable for every passenger in excess of that number. The clause further stipulates that no reduction will be given for a shortfall in the number of passengers.
Clause 6 - Other Charges
The hire is also based on a specified price for bunkers and as the Charter Party is usually signed long before commencement of the Cruise, provision is made for an additional payment in case bunker prices should increase by more than 10 percent.
This section also obligates Charterers to arrange for an agreed amount to cover gratuities for service employees such as stewards and restaurant staff. In many cases the passengers will be expected to pay gratuities directly, in which event this agreed amount would be nil. Finally there are terms for passenger related charges such as port taxes, government fees, etc. These so-called "other charges" are excluded from the calculation of broker commissions.
Clause 7 - Payment of Hire and Other Charges
The payment of hire is to be made in full, without deductions, set-offs or bank charges in a manner and at times to be agreed. Sub-clause (b) contains an anti-technicality provision allowing a grace period for rectification of a possible default in payment, before cancellation of the contract takes place. All details regarding payment schedules and security are referred to Annex 4.
Clause 8 - Charterers' Obligations
This clause and the clauses that follow up to and including Clause 16 deal in general with Charterers obligations and liabilities. They start with a general requirement to comply with all applicable laws, regulations and practices in relation to tour group travel and to inform passengers accordingly.
Clause 8 also requires Charterers to be covered for Charterers' liability risks with underwriters approved by the Owners. This balances the provisions of Clause 17 in respect of Owners P&I cover.
Clause 9 - Marketing and Publicity
This clause stipulates that Charterers are solely responsible for any advertising expenses in connection with the cruise and requires that any advertising copy give an accurate and truthful description of the vessel, the cruise and the catering. Furthermore, that any brochures issued by Charterers will not prejudice the Owners' rights and immunities nor increase their liabilities under the terms of the Passenger Ticket. All advertising and promotional materials must be submitted for Owners' approval before publication. Charterers may not permit the media or cameramen to board the vessel without the prior written permission of the Owners.
Clause 10 - Passenger Lists and Cabin Assignments
This clause provides that the Charterers are solely responsible for cabin allocation. Furthermore that passenger lists with pertinent information about passengers and Charterers' staff are to be submitted to Owners 30 days before departure. There-after additions may be made but only to the extent allowed by Authorities at the various ports of call. A complete list is to be submitted latest on the date of departure.
Clause 11 - Passage Tickets
It is important to note that the relationship between the Owners and the passengers is not regulated by the Charter Party but rather by the Owners' Passage Ticket which limits the Owners' liability to the extent of its terms and conditions. It is the intention that the contract which the Charterers conclude with the passengers is on terms not less favourable to the Owners than those of the Passage Ticket and consequently a specimen ticket will be attached to the Charter as Annex 5.
This clause further provides that the Owners will supply tickets to the Charterers for the passengers booked but Owners are not obliged to do so until all hire and other payments due to Owners have been paid. It is the Charterers' responsibility to deliver the tickets to the passengers. With a view to International Regulations such as the European Council Directive on Package Travel it is important that passengers be acquainted with the terms of the Passage Ticket latest at the time of booking their Cruise.
Charterers are free to determine the fares they will charge but provision is made to limit the geographical areas where they are entitled to market and sell tickets.
Clause 12 - Passengers' Travel and Health Documents
Clause 13 - Passengers' Luggage
Certain restrictions are placed on passengers' luggage whilst Charterers warrant that passengers under no circumstances will bring on board contraband or illegal substances such as narcotics.
Dangerous goods, firearms and live animals, are not allowed except with the express prior permission of the Owners.
Clause 14 - Shore Excursions
This clause reflects what is common practice in the cruise industry. The Owners will arrange excursions with local tour operators but only as agents for the Charterers. These excursions are at the sole risk and responsibility of the Charterers and the passengers, and are subject to the terms and conditions of the tickets issued by the local contractor. The Owners will collect the charges for these excursions but again only as an agent.
If something goes wrong the Owners will be liable to pay back only moneys which they have not yet passed on.
Clause 15 - Charterers' Representative and Staff
This clause requires the Charterers to appoint a contact person on board who will liaise with the Master and the crew and facilitate a successful cruise. For purposes of Owners' liability, Charterers' staff on board have the same status as the passengers and passage tickets will also be issued to them.
Clause 16 - Charterers' Liabilities
Sets out the Charterers' liability towards Owners both in respect of third party claims as well as for damages to the Vessel. It requires the Charterers to indemnify the Owners against any claims which arise, among others, out of events occurring off the Vessel or launches belonging to the Vessel, or which occur due to breach of the Charter Party including negligence or an illegal act by the Charterers, their staff, or the passengers. Examples of such illegal acts are smuggling, drug abuse, helping stowaways, possession of firearms, pollution of the sea and unlawful entry into another's cabin.
Clause 17 - Owners' Obligations
This clause deals with additional Owners' obligations, including payment for items which are covered by the hire such as port charges relating to the Vessel, canal dues, wages of the crew including the entertainment staff, luggage handling, running costs of the Vessel, the provision of food and service of meals in accordance with what has been agreed in Annex 3, the supply and regular changing of bed linen and towels, and providing entertainment according to a certain standard.
Not included in the hire, but which the Owners agree to provide against extra payment by the passengers are facilities such as on-board bars, beverages, hairdressing salons, shops, duty-free outlets, photographer and laundry service and perhaps a certain degree of medical attention.
In order to pay for such services as well as shore excursions, provision is made for passengers to open individual shipboard accounts, settlement of which must take place by the end of the cruise.
Finally the clause provides for a warranty by the Owners that they will be covered for P&I insurance with a member of the International Group of P&I Clubs.
Clause 18 - Alterations to Vessel's Itinerary
Under certain circumstances the Master may alter the itinerary of the vessel at his sole discretion if he feels that this is necessary for the safety and security of the Vessel or the comfort of the passengers. The Master may also alter the itinerary for the usual justified deviations such as: saving life or property at sea, providing or receiving medical assistance and for other circumstances beyond his control. If possible he will revise the schedule in consultation with his Owners and the Charterers. Charterers, however, are not entitled to an extension of the cruise.
Clause 19 - Salvage
This clause is self-explanatory.
Clause 20 -Loss of Vessel
Clause 21 - Vessel's Substitution
Clause 22 - Cancellation and Termination
This is one of the most important clauses in the Charter Party as it deals with the remedies in case of cancellation or termination of the cruise for various reasons. Distinction is made between cancellation before commencement of the cruise and premature termination thereafter. In the latter case a further distinction is made between events caused by simple negligence, lack of due diligence or force majeure as described in sub-clause (b) and those due to gross negligence or wilful breach. It was realised that the term "gross negligence" may not be clearly recognised in English law but in this case it was decided to follow the practice in other jurisdictions such as the US and Scandinavia.
Recognising that passenger cruises of one or two weeks' duration are frequently booked many months in advance, in order to preserve Owners' ability to sell the ship, Owners are given the right to cancel at any time by giving a certain period of notice. In such case all amounts previously paid will of course have to be refunded but, in addition, an agreed cancellation fee will have to be paid unless cancellation was due to circumstances beyond the Owners' control. This amount is intended to pacify any Charterers who understandably will be uncomfortable about the possibility of an Owner cancelling the Charter. In practice of course it is very unlikely that an Owner would invoke this provision.
Charterers too can cancel the cruise before its commencement and unless this cancellation is due to circumstances beyond the Charterers' control, the Owners may retain all sums they have received and are entitled to be paid whatever is then due.
If, after its commencement, the Cruise is prematurely terminated for any reason other than Charterers' gross negligence, reckless conduct or wilful breach (in which case they will forfeit the hire for the entire Cruise), Charterers are entitled to a refund of at least the amounts of prepaid hire for that part of the cruise not executed. If premature termination is due to Owners gross negligence, reckless conduct or wilful breach, Charterers are entitled to additional liquidated damages in the full amount of prepaid hire and charges.
Finally the clause provides that in case of premature termination the Owners will land the passengers and use their best endeavours to forward the passengers and their luggage to the port of embarkation or disembarkation. This will be at the passengers' own risk but at the Owners' expense. However if termination is due to an event for which Charterers are responsible they will indemnify the Owners for such expense.
Clause 23 - Assignment and Sub-chartering
This clause is self-explanatory.
Clause 24 - Limitation of Liabilities
This clause provides for limitation of Owners' liability in accordance with applicable regulations or statutes, without going so far as to enumerate these. However, they would include, inter alia, the 1957 Brussels Convention relating to Limitation of Liability for Seagoing Ships and the Athens Convention relating to the Carriage of Passengers and their Luggage. Similar protection is extended to the Master, crew, agents or independent contractors of the Owners.
Clause 25 - Force Majeure
Clause 26 - War Risks
BIMCO has developed a Standard War Risks clause for Charter Parties and an amended version of this clause is included in this Charter.
Clause 27 - Law and Arbitration
The BIMCO Standard Law and Arbitration Clause has been included which provides for a choice of arbitration either in London, New York or a place to agreed by parties.
Clause 28 - Notices
Clause 29 - Entire Agreement
This clause contains a number of technical provisions concerning the Contract.
Clause 30 - Brokerage
Copyright in CRUISEVOY is held by BIMCO.