Standard Coal and Ore Charter Party Code Name: "COAL-OREVOY"
Viewing requires Adobe Acrobat Reader(tm). If you do not have it installed on your computer, you may download it from here.
(Printed in BIMCO Bulletin No. 3, 2003)
The original OREVOY Standard Ore Charter Party was published in 1980 at the end of a decade that had witnessed a considerable growth in the international seaborne transportation of iron ore.
At that time around 300 million tons of iron ore were being shipped annually. Today, some twenty-three years later, the annual figure for iron ore is over 410 million tons - an increase of 36%. However, the growth in the transportation of iron ore by sea has in recent years been dwarfed by coal shipments of which over 482 million tons are shipped annually.
The majority of iron ore and coal cargoes nowadays are carried on dry bulk vessels of 100,000 dwt and over and many are employed to service the material needs of the world's steel producers. With a general trend towards greater consolidation in the steel sector over the past few years many companies have been examining ways of streamlining the documentary process for shipments.
OREVOY has been the predominant charter used in the ore trades since 1980. In 2000, BIMCO's Documentary Committee decided that OREVOY might benefit from a revision to bring it in line with current commercial practice and any recent changes in the law. The sub-committee assigned the task of revising OREVOY were also given the mandate to consider a possible broadening of the commodities covered by the OREVOY charter. As the primary end-users of the OREVOY charter are the steel mills, the sub-committee concluded that the ability to use the same charter for iron ore and coking coal shipments would add considerable value to the form and might expand the user base further.
The sub-committee appointed to revise and expand OREVOY was composed of experts from shipping companies involved in the iron ore and coal trades, as well as broker specialists. A representative of a leading P&I Club provided legal expertise.
Work on the revision of OREVOY began in March 2001 and was completed in November 2002, when a copy of the revised charter was presented for adoption to the BIMCO Documentary Committee. To reflect the broadening of the scope of application of the revised charter, the new version has been code named COAL-OREVOY, with the accompanying bill of lading code named COAL-OREVOYBILL. Copies of both documents are reproduced in this Bulletin after this article.
The COAL-OREVOY charter uses the well-known BIMCO Box Layout system with a separate Part I and Part II. Although the majority of BIMCO charter parties and contracts use this method and have done so for many years, it is worth repeating the reasoning behind the system. The main idea behind dividing the form into two parts is to have a charter party where the filling-in and all amendments and special provisions are made by the parties in Part I, leaving the printed text in Part II unaltered. This method has considerable merit in reducing the amount of documentation work where parties are considering repeat business, as only Part I of the charter needs to be amended. Part I also provides a useful recap of the concluded fixture.
All items to be agreed for the particular fixture are arranged in boxes in Part I. Each box contains a brief description of the particular item and a reference to the relevant clause in the printed body of Part II.
Additional clauses covering special provisions, if necessary and agreed for a particular fixture, may be added as a Rider to the charter and the clauses should be referred to in Box 32 of Part I.
Care should be taken when completing the boxes in Part I to ensure that the details entered are consistent with the requirements of the relevant provisions of Part II.
In comparing OREVOY with COAL-OREVOY it will be noted that Part I of the form now extends over two pages, although there is one less box to complete. This has been done because the boxes in the original OREVOY Part I were felt to be too cramped to allow the necessary details to be added when using a typewriter. COAL-OREVOY will be made available in an electronic format for users of BIMCO's idea (Internet Document Editing Application). This system allows users to fill in the boxes of Part I on the screen and record clearly any amendments to the provisions of Part II, as well as being able to add rider clauses. The completed electronic forms can then be e-mailed. More details of how to subscribe to BIMCO's idea can be found by visiting www.bimco.dk.
The following is a brief set of notes describing some of the thinking and underlying principles behind the standard provisions of Part II. The descriptions are given to provide assistance to owners, brokers and others interested in the practical use of this charter party.
Clause 1 - Vessel
Sub-clause 1(a)(i) is based on the requirements of the Hague/Hague-Visby Rules in respect of obliging the owners to exercise due diligence before and at the beginning of the voyage to make the vessel seaworthy. The owners must also, in accordance with sub-clause 1(a)(ii), exercise due diligence to ensure compliance with all statutory rules or regulations and requirements to ensure the safe and unhindered loading of the cargo, performance of the voyage and discharging of the cargo. It should be noted that in COAL-OREVOY the obligation to comply with all statutory rules and regulations has been changed from an absolute obligation as it was in OREVOY, to a continuing obligation to exercise due diligence.
In sub-clause 1(b) the owners' obligation to maintain the vessel's class throughout the currency of the charter party is now an absolute warranty. The vessel must also be fully insured against loss of or damage to the cargo and the owners must provide to the charterers evidence of such insurance on request.
It should also be noted that sub-clause 1(b) requires only that the vessel be "classed" and that the class of the vessel at the commencement of the charter should be maintained throughout the charter period. No attempt has been made to require the vessel's classification society to be a member of IACS or to conform to the Institute Classification Clause definition of the commonly used term "Lloyd's 100 A1 or equivalent". In BIMCO's view, such a narrow definition of an acceptable classification society is unduly restrictive and penalises some smaller classification societies who have, over the years, demonstrated the very highest standards of quality. For this reason, it is left to the charterers to establish, as part of their pre-fixture safety and quality considerations to establish whether the vessel is of sufficient quality and if its class is of a commercially acceptable standard.
In order to ensure the optimal use of modern loading facilities the charterers may wish to make sure that the chartered vessel is capable of receiving cargo at the maximum loading speed available at the port in question. In such cases the parties can insert the relevant figure in Box 6 of Part I. In keeping with the original OREVOY, the requirements relating to the suitability of the vessel for grab discharge are provided for in sub-clause 1(b)(iv).
Sub-clause 1(a)(v) provides for any other technical requirements and particulars to be detailed in Box 7 of Part I.
Clause 2 - First Layday, Present Position and Expected Load Readiness
This Clause has been simplified to provide for the date of the opening layday; the vessel's present position; details of prior commitments; and expected load readiness date. The provisions of Clause 2 make it clear that if the vessel arrives at the loading port prior to the agreed opening layday then notice of readiness may be tendered; however, laytime will not commence before 00.00 hours on the opening layday unless the charterers elect to start loading before that time. In such a case, the provisions of sub-clause 9(b)(i) shall take effect.
The cancelling provisions previously found in Clause 2 have now been moved to a new Clause 3 (Cancelling).
Clause 3 - Cancelling
The provisions of the Cancelling Clause contain the traditional right of the charterers to cancel the charter party if the vessel does not tender notice of readiness before the agreed time and date. In sub-clause 3(b) the interpellation provision has been modified to make the wording consistent with that used in other BIMCO voyage charter parties, such as GENCON 1994. The purpose of the "interpellation" provisions is that the vessel should not have to proceed on a long ballast voyage towards the loading port not knowing whether or not the charterers will accept the vessel once it arrives. The "interpellation" provisions in sub-clause 3(b)
strikes a balance between the parties in this difficult situation in as much as the owners may avoid setting out on a long ballast voyage to no avail, whereas the charterers are, at the same time, to declare whether or not they wish to cancel the charter party.
It should be noted that the period within which the charterers must declare their option of cancelling the charter or agreeing a new cancelling date after the receipt of the owners' notice has been reduced from 5 running days to 2 working days (as applied at the charterers place of business) as it was felt that 5 days was too long a period of time to allow the charterers. The requirement that the option should not be declared more than 20 running days before the revised date of load readiness has been deleted.
For the sake of clarity and for emphasis, the charterers' obligation to declare whether they intend to exercise their option to cancel the vessel no later than the time of the vessel being ready to load has been made into a separate sub-clause 3(c).
Clause 4 - Subletting, Assigning
This Clause has been amended from the original OREVOY version to emphasise that it is the identity of the sub-charterers/assignees that is the cause of concern. Consequently, Clause 4 expressly refers to sublet or assignment "to another party". The idea behind the Clause is that the charterers should be permitted to sub-let or assign provided they remain responsible for the due fulfilment of the charter party. The charterers must also ensure that any sub-let or assignment does not restrict the vessel's future trading due to black listing or by the imposition of bunkering restrictions.
Clause 5 - Substitution
This Clause remains unchanged from the previous OREVOY and gives the owners the liberty to substitute the vessel provided they continue to be responsible for the due fulfilment of the charter party. The liberty may be denied owners if a "No" has been inserted into Box 12 of Part I.
Clause 6 - Cargo
In this Clause the charterers warrant that the cargo to be shipped is of a non-hazardous/non-dangerous nature according to applicable safety regulations. In sub-clause 6(a) the reference to "IMCO Code(s)" has been amended to the modern term "IMO Code(s)". The parties must ensure that all the relevant details of the cargo are correctly stated in Box 13 of Part I. It is important to note that unlike OREVOY this revised form does not stipulate a default cargo size margin of 5% in Box 13. Accordingly, it is for the parties to specify any agreed cargo size margin when negotiating the charter.
Sub-clause 6(b) provides the charterers with the right to ship different parcels in separate holds within the natural segregation of the vessel, i.e., depending on the construction of the vessel. The carriage of such parcels should not in any way affect the vessel's seaworthiness.
The provision relating to the expression of quantities in metric tons of 1,000 kilograms formerly found in sub-clause 5.3 of OREVOY has been deleted as Box 13 in Part I now provides for the parties to specify whether metric or long tons should apply to the cargo quantity.
Clause 7 - Advance Notices
This provision is carried over from the original OREVOY and requires the owners or the master to adhere to the advance notice requirements of the charter party and to keep the charterers fully advised of any changes to the vessel's expected date of readiness for loading and discharging.
Clause 8 - Port of Loading, Voyage, Port of Discharge
Several noteworthy changes have been made to this Clause. In sub-clause 8.2 of the original OREVOY the obligation to carry the cargo "with all possible despatch" has been modified to the more commonplace and acceptable "all due despatch".
The owners' right to order the vessel to reduce speed to conserve fuel, previously found in the last sentence of sub-clause 7.2, has been removed from the amended version. This has been done because the provision was felt to be contemporaneous with the high bunker consumption rates of vessels and high fuel prices that marked the 1980s and which was no longer applicable.
In sub-clause 8(c) the charterers' warranty of safe ports/berths has been clarified to ensure that it applies only to nominated ports/berths that are not specifically named in the charter party. For fixtures where the loading and/or discharging ports/berths have been expressly named in the charter party, it is the owners' obligation to ensure that the ports/berths are safe and accessible for their vessel.
An issue that is a constant source of disputes is whether or not the charterers are obliged to nominate ports in geographical rotation when two or more loading/discharging ports have been agreed. This issue is dealt with by sub-clause 8(e) by providing that, unless otherwise agreed, loading and/or discharging at two or more ports will be done in geographical rotation.
Clause 9 - Notice of Readiness, Laytime, Demurrage/Despatch Money
The detailed and comprehensive Notice of Readiness, Laytime and Demurrage/Despatch provisions found in the original OREVOY have been maintained in the revised version. The Clause is split into 5 main categories in order of chronology - namely: (a) Notice of Readiness; (b) Laytime; (c) Suspension of Laytime; (d) Termination of Laytime; and (e) Demurrage/Despatch Money.
(a) Notice of Readiness - Sub-clause 9(a)(i) introduces a new provision relating to the transportation of coal under the charter party. The final sentence of the sub-clause requires that the vessel, if it is a combination carrier that has carried a liquid cargo on its previous voyage, must be in possession of a valid gas free certificate on tendering notice of readiness. Reflecting the very fast loading/discharging that is commonplace in the coal and iron ore trades, sub-clause 9(a)(iii) provides that notice of readiness can be given "on any day at any time" and that laytime will commence when notice has been given and notice time has expired (if any has been agreed and stated in Box 17).
In sub-clause 9(a)(ii) the risk of weather delay, tidal conditions, strike of tug boats or pilots, etc, all of which are considered maritime risks, have been allocated to owners as falling within their sphere of risks.
Part (iii) of this sub-clause addresses the issue of whether demurrage should be applied during notice time at discharge ports if total laytime has been agreed. The provision expressly states that in such circumstances notice time will apply at discharge ports unless the vessel is already on demurrage.
Sub-clause 9(b)(vii) has been drafted to protect the owners from a potential "Happy Day" scenario whereby the vessel is loaded or discharged by the charterers despite the notice of readiness being invalid, the result being laytime not counting. The sub-clause expressly states that laytime will start counting from the commencement of loading or discharging, regardless of whether a valid notice of readiness has been tendered.
It should be noted that sub-clauses 9(b)(iv) and 9(b)(v) are optional choices relating to whether Total or Separate Laytime is agreed in accordance with Box 18 in Part I. Parties must ensure that Box 18 is correctly filled in. By way of example, Box 18 a) could read "2 days SHINC" and 18 b) "3 days SHEX" or, if applicable, Box 18 c) could read "4 days SHINC".
(c) Suspension of Laytime
This sub-clause is unchanged from the version that appeared in OREVOY sub-clause 8.3. Exceptions to laytime agreed by the parties applying to the loading and/or discharging must be expressly stated in Boxes 19 and 20 of Part I.
Attention is drawn to sub-clause 9(c)(i) and sub-clause 9(c)(iv) which are to be read in conjunction with other clauses - namely Clause 16 and sub-clause 10(m) respectively.
(d) Termination of Laytime
This sub-clause is unchanged from the version that appeared in OREVOY sub-clause 8.4. The provision in sub-clause 9(d)(i) spell out when laytime/time on demurrage cease to count. The reference to "cargo documentation" in line 229 means the documents for the production of which the charterers or their servants (shippers or receivers) are responsible - such as bills of lading and draft survey certificates. In line 231/232 a reference is made to the completion of repairs to stevedore damage in accordance with sub-clause 12(b).
Sub-clause 9(d)(ii) obliges the vessel to depart the berth as soon as possible after the completion of loading or discharging if so required by the charterers. Failure of the vessel to depart when so requested will result in the charterers being entitled to proved damages. This provision is viewed as a fair concession to the charterers to allow them to make optimal use of loading/discharging facilities and to minimise delays to waiting vessels.
(e) Demurrage/Despatch Money
This sub-clause is unchanged from the version that appeared in OREVOY sub-clause 8.5. The revised OREVOY has retained the provision that allows the owners the possibility to cancel the charter party if the vessel has been on demurrage for 15 days or more, provided that no cargo has been loaded.
It should be noted that in sub-clause 9(e)(iii) despatch money is payable only if agreed to and stated accordingly in Box 23 of Part I. It is assumed that if despatch money is agreed, then it will be payable at half the demurrage rate for laytime saved in loading/discharging, unless otherwise agreed.
Clause 10 - Loading and Discharging
Consistent with the approach taken in Clause 9 (Notice of Readiness, Laytime, Demurrage/Despatch Money), all matters relating to loading and discharging, including shifting, warping and overtime, have been gathered together in a single comprehensive clause.
In sub-clause 10(b) reference is made to shifting costs incurred as a result of the charterers failing to nominate a free loading or discharging berth on the vessel's arrival. It is implied, consistent with the provisions of sub-clause 10(g) (see below), that the charterers will also pay for any costs incurred in shifting, including bunkers, from the waiting area to the berth, if no free berth is available on arrival.
The matter of shifting costs and time spent in shifting is dealt with in sub-clause 10(d). The basic principle is that once the vessel is in berth, should it become necessary to shift between berths then the charterers should pay all associated costs. This wording of this provision has been amended from the earlier edition of OREVOY and now simply states that the costs of shifting the vessel between berths at port(s) of loading and discharge, including bunkers, are for the charterers' account. It should be noted that although the costs of bunkers are normally excluded for shifting under most voyage charter parties, it has been decided to maintain the inclusion of bunker costs in this provision as it is considered reasonable that the charterers should also pay for the bunker used.
In sub-clause 10(g) the reference to the charterers loading the vessel "always within the capacity of the loading installations" has been deleted. This has been done because it was felt to be unreasonable for the owners to have to bear the risk related to the loading capacity of the installations which would, most likely, be unknown to them.
Sub-clause 10(g) provides that the cargo has to be loaded, spout trimmed and discharged (including shovel cleaning) by the charterers free of any risk, liability and expense to the vessel. From this sub-clause it also follows that if the Master or the owners require any extra trimming and/or levelling, then this will be for the owners' account and any time lost during such activities will not count as laytime or time on demurrage.
Clause 11 - Bulk Carrier Safety Clause
BIMCO's Bulk Carrier Safety Clause was developed in 1996 in response to growing concern among bulk carrier operators about the effect of high speed loading of bulk commodities on the structure of their vessels. This standard Clause places the responsibility on the charterers to instruct the terminal operators to carry out cargo operations in accordance with IMO guidelines.
In sub-clause 11(a) the charterers are required to ensure that the terminal operators co-operate with the vessel's master in completing the IMO Ship/Shore Safety Checklist and that the cargo operations are conducted in accordance with the IMO guidelines.
Sub-clause 11(b) requires the charterers to ensure that the vessel's loading/discharging is done in accordance with the loading/discharging plan approved by the master.
In Sub-clause 11(c) the Master is given the right to instruct the terminal operators to slow down or stop the cargo operations for reasons of safety.
Finally, sub-clause 11(d) makes it clear that the counting of Laytime is not affected by compliance with the Bulk Carrier Safety Clause.
Clause 12 - Stevedore Damage
It should be noted that the provisions of sub-clause 12(a) have been amended so that the owners no longer have to try to obtain the stevedores' written acknowledgement of liability for damage or try to settle stevedore damage claims directly with the stevedores. It was felt to be impracticable for the owners to enter into settlement negotiations with the stevedores and that this should be a task for the charterers who had appointed the stevedores in the first place. Similarly, as far as acknowledgement of liability for damage caused, it was felt to be unreasonable for the owners to expect anything more from the stevedores than a simple acknowledgement that damage had occurred.
In sub-clause 12.2 the provision giving the charterers the responsibility for making repairs to the vessel arising out of stevedore damage has been amended to simply state that the charterers must pay for such damage. It was felt that no responsible owners would allow the charterers to make actual repairs to their vessel
Recognising the availability of repair facilities at some of the ports used in the coal and ore trades is often limited, Clause 12 contains a mechanism whereby the parties can mutually agree on an alternative place for repairs not affecting seaworthiness on completion of the voyage. In such circumstances the charterers must bear the costs for the repairs as well as compensating the owners for any time lost at the agreed demurrage rate.
Clause 13 - Dues, Taxes and Charges, Extra Insurance
This Clause is unchanged from the previous edition and is consistent with similar clauses found in other modern dry cargo voyage charter parties. It should be noted that sub-clause 13(c) provides an option for the parties to negotiate who will pay taxes on freight. Sub-clause 13(d) (Extra Insurance) permits the parties to agree a specific maximum amount for extra insurance. However, should the parties not reach an agreement, then the default provision is for the extra insurance amount not to exceed the lowest extra premium that would be charged in the London insurance market.
Clause 14 - Agents
Clause 14 provides for the nomination and appointment of agents at loading and discharging ports. It is for the parties to decide which agents the vessel is consigned to by completing in Part I Box 25 for the loading port(s) and Box 26 for the discharging port(s). In all cases the owners are liable for paying the customary agency fees.
Clause 15 - Freight
Continuing the flexible method employed in OREVOY the revised edition offers the parties a number of negotiable alternatives for the payment of freight.
Two changes have been made to the freight provisions. Firstly, as it is no longer the practice for charterers to advance funds to agents to cover the owners' ordinary disbursements the Freight Advances provision found in sub-clause 13.6 does not appear in this version.
Secondly, in sub-clause 15(f) (Deductions), the provision relating to the charterers' right to deduct despatch money from freight has been qualified to refer to "undisputed despatch". The charterers' right to deduct extra insurance from the freight is conditional on the provision by the charterers of evidence of payment supporting such deductions.
Clause 16 - Strike and Other Hindrances
The Strikes and Other Hindrances Clause that appeared in OREVOY has been replaced with the BIMCO General Strike Clause, which appears in a number of other BIMCO forms including GENCON 1994.
Clause 16 becomes operative in the event of any of the causes referred to in Clause 24 (Force Majeure) either preventing or threatening to prevent or delay the loading or discharging of the cargo. It is important to note that the application of this Clause is confined to those strikes that take place in the loading and discharging ports.
Sub-clause 16(a) (Port of Loading) provides the owners with the possibility of cancelling the charter party unless the charterers agree to count the time during which the loading is prevented by any of the causes stated in Clause 24 (Force Majeure).
Attention is also drawn to sub-clause 16(b) which expressly states that half demurrage is payable after the time provided for discharging has expired until the strike or lock-out comes to an end. After the strike or lock-out has ended full demurrage is payable until the discharging of the cargo has been completed.
In the event that the charterers opt to order the vessel to another port of discharge, all terms and conditions of the charter party and bill of lading are to apply as if the vessel had discharged at the original intended port. If the distance from the original discharge port to the substitute discharge port exceeds 100 nautical miles, the charterers must increase the freight paid on the cargo delivered at the substitute port in proportion.
Clause 17 - General Ice Clause
BIMCO published a revised General Ice Clause for Voyage Charter Parties in 2002 to reflect recent legal and commercial developments. The updated version is now incorporated as standard practice into all new and revised BIMCO voyage charter parties. The amendments have been made because the existing ice clause was found to be deficient in a number of ways, in particular that the vessel should not be required to follow ice breakers or to force ice. It was also felt that provisions were needed to protect the owners against the risk of ice being experienced on the approach voyage.
The preamble to Clause 17 permits the vessel to follow icebreakers when reasonably required, subject to the owners' approval and taking into account its size, construction and class. There is no obligation for the vessel to force ice.
In sub-clause 17(a)(i), if ice impedes the vessel from arriving at the loading port, the charterers are given three options: (1) nominate an alternative safe and accessible port; (2) agree to reckon laytime as if the port were accessible or; (3) declare that they cancel the charter party. The option must be declared to the owners within 48 running hours, which is the period deemed reasonable to allow the charterers sufficient time to make arrangements either for the cargo to be transferred to or a substitute cargo made available from an alternative port of loading.
Where there is a risk that the vessel may be frozen in at the load port after part of the cargo has been loaded, sub-clause 17(a)(ii) requires the Master/owners to notify the charterers that the vessel is leaving for the nearest safe place to await the charterers' nomination of an alternative safe port. If the charterers fail to nominate a port within the stipulated time the vessel
may leave and complete with cargo at another port.
Sub-clause 17(b) provides parallel provisions for the port of discharge.
For further description of the BIMCO General Ice Clause, please see BIMCO Bulletin No. 6/2002, page 25.
Clause 18 - War Risks (VOYWAR 1993)
The multitude of different war situations with which the world has been confronted during recent years has shown that some war clauses, notably those found in older charter parties have serious short-comings and do not explicitly cover all the various situations which may arise nowadays as a result of war or warlike operations. The lack of a proper war clause may, therefore, have serious consequences for both parties in case of sudden outbreak of war or when warlike situations may arise.
The revised OREVOY charter party incorporates BIMCO's Standard War Risks Clause for Voyage Chartering - VOYWAR 1993. This clause is found in a number of modern charter parties published by BIMCO during recent years and has time and again stood the test whenever a war situation has arisen, making it necessary to take a quick decision. The Clause contemplates the possible action by terrorists and action or intervention by supranational bodies. It also offers a definition of war and warlike operations.
For a fuller description of the BIMCO Standard War Risks Clause for Voyage Chartering, please see BIMCO Bulletin No. 4/1993, page 27.
Clause 19 - Lien
The object of this Clause is to preserve the owners' contractual right to place a lien on the cargo. The matter of exercising a lien on the cargo can be a vexed problem, not only from a practical point of view, but also from a legal perspective - especially in those countries where the right to exercise a lien on cargo is not legally recognised.
The Clause has been split into two sub-clauses to distinguish between the owners' rights and the charterers' responsibilities. References to "damages for detention" have been deleted from the list of categories under which an owner can exercise a lien. This has been done because damages for detention are considered to fall outside the contract and are therefore not a feasible option for the owners. A new category has been added to extend the Clause to cover general average contributions.
In the Lien Clause of the original OREVOY there was a reference to the charterers being responsible for freight and demurrage incurred at the discharge port, but only to the extent that the owners were unable to exercise a lien to obtain payment. In reviewing this provision a number of P&I Clubs expressed a concern that if the owners were to make a claim for demurrage after discharge was completed, the charterers could counter-claim that the owners had failed to establish whether it was legally and practically possible to exercise a lien and had therefore waived their right to a claim. It should be noted in this respect that although it might be legally possible to exercise a lien in a particular jurisdiction, it might not be possible practically if a bulk cargo has been discharged on to an existing stockpile. For this reason the reference to the owners' exercising a lien has been deleted from the final part of the Lien Clause.
Clause 20 - Liberty
The Liberty Clause is of the usual type found in voyage charters and should be construed in a restricted manner. The exercise of liberty must be limited to deviation for "any reasonable purpose" consistent with the provisions of Article IV of the Hague/Hague-Visby Rules.
Clause 21 - Both-to-Blame Collision Clause
This is a standard clause and is unchanged from the original OREVOY. Although it rarely comes into operation, the Both-to-Blame Collision Clause forms part of almost every standard charter party issued by BIMCO.
Clause 22 - General Average and New Jason Clause
These are both standard clauses and are unchanged from the original form other than the reference to the York-Antwerp Rules now refers to the1994 version. It is left to the parties to decide where General Average should be adjusted and this information should be entered into Box 29 in Part I.
Clause 23 - Responsibilities
Previously referred to as the "Responsibilities and Immunities Clause", the new "Responsibilities Clause" takes it's wording from BIMCO's Standard General Clause Paramount, which was issued in October 1997, and which make the Hague Rules or the Hague-Visby Rules as the case may be, also applicable to the charter party. Applying the Hague or Hague-Visby Rules in the charter party means that as far as the owners' responsibilities and immunities are concerned they, shall be the same under the charter party and the bill of lading.
The General Clause Paramount has been revised on the basis of recognising the Hague-Visby Rules as the principle liability regime covering the particular contract of carriage. The Paramount Clause has the following main components:
- The Hague-Visby Rules as enacted in the country of shipment shall apply to the contract of carriage. If no such enactment is in place the corresponding legislation of the country of destination shall apply.
- However, in those trades where the Hague-Visby Rules are not applicable mandatorily or otherwise, the Hague Rules (when compulsorily applicable in the country of shipment or destination) shall apply.
- In all other trades, i.e. where neither the Hague-Visby Rules nor the Hague Rules apply compulsorily, the terms of the Hague-Visby Rules shall apply.
- The SDR Protocol 1979 which replaces the old limitation amount of 10,000 gold francs per package or unit, or 30 gold francs per kilo as provided in the Hague-Visby Rules by 666.67 SDR per package or 2 SDR per kilo shall apply to the contract of carriage to the extent possible.
Thus, sub-clause 23(a) refers to the Hague-Visby Rules as the governing liability regime providing a clear choice of law as regards which jurisdiction's Hague-Visby Rules shall apply in trades between two Hague-Visby Rules countries. The wording irrespective of whether such legislation may only regulate outbound shipments at the very end of this paragraph is meant to make sure that, in a voyage from a non-Hague-Visby Rules state to a jurisdiction which only applies the Hague-Visby Rules to outward shipments, such Rules will still apply.
Sub-clause 23(b) includes a fall back provision in line with 3) above effectively providing that in the trades where the Hague-Visby Rules are neither applicable in the country of shipment or in the country of destination the terms of the Hague-Visby Rules apply. The only exception to this general rule is, however, where the Hague Rules are compulsorily applicable in either the country of shipment or destination, in which case the Hague Rules prevail. Accordingly, due respect has been paid to those states still signatories to the Hague Rules. In the event of clean Hague Rules trades the choice of law provision provides which jurisdiction's Hague Rules shall apply.
Sub-clause 23(c) takes care of another of the key components as mentioned under 4) which is that the SDR Protocol 1979 shall also apply in those trades where they are not mandatorily applicable. It is to be realised, however, that those states that are signatories to the Hague-Visby Rules but not the SDR Protocol 1979 may, irrespective of what is provided in this Clause, apply the old limitation rules.
The final sub-clause, 23(d), expressly exonerates the carrier from all liability for loss or damage to the cargo before loading and after discharge and to deck cargo and live animals. It is realised that this provision may not be upheld in all jurisdictions applying the Hague- or Hague-Visby Rules. Thus, for instance, it will be considered invalid under the Scandinavian maritime codes that contain rules compulsorily applicable when the cargo is in the custody of the carrier in the port, i.e. outside the "tackle-to-tackle" period and for deck cargo and live animals.
The final provision of the original OREVOY "Responsibilities and Immunities" Clause has been moved from this Clause to form a new "Force Majeure" Clause as it was felt that the provision warranted elevation to a freestanding clause.
Clause 24 - Force Majeure
This is the original and unamended wording taken from sub-clause 21.2 of OREVOY and is standard wording for this type of provision as found in many modern BIMCO charter parties.
Clause 25 - Bills of Lading
The text found in the original OREVOY has been replaced with wording based on Clause 10 (Bills of Lading) of GENCON 1994 in order to standardise the provision with other BIMCO charters.
This Clause provides that the bill of lading to be used for shipments under the COAL-OREVOY Charter is to be the COAL-OREVOYBILL Bill of Lading. The Clause also provides that bills of lading are always to be presented and signed in accordance with Mate's Receipts and that the owners' agents can sign bills of lading provided that the owners have issued a written authority for them to do so, and given a copy to the charterers.
It should also be noted that the provision gives the owners an express right of indemnity from the charterers against issuing bills of lading at the charterers' request as a result of which the owners are exposed to or suffer greater liabilities than under the charter party. Although such a right of indemnity might be considered by some courts to be implied, there have been cases where courts have been inclined to deny the owners such a right of indemnity because the charter party prescribed a specific named bill of lading. Given that the COAL-OREVOY Charter prescribes the use of the COAL-OREVOYBILL Bill of Lading and to avoid a situation where the owners might have to absorb liabilities in excess of those contemplated under the charter party, an express right of indemnity has been incorporated.
The provision protecting the owners from being obliged to sign or endorse freight pre-paid bills of lading unless and until the freight has actually been paid, formerly found in the second paragraph of sub-clause 22.1 of OREVOY has been deleted, as this matter is already covered in sub-clause 15(a) of the Freight Clause.
Clause 26 - Dispute Resolution
This Clause, previously the "Law and Arbitration Clause", is the latest edition of BIMCO's standard suite of dispute resolution provisions. In addition to BIMCO's Law and Arbitration Clause 1998, the provision incorporates a new mediation clause. The mediation provision is designed to function in conjunction with the chosen arbitration option, whether that be English law, London arbitration; US law, New York arbitration; or law and arbitration as agreed. Mediation is a technique that is recognised as offering savings in costs and time over traditional methods of dispute resolution for certain types of disputes. BIMCO's mediation provision is only triggered once arbitration proceedings have commenced and then runs in parallel with those proceedings, if the parties so choose. This has been done to ensure that one party cannot invoke mediation as a delaying tactic.
For a fuller description of the BIMCO Standard Dispute Resolution Clause, please see BIMCO Bulletin No. 1/2002 page 7.
Clause 27 - Brokerage
The Brokerage provision has been amended to bring it line with the wording used in Clause 15 of GENCON 1994. Commission is now payable on demurrage as well as freight and deadfreight earned.
In the second part of the provision, dealing with the non-execution of the charter, the responsibility to pay one third of the brokerage commission no longer falls to the owners by default, but is now to be paid by the party responsible for the non-execution.
Clause 28 - Notices
In an attempt to consolidate and rationalise the many references to notices often found in standard charter parties, BIMCO has developed a standard Notices Clause. Sub-clause 28(a) provides that all notices given by either party in compliance with the charter party should be in writing.
Sub-clause 28(b) defines what "in writing" means and provides a non-exclusive list of acceptable effective means of sending notices, such as telex, fax, e-mail and registered or recorded mail.
COAL-OREVOYBILL Bill of Lading
The COAL-OREVOYBILL Bill of Lading is intended for use in connection with any cargo carried under a COAL-OREVOY OREVOY charter party. By means of a specific reference in the incorporation clause in the Bill of Lading, the War Risks Clause and Dispute Resolution Clause, which form part of COAL-OREVOY, also apply for the purpose of the Bill of Lading. A copy of the COAL-OREVOYBILL is reproduced on pages 36 to 47 of BIMCO Bulletin No. 3/2003.
Copyright in COAL-OREVOY is held by BIMCO.