bimco charter parties

malingroup.com

INNOVATING HEAVY LIFT SOLUTIONS

BIMCO CHARTER PARTIES

Nick Banks – Contracts Engineer

Chris Cairns – Tendering Manager

CONTENTS OF PRESENTATION

• Introduction to Malin

• Quality, Safety, Health and the Environment

• What is BIMCO?

• Contract Formation

• Types of Charter Party

• BIMCO Contract Forms

DESIGNED, BUILT & COMMISSIONED IN SCOTLAND

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THE MALIN GROUP

OUR BUSINESS UNITS



We serve a range of clients across a number of sectors:

• Marine

• Offshore & subsea

• Energy

• Oil & gas

• Infrastructure

• Process manufacturing

• Our clientsOUR CLIENTS



• Formed in 1899, Malin Abram Ltd specialise in heavy lift project cargo shipping and handling. This includes full turnkey projects where all trailer hire, craneage, shipping, engineering, temporary steelwork fabrication chartering and operational planning and oversight is managed and executed by one in-house team.

• Our specialist skills are also harnessed to deliver other heavy lift services such as third party warranty approvals and operational oversight as well as design and fabrication of custom mechanical handling jigs, cradles and equipment

• Our clientsMALIN ABRAM

• Malin Abram pride ourselves in always putting the health, safety, and well being of our staff above everything that we do.

• As users of the marine environment, first and foremost, we similarly take our obligation to this natural resource equally seriously all of which our SHE statistics attest.

QUALITY, SAFETY, HEALTH AND THE ENVIRONMENT

• If you are moving cargo by sea, then you would typically use a form of BIMCO Charter Party

• Charter Party• A maritime contract between a shipowner

and charterer for the hire of a vessel and delivery of cargo

• Parties involved• Owner• Charterer• Shipbroker (sometimes)

• Vessel can be sub-chartered• If sub-chartered, typically back-to-back

CONTRACT FORMATION



• Baltic and International Maritime Council, founded in 1905.

• Circa. 1,900 member companies across 120 countries (ship-owners, operators, managers, brokers and agents)

• Now the world’s largest international shipping association with the aim to produce standard contract forms

• Maintain relevant and updated shipping contracts - balance the competing interests of the owner and charterer. Regularly updated to remove any ambiguity in previous revisions.

• Use of BIMCO SMARTCON online to create and amend charter parties as required.

• Our clientsWHAT IS BIMCO?



• Bareboat Charter Parties• Hire of a “bare” vessel only, whereby no administration or technical maintenance is included as part of the

agreement (e.g. BIMCO BARGEHIRE 2008);• Charterer obtains possession and full control of the vessel along with the legal and financial responsibility for it;• Charterer pays for all operating expenses, including fuel, crew, port expenses and P&I and hull insurance.

• Voyage Charter Parties• Hiring of a vessel and crew for a specific “voyage” between a load port and a discharge port;• Charterer pays vessel owner on a per-ton or lump sum basis. Payment for the use of the vessel is known as

“freight”;• Owner pays the port costs, fuel cost and crew costs for vessel i.e included in the Lump Sum;• Specifies a period, known as a laytime, for loading and unloading the cargo - if laytime is exceeded, the charterer

must pay demurrage at a pre-agreed rate.• Common examples of this type of CP are BIMCO “GENCON” for general purpose cargo vessels, or “TOWCON” for

towing vessels

• Time Charter Parties• In contrast to voyage charters, time charters are not defined by load and discharge ports, but rather a specific period

of time;• Owner is responsible for and manages all aspects of the vessels technical management and operation, but the

charterer selects the ports and directs the vessel where to go;• Charterer pays a daily hire to owner;• Charterer to pay for all fuel consumed, port charges and commissions.• Common variants of this particular type of charterparty that we see and use include BIMCO’s "TOWHIRE",

for towing vessels, and "SUPPLYTIME", for offshore vessels.

TYPES OF CHARTER PARTY

• GENCON 1994

• SUPPLYTIME 2017

• TOWCON 2008

• TOWHIRE 2008

• Note – above are latest revisions of each form. It is still possible to use previous forms, so it is important to review the differences in each.

• With an increasing focus on force majeure due to the COVID-19 outbreak, BIMCO has gathered a drafting team to develop a free-standing force majeure clause for use in a variety of contracts. These contracts will supersede the versions listed above, when available from BIMCO.

BIMCO CONTRACT TERMS

• BARGEHIRE 2008

• HEAVYCON 2007

• And many more…

BIMCO FORM STRUCTURE

• BIMCO Charter Parties are divided in to two main sections:

• Part I• Box layout used to insert specific contract

information:• Name of the parties, basic ship details,

scope of work and rates, etc

• Part II• Terms and Conditions

• Annex A• Vessel Specification



• Voyage charter party i.e for a specific “voyage” between a load port and a discharge port

• A general purpose agreement for the services of a vessel in exchange for freight, and can be used in a variety of trades

• Example – transportation of 3 off loaded reels from Le Trait to Nigg

GENCON 1994

GENCON 1994: KEY CONSIDERATIONS• Cargo:

• Type and quantity of the cargo to be loaded and whether “full and complete” or “part” cargo. Last in first out.

• Important for this to be accurate – freight can be calculated on per Te basis or volume basis, therefore can have an impact later down the line.

• Cargo Handling Gear• Free use of vessel’s equipment as on board is typically provided.• Vessel’s securing equipment (lashings, chains) may not be certified, therefore crucial to obtain inventory and

any certification available. Often, Malin Abram tend to supply brand new to avoid any hiccups down the line.• Loading / Discharging• It is important to distinguish which party is responsible for loading, stowing, securing at load port and

unsecuring at the discharge port – cost and liability implications if not clear in the Charter Party.

• Laytime• Time allowed for loading and discharging cargo;• Can be separate times for loading and discharging or a total laytime;• When does time start? Important!!! Berth availability is also a consideration – laytime will

start if berth not available upon vessel’s arrival. • Example – 12hrs freetime each port for loading/discharging - Demurrage £7,500 per day

pro rata

• Cancelling Date:• Sets out the cancelling date which means if the vessel is not ready to load on the agreed

date the charterers may cancel the charterparty.

• Liability and Indemnity Provisions• Owners Responsibility Clause – Owners are responsible for loss of or damage to the goods

in the case the loss, damage, or delay has been caused by negligence on part of the Owner.

• Loading / discharging as noted above – Charterer’s liability. • Stevedore damage – Charterers are responsible for Stevedore damage to the Vessel



GENCON 1994: COMPLETED EXAMPLES

SUPPLYTIME 2017• Developed in 1975 to meet the demand for specialist support vessels to serve a

rapidly growing offshore oil and gas exploration and production industry

• Time charter party - vessel supplied for a defined time period

• Freight rate – daily hire rate

• Owner responsible for all aspects of the vessels technical management and operation

• Charterer responsible for its commercial operation

• Provides for limited cargo space, deck space for operating, cranes and other services

• Contract allows charterer to make modifications to vessel

• Knock for knock liability regime

SUPPLYTIME 2017

Skandi Africa, DOF owned vessel, on time charter to TFMC

Skandi Acergy, DOF owned vessel, on time charter to Subsea 7

Rever Sapphire, Diving Support Vessel

Olympic Ares, Construction Support Vessel

• Delivery and Redelivery• Vessel delivered on a fixed date at named port or place• Charterers to redeliver vessel at named port or place. Vessel to be free of

cargo and with cargo tanks clean

• Condition of Vessel• Vessel to be as described and in class as specified in Annex A• Owner to keep vessel in such class and in every way fit for the service

• Employment and Area of Operation• Vessel restricted in the work it can perform and where it can perform the

work

SUPPLYTIME 2017: KEY CONSIDERATIONS

• Structural Alterations and Additional Equipment• Requires consent of the Owners• Vessel to be redelivered reinstated and all additional equipment removed,

fair wear and tear excepted

• Period of Hire• From the time that vessel is delivered to the charterers until the expiration or

earlier termination of charter party

• Off-Hire• If vessel prevented from working, due to Owner’s fault, no hire is payable in

respect of any time lost• Owners have 24 hours on hire per month maintenance, survey, repair and

dry-docking. Can be used to offset off-hire time• Charterer can terminate charter party if allowed off-hire periods exceeded

SUPPLYTIME 2017: KEY CONSIDERATIONS

TOWCON 2008

• Ocean towage charter party on a lump sum basis

• Agreement for a tug to tow vessel/object from a place of departure to a place of destination

• Aimed at commercial towage sector

• Risk of time and delay on tugowner


TOWHIRE 2008

• Ocean towage charter party on a daily hire basis.

• Freight rate – daily hire rate.

• Towage services to be provided for a fixed period of time.

• No delay or demurrage provisions.

• Knock for knock liability regime.



VESSELS CHARTERED WITH TOWCON/TOWHIRE

Queen Elizabeth Aircraft Carrier Alliance – tugs chartered on a Towcon basis for QEC Block Moves

• Payment• Can be split into instalments (Towcon)• All sums earned at the moment due

• Certified Bollard Pull• Measure of the pulling power of tug; must be sufficient to pull tow

• Additional Charges and Extra Costs• For hirer account: port expenses, pilotage, harbour dues, taxes, assisting tugs, costs for

preparation of tow and cost of insurance of tow

• Towing Gear• Tugowner provides free of cost• Hirer to pay for replacement if towing gear is lost or damaged; an exception to knock for

knock liability

TOWCON 2008 / TOWHIRE 2008 – KEY CONSIDERATIONS

• Free Time (only Towcon)• Time allowed for connecting and disconnecting of the tow• Separate times at place of departure and place of destination• Commences when arriving at pilot station and ends when dropping last pilot when leaving for

open sea• Delay Payments to apply if free time exceeded. Charged until tug and tow sails from place of

departure or the tug is free to leave the place of destination

• Bunkers (Fuel)• Lump sum price based on current cost of bunkers• Adjustment to price if actual cost of bunkers is higher or lower

• Tow-worthiness• Obligation on hirer to ensure that tow is fit to be towed; includes cargo on tow• No obligation to perform the tow until tugowner is satisfied that it is fit and ready

• Cancelling• Hirer has option of cancelling the agreement if the tug is not ready to commence towage

TOWCON 2008 / TOWHIRE 2008 – KEY CONSIDERATIONS

BARGEHIRE 2008

• A bareboat charter party

• Specifically designed for unmanned, non-self-propelled seagoing barges

• It is a lease agreement whereby the charterer obtains possession and full control of the barge along with the legal and financial responsibility for it

• Often chartered with owner’s insurances made available to charterer

• Charterers to provide suitable tug or tugs

• Freight Rate – daily hire rate




BARGEHIRE 2008

• Dina Launcher barge chartered on Bargehire 2008 for OPV contracts for BAE Systems

• Stemat 92 barge chartered for transportation of Jacket Extension Piece

• Charter Party Period• Fixed period of hire

• Charter Hire• Charterer to pay owner day rate from date of delivery• Hire to continue to until barge redelivered to Owner

• Insurance• Owners or Charterers to insure

• Surveys• Marine Surveyor appointed to report on condition of barge together with its equipment,

machinery and spares at time of delivery and redelivery• Cost of on-hire and off-hire surveys shared equally between owner and charterer

BARGEHIRE 2008: KEY CONSIDERATIONS

• Maintenance and Operation• Barge in full custody and at absolute disposal of the charterers• Charterers must use tugs that are of suitable size and capability for the proposed tow• Charterers responsible for having necessary repairs down to the barge

• Delivery / Redelivery• Once charterers accept the barge unable to make a claim against the owners on account

of the condition of the barge• Barge shall be redelivered to the owners in the same or as good structure, state, condition

as barge was delivered

BARGEHIRE 2008: KEY CONSIDERATIONS

HEAVYCON 2007

• Standard heavylift charter party – classified as a Voyage Charter Party

• The developments within the heavylift sector, which initiated drafting of HEAVYCON, has since continued at great speed with more types of cargoes and vessels tailor made for the various cargoes coming on to the market

• It is a knock-for-knock contract designed primarily for use by semi-submersible vessels in the super-heavy lift (float-on/float-off) market where cargoes are almost always loaded on deck and are usually sole cargoes

HEAVYCON 2007

• Also used by the midsized (lift-on / lift-off and roll-on / roll-off) sector, however less suited – HEAVYLIFTVOY typically used, whereby there are multiple shipments both above and below deck. Key difference in the application of each contract is the liability provisions

• Freight Rate – Lump sum voyage fee, with mobilisation and redelivery fees

• Demurrage rates typically higher than GENCON given increase to size and capability of vessel

LIFT-ON / LIFT-OFF

ROLL ON/ROLL OFF

FLOAT ON/FLOAT OFF

• Cargo:• Type and quantity of the cargo to be loaded and whether “full and

complete” or “part” cargo. • Important for this to be accurate – freight can be calculated on per Te basis

or volume basis, therefore can have an impact later down the line. Cargo can be refused if the volume and/or weight is different than that specified.

• Additionally, with reference to cargo handling gear, particularly important if the project plan is to use the vessel’s cranes to load / discharge the cargo

• Impact on liability provisions – HEAVYCON vs HEAVYLIFTVOY

HEAVYCON 2007: KEY CONSIDERATIONS

• Loading and Discharging • Clause 4 provides the parties with optional methods of loading and discharging. It

is therefore important that the parties agree on which loading and discharging method shall apply.

• Commencement of Loading / Cancelling Date• The first layday and the cancelling date shall be stipulated in the Charter Party;• The vessel shall be ready for loading at any time between the first layday and the

cancelling date, subject to a notification mechanism (narrowing window);• The parties decide and agree between them the number of days after the first

layday after which the Charter Party can be cancelled.• Interpellation provision

• Free time / Demurrage• The term “free time” is used for the time allowed for loading and discharging

operations (differs from other contracts where it is referred to as “laytime” – just to confuse you!

• Important to note the freetime included within the Lump Sum, and if this is enough for the project – can easily incur demurrages when the project overruns.

SUMMARY

• Insight in to Malin Abram, and the BIMCO contracts used by industry

• Who are BIMCO and why we use them

• Types of charter party and specific contract forms - important to consider the type of contract required:

• Time charter, voyage charter, bareboat• Gencon, Supplytime, Towhire, Towcon, Bargehire, Heavycon… and more!

malingroup.com

INNOVATING HEAVY LIFT SOLUTIONS

THANK YOU!

Nick Banks – Contracts Engineer

Chris Cairns – Tendering Manager

bimco charter parties

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