The AUTOSHIPMAN Standard Ship Management Agreement for MASS provides a standard contractual foundation for third-party ship managers to deliver services for the operation of remotely controlled or fully autonomous ships. Remotely controlled ships are currently used primarily in inland waterways and coastal trades, but the sector is growing.

The agreement has been developed using the widely used SHIPMAN agreement to govern the management services and provide the framework for the obligations, responsibilities, and liabilities. The AUTOSHIPMAN has the flexibility to apply in any degree of autonomous operation of the ship, including switching operational modes during a voyage.

The flexibility matters because it may be a legal requirement for remotely controlled ships to be partially or fully manned when passing through the territorial waters of a jurisdiction or for calling at a port.

AUTOSHIPMAN is a first step by BIMCO into contracts for the management and operation of remotely controlled ships, and eventually fully autonomous ships.

Drafting Team

The development of AUTOSHIPMAN is the result of a collaborative and consensual process between owners, managers, P&I clubs, insurance and legal experts. BIMCO is grateful to the drafting team for their considerable time, effort and commitment in producing this version of the ship management agreement:

• Captain Ajay Hazari, Anglo-Eastern (Chairperson)
• Tim Davies, West P&I Club
• Tim Howse, Gard P&I Club
• Robert Hodge, ITIC
• Tomoo Hikichi, NYK
• Jon Nordgard, Tom Eystoe and Kristine Prosch, Massterly
• Tom Borrema, Shipping Technology

• Henry Clack and Gudmund Bernitz, HFW

BIMCO representatives:

• Grant Hunter
• Mads Wacher Kjærgaard

Explanatory notes

The following explanatory notes provide information about AUTOSHIPMAN’s key provisions and clarify how the agreement is intended to operate. If you have any questions about AUTOSHIPMAN please contact us at contracts@bimco.org and we will be happy to assist.

There are references made in these explanatory notes to the SHIPMAN 2024 explanatory notes which can be found here.

Key features of the form

AUTOSHIPMAN is a derivative of the 2024 edition of the SHIPMAN agreement. SHIPMAN is the most widely used industry standard contract for third party ship management. It is an agency agreement whereby managers are appointed by owners to carry out ship management services as defined in the contract. This will usually include technical management and may also include crew, remote operations centre (ROC) and commercial management as well as insurance arrangements in respect of a ship. Crew comprises seafarers on board the ship and the ROC operators, and the agreement allows for the managers to be responsible for either or both.

Structure

AUTOSHIPMAN is divided into seven main sections. Part I, Part II and Annexes A to E. Part I is the traditional BIMCO box layout used to insert the deal-specific information that has been agreed between the parties. Part II contains the standard terms and conditions which have been drafted with the intention that these carefully balanced provisions should not need to be amended by the parties. Annexes A to E enable the parties to insert more detailed information about aspects of the management agreement such as details of the ship and associated ships, ROC, crew, budget and fee schedule.

The priority of the different sections of the agreement is set out above the signature boxes in Part I, namely that the provisions of Part I and Annexes A to E shall prevail in case of conflict with Part II.

Part I - Box Layout

The box layout is modelled on SHIPMAN 2024 but includes two additional boxes - 10 (ROC) and 11 (operating areas and limits).

Box 7 deals with crew management the same way as SHIPMAN 2024. However, in the context of AUTOSHIPMAN the definition of “Crew” includes shore-based ROC personnel as well as seafarers serving on board the ship. In addition to electing whether the managers will provide crew management, the parties must also elect whether they will manage the seafarers and, separately, manage the ROC operators.

Box 10 contains details of who will provide the ROC and who will manage the ROC. The ROC could be provided by the managers, by the owners or by a third party. Similarly, the ROC could be managed and operated by the managers or another entity.

Box 11 concerns the ship’s operating areas and limits. This is different from the normal “trading restrictions” which relate to the employment terms and conditions of the ship’s crew. The operating areas and limits are governed by the extent to which the ROC or network of ROCs can provide operational support for the ship when it is operating by remote control or is in fully autonomous mode.

Part II

Clause 1 (Definitions)

This clause lists defined terms that appear several times throughout the contract. Defined terms which only appear in a single clause are included in the clause in question.

“Applicable Laws” has been defined in AUTOSHIPMAN because of the complex interplay between maritime legislation impacting the ship and domestic legislation affecting the operation of the ROC. It also makes a distinction between laws and regulations applicable and the law applicable to the agreement.

Definitions include degrees of autonomy consistent with those defined by the International Maritime Organization (IMO).

A definition of “Delivery” has been included to make a distinction between predelivery management fees and annual management fees in Clause 13.

Clause 2 (Commencement and Appointment)

This clause establishes the start date of the agreement and the roles and responsibilities of the owners and managers. Whereas the 2009 edition referred to the commencement of the management services, the clause now refers to the commencement of the agreement per the date stated in Box 2.

Clause 3 (Authority of Managers)

This clause establishes the fundamental principle of AUTOSHIPMAN - that it is an agency agreement with the managers carrying out the functions specified in the agreement as agents for and on behalf of the owners.

The provisions of the second sentence of Clause 3 provide the managers with a right to take such action or actions as they may in their absolute discretion consider necessary from time to time to enable them to perform the agreed management services. Reference is made to “sound ship management practice” which is consistent with the benchmark term used in SHIPMAN. A new reference to “sound ROC management practice” has been added to this provision although it is accepted that ROC management practices are still in their infancy.

Clause 4 (Technical Management)

This clause specifies the technical management services that the managers will provide if agreed according to Box 6.

Subclause (f)(ii) is specific to remote controlled/autonomous ships. It requires the managers to maintain and keep up to date the ship’s equipment and systems that are required by the ROC to operate the ship in various states of autonomy.

Clause 5 (Crew Management and Crew Insurances)

This clause specifies the crew management and crew insurance services that the managers will provide if agreed. The crew insurance services can only apply if crew management services have been agreed.

The clause differs from the equivalent provision in SHIPMAN because “Crew” in AUTOSHIPMAN includes ROC personnel as well as seafarers. To make the clause sufficiently broad to cover shore-based personnel it refers to “Applicable Laws” which encompasses national legislation applicable to land-based personnel.

Similarly in subclause (a)(iii) the reference to “Flag State requirements” is paired with “Applicable Laws” in relation to medical examinations and certificates for sea-going and land-based personnel.

Subclause (a)(x)(1) and (xi)(2) differ from the wording in SHIPMAN which refers to “before joining the Vessel”. In AUTOSHIPMAN these words have been replaced with “prior to assuming their duties” as the provision also relates to land-based personnel who will not join the ship but need to be properly familiarised with their duties.

Clause 6 (Commercial Management)

This clause specifies the commercial management services that the managers will provide if agreed.

The managers are required to provide commercial management services in line with the owners' instructions. The services listed in Clause 6 are not exhaustive. The specific services to be provided by the managers will be determined by the owners' instructions within the framework of the agreed provisions and in the context of the way the ship is being operated at any given time (autonomous state).

Subclause (b) refers both to “fuels” and “energy source” to make the distinction between conventional physical fuels and electric power from batteries. As such there is no reference to “quality” only that the fuels or energy source must be suitable for use by the ship.

Subclause (d) caters for the managers’ collection of emission allowances due from charterers to owners. The wording “assisting in the collection” means circumstances where the managers, as part of their commercial management services, can ask the charterers to transfer a quantity of emission allowances to the account nominated by the owners.


Clause 7 (ROC and ROC Management and Insurance)

This clause deals with who provides, manages and insures the ROC and what services are included. It is the owners’ responsibility to ensure that the ROC is suitable to operate the ship in the agreed states of autonomy.

Subclause (a) describes the necessary characteristics and capabilities of the ROC to operate the ship safely and securely – notably, the need to have sufficient redundancy in the event of a systems failure.

Subclause (b) sets out the managers’ obligations if they are responsible for managing the ROC. This applies equally if the ROC has been provided by the owners, the managers or a third party. It provides for the managers to procure necessary spare parts and incur the expenditure to ensure the ROC complies with class requirements and applicable legislation.

Subclause (c) relates to insuring the ROC. This is the responsibility of whichever party provides the ROC. This could be the managers, but it could also be the owners or a third party.

Clause 8 (Insurance Arrangements)

This clause provides for the managers to arrange insurances, if so agreed, on behalf of the owners in accordance with the insurance provisions of Clause 12 (Insurance Policies). The insurances will be arranged according to the terms instructed by or agreed with the Owners, including conditions, insured values, deductibles, franchises, and limits of liability. This clause excludes insurance of the ROC, which is dealt with in Clause 7 (ROC and ROC Management and Insurance).

Clause 9 (Managers’ Obligations)

This clause sets out the managers’ obligations in carrying out the agreed services as managers of the ship and the ROC. The managers are obliged to use “their best endeavours” to provide management services to the owners in accordance with “sound ship management and ROC management practice” and to protect and promote the interests of the owners in all matters related to the provision of the services under the agreement.

The managers’ general obligation to use “their best endeavours” should not be taken lightly. Courts take a strict view as to what constitutes “best endeavours” – the phrase should be taken literally and does not mean “second best endeavours”.

“Sound management or ROC management practice” does not depend on what a particular manager may regard as sound. In the event of a dispute, the acceptable standards of best management practice may well depend on the testimony of an industry expert.

Managers may simultaneously act as managers for other ships on behalf of other owners. The second paragraph of subclause 9(a) defines the overall responsibility of the managers in relation to all ships entrusted to their management. This important provision permits managers who are acting on behalf of different owners to allocate personnel and services in a fair and reasonable manner. In the absence of such provisions the managers would be faced with demands of favourable treatment and priority from all owners.

Subclause (b) obliges the managers or their nominee, if the managers are providing technical management and/or ROC management services, to ensure compliance with applicable flag state and the applicable laws and assume being designated the “Company” for ISM/ISPS purposes.

Subclause (c) provides for the managers to be responsible for ensuring the vessel is properly crewed, including on board and in the ROC, at all times according to the degree of autonomous operation of the vessel.

Clause 10 (Owners’ Obligations)

This clause sets out the owners’ obligations and responsibilities for the management and operation of the ship. It includes provisions related to timely payment of sums due to the managers, compliance with reporting requirements to the flag state administration, giving instructions to the crew, providing information regarding trading in any war risks, etc., areas, any change of flag, accommodation and living standards on the familiarising the crew with the safety management system and so on, respective to the management services being provided (or not) by the managers under the agreement.

Subclause (f) relates to situations where the managers are not providing ROC management. The owners must ensure that the managers know who is operating and managing the ROC and that managers’ orders will be obeyed by the ROC operator.

Clause 11 (Emission Trading Scheme Allowances)

This is BIMCO’s SHIPMAN Emission Trading Scheme Allowances Clause 2023. The parties are strongly encouraged to read the explanatory notes to the clause. A health warning has been included at the top of the clause to this effect. The explanatory notes for this clause can be found here.

The clause is accompanied by Box 16 for the parties to fill in relevant information required in respect of subclauses (a), (b) and (c).

BIMCO has published a standard template for mandating compliance with ETS obligations under Commission Implementing Regulation (EU) 2023/2599. See the Standard ETS Mandate 2024. The mandate can be used in conjunction with and to appoint managers as the responsible entity under subclause (b) (Managers as Responsible Entity) of the clause.

Clause 12 (Insurance Policies)

The insurance provisions are critical to the operation of AUTOSHIPMAN. See SHIPMAN 2024 explanatory notes for details.

Clause 13 (Owners' Receivables and Expenses); Clause 14 (Management Fees and Expenses); Clause 15 (Budgets and Management of Funds); Clause 16 (Trading Restrictions); Clause 17 (Replacement); Clause 18 (Managers’ Right to Subcontract); Clause 19 (Change of Control); and Clause 20 (Responsibilities)

See SHIPMAN 2024 explanatory notes for details.

Clause 21 (General Administration)

The purpose of this clause is to outline the general administrative duties of the managers overseeing vessel operations on behalf of the owners. Subclause (a) is worded slightly differently to the equivalent clause in SHIPMAN 2024 as it relates to incidents that may impact the ROC as well as the ship.

Clause 22 (Managers’ Information System) and Clause 23 (Vessel’s Information and Data)

See SHIPMAN 2024 explanatory notes for details.

Clause 24 (Inspection of Vessel)

Subclause (b) is in addition to the ship inspection right conferred on the owners in SHIPMAN 2024 and relates to the owners’ right to inspect the ROC.


Clause 25 (Compliance with Laws and Regulations)

This clause in AUTOSHIPMAN extends beyond compliance with flag state law and the laws of the places the ship trades, which is provided for in SHIPMAN 2024, to include “Applicable Laws”.

Clause 25 (MLC)

The explanatory notes for this clause are available here.

Clause 26 (Personal Data Protection)

The explanatory notes for this clause are available here.

Clause 27 (Cyber Security)

This is the BIMCO Cyber Security Clause 2019 with a few adjustments to align it with SHIPMAN 2024 and AUTOSHIPMAN. The most notable adjustment is that the liability cap in subclause (d) of the Cyber Security Clause 2019 has not been included as this issue is considered sufficiently covered in Clause 20 (Responsibilities).

The clause has been incorporated to ensure that both parties implement appropriate measures to protect digital environments from cyber security incidents. It also mandates the parties to have plans in place for responding to such incidents efficiently, to regularly review their cyber security arrangements, and to promptly notify each other in the event of a cyber security incident, with provisions for cooperation and information sharing to mitigate and prevent the effects of such incidents.

The explanatory notes to the 2019 clause are available here.

Clause 28 (Sanctions)

See SHIPMAN 2024 explanatory notes for details.

Clause 29 (Anti-Corruption)

This is an amended version of the BIMCO Anti-Corruption Clause for Charter Parties 2015 adapted to fit a ship management context. The explanatory notes to the charter party clause are available here.

Subclause (a) of the AUTOSHIPMAN clause sets out the scope of the clause.

Subclause (b) sets out the rights and obligations of the parties in case of non-compliance. The mutual indemnity in subclause (b)(i) imposes an obligation on a party that has breached anticorruption legislation to which it is subject to indemnify the other party against any loss or damage suffered as a result by the latter. This provision is likely to be of assistance in response to incidents of non-compliance where the termination provision in subclause (b)(ii) cannot be or is not invoked.

Subclause (b)(ii) sets out the criteria for termination. The provision cannot be invoked simply as an excuse to exit an inconvenient management agreement or used where the actions of the party seeking to rely on it have previously compromised the position of the other party. Termination can be invoked either by owners or managers but only where the other party has breached applicable legislation and that breach has put the other, non-breaching, party in breach of anti-corruption legislation to which it is subject. The non-breaching party’s right to terminate is optional and any breach committed by one party can be disregarded by the other party.

Clause 30 (Duration of the Agreement)

See SHIPMAN 2024 explanatory notes for details.

Clause 31 (Termination)

See SHIPMAN 2024 explanatory notes for details.

Clause 32 (BIMCO Law and Arbitration Clause 2020)

This is BIMCO’s 2020 edition of the law and arbitration clause which offers four named arbitration venues and a free choice of law and forum. The explanatory notes for this clause are available here (the link is to the London version of the clause – versions with the other named arbitration venues can be found on the BIMCO website but the explanatory notes are identical for all versions).

Clause 33 (BIMCO Mediation/Alternative Dispute Resolution Clause 2021)

The explanatory notes for this clause are available here.

Clause 34 (Notices); Clause 35 (Entire Agreement); Clause 36 (Third Party Rights); Clause 37 (Partial Validity); Clause 38 (Waiver); Clause 39 (Warranty of Authority); and Clause 40 (Confidentiality)

See SHIPMAN 2024 explanatory notes for details.

Clause 41 (BIMCO Electronic Signature Clause 2021)

Explanatory notes for this clause can be found here.

Clause 42 (Interpretation)

See SHIPMAN 2024 explanatory notes for details.

Annexes

AUTOSHIPMAN includes five annexes which enable the parties to include more detailed information about the ships and ROC covered by the agreement (Annex A), seafarers/ROC operators (Annex B), budget (Annex C), associated vessels (Annex D) and fee schedule (Annex E). See SHIPMAN 2024 explanatory notes for details.