Hire and termination clauses reviewed in BARECON update
Overview
BARECON 2001 is being updated to reflect changes in commercial practice and legal development in the 15 years since it was published. At a meeting held at BIMCO House on 29 September the focus of the revision team was the hire and termination provisions.
BARECON 2001 is being updated to reflect changes in commercial practice and legal development in the 15 years since it was published. At a meeting held at BIMCO House on 29 September the focus of the revision team was the hire and termination provisions.
The updated draft now contains a NYPE 2015-style grace period clause permitting the charterers three days grace to meet their hire payment obligations before the owners are entitled to terminate the charter party. The revised termination clause spells out more clearly the consequences of termination. For example, if the owner terminates due to the charterer’s failure to pay hire, the owner will be entitled to damages for the loss of the remainder of the charter period. Similarly, if the charterer terminates because of the owner’s breach, the charterer will be able to claim damages. This could become relevant if the market charter rate had gone up and the charterer is faced with fixing repelacement tonnage at a higher rate.
The drafting team has also modernised and clarified the wording of the lien, indemnity and wreck removal clauses. New clauses include provisions for anti-corruption and sanctions.
Commercial, legal and insurance experts with firsthand experience of BARECON are involved in the project. The companies involved are Stena RoRo; Leonhardt & Blumberg; Anglo-Eastern Shipmanagement; Nordisk; Gard P&I; and Lax & Co LLP. The subcommittee is chaired by Ajay Hazari of Anglo Eastern.
A first draft will be presented to the Documentary Committee on 17 November 2016. It is hoped that the document will be ready for adoption in the autumn of 2017, following industry consultation.
VIDEO: Ajay Hazari, Chairman of the BARECON Subcommittee, discusses the update oil this well used standard form.
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Posted:
30 September 2016
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