Maritime contracts often transcend national borders, whether due to the nationality of the contracting parties, the flag of the vessels involved, or the geographical location of the various ports. Among the most critical documents in international shipping are the BIMCO contracts, which are widely recognized and used across the maritime industry for chartering and ship leasing.

The charter party and ship lease contracts are the primary agreements governing the commercial use and operation of vessels. Today, it is common practice in commercial shipping to rely on standardized contracts or forms developed by respected institutions with extensive industry experience, such as BIMCO (Baltic and International Maritime Council).

The main goals of these standardized forms are to:

• Maximize business efficiency by reducing the time and costs involved in negotiations.
• Limit the risks associated with misinterpretations or translation issues.
• Let parties know the risks involved and the proportion of responsibility each party will bear, providing security and simplicity in negotiations. This enables the parties to focus on the specific and unique aspects of each case.

These contracts, including the well-known BIMCO contracts, are crafted by leading organizations like BIMCO, the Association of Ship Brokers and Agents of New York (ASBA), the International Association of Independent Tanker Owners (INTERTANKO), and the International Association of Dry Cargo Shipowners (INTERCARGO), among others. While these institutions recommend using these forms, it is entirely discretionary and not mandatory.

Issues arising from insurance policies within the framework of ship usage contracts often affect not only the relationship between the insurer and the insured but also the parties involved in the underlying contracts (shipowners, charterers, lessors, lessees). Similarly, while many legal questions arise in the context of marine insurance (e.g., the insurer’s subrogation in actions against the liable party), the way parties in the charter or lease contract allocate liability and insure their interests can also impact the insurance agreement, creating situations not explicitly covered by maritime law.

In this article, we delve into the essential aspects of BIMCO contracts, exploring how they facilitate maritime trade and protect the interests of all involved parties.

Also read Introduction to Charter Party Agreements: The Contracts That Move Cargo.

Q1.  What are BIMCO contracts?

BIMCO contracts are standardized maritime agreements that cover a wide range of activities such as the chartering of vessels, the transportation of goods, and ship management. These contracts are used by shipowners, charterers, freight forwarders, and insurers across the globe due to their clear legal framework and ability to streamline operations.

One of the key elements of BIMCO contracts is the inclusion of BIMCO terms—specific clauses that set out standard conditions for crucial aspects of maritime agreements. These terms cover key areas such as:

• Laytime: The amount of time allowed for loading and unloading cargo.
• Demurrage: The financial penalties imposed if the loading or unloading exceeds the agreed laytime.
• Payment terms: How and when payments, such as freight or hire, should be made.
• Liabilities: The allocation of responsibility for various risks and losses, including damage to the cargo or vessel.

The use of standardized BIMCO terms reduces ambiguity and helps prevent disputes, as all parties involved clearly understand their rights and obligations. These terms are widely accepted across different legal systems, which is especially useful in international shipping where multiple jurisdictions may be involved.

BIMCO contracts can be customized via SmartCon, a digital platform that allows for easy modification of terms while maintaining the contract’s legal integrity.

Q2. What Are BIMCO Charter Parties?

BIMCO Charter Parties are specialized agreements within the broader BIMCO contract framework, specifically designed to cover all aspects of the chartering process. These standardized contracts simplify and streamline the relationship between parties involved in maritime operations—such as shipowners, charterers, freight forwarders, and insurers—by clearly outlining key terms such as payment, liability, and risk management.

One of the key features of BIMCO charter parties is the inclusion of dispute resolution mechanisms, typically through arbitration clauses. These clauses are essential in reducing legal conflicts by offering a structured process for resolving disputes quickly and cost-effectively, without the need for lengthy litigation. This is particularly important in international shipping, where disputes can involve parties from different jurisdictions.

Additionally, BIMCO charter parties often include comprehensive insurance provisions, ensuring that both the vessel and the cargo are properly protected during the charter period. This provides security for all parties involved, ensuring that potential risks such as cargo damage, vessel breakdown, or accidents are mitigated.

Q3. What BIMCO contracts are most commonly used in chartering?

BIMCO offers a variety of standard charter party agreements tailored to different types of charters. These contracts form the foundation of global chartering and are widely recognized and used across the shipping industry.

Below are some of the most commonly used BIMCO contracts:

 GENCON (General Charterparty)

• Type: Voyage Charterparty
• Purpose: One of the most widely used contracts for the transportation of goods by sea on a single voyage basis. It governs critical aspects such as freight payment, laytime, and demurrage.
• Popular Version: GENCON 94 (updated versions are also available).

BALTIME (BIMCO Time Charterparty)

• Type: Time Charterparty
• Purpose: Commonly used for time charter agreements, where the vessel is hired for a fixed period. This contract clearly defines the operational responsibilities of both the shipowner and charterer, including the payment of hire.

BARECON (Bareboat Charterparty)

• Type: Bareboat Charterparty
• Purpose: Used when the charterer assumes full operational control of the vessel, taking responsibility for crewing, maintenance, and insurance. This is ideal for long-term leasing arrangements.
• Popular Version: BARECON 2001, BARECON 2017.

NYPE (New York Produce Exchange)

• Type: Time Charterparty
• Purpose: One of the most widely used time charters for bulk carriers. It governs the hiring of the vessel for a specific period and outlines operational and payment responsibilities.
• Popular Version: NYPE 93, NYPE 2015.

SUPPLYTIME

• Type: Time Charterparty
• Purpose: Designed specifically for the offshore industry, SUPPLYTIME governs the chartering of offshore supply vessels (OSVs) and anchor handling tug supply (AHTS) vessels.
• Popular Version: SUPPLYTIME 2005, SUPPLYTIME 2017.

ASBATANKVOY

• Type: Voyage Charterparty
• Purpose: Primarily used for the transportation of liquid bulk cargoes, such as oil and petroleum products. It is a standard form widely recognized in the tanker industry.

HEAVYCON

• Type: Voyage Charterparty
• Purpose: Tailored for the transport of heavy lift and project cargo. It accounts for the specific challenges of transporting oversized or heavy goods.
• Popular Version: HEAVYCON 2007.

CONGEBILL

• Type: Bill of Lading
• Purpose: BIMCO’s standard form of bill of lading, used to ensure the smooth handover of cargo between parties while providing legal protections for the cargo owner, the carrier, and intermediaries.

Also read CONGEBILL in ship chartering

Q5. What Are the Latest Updates in BIMCO Contracts?

BIMCO regularly updates its contracts and clauses to reflect the evolving challenges of the maritime industry. One of the most significant recent updates includes the BIMCO Emissions Control Clauses, which address the growing need to comply with international emissions standards, particularly for vessels operating in Emission Control Areas (ECAs). These clauses help manage the allocation of costs and responsibilities related to complying with environmental regulations.

Other recent updates include:

• Force Majeure Clauses: Enhanced to provide clearer guidance on how parties should handle unforeseen events such as natural disasters, pandemics, or other disruptions to the charter.
• War Risk Clauses: Revised to offer better clarity on the procedures and responsibilities when vessels are exposed to geopolitical conflicts or war zones.

Conclusion

At Marlin Blue, we are one of the few law firms in Southern Europe specializing in both the transactional and litigation aspects of charter party agreements. Our expertise in drafting, negotiating, and resolving disputes related to these contracts makes us a valuable legal partner for shipowners, charterers, freight forwarders, and insurers.

For expert legal advice on BIMCO contracts and maritime law, contact us today to ensure your interests are fully protected in charter party agreements, do not hesitate to contact us:

• Email: info@marlinblue.com
• Phone:  +34 955 283 913

FAQs

Q1: How can Marlin Blue assist with BIMCO contracts disputes?

A1: At Marlin Blue, we provide tailored legal services to assist with disputes related to BIMCO contracts. Our expertise includes drafting, reviewing, and negotiating charter party agreements, ensuring that all parties are fully aware of their rights and obligations. We also specialize in arbitration and mediation, offering representation in both commercial and maritime disputes. Our goal is to provide efficient and effective solutions that protect your business interests and minimize operational disruptions.

Q2: What are the benefits of using BIMCO contracts in maritime operations?

A2: BIMCO contracts offer several benefits, including standardized clauses that reduce the risk of misinterpretation, simplify negotiations, and provide clear guidance on key aspects like freight, laytime, demurrage, and dispute resolution. These contracts are globally recognized and accepted, making them an ideal choice for international operations. The use of BIMCO contracts also ensures a fair balance of risk and responsibility, protecting all parties involved in the chartering process.

Q3: Can BIMCO contracts be customized to suit specific business needs?

A3: Yes, while BIMCO contracts are standardized, they can be customized to fit the specific needs of your business. Through platforms like SmartCon, parties can modify certain clauses to reflect their unique operational or legal requirements. However, it is important to ensure that any modifications do not undermine the integrity of the original agreement. At Marlin Blue, we can guide you through the customization process, ensuring that your contract meets both your commercial objectives and legal obligations.