What is a bareboat charter? Barecon , , , . pursue the claim against the time charterers or other third party such as a shipper of. BIMCO has recently published its new BARECON following a review of its predecessor . accordance with the terms of this Charter Party”. The phrase “in. Barecon. Charterparty. Contract. for. Newbuildings. and. Hire. Purchase. Agreements. Introduction This chapter continues and concludes the analysis of the.
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The charter party was last updated in and was due for a throughout review and update to ascertain that it keeps pace with modern commercial developments, as well as legal developments.
The purpose of this newsletter is to provide an overview of some charteg the key changes to the charter party. The charterer will generally be prevented from bringing claims against the owner in respect of the condition of the vessel following the charterer’s acceptance of patty vessel.
A key characteristic of a bareboat charter relates to the condition of the vessel at delivery. Consequently, the charterer’s position under the charter party has been strengthened. Moreover, if the charterer has inspected the vessel prior to delivery, the charterer will also be obliged to redeliver the vessel to the owner in the same condition, fair wear and tear excepted.
This is updated in BARECONwhich requires the owner to keep the charterer informed about the vessel’s itinerary and the parties charetr expressly state the number of days’ approximate and definitive notice to be given. A key obligation for the charterer is the payment of hire.
In the earlier version of the cgarter party it was left up to the parties to agree the remedy period for late payment, the BARECON provides for fixed three banking days. Clause 6 in BARECON is new and provides the charterer and the owner the right to place representatives on board the vessel prior to delivery and redelivery.
The purpose of the clause is to give the representatives an opportunity to familiarise themselves with the vessel, and the length of such attendance on board should be agreed on a case-by-case basis.
The different requirements for a newbuilding compared to an ordinary trading ship are bareocn. Due to a more complex and stringent regulatory environment for operators, the relevant provisions pary the BARECON have undergone amendments to further clarify the parties’ responsibility for the patty of compliance with the new regulations.
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A vital feature of any bareboat charter is the vharter obligations relating to the maintenance and operations of the vessel. In the event that the vessel is chartered for the whole or majority of the estimated trading span for the vessel; the most likely option will be the default solution. For shorter term charterers however, the owner may prefer to place the insurance.
This is partly to address the potential “mis-directed” arrows claims where a claim is made to the owners which should rightfully have been made against the charterers, who are in full operational control of the vessel. Furthermore, another reason for the parties to be co-assured is to give the charterer direct access to the joint insurance, which enables them to fulfil their obligation to maintain and repair the vessel during the period of the charter.
A new sentence has been added to the previous sub-clause 19 a ;  stating that the bareboat charterers are liable to the owners by way of damages if the ship becomes a total loss.
BARECON 2017: Aligning an industry standard to reflect commercial and legal developments
That is a liability which the charterers can protect by insurance. BIMCO has underlined that the objective has not been to make the bareboat charterer liable for the purpose of making a claim against them. Should either party be in breach of these provisions, the non-defaulting party may terminate the charter. Part III has also been amended to reflect current industry practice. The amendment provides a right to the charterer to request a variation order to the vessel’s specification in accordance with the terms of the building contract.
There are also amendments made to the termination provisions. Under the charter, the charterer had the right to terminate the charter in the vent the owner became entitled to terminate the building contract. However, in the version, this has been amended so that it is now the owner that has the right to terminate the charter should it become entitled to cancel the building contract.
BIMCO has also included a liquidated damages provision. This provides the parties with different options as to how any liquidated damages payable by the yard under the building contract are to be apportioned between the parties. BARECON provides the charterer with various options to purchase the vessel during the charter term at a pre-agreed purchase price.
In contrast, BARECON provided a purchase option on behalf of the charterer, where title in the vessel would be transferred to the charterer on the final payment of hire under the charter — provided of course that the parties had elected such provision to apply.
The BARECON represents a slightly leaner charter party than its predecessors and the amendments have made the provisions both clearer and easier to read. The charter party seems to retain a balance between the owner’s and charter’s interests, and we expect that barscon new edition will be accepted quickly in the industry.
Aligning an industry standard to reflect commercial and legal developments. Condition of vessel at delivery The charterer will generally be prevented from bringing claims against the owner in respect of the condition of the vessel following fharter charterer’s acceptance of the vessel. Payment of hire A key obligation for the charterer is the payment of hire.
Familiarisation and surveys Clause 6 in BARECON is new and provides the charterer and the owner the right to place representatives on board the vessel prior to delivery and redelivery.
Purchase option BARECON provides the charterer with various options to purchase the vessel during the charter term at a pre-agreed purchase price. Summary The BARECON represents a slightly leaner charter party than its predecessors and the amendments have made the provisions both clearer and easier to read.
Lawyers Henrik Aadnesen Henrik Aadnesen.