Shipping: BPVOY5 to take effect on 21 March 2016

BPVOY5

Comment

BPVOY4 / NEW

1. Condition of the Vessel

Owners are now under an obligation to exercise due diligence to make and maintain the sampling lines in every way for the service/to carry cargo, in addition to the Vessel, her tanks, pumps and valves (1.1(a)).

Owners must also exercise due diligence to make and maintain the Vessel's systems in a fully efficient state (1.1(b)).

Owners are liable for time used in preparing tanks, pumps, valves and pipelines, and any costs and losses incurred by reason of any such part of the Vessel shall not count as laytime or demurrage (1.3).

Owners should be aware that their express obligations in due diligence now extend to the sampling lines and Vessel systems and to put processes in place (if not already) to monitor and maintain such sampling lines and systems.

If the Vessel’s tanks (or pumps, valves or pipelines) are improperly prepared, Owners bear the cost of delays.

Removed: The undertaking from Owners that the Vessel shall be operated in accordance with the recommendations set out in the 1996 Edition of ISGOTT. See clause 19 below for new compliance framework.

1. Condition of the Vessel

2. Compliance

Owners will be aware that more stringent compliance regulations have come into force since 1998 (when BPVOY4 was issued) and these are captured in clause 2 of BPVOY5.

Clause 2.2 is particularly onerous for Owners, obliging them to "comply with all applicable requirements stipulated in respect of zones and/or areas regulated by regional and/or national and/or international authorities."

Should Owners breach any of the compliance obligations in clause 2, Owners will assume liability and shall indemnify, defend and hold harmless Charterers against any fines, penalties or other regulatory measures and related costs (2.8).

NEW

3. Ethical Policy and Anti-Corruption

Clause 3 sets out new obligations, in light of the UK Bribery Act 2010 and similar legislation in other jurisdictions.

Charterers have the right to terminate the charter or suspend any payments with immediate effect if they reasonably believe in good faith that Owners have breached, in any material respect, any of the requirements of clause 3 (3.3).

Owners must comply strictly with clause 3. Charterers have a widely drafted right to terminate the charter and need only “reasonably believe in good faith” that Owners have breached the requirements. Charterers need not necessarily have proof of Owners’ breach.

Owners should make sure that all managers, master, offices and crew of the vessel are aware and familiar with the BP Code of Conduct (3.5) and the implications of the Bribery Act 2010 and/or other applicable bribery legislation.

NEW

4. Chartering Questionnaires

The Q88 has replaced the BP Shipping Questionnaire.

It is important that Owners populate the Q88 with care, as Charterers have a wide right to cancel the charter, or claim losses, damages, costs and expenses, if any information proves incorrect. Charterers need only be likely to suffer prejudice, incur loss, damage or expense if any information is wrong.

2. Chartering Questionnaire

5. Loading / Compliance with Voyage Orders

A new obligation has been added to those included in BPVOY4 at the equivalent clause, whereby the Vessel shall provide a report to Charterers at 1200 local time daily providing details of the Vessel's position and speed, the RPM and bunker ROB figures.

Crew need to be aware of the obligation and update Charterers accordingly.

3. Loading / Compliance with Voyage Orders

6. Estimated Time of Arrival

References to “telex” have been replaced with “email”. The ETA’s given must now take account of anticipated bunker requirements and any anticipated delays.

4. Estimated Times of Arrival

7. Cancellation

The clause remains broadly the same.

However, a new protection is afforded to Charterers in clause 7.4. If the date and time for loading as notified by the Owners falls after the applicable Cancelling Date, or if the Vessel is not in fact ready to load by the applicable Cancelling Date, then the Charterers shall have the option of cancelling the charter. The text in italics is new and obliges the owners to ensure that the Vessel is ready to load.

16. Cancellation

8. Agency

The fees for Agents, as nominated by Charterers and employed and paid for by Owners, should now be “competitive compared to those of other agents in the port”.

15. Agency

9. Loading and Discharge Port / Shifting

Pursuant to clause 9.1, Charterers do not, in any part of this charter or otherwise howsoever, warrant the safety of any port unless Charterers fail to exercise due diligence to ascertain the vessel can lie safely afloat. The phrase (italicised for emphasis) has been added to the equivalent clause in BPVOY4.  It seems likely this new wording is intended to extend the protection for a Charterer so that a description in the recap, for example, "1 safe port" will not constitute an absolute sage port warranty.

There is a new provision for the circumstance in which the Vessel faces adverse weather conditions before cargo operations are completed. Where the Vessel has to (a) take additional measures to keep her safely alongside and/or (b) has to move from a particular location within the port, Charterers will reimburse 50% of additional costs directly incurred by the Owners. If the Vessel has to move from a particular location within the port, Charters will reimburse 50% of the cost of bunkers consumed in shifting from that location and back to any other location (9.5).

5. Loading and Discharge Port / Shifting

10. Notice of Readiness (NOR)

A new provision has been added to clause 10.1, whereby if a Master is unable to obtain a signature from a terminal representative for a NOR certificate, then he shall present a Letter of Protest ("LOP") recording the failure of the terminal to sign.

A NOR is not effective until a US Coastguard Vessel Examination Certificate ("COC") has been issued, when calling at US ports (10.4(c)). 

If a valid COC is required, but on tendering NOR, the Vessel does not have one, then the Master shall retender NOR immediately upon receipt of valid certification. If the Master fails to do so, all the time from the receipt of a valid certification until the sooner of (a) such retender or (b) commencement of loading or discharge, shall not count as laytime or demurrage (10.6).

The requirement to have a valid COC when calling at a US port is strict. If the Vessel does not have one, then there are significant consequences for the calculation of laytime and demurrage. A Shipowner cannot recover time lost, by way of demurrage, if such time is incurred as a result of the failure to have a valid COC.

6. Notice of Readiness (NOR)

11. Laytime / Demurrage

The clause remains broadly the same.

However, added to the list of scenarios that count as one half laytime or demurrage is:

11.4(k) closure of, or any restriction of operation at, any port of terminal by order of any local authority.

Further, all of the delays listed in 11.4 are now qualified so that they only count as half laytime or demurrage if the delay could not have reasonably have been prevented by Charterers or Owners.

7. Laytime / Demurrage

12. Laytime / Demurrage Not to Count

In addition to the scenarios in which time shall not count as laytime or demurrage, contained within clause 18 of BPVOY4, two new provisions have been added. Clause 12.1(d) excludes time spent or lost as a result of arrest or detention of the Vessel, unless due to the fault of Charterers.

Further, time lost in connection with bunkering has been added to the exclusions (12.1(e)).

18. Suspension of Laytime / Demurrage

13. Ship to Ship Transfers

There have been significant changes to clause 13, which amends and updates clause 8 of BPVOY4.

STS operations are now expressly permitted and Charterers are to provide and pay for all necessary equipment and may at their expense engage supervisors to attend on board the vessel, including a mooring master, to assist the STS Operation (13.5)

MARPOL, Annex 1, Chapter 8 came into force on 1 January 2011 and concerns measures to prevent pollution during STS transfers of oil cargoes at sea. The provision stipulates that an STS oil transfer operation should be under the advisory control of one individual, who will be the Person in Overall Advisory Control ("POAC").

Clause 13.5 envisages a supervisor, who will act as POAC and they should be qualified to perform all relevant duties relating to ship handling and cargo operations.

8. Cargo Transfers

14. Loading and Discharge of Cargo

This clause remains broadly the same.

The obligation with regards to pressure has been amended from a minimum discharge pressure of 7 bar at the Vessel’s manifold, to an average discharge pressure of 100 PSI at the Vessel’s manifold.

19. Part A. Loading and Discharge of Cargo

15. Inert Gas System (IGS)

Clause 15.2 contains a new exception to laytime and demurrage. If tanks are inspected and rejected, time used for gas-freeing shall not count towards laytime or demurrage, and laytime or demurrage shall not commence or recommence, until such tanks have been re-inspected, approved by Charterers' inspector, and re-inerted. Charterers shall reimburse Owners for bunkers consumed for gas-freeing/re-inerting.

Removed: The obligation at 12.2 BPVOY4 for the Owners to ensure that the IGS is fully compliant with Regulation 62, Chapter 11-2 of the SOLAS Convention 1974 has been removed.

12. Inert Gas System (“IGS”)

16. Closed Cargo Sampling

The closed sampling equipment must be clean and free of contaminants. Any delay caused by contamination in the equipment shall not count as laytime or demurrage and any other losses will be for Owners’ account.

13. Closed Cargo Operations

17. Oily Residues and Ballast Water

Charters can request Owners to email to them the details of slops and separate estimates for oil and water on board (17.1).

At loading the Master and cargo suppliers will arrange for the quantity of all segregated slops to be measured, inclusive of water, and shall note the results in the Vessel’s ullage record (17.2).

Charters can instruct Owners to load cargo on top of slops and to discharge slops together with the cargo and freight shall be payable in respect of the slops (17.3).

14. Oily Residues / Clean Ballast

18. Crude Oil Washing (COW)

Owners are obliged to carry out COW concurrently with cargo discharge, and the Master will provide a COW log, which identifies each tank washed and stating whether the vessel has been washed to the MARPOL minimum standard. (18.2)

Removed: The complicated formula at 19.9 of BPVOY4 used to calculate total excess pumping time has been removed.

19. Part B. Crude Oil Washing and Stripping

19. Hydrogen Sulphide and Marcaptans

This is a new clause to reflect changes introduces by the International Safety Guide for Oil Tankers & Terminals (ISGOTT).

Owners undertake that before tendering NOR and prior to berthing at any loading port the Hydrogen Sulphide and Mercaptans levels in the vessel's tanks shall comply with any limits set by national or local law, rule, regulation or port requirement.

Owners must measure and be aware of the appropriate levels of Hydrogen Sulphide and Mercaptans and ensure that they are compliant with local or national law, regulations or port requirements.

NEW

20. Cargo Temperature

Charterers may instruct Owners to maintain the cargo temperature up to the Vessel’s maximum, throughout the laden voyage and discharge. Any costs associated with maintaining the temperature are for Owners’ account. (20.2)

Removed: The formula to calculate the quantity of bunkers consumed to raise the temperature of the cargo has been removed (25 BPVOY4).

24. Maintenance of Cargo Temperature and

25. Cargo Heating

21. Cargo Retention

The clause remains broadly the same.

Any cargo remaining on board must not only be liquid, but also now pumpable (21.1, 21.2)

33. Cargo Retention

22. Even Keel

The clause remains broadly the same.

The requirement for Owners to notify Charterers of the vessel’s expected arrival draft forward and aft by “telex” has been replaced by “email”.

The notification shall be given as soon as practicable after Owners have received the Voyage Orders. The qualification in BPVOY4 that this should be “no later than the vessel’s departure from the loading port” has been removed.

21. Slack Tanks / Even Keel (21.2)

23. Under Keel Clearance

Owners must be aware of and understand BP's Under Keel Clearance Policy.

The Vessel's Under Keel Clearance must be no less than 1.5% of the Vessel's extreme breadth, or 30cm, whichever is the greater (23.1(b)).

It is the Owners' responsibility to inform Charterers of the Vessel's maximum cargo intake, prior to loading and make sure that this is not exceeded (23.2).

Any loss or damage caused by non-compliance with BP's Under Keel Clearance policy shall automatically be deemed to result from Owners' breach entirely (23.3).

The obligations on Owners in this clause are strict and will render Owners exposed for any damage to vessel by virtue of failure to comply with the under keel clearance policy and obligations.

NEW

24. Revised Voyage Orders

The clause remains broadly the same.

Charterers are permitted to issue revised voyage orders and instruct the vessel to stop and await orders (24.1). The Cancelling Date will be extended if any delay is caused as a result of the revised orders (24.2).

Any time awaiting orders shall count as laytime or demurrage. Any costs incurred by the difference in steaming time between the Vessel’s route if it had gone directly and the revised route will be for the Charterers’ account, along with additional bunkers consumed (24.3).

22. Revised Charterers’ Voyage Orders for Loading or Discharge Ports

25. Interim Ports

Charterers are permitted to order the Vessel to load and/or discharge at additional ports within the charter Ranges (25.1).

If the agreed Freight Rate is not on a Worldscale basis and the freight for a voyage which includes additional ports is not expressly provided for then charters shall reimburse additional port costs incurred by owners and for additional bunkers consumed. Additional distance will count as laytime or demurrage (25.2).

Laytime and demurrage will commence upon tendering a valid NOR at the additional ports and end on dropping the last outward pilot (25.3).

22. Revised Charterers’ Voyage Orders for Loading or Discharge Ports

26. Backloading

Charterers are permitted to order the Vessel to discharge and backload a full or part cargo (26.1).

Freight shall be calculated in accordance with Worldscale for the whole voyage (26.2).

All time used to backload shall count as laytime or demurrage and charterers shall reimburse additional port costs and bunkers (26.3).

NEW

27. Virtual Arrival

Clause 27 provides a scheme for which Charterers are entitled to instruct Owners to proceed at a speed (the “Set Speed”) such that the vessel will reach the discharge port at a particular date and time.

The Vessel must always be within the limits of the minimum safe speed. That speed will be calculated by a weather service company.

Extra passage time is calculated by the weather service company and their calculation will be final and binding (unless in cases of obvious arithmetical error) and any extra passage time shall count as laytime or demurrage.

NEW

28. Freight and Dues

The clause relating to freight has been significantly amended.

Owners are obliged to provide supporting documentation, when requested to do so, in relation to payment of freight (28.2).

There are new provisions in respect of freight based on Worldscale (28.8). Any dues payable under the Preamble to the Worldscale are payable by Owners, unless expressly stated otherwise in Section 5, Part B of the Preamble. Even if those dues are listed in Section 5, Part B, Owners pay in the first instance and are reimbursed by Charterers, on the production of supporting invoices.

If freight is not based on Worldscale, section 28.9 applies. Costs covered by Worldscale under a fixed or variable freight differential are deemed to be included in freight. In this case, Charterers are liable for those costs stated in Section 5 of Part B of the Preamble.

31. Freight Rate

29. Vessel / Cargo Inspections / Bunker Surveys

This clause is broadly the same as the clause in BPVOY4.

29.6 is a new provision in respect of the use of personal data. Charterers may need to provide personal details of their representatives to Owners to facilitate access to the vessel. Owners’ obligation is to comply with data protection laws and procure that any of their agents or other persons in receipt of such data will also comply.

23. Vessel / Cargo Inspections / Bunker Surveys

30. Bills of Lading

The charterparty now allows for electronic Bills of Lading  to be transmitted using the ESS-Databridge, as an eDoc. (30.3).

Owners need to ensure that crew are aware of the requirement for electronic bills and are trained and equipped accordingly and that Owners have access to the ESS-Databridge.

30. Bills of Lading

31. Additional Cargo Operations and Indemnities

BPVOY4 did not address blending, commingling or additives.

In BPVOY5, "blend" is defined as "to mix on board separate parcels of cargo, each bearing a different grade and/or specification to the other, to form one parcel with a single grade and/or specification."

Obligations in relation to blending cargoes are found in clause 31.4. Charterers may request Owners to blend cargoes and if they do:

Charterers warrant that any cargoes to be blended shall be stable and compatible and no precipitation of solid deposits in cargo tanks, pipes, pumps or valves will occur;

blending will be in strict compliance with the safety rules and subject  to the technical characteristics of the vessel;

any costs incurred will be for Charterers' account;

Charterers shall return to Owners for cancellation all three Bills of Lading issued in respect of the cargoes being blended and Owners will issue replacement Bills of Lading stating the place and date that the blending took place and the nature of the original cargo, the original quantity, and the date and place of loading.

Commingling is defined as “mixing on board separate parcels of cargo each bearing the same grade and/or specification to the other, to form one parcel with a single grade and/or specification.

Charterers may request Owners to commingle cargoes, pursuant to clause 31.1(e).

Charterers may also request Owners to introduce additives, pursuant to clause 31.3. Charterers bear the cost of additivisation operations and Charterers warrant that additives shall be stable and compatible and that no precipitation of solid deposits will occur in tanks, pipes, pumps or valves.

Charterers will be deemed to indemnify Owners against any liability, loss, damage of expense arising out of the blending, commingling and additives. However, if the damage or expense could have been avoided by the exercise of due diligence, then the indemnity is not effective.

LOIs: Charterers will be deemed to provide an undertaking (31.2) in relation to additional cargo operations. This wording removes the requirement for the physical provision of an LOI.

Limitation: Charterers' liability is limited to no more than twice the CIF value of the cargo at the discharge port on completion of the discharge. Under the clause, there is a strict time bar of three years from disconnection of the hoses at discharge port in which Owners must issue written notice of a claim.

30. Bills of Lading and Indemnities

32. Liberty

This clause has not changed materially.

26. Liberty

33. Ice

There are new provisions with regards to ice.

Clause 33.3 precludes any vessel from transiting the Northern Sea Route or Northwest Passage. Should a Vessel require to travel these routes, Owners and Charterers must agree in writing, prior to the voyage.

The charterparty makes allowances for those vessels that are ice classed or strengthened (33.4). However, if the Vessel enters an area in which the published data indicates that the ice is thicker than that for which the vessel is classed, Charterers will be in breach for ordering a vessel into such areas.

28. Ice on Voyage and Ice at Loading or Discharge Ports

34. War Risks

The definition of "War Risks" has been widened to include attempted acts of piracy, terrorist and hostility.

Further, liability for the Master's decisions with respect to exposure to War Risks has been removed and judgment for the likelihood of exposure to War Risks now falls solely on the Owners (see clauses 34.1(b), 34.2 and 34.3).

The liberties of the Vessel in relation to War Risks have been increased. The Vessel may now:

• take preventative measures to protect the vessel, her crew and cargo, including re-routeing, proceeding in convoy, adjusting speed and course, or engaging security personnel or equipment on or about the Vessel;
• deploy armed or unarmed guards.

If Owners deploy armed guards, then they must indemnify Charterers for costs and losses arising out of or in connection with the carriage and/or use of the security guards' weapons.  Owners bear the costs of armed guards and must follow industry guidelines.

39. War Risks

35. Established Threat of Piracy

Owners must ensure that their Vessel is registered with the Maritime Security Centre Horne of Africa in Northwood UK and the UK Maritime Trade Operations Centre in Dubai, if their Vessel is transiting through the Red Sea, Gulf of Aden, Arabian Sea and western parts of the Indian Ocean.

NEW

36. War Risks and Additional Expenditure

Owners must have war risk insurance in respect of H&M, loss of earnings and detention, the crew and their P&I risks (36.1). APs are for Charterers’ account if the clause is complied with (36.2) but Charterers are credited with discounts (36.3). The following insurances are for Owners’ account during the charterparty; blocking and trapping, detention, loss of profit, loss of hire, loss of freight, loss of bunkers, crew bonus and kidnap and ransom (36.4).

NEW

37. Quarantine

This clause has not changed.

29. Quarantine

38. Address Commission

This clause has not changed.

32. Address Commission

39. Claims Time Bar

The claims time bar remains the same as that in BPVOY4.

Owners must notify Charterers of the claim and provide all supporting documentation within 90 days of completion of discharge for claims for demurrage, deviation or detention, or 180 days for all other claims.

Whilst the obligation has not changed since BP VOY 4, it is worth highlighting to ensure strict compliance with the clause. Failure to present a claim in time will extinguish Owners' right to the claim.

When negotiating the charterparty, Owners should seek to amend this clause, in order to carve out cargo liabilities, which may materialise long after discharge. Cargo claims under the Hague / Hague Visby Rules will allow for claims to be presented up to one year after discharge, and under the Hamburg Rules, 2 years after discharge. Owners may wish to claim an indemnity from Charterers in respect of such claims depending on the circumstances. Owners should seek to amend the clause if commercially viable.

20. Claims Time Bar

40. Certificates of Financial Responsibility (COFRs)

The Vessel must have on board paper copies of all COFRs that may be necessary.

37. United States Coast Guard (“USCG”) Certificate of Financial Responsibility / United States Coast Guard Regulations

 41. ITOPF, P&I and Oil Pollution

The Vessel must be a member of the International Tanker Owners Pollution Federation Limited (ITOPF). Failure to do so will be a breach of charter.

NEW

42. TOPIA and STOPIA

Owners warrant that the vessel is entered in the Tanker Oil Pollution Indemnification Agreement 2006.

NEW

43. US Customs Regulations – Coding

Owners’ obligations have been extended from those in BPVOY4.

When transiting through US Ports, Owners must:

(a) comply with US Customs regulations

(b) undertake the role of carrier

(c)  have in place a Standard Carrier Alpha Code and insert this on the Bill of Lading

(d)  have in place an International Carrier Bond

(e)  submit cargo declarations to US Customs via the Automated Manifest System

(f)  provide Charterers on request with details of the Unique Identifier in respect of all cargo carried.

Charterers’ obligation is to provide all necessary information to Owners to allow them to submit a timely and accurate cargo declaration.

36. Coding of Cargo Documentation – US Customs Regulations

44. ISPS, MTSA and CBP

Costs and expenses relating to security regulations in accordance with ISPS, MTSA or CBP (such as security guards, launch services, port security fees) shall be for Owners’ account (44.2), unless Charterers fail to provide Owners with their full style contact details and any other information that Owners reasonably require to comply with ISPS, MTSA and CBP (44.1).

Owners also warrant that all of the 10 ports at which the Vessel has called before tendering NOR at the first loadport were registered with the IMP as ISPS Compliant Ports. Owners’ further warrant that if the Vessel conducted any ship to ship loading or transfer of goods, such loading has been carried out in accordance with the Vessel’s approved Ship Security Plan (44.5)

NEW

45. Drugs and Alcohol Policy

This clause is broadly the same.

The burden is on Owners to show that they have exercised due diligence, if an actual impairment of the Drug and Alcohol Policy is uncovered.

10. Drugs and Alcohol Policy

46. Exclusions

This clause is broadly the same as BPVOY4

38. Exceptions

47. Both-to-Blame

This clause has not changed.

40. Both-to Blame Collision

48. General Average

This clause has not changed.

General Average shall be adjusted and settled in London in accordance with the York-Antwerp Rules.

41. General Average

49. New Jason

This clause has not changed.

42. New Jason

50. Clause Paramount

This clause has not changed.

43. Clause Paramount

51. Lien

This clause has not changed.

46. Lien

52. Sub-Letting / Assignment

Charterers have an additional right to assign the charter. Clause 52.2 permits (with the Owners’ approval, not to be unreasonably withheld), assign the charter to any entity or person, without prejudice to the respective rights and obligations of either party. However, Charterers shall remain responsible for the performance of this charter.

47. Sub-Letting

53. Remeasurement

Charterers may request that the vessel is remeasured to comply with particular port restrictions, and the reasonable time incurred and disbursement cost for any such remeasurement will be for the Charterers’ account.

NEW

54. Administration

The charter will not be issued in paper form unless required by either party.

This is a significant departure from the paper based system in BPVOY4.

48. Administration

55. Communications

All communications from Owners shall be according to the Voyage Orders and all communications from Charterers shall be to the details listed in Section M of Part 1 or via brokers.

NEW

56. Baltic Routeing

The Vessel is required to have a pilot on board for laden transit of the Kattegat, Sound or Belts.

NEW

57. Magellan Straits

Laden transit in the Magellan Straits is forbidden, unless the Vessel is bound to a port therein.

NEW

58. Turkish Straits

The Strait of Istanbul and the Strait of Canakkale are defined as the Turkish Straits. Any delays arising as a consequence of observing traffic regulations through the Turkish straits (northbound and southbound), in excess of 48 hours in aggregate, shall count in full as laytime or demurrage.

A pilot is required for transit of the Turkish Straits, the cost of which is for Owner's account.

Charterers may request owners to issue a copy non-negotiable Bill of Lading and cargo manifest bearing the name of the Turkish receiver. This Bill of Lading shall be marked "For Customs Purposes Only" and "Not a Document of Title." Charterers indemnify owners for complying with the request. Owners will need to check with their P&I club that compliance with this clause will not prejudice cover.

NEW

59. Carriage of Cargo Additive

The charter allows for Charterers to carry up to 15 drums of cargo additive. Time used to load or discharge such drums shall count as laytime or demurrage, unless it happens concurrently with loading or discharging of the cargo.

NEW

60. Confidentiality

Details of the charter and negotiation of the charter are private and confidential.

NEW

61. Law and Jurisdiction

The construction, validity and performance of the charter shall be governed by English law and the High Court in London has exclusive jurisdiction over any dispute which may arise in relation to it.

This is the same as the Law clause in BPVOY4.

49. Law