BARGEHIRE 2008 PDF

Reproduced with kind permission of BIMCO Drafting Notes 0ver the years, BIMCO has been quite active and successful in the formulation of various standard documents which are of use to the offshore and marine related construction industry. Against this background, BIMCO was, some time ago, approached by trade interests specialised in the offshore business expressing considerable interest in the formulation of a special standard bareboat charter for use in connection with chartering of non self-propelled barges for marine related construction operations for both offshore and civil work. It was envisaged that the provisions of such a charter could largely be based on the terms and conditions of the BARECON 89 Standard Bareboat Charter but suitably adapted to meet the special requirements of barge chartering. It was understood that the offshore barge industry is a highly sophisticated trade with a large volume of chartering done on a global basis. In addition to the European controlled non self-propelled flat top barge fleet, comprising approximately 75 units of feet X 90 feet or larger, there are barges trading in the US Gulf, South America, and the Middle and Far East areas.

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Reproduced with kind permission of BIMCO Drafting Notes 0ver the years, BIMCO has been quite active and successful in the formulation of various standard documents which are of use to the offshore and marine related construction industry.

Against this background, BIMCO was, some time ago, approached by trade interests specialised in the offshore business expressing considerable interest in the formulation of a special standard bareboat charter for use in connection with chartering of non self-propelled barges for marine related construction operations for both offshore and civil work.

It was envisaged that the provisions of such a charter could largely be based on the terms and conditions of the BARECON 89 Standard Bareboat Charter but suitably adapted to meet the special requirements of barge chartering. It was understood that the offshore barge industry is a highly sophisticated trade with a large volume of chartering done on a global basis. In addition to the European controlled non self-propelled flat top barge fleet, comprising approximately 75 units of feet X 90 feet or larger, there are barges trading in the US Gulf, South America, and the Middle and Far East areas.

Norway and The Netherlands tend to dominate the barge owning industry within Europe, although there are also a number of major owners in the UK and Germany. The charterers of large and smaller barges are usually oil companies, construction contractors and fabrication yards who use the barges for transportation and storage of heavy and voluminous cargoes, such as modules for offshore platforms, in long and short term contracts.

At its meeting held in Singapore in May , the Documentary Committee of BIMCO gave its support to the idea of developing such a standard barge bareboat charter to meet an increasing demand in this area of activity. It is expected that a new standard barge bareboat charter developed by BIMCO will ensure a wide international acceptance, the aim being to develop a balanced, concise and practical document which takes into account all the peculiarities of the trade.

The actual drafting of this new standard charter party was entrusted to a subcommittee composed of individuals with expert knowledge within the specific field of barge bareboat chartering and representing the various interests involved, i.

Throughout the drafting work it was encouraging to receive a large number of proposals for improvements and amendments from trade interests and legal experts, and every suggestion and recommendation received has been carefully considered and, whenever possible, taken into account in the finalisation of the document. All items to be agreed for the particular charter and to be filled in by typewriter have been arranged in boxes in Part I.

The boxes contain a brief description of the particular item and a reference to the relevant clauses in the printed body of the charter Part II. Some of the boxes to be completed in Part I may call for special observations; however, in view of the fact that the details to be written into the boxes should be considered in light of the provisions in the corresponding clauses in Part II, it has been considered appropriate to make these observations together with the comments on the standard clauses in Part II.

The main idea of the division of the charter into two parts is to leave the printed text of Part II unaltered. In this context it may be useful to emphasise that a standard contract constitutes an integrated whole and that any changes to some of the printed clauses may destroy the over-all balance of the contract as such, a fact which should not be forgotten when attempting to amend standard clauses in Part II.

The following is a brief description of the standard clauses contained in Part II giving some background explanation to the clauses in order to assist owners and other interested parties in the practical use of the charter party. Clause 2 - Period of Charter Party Sub-clause b provides the Charterers with the right to extend the charter party by up to one-third of the agreed charter period or 45 days, whichever is the lesser.

Clause 3 - Delivery The port or place of delivery agreed shall be stated in Box Pursuant to this Clause the Owners undertake to deliver the barge described in Boxes 5 to 12 of Part I. Reference is made to the observations made under Clause 5 Substitution.

This Clause also provides for the condition in which the barge shall be delivered and, finally, that the delivery to the Charterers shall constitute a full performance by the Owners of their obligations under this Clause. In this Box details on the currency and method of payment as well as when and where the fee is payable should also be filled in.

Clause 5 - Substitution It has been found useful to include a substitution provision giving the Owners a right to substitute the barge described in Part I with an equivalent barge suitable for the purpose of the charter in question.

The substituting barge shall be of an equivalent size and quality and, evidently, such substitution must not result in any delay and costs for the Charterers.

If the Owners wish to exercise this option they shall notify the Charterers thereof no later than 15 days prior to the delivery date. In order to strike the right balance in this Clause and because the Charterers most likely will have to change the technical calculations etc. This will also enable the Owners to reconsider the financial implications of the substitution. Clause 6 - Time for Delivery It is common practice in the industry for barge bareboat charters to be entered into a long time before the charter period is expected to run and the actual dates known.

The parties, therefore, typically agree on an initial charter period a so-called "delivery window" referred to in sub-clause 6 a and to be stated in Box 17 with an option for the Charterers to subsequently specify their firm requirements.

An example would be that in April, , the Owners and the Charterers agree on an initial delivery period "window" from I February , to 30 April 90 days. When negotiating the charter terms, Box 18 will also have to be filled in with the delivery period notification schedule, as follows: Example: The contracting parties may agree that days i. In this example, therefore, and in order to comply with this provision, the Charterers, on 1 February, , narrow down the delivery period to I March to 30 April, Continuing the example, the parties may also have filled in " days" notice period and "30 days" delivery period , respectively, in the next line of the notification schedule in Box This would mean that days prior to 1 March, the first day of the previous declared delivery period the Charterers shall narrow down further the delivery period to 30 days.

The Charterers may then declare that the new delivery period is 1 April, to 30 April, If, in the next line of the notification schedule, "90 days" and "15 days" have been specified, the Charterers shall, 90 days prior to 1 April, , narrow down the delivery period to 15 days, for instance 15 April to 30 April, In this example, the last number of days which have been filled in as notice in this Box is "45".

The Charterers shall therefore notify the Owners of the exact delivery date 45 days prior to 15 April, Clause 7 - Cancelling Non-delivery of a barge by the Owners, or even a small delay, may have serious consequences for the Charterers, not least when they are engaged in large construction projects in the offshore industry.

A distinction has been made between claims for damages caused by late delivery of the barge and, those caused by non-delivery resulting in subsequent cancellation of the charter. Accordingly, sub-clause 7 a provides that late delivery shall entitle the Charterers to a daily compensation Box 19 or a maximum lump sum amount Box 20 , as agreed, whichever is the lesser, whereas sub-clause 7 b provides that in the event of non-delivery of the barge and the charter is cancelled, the Owners shall pay compensation to the Charterers as agreed in Box The exception of gross negligence and wilful misconduct has been introduced in order to avoid that the Owners may feel it beneficial to them to pay the penalty and not deliver the Barge through gross negligence or wilful misconduct.

On the basis of Clause 7 it should thus be fairly simple to assess the amount of damages to which the Charterers shall be entitled on the grounds of late delivery or non-delivery. It should be noted that the assessment of compensation for claims for late or non-delivery is to be made without regard to any other claims the Charterers may have under the Charter Party.

Sub-clause 7 d includes the so-called "Interpellation Clause" found in a number of BIMCO standard documents, the idea of which is that the barge shall not have to proceed on a long voyage towards the place of delivery not knowing whether or not the Charterers are going to accept the barge. Reference is made to the observations made under Clause 20 Redelivery regarding late redelivery by the Charterers.

Clause 8 - Trading Limits According to this Clause, the Charterers undertake not to employ the barge under terms which are not in conformity with the terms of insurance without first having obtained the consent to such employment from the insurers.

Even though it is the Charterers who take out the insurance if Clause 16 ii applies, there may be situations where the Owners have a legitimate interest in being informed about the employment of the barge. Hence, it has been stipulated 4 in sub-clause a that the Charterers shall keep the Owners advised of the intended employment of the barge.

Clause 10 - Surveys This Clause deals with the usual on-hire survey and off-hire survey to be carried out by a mutually acceptable qualified marine surveyor and, moreover, the allocation of costs and time connected thereto.

Clause 11 - Inventories and Consumable Oil and Stores This Clause provides for the drawing up of inventories and the taking over of consumable oil and stores at delivery and redelivery. Clause 12 - Inspection This Clause gives the Owners a right to inspect or survey the barge throughout the charter period, and it also provides for an equitable allocation of costs in connection herewith.

The last paragraph provides an obligation for the Charterers to inform the Owners of incidents occurring to the barge. Clause 13 - Maintenance and Operation One of the significant consequences of bareboat chartering is that during the entire charter period the barge is under complete control and at the absolute disposal of the Charterers.

Thus, it follows from sub-clause a of this Clause that the responsibility for maintenance and operation and all costs and expenses arising therefrom shall rest with the Charterers.

It is important that the date of the last special survey is indicated in Box A breach of the obligation to maintain and repair the barge may entitle the Owners to withdraw the barge if the Charterers fail to effect repairs, etc. Sub-clause 13 a also takes into consideration that unforeseen requirements for structural changes or new costly equipment may arise under a long-term charter, especially as a result of new international regulations, and the question therefore is which of the contractual parties should bear this potentially heavy burden.

On the one hand, it would not be reasonable to place such burdens on the Owners without providing for renegotiation of the hire. On the other hand, such new requirements may place an excessive burden on the Charterers, for instance, if compliance is required shortly before redelivery. In case the parties fail to reach agreement, the matter shall be referred to arbitration according to Clause 30 Law and Arbitration.

If, therefore, subclause 16 i is applicable, i. Notably, sub-clause 13 c gives the Charterers a right to paint the barge in their own colours, install and display their insignia and fly their own house flag, provided that costs incurred in this connection, and by re-painting and re-instalment, shall be borne by the Charterers and, finally, that time used thereby shall count as time on hire.

The provision should be seen against the background that, under a barge bareboat charter, the Owners have no influence on, nor are they responsible for, the management and the operation of the barge. Therefore, the purpose of this Clause is to ensure that, during such specialised operations which may pose a certain danger to the barge, a qualified ballast engineer is used. The Charterers may not always possess sufficient expertise and experience to conduct the operations mentioned and, above all, the ballast engineer would typically be familiar with that particular barge.

Hence the provision that, if requested by the Charterers, the Owners may provide a ballast engineer at the expense of the Charterers. It is important to note that the ballast engineer is under the supervision of the Charterers and shall be deemed to be a servant of the Charterers.

This means that the Charterers shall indemnify and hold the Owners harmless from and against all liabilities arising from the ballast operations.

Clause 15 - Hire In line with common practice within bareboat chartering, and as a practical measure, it has been decided that the charter hire should be fixed at a lump sum rate per day and that the charter hire falls due and shall be paid monthly in advance on the first day of each month.

An unconditional obligation to pay hire as and when due must, of course, be linked to a right for the Owners to withdraw the barge if the Charterers are in default of payment.

However, it has been felt that a certain grace period should be granted to the Charterers if, for a bona tide reason, they happen to be behind with payment. Accordingly, 4 sub-clause 15 e provides for a grace period of 96 running hours. It goes without saying that this grace period is intended to be applied in exceptional situations only and it does not.

Moreover, an attempt has been made to make it clear that any default by the Charterers in the payment of hire beyond the grace period shall amount to repudiation of the Charter Party which shall entitle the Owners to withdraw the barge and to claim damages for costs and losses incurred as a consequence of such default.

Sub-clause 15 f leaves it to the contracting parties to negotiate the interest rate to apply and to fill in Box 25, accordingly. If, however, Box 25 has not been filled in, the LIBOR interest rate for the currency stated in Box 25 increased by 2 per cent shall apply.

This latter approach has been chosen in order to avoid possible dispute as to the current market rate. Clause 16 - Insurance, Repairs and Classification Sub-clause 16 i In the bareboat chartering of barges, and contrary to what is usually the case as regards bareboat chartering of vessels, it is practice that the Owners arrange and keep the barge insured for marine, war, and protection and indemnity risks.

Of course, proper insurance of the barge is considered paramount, and sub-clause 16 i b therefore provides that in the event that any act or negligence by the Charterers vitiates any of the insurances, the Charterers shall pay to the Owners all losses and indemnify the Owners against all claims which would otherwise have been covered by such insurances.

In some cases, either of the parties may wish to place additional insurance to cover their interest in the venture. For instance, the Charterers may have an interest in covering themselves against loss of time occasioned by excessive and time-consuming repairs on account of hull damage.

Hence sub-clause 16 i f. There may, however, be certain problems as to the right of placing such additional insurance, for instance, according to national legislation or because the insurers of the vessel may either refuse or put a certain limit on such additional insurance cover. Whilst subclause 16 i f does not cover the wide range of possibilities and difficulties which may be envisaged, it does remind the parties of the problem and, moreover, prescribes the amount of such additional insurance to be stated in Box 31 and Box 32, respectively.

In line with generally accepted legal principles sub-clauses 16 i g to 16 i i allocate the responsibilities of the Charterers and the Owners in the event the barge becomes an actual, constructive, compromised or agreed total loss.

It is, of course, important to determine and agree in the contract the value of the vessel for the purpose of insurance coverage and such sum as may be agreed between the parties should be stated in Box 30 according to sub-clause 16 i j. Regarding sub-clause 16 i k , it has been considered reasonable that when this applies, the Owners shall also keep the barge with unexpired classification in force during the entire charter period reference is made to the comments made under Clause 13 sub-clause a.

In particular, in case of short-term charters it has not been felt appropriate that renewal of class should always fall upon the Charterers. Sub-clause 16 ii It should be stressed that sub-clause 16 ii is optional and is only to apply if expressly agreed and stated in Box 29, in the event of which sub-clause l6 i shall be considered deleted. Notwithstanding the observations made under sub-clause 16 i , it has been felt useful to also cover the possibility, which may arise from time to time, in particular regarding long-term barge bareboat charter parties, that the Charterers are responsible for arranging and paying insurance against marine, yar, and protection and indemnity risks.

Hence, the main difference between sub-clause 16 i and 16 ii is that if the latter applies, the responsibilities just mentioned rest solely with the Charterers.

According to sub-clauses 16 ii c and 16 ii d the responsibility to effect repairs, including repairs not covered by the insurance, for instance, due to franchise or deductibles applicable under the terms of the insurances, also rests with the Charterers. Consequently, there is no question of the barge becoming off hire, for instance, for time used for repairs and according to sub-clause 16 ii e the time on hire thus runs unabated in such events.

As in sub-clause 16 i , the possibility of placing additional insurance by both parties is also envisaged in sub-clause 16 ii t to the extent such additional insurance is permissible as already explained in regard to sub-clause 16 i above. Similarily, subclauses 16 ii g to 16 ii i duly reflect the contents of sub-clause 16 i. Bearing this in mind there should, in principle, be no doubt that the barge Charterers are responsible for damage suffered by third parties caused by the barge, damage to or by the cargo, and any liabilities arising out of the barge becoming a wreck or obstruction to navigation.

However, for the sake of clarification it has been felt useful to provide for the responsibilities of the Charterers in the above instances, hence this Clause.

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BARGEHIRE 2008 PDF

Ducage Clause 10 — Surveys This Clause deals with the usual on-hire survey and off-hire survey to be carried out by a mutually acceptable qualified marine surveyor and, moreover, the allocation of costs and time connected thereto. It should be noted that the assessment of compensation for claims for late or non-delivery is to be made without regard to any other claims the Charterers may have under the Charter Party. Sub-clause 13 a also takes into consideration that unforeseen requirements for structural changes or baryehire costly equipment may arise under a long-term charter, especially as a result of new international regulations, and the question therefore is which of the contractual parties should bear this potentially heavy burden. Consequently, there is no question of the barge becoming off bargehiee, for instance, for time used for repairs and according to sub-clause 16 ii e the time on hire thus runs bargehirre in such events.

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