Charty party forms in a charter agreement between shipowner and charterer

Charty party forms in a charter agreement between shipowner and charterer

Defining a charter party

A charter party (commonly abbreviated to “C/P”)

i) is a document containing the written terms of a charter agreement between a shipowner and a charterer, who are usually respectively referred to in the text in the plural, i.e. as “Owners” and “Charterers”.

ii) defines the obligations, rights and liabilities of the shipowner and charterer.

iii) is usually drawn up by the broker representing the charterers following negotiation and agreement of terms between both parties.

iv) is usually based on a particular edition of a recognised standard form (e.g. GENCON, BALTIME, NYPE).

v) is sometimes based on a specified charter party already performed by another vessel at an earlier date, in order to save effort and time in negotiating many of the terms.

vi) usually comprises a set of standard clauses on a printed form, with additional typed rider clauses appended if the standard clauses fail to cover all aspects of the parties’ agreement. Where there is a conflict between standard and rider terms, the rider clauses override the standard clauses.

vii) may have many amendments to the standard clauses, as agreed by the parties. Generally, the more amendments there are, the more scope for legal disputes, and it is preferable to have as few amendments as possible.

viii) may be in a modern “boxed” layout, with plain wording of clauses (as with BIMCO-designed forms), or in a more traditional style with (sometimes) rather archaic wording.

ix) may contain annexes dealing with special arrangements (as with CRUISEVOY, which has five annexes).
x) may have sensitive clauses in an addendum and/or side letter. Side letters are legally not so important as addenda.

xi) should be signed by a broker representing each party to the contract, unless their principals sign instead.

xii) should ideally be balanced so that it does not favour one party to the disadvantage of the other. (Some charter parties, such as SUGAR CHARTER 1999, are sometimes accused of being biased.)

Numerous charter party forms are in use for different trades and purposes. The use of an “off-the-shelf” form which has been carefully drafted, amended and improved over the years to avoid legal pitfalls is generally preferred by brokers and shipping practitioners to creating a totally new document for an individual charter.

Many forms have more than one edition, having been amended and improved over the years. Brokers may still use an older version, however, in preference to a newer version that has not gained their confidence.

Modern charter party forms drafted by BIMCO9 generally have boxed layouts, whereas older forms are in “conventional” layout. In a BIMCO boxed layout form, variable information is contained in boxes in Part I, while standard terms are contained in printed terms in Part II. Legally, the contract is generally contained in the Part I details, and in any other variable details in rider clauses, etc.

Voyage charter party forms

Examples of voyage charter party forms used in various trades are as follows:

Codename //Trade // Remarks

AFRICANPHOS // Moroccan phosphates //Charterers’ form.

AMWELSH // Coal // Americanized Welsh coal C/P. Widely used.

ASBATANKVOY // Tanker // American form.

AUSTWHEAT // Australian wheat // Australian Wheat Board form.

BEEPEEVOY // Tanker //BP form, used by many companies.

CHEMTANKVOY // Chemicals // BIMCO form. Boxed layout.

CRUISEVOY // Cruising // BIMCO form for cruise ship charter

C”ORE”7 // Iron ore // Full name: Mediterranean Iron Ore C/P.

FERTIVOY // Fertilisers // Unknown origin.

GENCON // General purpose // BIMCO form. 1922, 1976 and 1994 revisions.

GRAINVOY // Grain // BIMCO form.

INTERTANKVOY // Tanker Intertanko form, used by independent owners.

NORGRAIN // North American grain American form.

NUBALTWOOD // Timber // Used in Baltic trade.

OREVOY // Iron ore // BIMCO form with boxed layout.

PANSTONE // Stone (UK/Eire and N Continent trade) //BIMCO form last amended 1995 but retaining traditional layout.

SHELLVOY // Tanker // Shell form, used by many companies. Various editions.

Time charter party forms

Examples of time charter party forms in use are as follows:

Codename // Trade // Remarks

ASBATIME // Dry cargo tramp or liner // American form.

BALTIME // Dry cargo tramp or liner // BIMCO form. Boxed layout. Popular in short sea trades.

BEEPEESUPPLYTIME // Offshore service // BP form.

BEEPEETIME // Tanker // Widely used BP form with various versions.

GENTIME 1999 // Dry cargo tramp or container // Designed to replace BALTIME 1939 and LINERTIME, and as an alternative to NYPE.

INTERTANKTIME // Tanker // Intertanko form. Used by independent owners.

LINERTIME // Dry cargo // liner BIMCO form. Boxed layout.

NEW YORK PRODUCE EXCHANGE (NYPE) // Dry cargo tramp or liner Most commonly used time C/P form. 1946 version more popular than 1993 version.

SHELL VESSEL TIME // Offshore service // Shell form. 1986 revision of SHELL SUPPLY.

SHELLTIME // Tanker // Shell form, but widely used. Various versions.

SUPPLYTIME // Offshore supply // BIMCO form.

TEXACOTIME // Tanker // Texaco form. Various versions.

Defining a sub charter

It is common for the terms of both time and voyage charters to permit the charterers to sub-let the vessel in whole or in part, on condition that the head charterer remains responsible to the shipowner for the performance of the original charter. It would be possible, therefore, for a vessel to be:

1. owned by a bank or finance house;

2. leased or bareboat chartered to Company A;

3. time-chartered from Company A by Company B;

4. voyage-chartered from Company B by Company C;

5. employed by Company C in its own liner service, or even sub-chartered from Company C by Company D.

* Any reference in a charter party to a “disponent owner” refers to the time or bareboat charterer of a sub-let vessel, who assumes, in relation to the sub-charterer, the responsibilities of a real owner.

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Charty party forms in a charter agreement between shipowner and charterer

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