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BIMCO publishes two 2020 sulfur clauses

Dec 10, 2018 09:01 AM

The guidelines deal with the pending IMO switch to 0.5 percent fuel

The following is text of a news release from BIMCO:

(LONDON) — BIMCO has published two sulfur content-related bunker clauses which are now available on the BIMCO website and on SmartCon, BIMCO’s contract editing solution.

The two clauses are:

• BIMCO 2020 Marine Sulfur Content Clause for Time Charter Parties 
• BIMCO 2020 Fuel Transition Clause for Time Charter Parties

“The subcommittee’s objective has been to create clauses that are simple and practical, and I’m confident we’ve achieved that objective,” said Peter Eckhardt, chairman of the drafting committee and head of chartering and operations at Reederei F. Laeisz.

The 2020 Marine Fuel Sulfur Content Clause replaces the BIMCO Fuel Sulfur Content Clause 2005 and can be incorporated into time charter parties as of now. The new clause forms an integral part of BIMCO’s Suite of Standard Bunker Clauses for Time Charter Parties.

“By making the 2020 Marine Fuel Sulfur Content Clause part of the Suite of Standard Bunker Clauses, it means that we have been able to keep the revised clause short and simple. It is written as a straightforward compliance provision with the sulfur content requirements of MARPOL Annex VI,” said Grant Hunter, BIMCO head of contracts and clauses.

Issues relating to the specifications, grades and quality/suitability of the fuel supplied by time charterers are covered by existing standard bunker clauses in time charters, so these should not need to be amended in relation to sulfur content alone.

Transition clause

The 2020 Fuel Transition Clause is not part of the Suite of Bunker Clauses as it deals with the one-off event of switching from 3.50 percent sulfur content fuel to 0.5 percent sulfur content. The switch is a process that will need to be started before Jan. 1, 2020 and so requires the owners and charterers to cooperate to ensure a smooth transition. The clause is designed to provide a fair allocation of responsibilities and liabilities between the owners and charterers in managing remaining stocks of fuel that will become non-compliant under MARPOL from Jan. 1, 2020.

The clause has been specifically designed for time charter parties that will span Jan. 1, 2020.

“We would also recommend incorporating the clause into time charter parties with redelivery very close to Jan. 1, 2020 where delays or extensions might result in the ship redelivering after the date the change comes into force,” Hunter said.

A joint development

The 2020 Bunker Clauses have been developed by a team comprised of owners, charterers, bunker suppliers, P&I clubs and legal experts.

BIMCO is grateful to the following individuals for assisting us with this important project:

Peter Eckhardt, F. Laeisz, Hamburg (chairman)
Daniel Chu, Navig8, London
Nicola Ioannou, Oceanfleet Shipping, Athens
Ann Shazell, Cargill Ocean Transportation, Geneva
Rob Crees, World Fuel Services, London
Tiejha Smyth, North of England P&I Club, Newcastle
Paul Dean and Alessio Sbraga, HFW, London
Michele White, Intertanko, London

BIMCO will also set up a working group to examine if a scrubber clause is needed.

Both clauses, and the accompanying explanatory notes, are available on the BIMCO website in the Contracts & Clauses section:

https://www.bimco.org/contracts-and-clauses/bimco-clauses/2020_Fuel_Transition_Clause_for_Time_Charter_Parties

https://www.bimco.org/contracts-and-clauses/bimco-clauses/2020_Marine_Fuel_Sulphur_Content_Clause_for_Time_Charter_Parties

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