The COVID-19 pandemic has caused BIMCO to review its Infectious or Contagious Diseases clauses for time and voyage charter parties. The challenges that COVID-19 has posed to the shipping industry have led BIMCO to re-evaluate whether the original clauses remain suitable for the current pandemic, according to BIMCO’s release.
The original clauses were developed in 2015 at a time when Ebola was of great concern but was also generally limited to localized outbreaks in a few specific geographical areas.
A BIMCO sub-committee has reviewed the clauses including the definitions of “Disease” and “Affected Area” which trigger the operation of the clauses.
The global nature of the COVID-19 pandemic has caused potential difficulties with the existing clauses and terms such as “Affected Area”, which were originally drafted to provide a contractual solution for epidemics. In the current pandemic, the term “Affected Area” could arguably now be applied to the whole world.
BIMCO has made clear they are not looking to create a COVID-19 specific clause. The aim of the new clauses is that they will be suitable for, and applicable to, both future epidemics and pandemics and will also find an appropriate balance between the interests of owners and charterers.
The BIMCO documentary sub-committee feels that charterers are usually unwilling to agree on the existing clauses which give owners considerable powers to refuse charterers’ orders.
They hope that the new clauses will balance the key concern of preventing seafarers from being exposed to serious illnesses with charterers’ right to give orders to owners, make commercial use of the vessel, and trade.
It is anticipated that the new clause will greatly limit the right of owners to refuse charterers’ orders to call at ports but that, at least for time charters, the risk of delays relating to contagious diseases will largely be placed onto charterers.
Work has begun on revising the existing clauses with the new clauses due for publication in November 2021. The club welcomes the review and revision process as it is hoped the revised clauses will apply more directly to the current and any future pandemics, bringing certainty to both parties and maintaining a balance between the respective interests of owners and charterers, which in turn should encourage trade and assist the industry.