SupplyTime 2017 Requirements For Charterers at SUPPLYTIME
Atlantic Tonjer reveals how courts view the provisions in SupplyTime 2017 and standard form charterparties. It reminds us that even in commercial settings, the parties have equal bargaining power and must follow the letter of their agreement. Moreover, in such a setting, there is no special rule regarding the interpretation of contractual restrictions, because they are considered a necessary component of risk allocation and pricing. If this were not the case, contractual restrictions would be more likely to be upheld.
Changes to the form
The Supplytime.com charterparty form has been updated from the previous version in 2005. The new form makes several important changes. It is designed to be more balanced, reflect modern practices and developments in case law, and be more attractive to charterers. Below are some of the main changes to the form. Hopefully, the changes to the form will make the charterparty more appealing to charterers. However, many owners may find the new form unattractive.
The SUPPLYTIME 2017 form makes many amendments to clarify clauses that can lead to disputes. First, it clarifies that early termination is not a reason to terminate a contract. It also specifies that the vessel remains off-hire once the vessel is returned to the owner. Moreover, the SUPPLYTIME form now provides a more balanced set of liabilities. The new form also clarifies the wording of some clauses and reduces potential ambiguity.
The Atlantic Tonjer case clarifies clause 12(e) of the standard form and the requirement to provide prior notice of a due date. The decision emphasized equal bargaining power and the value of cash flow for Owners. For example, the due date notification requirement in a standard form may be a significant concern for Owners. As a result, the new form aims to make the process more equitable for both parties.
A knock-for-knock indemnity provision has been added to the SUPPLYTIME form in 2017. This indemnity clause allows the parties to allocate liability without regard to fault. The new form also requires the parties to indemnify each other if the other party's property is damaged. In such a case, each party will be liable for losses or damage to the other party's property, even if the other party is at fault.
Changes to APPENDIX B
A charter contract, SUPPLYTIME, is a common commercial document that has wide industry reach and frequent practical application. However, the form can be difficult to use in practice, with numerous boxes to check on the face of the document. For example, it contains 38 clauses that must be met, including detailed assessments of the capabilities and insurances of a ship. Here's a breakdown of the changes and their implications.
Requirements for charterers
Requirements for charterers at supply time is an industry standard contract which sets out the terms and conditions for a ship charter. The contract is widely applicable and is based on a variety of industry standards. However, it is not always straightforward to navigate through. Its 38 clauses require a voluminous amount of information. The purpose of the SUPPLYTIME form is to ensure a fair balance between the interests of the charterer and the owners. The charter rate is disproportionate to the scope of liability and the value of the project.
In addition, the annex on manning and crew qualifications addresses the complexity of offshore operations. It includes provisions on manning levels, certifications and the responsibilities of the owner and charterer. These annexes are intended to serve as templates for the specific circumstances in the offshore industry, but are not designed to address all aspects of the industry. In addition, some specific projects may require tailored provisions.
SUPPLYTIME 2005 reinforced the principle of knock-for-knock liability apportionment. This means that the owners and charterers share responsibility for any damage to property or injury to personnel caused by a breach of the contract. However, the 2005 form has some owner-friendly exceptions. The knock-for-knock regime excludes liability incurred due to damage caused by undisclosed dangerous cargo and liability incurred as a result of suspension of service.
SUPPLYTIME 2017 has further enhanced the requirements of the charterer. The clause has extended the definition of a 'charterers' group to include any client of any tier. The amended definitions have addressed concerns about extending the rules of the contract further down the contractual chain, but are not without fault. Regardless, it is important that the contract is clearly understood and enforced. There is a significant risk of litigation and inadequacy of documentation.
In addition to a requirement to comply with the provisions in the charterparty, charterers must also provide fuel in specified grades. The fuel must be homogeneous, stable, and compliant with relevant provisions of MARPOL. The Chief Engineer of the ship must work closely with the charterer's agents, comply with their requests, acknowledge delivery of the fuel and ensure that the vessel has a representative fuel sample.
The 2017 version of SUPPLYTIME includes a new lay-up clause with more specific provisions for warm lay-up. These changes were made in response to depressed market conditions. The 2005 SUPPLYTIME form was criticized for being too lenient towards Owners and was therefore revised to reflect the feedback of industry participants. The new form aims to balance Owners' obligations and indemnities.