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REVISION OF THE GENCON CHARTER PARTY - Written by Hans Levy - Date: 12/02-1994 As mentioned earlier in the Annual Report, BIMCO has adopted the GENCON 1994 charter which is a revised version of the old GENCON 1976. The structure of the GENCON 1994 follows that of its predecessors, but includes many improvements and clarifications. It is important to note, however, that in principle the owner’s responsibility clause (2) remains unamended, apart from this, however, the GENCON 1994 contains many new issues of which the most important are mentioned below: Clause 1, Preamble It is now stipulated that "The said vessel shall, as soon as her prior commitments have been completed, proceed to the loading port(s) or so near thereto as…". The words "as soon as her prior commitments have been completed" have been incorporated bearing in mind what could be referred to as "The North Anglia" doctrine under English law which makes the owners liable, if delays occur during previous voyages, even if such a delay was not due to any fault on the part of the owners or the vessel. The above insertion will protect the owners in that situation. Clause 2, Owners’ Responsibility Clause In principle the clause remains unamended, but the reference to owners’ responsibility due improper or negligent stowage of the goods has been deleted due to the fact that in clause 5, Loading/Discharging, the so-called "gross terms" have been deleted, and the charter party is now based on the FIOS terms only. Clause 4, Payment of Freight Payment of freight can be agreed to be prepaid or paid on delivery. If the freight is agreed to be prepaid, it is expressly stated that the freight is to be paid on shipment and deemed earned and non-returnable, vessel and/or cargo lost or not lost. This is in accordance with the standard terms of the trade when prepayable freight has been agreed. Clause 5, Loading/Discharging As mentioned above, the charter party provides for the FIOS only and states that loading, stowing and trimming etc. of the cargo shall be carried out by the charterers, free of any risk, liability and expense whatsoever to the owners. The owners shall, however, provide free use of the vessel’s gear including cranemen/winchmen from the crew to operate the cargo handling gear. A new provision has been inserted dealing with stevedore damage, which shall be notified as soon as reasonably possible by the master to the charterers and to the stevedores. The master shall endeavour to obtain the stevedores’ written acknowledgement of liability, but the charterers are ultimately liable for repair of any stevedore damage. Clause 6, Laytime The notice provision is more specific as regards to whom the notice should be tendered. In the loading port, notice is to be given to the shippers if named in the charter party, otherwise to the charterers. In the discharging port, notice is to be given to the receivers or, if not known, to the charterers. The question of laytime counting while the vessel is waiting for berth is now expressly dealt with. If the loading/discharging berth is not available on the vessel’s arrival at or off the port, the vessel shall be entitled to give notice of readiness and time shall count while the vessel is waiting. When the berth becomes available, laytime shall not count during shifting, but shall count again when the vessel has berthed. If it is then found that the vessel is not ready to load/discharge, the time lost in making the vessel ready shall not count as laytime. However, as soon as the vessel is ready, the counting of laytime will be resumed. Clause 7, Demurrage The provision "ten running days…" has been deleted, as this has almost inevitably been common practice in the past. As a consequence of the deletion and in order to protect the owners’ position, it is stated that demurrage shall be payable upon receipt of the owners' invoice. In the event that the demurrage is not paid accordingly, the owners shall be entitled to give the charterers a written notice of 96 running hours to rectify the failure. If the demurrage is not paid at the expiration of this time limit, the owners are entitled to terminate the charter party and claim damages for any losses caused thereby. This is the rule to be applied in the loading port. In the discharging port the owners will have the secure their position by exercising lien on the cargo. Clause 8, Lien The owners’ right to exercise lien has been increased and thus the owners may exercise lien in respect of claims for damages and for all other amounts due under the charter party, including the costs of recovering same. Accordingly, the owners would for instance have a lien for any warehouse costs incurred in connection with any necessary storing of the cargo while the lien is exercised. Clause 10, Bills of Lading The bills of lading shall be signed on the CONGEN 1994 form incorporating the Hague or Hauge/Visby Rules whichever is compulsory for the trade in question. It is specifically stated that the charterers shall indemnify the owners against all consequences and liabilities arising from the signing of bills of lading. This would entitle the owners to claim indemnity from the charterers under clause 2, if the owners vis á vis the bill of lading holders have incurred a liability exceeding the liability exceeding the liability of the owners pursuant to the responsibility clause(2). Clause 11, Both-to-Blame Collision Clause The standard Both-to-Blame Collision Clause has been inserted. This clause is of particular importance when a case is subject to US jurisdiction. Clause 12, General Average Reference is made to the York-Antwerp rules 1994 and any subsequent modification thereof. Clause 15, Brokerage In case of non-execution of the charter party, the party responsible for such non-execution shall pay 1/3 of the brokerage or the estimated amount of freight. It depends on the actual circumstances ie why the charter party was not executed, who shall be responsible for payment of the compensation to the broker. If none of the parties is responsible for the non.execution, e.g. in the event that the charter party became frustrated due to no fault or negligence by either of the parties, the broker will not be in a position to claim compensation under this clause. Clause 16, General Strike A redrafting of the clause has been made to take into account the ONISILOS case where it was held that in the event of a strike in the discharging port, only half the demurrage rate will apply throughout the entire discharging period, even if the strike had been terminated at an earlier date. It is now specifically stated that if the charterers exercise the option of keeping the vessel waiting, the time shall count as if there was no strike and when the vessel comes on demurrage, half demurrage shall count until the strike is terminated and thereafter full demurrage until the completion of the discharging. Clause 17, War Risks The "Voywar 1993" clause has been incorporated instead of the old "War Risk 1950" clause. A definition of war risks has been provided, expanding the scope of war risks to include acts of terrorists or malicious damage exercised by any person, body, terrorist or political group, or the government of any state. Furthermore, war risks include action taken or sanctions imposed selectively against vessels of certain flags or against certain cargoes or crews. A new provision has been included covering the situation where due to war risks a vessel has to follow another and longer route to the discharging port than anticipated. In such a case the owners shall be entitled to give notice to the charterers that this route will be taken and the owners shall be entitled to additional freight for the prolongation of the voyage. Clause 19, Law and Arbitration The old GENCON charter party forms did not contain an arbitration clause. It had to be agreed and drafted specifically at the fixture of each charter party. In some instances the parties forgot to include an arbitration clause and in other cases the drafting of the clause was somewhat incomplete, which occasionally resulted in the arbitration clause being void. The GENCON 1994 incorporates BIMCO’s Standard Law and Arbitration Clause stipulating that disputes are to be referred to arbitration in London and that English law shall apply. The clause, however, contains an alternative provision – to be expressly agreed in each case – according to which disputes are referred to arbitration in New York pursuant to American law or such other place of arbitration as is agreed pursuant to the law of that country. The CONGENBILL 1994 contains in the so-called Incorporation Clause an express stipulation according to which the law and arbitration clause of the charter party is incorporated in the bill of lading. This has proven necessary, as without an express incorporation the arbitration clause would not be considered incorporated in the bill of lading. |