Answer
A – BARECON arranges
CHARTR PARTY
charter party, contract by which the owner of a ship lets it to others for use in transporting a cargo. The shipowner continues to control the navigation and management of the vessel, but its carrying capacity is engaged by the charterer.
There are four principal methods of chartering a tramp ship—Voyage charter, Time Charter, Bareboat charter, and “lump-sum” contract.
Charteringdefinition – It is an agreement, whereby one party, the owner, puts a ship or a part of it at the disposal of another party, the charterer, for the carriage of goods between named ports. The charterer can in turn, sublet the ship or a part of it to a third party, who now becomes the “Disponent Owner”.
The chartering agreement is contained in a Document, called “Charter Party”.
In most countries, chartering agreements are governed by local legislation. A vessel might also be chartered to carry passengers on a journey.
The following terms must be present in a Charter Party Shipping Contract -
A. Name of Vessel
B. Charter Period: The period of the Voyage
C. Lay days/Cancelling: This term must include the Commencement date of the Voyage and the Cancelling date. D. Place of Delivery: The port of destination must be mentioned here.
E. Cargo history: The previous history of the cargo must be mentioned before the Voyage starts.
F. Place of Re delivery: if applicable
G. Bunkers on Delivery and Re delivery: if applicable
H. Rate of Hire: The rate of hire and the overtime hire rate must be mentioned.
I. Owners' Payment Details: Owner’s bank details must be provided.
J. Bunker Specifications: A detailed specification of the bunker must be provided
K. Product description: A detailed description of the products along with the amount of products
L. Trading Limits: The limits of the Voyage must be clearly mentioned so that the vessel does not depart from the original route.
M. Additional Clauses: Any other additional clauses as demanded by the ship owner or the charterer.
In addition to the above mandatory clauses, the following clauses should also be included in the Charter Party- 1. SPEED OF THE VESSEL: Permitted speed of the vessel along with route must be inserted in the Charter Party Agreement.
2. CARGoES: Permitted items as well as the capacity of the items in cargo must be mentioned. The consequences of carrying illegal items in the cargo should also be declared.
3. Payment: It must be mentioned when the payment must be made and also when the advanced payment has to be made. The consequence of failure to pay must also be mentioned.
4. OWNRS' OBLIGATIONS: A detailed list of the obligations of the ship owner must be mentioned.
5. CHARTRER’S OBLIG ATIONSV: A detailed list of the obligations of the charterer must be mentioned.
6. MASTER AND CRE W: The powers, rights and obligations of the master and crew.
7. LIEN: It must be mentioned that the Owners shall have a lien upon all cargoes, hire, sub-hire, freights
8. PERFoRMANCE OF VESSEL: Owners warrant that the Vessel is and shall remain capable of maintaining, throughout the Charter Period, the speeds and bunker consumption for propulsion under normal working conditions and in moderate weather.
9. OFF-HIRE: It must be mentioned that the Vessel shall be off hire on each and every occasion that there is a loss of time arising out of or In connection with the Vessel being unable to comply with Charterers' instructions (whether by way of interruption or reduction in the Vessel's services, or in any other manner) on account of:-
10. SUB-LET: Charterers will not sub-let the Vessel without prior written permission from the Owner.
11. VESSEL/CARGo INSPECTIONS/BUNKR SURVYS: It must be mentioned that Charterers at their time and expense shall be entitled to cause their repress.
12. OUTBREAK OF WAR: Either party should be allowed to cancel the Agreement on the outbreak of war or hostilities during the period of the Charter Party.
13. DAMGE: It has to be clarified who bears responsibility in the event of accident, danger, damage or disaster before or after the commencement of the Voyage.
14. LAW: It must be mentioned which law governs the Charter Party Agreement and where the dispute will be resolved.
Main types of contracts
the lump sum charter or chartering against a fixed price; The booking-note;
The forward Voyage charter;
Types of Charter Parties-
Voyage charter
Time Charter
Bareboat charter
Bareboat cum Demise Charter
Contract of affreightment.
The chartering by weight, number or measure has become obsolete and is therefore no longer encountered. On the other hand, the modern economic and commercial practices and transport methods such as the creation of consortia, containerization, etc. have introduced new types of contracts of affreightment,
such as: - "cross charters", where the owner can also be the charterer of a part of the ship.
- "storage chartering", where ships are chartered for temporary storing of goods. Some contracts of affreightment are bound locally such as the net form - chartering, which is used in the U.S. and where in addition to the freight, the charterer must also pay for the handling of the cargo.
There are also contracts of affreightment which are not related to the transport of goods such as the chartering of passenger ships, tugs, ship for scientific research, etc.
Voyage Charter – Under the Voyage charter, the ship is hired from the ship owner for one Voyage.
One Voyage could consists of multiple load ports and multiple discharge port.
under the Voyage charter, the charterer has hired the ship’s cargo space. But the Master and crew still remains under the disposal and instructions of ship owner and ship managers.
under the Voyage charter, charterer is not concerned about the fuel consumption. The fuel costs are for the ship owners. under the Voyage charter it is the ship owner who pays for the maintenance of the ship.
GENCON GRAINVOY INTERTANKVOY
SHELLVOY
Time Charter – the charterer hires the vessel for a particular period of time.
The time could be in years, days or months.
The shipowner receives the freight on per day basis which is settled every month or every quarter.
The Time Charter can be compared with the hiring a cab on per hour basis.
The maintenance of the ship is shipowner’s responsibility Agents at ports are appointed by the charterer
Fuel cost is borne by charter.
Ship is managed by the shipowner.
Port dues paid by the charter.
Crew cost paid by the shipowner.
GENTIME, LINERTIME(contanr), BALTIME (bulk carir)
Bareboat Charter Party – The shipowner leases his entire vessel and the charterer has the responsibility of operating it as though it were his own vessel. The shipowner has, for the period covered by the charter party, lost control of his vessel. The charterer pays all expenses: fuel, stores, provisions, harbour dues, pilotage, etc. and employs and pays the crew. There may, however, be a clause in the charter party that the master and the chief engineer must be approved by the shipowner. The charterer is responsible for the upkeep, preservation and safety of the vessel. Before delivery to the charterer the vessel is surveyed by representatives of both parties and the same is done on redelivery.
On redelivery the owner's representatives, usually the port captain and port engineer, may check the logbooks for information pertaining to groundings, striking objects and collisions.
The main purpose of a Contract of Affreightment (CoA) is to oblige one or more carriers to lift a fixed or determinable quantity of cargo of a specified type over a given period of time to specific destination(s).
- Usually, the CoA is not limited to one particular vessel, but operates as a series of Voyage charters Freight is
payable on the quantity of cargo transported and the carrier bears the risk of delay en route.
- CoAs in essence involve two promises. The shipper promises to provide a certain overall quantity of cargo
over a period of – usually – one year, and the carrier(s).promise to transport that cargo to the agreed destination(s) within the contract period at the predetermined freight rates, and other terms.
- CoAs protect shippers from freight market rises without the risks of a Time Charter while providing large
volumes of cargo to carriers. Charterer’s Representative ( terms includes any independent surveyor appointed by Charterers) to carry out inspections of the Vessel and/or observe cargo operations and/or ascertain the quantity and quality of the cargo, water and residues on board, including the taking of cargo samples, inspection and copying of the Vessel's logs, Documents at any loading and/or discharge port. Bareboat Charter cum Demise – means a Bareboat charter where the ownership of the ship is intended to be transferred after a specified period to the company to whom it has been chartered