New infectious diseases clauses to be announced in November 2021 in light of the pandemic
The Baltic and International Maritime Council (BIMCO), one of the largest of the international shipping associations representing shipowners announced an impending review of its Infectious or Contagious Diseases (IOCD) clauses to address pandemic-related concerns.
A balancing act for ships and crew
Originally developed in 2015 due to Ebola, the IOCD clauses were geographically limited. It was for shipowners to protect their crew against the infection and the consequences to the vessel when trading within “Affected Areas”. These clauses are shipowners-focused; granting strong rights when an outbreak occurs. For COVID-19 which is sweeping across the globe, the geographical limitation becomes “inapplicable”.
BIMCO aimed to genericise the updated clauses, considering the virus’ fluidity. The clauses will assert that shipowners only be allowed to bypass under extreme conditions when all measures taken were insufficient to protect the crew. Before one assumes this as favouring a party, the new clause is expected to deny shipowners the right to refuse calling at a port only as a last resort. BIMCO clarified, “The clauses attempt to balance the crew’s health and welfare against the commercial interests of the parties and the fulfilment of obligations under the underlying sale contracts to transport and deliver the cargo.”
Will this solidify everyone’s benefits?
The BIMCO documentary sub-committee observed charterers are usually not agreeable to existing clauses, which give shipowners considerable powers to refuse charterers’ orders. Under a time charter, the charterers decide where the ship trades. With major delays due to port restrictions or quarantine orders, the revised time charter clause therefore aims to allocate the risks of delay primarily to charterers. The applicable exception is owners’ failure to take adequate protective measures to safeguard the ship and its crew.
There is a hairline difference between a voyage charter party and a contract of affreightment – shipowners agree to go to a specific port or range of ports, and the charter party is often entered in support of a specific sale contract or trade. The revised voyage charter party clause will hopefully reach an appropriate balance between the interests of owners and charterers in consultation with the industry.
Liability is a prevailing concern for shipowners and charterers, warranting measures in place to protect everyone’s interests. However, it would be a three-way tug-of-war on whom should bear the least burdens. The industry can only hope these revised clauses will complement the new insurance coverages (if any) for seafarers related to COVID-19.
Crewing Online News Team
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