Explanatory notes

Introduction

With close to 20 years since its last revision, the WORLDFOOD charter party was due for an update. While the mandate of the UN humanitarian organisation World Food Programme (WFP) remains to fight hunger globally, commercial practice and the law have changed since the last edition was published in 1999. To carry out its mandate, the WFP buys food, or receives commodities, and charters ships with donated money and deliver in emergency areas. Because of the often volatile parts of the world in which they operate, a very high degree of flexibility to change ports at short notice is required. Another characteristic of the WORLDFOODCHARTER is that the WFP is at the same time the shipper, charterer, receiver and consignee of the goods and therefore generally uses cargo receipts for the goods shipped on board. Bills of lading are not required as the food is not traded during the voyage. These explanatory notes are meant to explain the changes that have been done in the latest revision and the reasoning behind the clauses.

BIMCO would like to thank the following subcommittee members for their considerable efforts in revising the WORLDFOOD charter party:

• Mr Jean- Pierre Laffaye, LD Bulk (Chairperson) 
• Mr Torsten Klüver, Aug. Bolten
• Mr Loutphi Madani, WFP
• Mr Ottmar Schulte, WFP
• Ms Carina Nilsson, WFP
• Professor Richard Williams, Consultant to WFP
• Mr Leo Fileti, Banchero Costa 
• Mrs Judy Binnendijk, Britannia P&I Club

Structure

The charter party is divided into three sections. Part I is a box layout used to insert specific contract information such as the name of the parties, type of cargo, rates, etc. Schedule A is the vessel description, and Part II is the applicable terms and conditions. It is emphasised at the bottom of Part I that the provisions of Part I and Schedule A are to prevail over the terms of Part II to the extent that there is any conflict between them.

Part I

The information that is provided in the boxes is to be read in the light of the provisions of the particular clause to which the box refers.

Most of the boxes are self-explanatory but specific reference is made to the following:

Boxes 1 and 20 – The WFP works only with an approved panel of shipbrokers. The appointed shipbroker from the WFP panel should be stated in Box 1. It is sometimes the case that WFP’s selected shipbroker will have to liaise with other shipbrokers, which are not on WFP’s panel. If that is the case, these other brokers may be identified in Box 20 which is also to specify the commission that is to be payable to the relevant shipbroker(s).

Box 4 – In this box, only the name and the place of business of the entity that enters into the Charter Party in the capacity of Owners should be stated but further details relating to such party should be included in Schedule A. However, since it is the WFP’s policy to determine the identity of the registered owner of the vessel as a means of quality control in their chartering procedure, details of the registered owners of the vessel should also be included in Schedule A if they are not the party entering into the charter party as Owners.

Box 10 – Wording has been added to clarify that it is the first day of the laydays that should be inserted here. This box should be read together with Clause 5 (Laydays and Cancelling) to establish when laytime will start to run.

Schedule A

Schedule A is intended to provide up-to-date information about the vessel and the Owners. The information in these boxes is also intended to be consistent with, and to be read in the light of, the provisions of Part I and Part II. The wording has been improved and modernised.

An important change from the previous editions of the WORLDFOOD charter party is that Schedule A has now been made an integral part of the Charter Party contract so that the Charter Party is to be performed subject to the terms and conditions set out in Part I, Part II and Schedule A. 

It should be noted that the phrase “Intended Performing Speed” in Schedule A should not be regarded as a guarantee that the ship will in fact do so when performing under the Charter Party and is not intended to replace the Owners’ obligation under Clause 2 (a) to prosecute voyages with all reasonable dispatch. However, it is important for the WFP to know the speed at which the Owners intend to operate the ship in order to calculate if the cargo will be able to arrive at the discharging port when required. It may be critical that the food cargo is delivered on a certain day as intervening events could make it impossible to deliver a few days later.

Part II

Definitions

This section is new and includes definitions for terms that are used in several places throughout the Charter Party.

Clause 1 (Vessel)

This clause remains unchanged from WORLDFOOD 99. It puts a due diligence obligation on the owners to provide a seaworthy ship before and at the beginning of the voyage. It also includes continuing obligations on the Owners to comply with all relevant international safety and health regulations necessary for the unhindered performance of the voyage as well as the loading and discharging of the cargo. Finally, the Owners must ensure that the vessel is throughout the currency of the Charter Party fully insured for P&I and hull and machinery risks and classed Lloyd’s 100 A1 or equivalent with the insurers and Classification Society specified in Schedule A.

Clause 2 (Voyage)

This clause remains unchanged from WORLDFOOD 99. The first paragraph sets out the Owners’ obligation to proceed to the loading port and subsequently to the discharging ports with reasonable despatch. 

Consistent with general practice, Owners are responsible for the safety of the ports that are named in the Charter Party at the time of the fixture but the responsibility for the safety of any other ports that are not named in the Charter Party and which may subsequently be nominated by the Charterers rests with the Charterers. 
If the Charterers have been given the right to order the vessel to load and/or discharge at one or more ports out of several named ports or within a specific range, the Charterers shall declare the actual port or ports within whatever number of days that may be agreed in each individual case. For this reason, it is important to ensure that the actual number of days within which the Charterers must declare the ports are stated in Boxes 6 and 7.

Clause 3 (Cargo)

The WORLDFOOD Charter Party is based upon the presumption that the agreement is for a full and complete cargo details of which should be inserted in Box 8. However, if part cargo is agreed, this should be clearly indicated in Box 8. 

The WFP has duties to its parent organisation, the United Nations (UN), to ensure that it does not engage in any activity which would contradict or offend against the stated aims and principles of the UN. Subclause 3(b) is intended to safeguard the WFP against potential difficulty if the Owners were to load additional cargo for a charterer other than WFP, or to sub-let the carriage of WFP cargo to a ship owner that has not been approved by WFP, since this could render the WFP in breach of its duties to its parent organisation. Therefore, it is expressly stated that part cargo may only be shipped with the WFP’s prior written approval, and that breach of the Owners’ duties in this regard will constitute a breach of a condition which will entitle the Charterers to terminate the Charter Party. The clause also makes it clear that the Charterers’ rights in relation to laytime and demurrage are in no way to be prejudiced by the loading and/or discharging of a cargo other than the Charterers’ cargo. A new subclause 3(d) has also been included to the effect that WFP’s cargo must not be sublet.

In practice, WFP will buy cargo for a specific amount of donor money, which will then determine the amount of cargo to be carried. It will never be a “clean” amount such as 9,000 tonnes, but rather an odd figure like 9,845 tonnes. This position differs from general trading practice and is therefore clarified by WFP at an early stage, during negotiations and before fixing the ship. If the commodity price increases, less cargo will be carried, but the Owners will not be able to ship additional cargo unless WFP gives permission to do so.

The previous reference to dangerous cargo has been deleted as dangerous cargo is generally not carried.

Clause 4 (Present Position)

This clause previously also dealt with the commencement of laydays and notice of readiness. These provisions have now been moved to Subclauses 5(a) and 9(a) respectively as more logical locations. Clause 4 now only clarifies the Owners’ responsibilities when entering into the Charter Party to specify the vessel’s then current position and its expected ready to load date. The heading of the clause has therefore been renamed “Present Position”.

Clause 5 (Laydays and Cancelling)

The heading of this clause has been amended to “Laydays and Cancelling” to better reflect its content since the first sentence of the previous Clause 4 has now been moved to the new Subclause 5(a).

Subclause 5(a) together with Box 10 specifies the date and time when laydays can commence. Subclause 5(b) together with Box 11 specifies the cancelling time and date. Reference is made to “local time at the loading port or place” to avoid arguments as to which time zone is applicable.

Subclauses 5(c) and (d) give the Charterers the option of cancelling the charter party if the Vessel has not tendered notice of readiness on or before 17.00 hours on the cancelling date. In the event of an anticipated delay, the Owners are required to advise the Charterers of the actual date of sailing or expected date of sailing from the Vessel’s last discharge port and its expected date of readiness to load.

If the Charterers choose to cancel the Charter Party, then the Owners may save considerable costs in not bringing the Vessel to the loading port and may be able to fix it on another charter. However, to ensure that this right does not induce Owners to take advantage of a more lucrative fixture, rather than doing their utmost to reach the loading port within the laycan, the option to extend the cancellation date applies only once. Under Subclause 5(d), if the Vessel is further delayed, the Charterers are entitled to cancel the agreement. If the charterers do not exercise their option to cancel, then the cancelling date will automatically be the fourth day after the new date of readiness indicated in the owners’ notification to the charterers.

Clause 6 (Advance Notices (Loading))

It is of great importance to the Charterers that the advance notice requirements for both loading and discharging ports, as well as the notification requirements during the Vessel’s voyage, as specified in Clauses 6 and 7, are observed.

Clause 6 sets out the notices of estimated time of arrival at the first loading port that the Owners must give. The words “and/or the master” have been added to recognise and clarify the fact that the relevant notice is generally given by the master rather than by the Owners themselves.

The wording of the final paragraph of Subclause 6(a) has been made more precise by stating that if notices are not given in accordance with this clause, then laytime will only start to count 48 hours after a valid notice of readiness has been given (rather than the more imprecise phrase “after arrival” that was previously used under WORLDFOOD 99).

Clause 7 (Advance Notices (Discharging))

This clause sets out the notices of estimated time of arrival at the first discharging port that the Owners must give. The changes to the final paragraph of Subclause 6(a) (Advance Notices (Loading)) have been mirrored here.

Clause 8 (Notice of Readiness (Loading and Discharging))

This clause, together with Boxes 13 and 14 provides for when, in what circumstances, by and to whom notices of readiness for both loading and discharging may be given. The phrase “securely moored” has been added to Subclause 8(a) to clarify the fact that the risk of delay (which is normally borne by shipowners on the voyage stage) is not transferred to the Charterers (who normally bear the risk of delay on the cargo operations stage) until the navigation has finally been completed.

A valid notice of readiness cannot be given at the loading port(s) unless and until the Vessel’s holds are clean, dry, free from smell and in all respects suitable to receive the cargo to the Charterers’ satisfaction. As the vessel may be required to load at more than one port, the phrase “at each loading port” in Subclause 8(b) is intended to clarify the fact that such a notice of readiness should be given at each loading port to ensure that the charterers know exactly when they are required to commence loading. Events may occur between the different ports, which may also be located in different countries, which may mean that despite the fact that the ship was ready in the first port, that is no guarantee that it will also be ready in subsequent ports.

Clause 9 (Time Counting (Loading & Discharging))

This clause, which specifies when time should count as laytime or demurrage, is perhaps the clause that has undergone the most changes in the latest revision.  This has been necessary in order to address issues that have arisen over the years in respect of laytime calculations.

Subclause 9(a) – This subclause provides that even if the Vessel arrives before the time and date specified in Box 10 on which the laytime can commence to run, the Owners are, nevertheless, entitled to give a Notice of Readiness that complies with the requirements of Clause 8. However, laytime cannot commence to run until the time and date specified in Box 10 even if the Vessel commences to load before then. Therefore, the first sentence corresponds with the new first sentence of Subclause 5(a) (Laydays and Cancelling) and the phrase “even if used” has been added in order to reflect commercial practice.

Subclause 9(b) – The reference to “Free In/Out Terms” has been included to clarify that this subclause applies only to ports where Free In/Out terms apply and not to other ports where the parties have agreed Liner In/Out terms. 

Subclause 9(c) – If there are more than one loading and/or discharging ports, the Master must tender a new notice of readiness for those ports. If the Vessel is already on demurrage on arrival at a second or subsequent port, demurrage will resume when the Master tenders a notice of readiness in accordance with Subclauses 8(a), (b) and (c). However, the time restrictions for giving notice set out in Subclause 8(d) do not apply.

Subclause 9(d) – If notice of readiness is tendered in accordance with Clause 8 while the Vessel is at or off the port, laytime will still count provided that the Vessel remains available for use by the Charterers. The reasoning is that whilst the Charterers should take the risk of the waiting time, they should not have to take the risk of time spent on matters that result in the Vessel ceasing to be at the disposal of the Charterers such as, for example, time taken by the Owners to repair the Vessel. Provided that the Vessel remains at the disposal of the Charterers the laytime shall be computed as if the Vessel was in berth so that any events that would have interrupted the running of laytime had the Vessel been at the berth at the time will also be applicable despite the fact that the Vessel was not yet at the berth.

Subclause 9(e) – This subclause provides that time used for shifting to a loading, discharging or waiting berth will not count as laytime or demurrage, as the case may be.
A new Subclause 9(f) has been added to clarify the fact that time lost in waiting for a pilot, obtaining free pratique, customs clearance or other similar events which can be said to fall within the Owners’ area of responsibility will be for the Owners’ account.

Subclause 9(g) – This provision has been amended to address a situation where, despite the fact that the laytime has commenced to run at a loadport following the tender of a valid Notice of Readiness pursuant to clause 8 (b), the Vessel is subsequently found not to be ready to load after waiting at anchor for some time due to congestion and is obliged to clean and then re-present itself for inspection and acceptance. Under the previous wording of WORLDFOOD 99, if the Vessel’s holds had been rejected by the surveyor, the time lost for cleaning would be for the Owners’ account. Under the new wording, laytime, or if the vessel is already on demurrage, demurrage will be suspended until the ship is in fact ready to load or discharge.

This clause provides a response to a situation in which delay can be caused by an event which may be beyond the control of both parties. In such circumstances, delays until the Vessel is again fit and ready to load is at the risk of the Owners whereas any subsequent delays in obtaining a berth is at the risk of the Charterers.

The references to customs clearance and free pratique have been deleted as this is addressed in Subclause 9(f).

Subclause 9(h) – This clause provides that laytime or demurrage will not count if delay has been caused by a “ship’s problem”. This reflects normal legal principles and has been expressly stated in order to avoid dispute.

Subclause 9(i) – Whereas Clause 8(c) addresses the situation where a Notice of Readiness cannot be given after arrival due to bad weather, Subclause 9(i) addresses the situation where delay in waiting for a loading or discharging berth has been caused by bad weather after giving a valid Notice of Readiness and draws a distinction between the running of laytime (which can be interrupted during periods of adverse weather) and demurrage (which cannot be so interrupted).

Subclause 9(j) specifies the excepted periods that are applicable to laytime depending on whichever the applicable day of rest may be. Subclauses 9(j)(i) and (j)(ii) apply when the recognised day of rest is Sunday and Friday respectively. A new Subclause 9(j)(iii) has been included to address the fact that the recognised day of rest may differ in different countries and not always be a Friday or a Sunday.

The previous Subclause 11(d) of WORLDFOOD 99 has been moved to the new Subclause 9(j)(vi) as this is considered to be a more appropriate location for it. It should be noted that laytime between loading and discharging ports under the WORLDFOOD charter party is non-reversible. However, if loading takes place at more than one loadport, or if discharging takes place at more than one discharge port, the laytime specified in boxes 15 and 16, as applicable, applies to all loading or all discharging, as the case may be, at the relevant loading and/or discharging port(s).

Clause 10 (Loading and Discharging)

This clause remains unchanged from the previous editions. Loading, spout-trimming, stowing and discharging are to be arranged by the Charterers at their expense. Furthermore, the primary responsibility for cargo operations lies with the Charterers. However, since the majority of cargoes carried for the WFP are grain products for human consumption, careful supervision of the cargo during loading and discharging operations is required. Therefore, it is important that the Master should supervise the work carried out by stevedores to ensure proper cargo handling and avoid claims for cargo damage. Consequently, the master is required to instruct the stevedores in relation to the handling, loading, stowage and discharge of the cargo and to notify the Charterers promptly if the stevedores refuse to follow the master’s instructions.

Clause 11 (Demurrage/Despatch Money)

Subclauses 11(a) and (b) together with Box 17 specify the terms on which demurrage and despatch money are to be paid and the applicable rate. Subclause 11(c) provides that the demurrage and despatch accounts should be settled together with the payment of freight as further specified in Clause 22 (Freight Payment). The previous Subclause 11(d) of WORLDFOOD 99 has been moved to the new Subclause 9(j)(vi) since this is considered to be a more appropriate location for it.

Clause 12 (Shifting and Warping)

This clause is divided into three subclauses dealing with shifting, warping and seaworthy trim.

Subclause 12(a) – The previous clause has been reworded to clarify the fact that Subclause 12(a) relates to shifting between berths at a port, and not to shifting between ports. Time spent shifting between berths is to count as laytime unless performed during excepted periods. However, the costs of doing so are to be for Owners’ account.

Subclause 12(b) – Warping at the berth is also to count as laytime unless performed during excepted periods. However, warping is to be carried out at Owners’ risk and expense.

Subclause 12(c) – This subclause emphasises the responsibility of the Charterers to ensure that the Vessel can proceed safely between loading locations and between discharging locations and that any associated expenses that may be incurred in so doing are for the charterers’ account. It is also made clear that any time that is used for this purpose is to count as laytime or demurrage, as the case may be.

Clause 13 (Dunnage/Separation)

Subclause 13(a) reflects the practice that dunnage will generally be provided by the Owners unless the parties agree otherwise. The disposal of dunnage was not addressed in the previous editions of the WORLDFOOD charter. However, as this is something that has become increasingly expensive, provision has now been made to the effect that Owners are responsible not only for the supply of dunnage but also for the disposal of it. 

Subclause 13(b) makes it clear that only natural separation of the cargo is permitted should parcels of different qualities or for different receivers be shipped.

Clause 14 (Opening and Closing of Hatches)

The opening and closing of hatches at the loading and discharging ports is to be done by the Vessel’s crew and at Owners’ cost. If the crew is not permitted by local authorities or local union regulations to open and close hatches, then shore labour (stevedores) must be provided and paid for by the Charterers.  The clause has also been worded to emphasise the Owners’ obligation to care for the cargo when the Vessel is performing such operations. For example, if there is rain or heavy fog then the hatches should be closed by the Owners to avoid damage to the cargo.

Clause 15 (Vessel’s Cargo Gear)

The previous clause in WORLDFOOD 99 was a frequent source of misunderstanding and confusion. It has therefore been amended for clarification.

Subclause 15(a) – If the ship is provided with cargo gear, the Owners must give the Charterers the use of that gear as described in Schedule A, maintain it and provide free use of motive power and crew to operate it during the currency of the Charter Party.

Subclause 15(b) – This subclause specifies that costs and time lost as a result of breakdown of the Vessel’s cargo handling gear are to be for the account of the Owners, unless the breakdown has been caused by the Charterers’ stevedores. Subclause 15(b)(ii) also emphasises that in the event of any conflict Subclause 9(g) takes precedence over Subclause 15(b).

Clause 16 (Light)

Owners are responsible for the provision of light during the loading and discharging operations.

Clause 17 (Loading/Stowing/Trimming and Discharging)

This clause specifies the duties that the Owners have to ensure that the Vessel satisfies the Charterers’ requirements in relation to the loading, stowing, trimming and discharging of bulk cargo (Subclause 17(a)) and bagged, cartoned and palletised cargo (Subclause 17(b)). In this latest revision, the wording has been amended to make it more “reader friendly” but the content remains substantially the same as in the previous edition.

Whereas Subclause 10(a) deals with loading by spout trimming, Clause 17 regulates the cost and time that may be expended in performing any other form of trimming that may be required in order to ensure a satisfactory bulk stowage. Such cost and time is to be for Owners’ account whereas Subclause 10(a) provides that spout-trimming is for the account of the Charterers.

Clause 18 (Stevedore Damage)

This clause makes it clear that the Charterers are responsible for damage other than fair wear and tear that is caused to the Vessel by the stevedores. Apart from hidden damage which may be discovered much later, the Master must report the damage in writing to the Charterers and their stevedores within 48 hours from discovery of the damage, but always before the Vessel leaves the port. This is to enable evidence to be secured. If the damage is not reported in this manner, the Charterers will cease to be responsible for it. Hidden damage must be notified as soon as reasonably possible and in any event before the Vessel leaves the final discharging port.

Recognising the often limited repair facilities that is available at some of the ports used by WFP, the clause contains a mechanism whereby the parties can mutually agree on an alternative place for repairs on completion of the voyage. However, if the damage affects the Vessel’s seaworthiness or class, it must be repaired before the Vessel leaves the port in which the damage was discovered.
Any costs incurred as a result of such damage such as, for example, the cost of repairs are to be for the Charterers’ account and anyime lost will count as laytime or demurrage, as the case may be. This differs from the WORLDFOOD 99 charter which contained a liquidated damages clause which provided that time lost would be compensated at the demurrage rate.

Clause 19 (Overtime)

All stevedore overtime costs at loading and discharging ports are to be for the account of the party (whether Owners or Charterers) that has ordered such overtime. However, crew overtime costs are always for Owners’ account and any overtime that is ordered by the port authority or any party other than the Charterers that control the loading or discharging terminal or facility is to be for Charterers’ account.

Clause 20 (Cargo Receipt)

This clause reflects the fact that as a general rule, no bills of lading are required. This is due to the fact that the WFP transports donated aid cargoes which are not traded during the voyage. A non-negotiable cargo receipt therefore meets WFP’s requirements in the majority of cases. The WORLDFOODRECEIPT 2017 should be used for shipments under the WORLDFOOD 2017 charter party. Since the WORLDFOODRECEIPT 2017 is a non-negotiable document, the contract that governs the relationship between the Owners and the Charterers is the Charter Party. However, in order to ensure that no conflict arises between the provisions of the two documents, clause 20 makes it clear that the WORLDFOODRECEIPT 2017 is to incorporate all the provisions of the Charter Party and that in the event of any conflict, the provisions of the Charter Party are to prevail.

Clause 21 (Tally)

This clause remains substantially the same as in WORLDFOOD 99 and the words “and/or weight” have been added to Subclause 21(a) to cater for the situation where bulk cargo is measured by weight. This is also consistent with the information that is stated on the WORLDFOODRECEIPT 2017.

Clause 21 provides that the WORLDFOODRECEIPT 2017 shall be conclusive evidence of the quantity and/or weight of the cargo that has been loaded as determined by the standard loading measurement procedures at the loadport and that a joint tally conducted on behalf of the Owners and Charterers at the discharge port shall determine the quantity and/or weight that has been discharged. The measuring procedures at both ends are to be for Charterers’ account.

However, the added reference in Subclause 21(c) to the General Clause Paramount is intended to preserve whatever rights the master may have under the Hague or Hague-Visby Rules to query the cargo measurements that have been ascertained at the loadport before these measurements are recorded on the WORLDFOODRECEIPT 2017.

Clause 22 (Freight Payment)

As a United Nations agency, WFP requires special freight payment procedures. The amendments in the latest revision have been done mainly for clarity and do not change the substance of the provisions.

According to Subclause 22(b), 90 per cent of the freight should be paid by the Charterers within five working days after the release of a signed Cargo Receipt.

Under Subclause 22(c), payment of any demurrage that is due, is to be made if requested by Owners 14 days after such demurrage has been incurred.

Subclause 22(d) – This subclause has been amended to reflect WFP’s changed internal procedures. Such procedures no longer allow for duplicates, but instead require that invoices are produced on the Owners’ letterhead paper and are signed and stamped. The subclause lists the documents that the Owners should send to the Charterers together with the invoice.

Subclause 22(e) – This clause remains substantially unchanged from WORLDFOOD 99. Deductions under this provision are conditional upon claims against the Owners for loss of or damage to the cargo being duly particularised and only if the Owners’ P&I Club has failed to provide security. Consequently, if the claim is detailed and acceptable security is provided, then the Charterers c are not entitled to make deductions from the balance of freight for cargo claims.

Clause 23 (Dues, Taxes and Charges)

The addition of the words “be responsible for” in Subclauses 23(a), (b) and (c) serve to clarify that the parties concerned do not merely have to pay the various taxes and charges but are the parties ultimately responsible to the relevant authorities for such matters. Therefore, the party that pays these items cannot claim reimbursement back from the other party.

The Owners are responsible for any dues, duties, taxes and charges that are levied on the Vessel and on the freight, and the Charterers are responsible for those that may be levied on the cargo.

Clause 24 (Additional or Extra Insurance)

The clause gives the parties the possibility of agreeing a specific maximum amount but failing such agreement the additional or extra insurance is limited to the lowest extra premium which would be charged in the London insurance market. The addition of the words “additional or” is intended to deal with issues that have arisen in a number of arbitrations in which a distinction has sometimes been drawn between “additional premium” and “extra premium”. Therefore, the clause now provides that any “additional or extra” insurance on the cargo due to the Vessel’s age, class, flag or ownership should be borne by the Owners.

Clause 25 (Lien)

The Owners have a right to lien the cargo for freight.

Clause 26 (Liberty)

The previous liberty clause was quite limited in its scope and has therefore been replaced with Subclause (a) of the BIMCO Liberty and Deviation Clause for Contracts of Carriage. The entire BIMCO clause could not be incorporated as some of its provisions are inconsistent with Clause 27 (United Nations Emergency Clause). The liberty clause has been made subject to Clause 27 so that if there is an emergency and the Owners’ wish to implement their rights under the Liberty Clause arise at the same time, then the Charterers are entitled to insist on the Owners performing in accordance with Clause 27.

The clause begins by listing the customary liberties in respect of which the Owners do not normally have to consult their P&I Club for advice on cover, such as going to the assistance of vessels in distress and for the purposes of saving life and property. It then goes on to deal with providing liberties for “any other reasonable purpose” and gives a non-exhaustive list of examples of the types of common deviations that might be considered “reasonable” for the purposes of this clause. It should be noted that this clause does not mean that any of the “reasonable” deviations referred to are necessarily covered – it is advisable for Owners to check with their P&I Club to ensure that cover is in place for the intended deviation.

Clause 27 (United Nations Emergency Clause)

This clause remains unchanged since the previous edition. The clause is required by the WFP because of its role as charterers responsible for the transportation and allocation of food aid cargoes and gives the Charterers the right to change the vessel’s destination in case of an emergency situation. Provision is made to allow for adjustment of the freight rate in consequence of change of destination.

Clause 28 (General Clause Paramount)

Clause 28 sets out the terms of the standard BIMCO paramount clause that incorporates the Hague or Hague Visby Rules as applicable into the Charter Party.

Clause 29 (International Group of P&I Clubs Financial Security in Respect of Pollution Clause)

This is the standard BIMCO clause and replaces the outdated pollution clause in WORLDFOOD 99. It spells out the Owners' obligations to obtain and maintain financial security for liabilities under international conventions and US regulations.

Clause 30 (BIMCO ISPS/MTSA Clause for Voyage Charter Parties 2005)

This is the standard BIMCO ISPS/MTSA Clause for Voyage Charter Parties 2005 and establishes the requirements that are imposed on Owners and Charterers by the ISPS Code (the International Code for the Security of Ships and Port Facilities and amendments to Chapter XI of SOLAS) and the MTSA Act (US Maritime Transportation Security Act 2002) when the Vessel is trading through US waters.

Clause 31 (Both to Blame Collision Clause)

This is a standard clause that P&I Clubs normally require as a condition of cover. The clause addresses the situation under American law whereby the Owners may become indirectly liable to owners of the cargo that they have been carrying. Under U.S. law, cargo lost or damaged in a collision is allowed to recover in full from the non-carrying ship, which is entitled to an indemnity from the carrying ship in accordance with its proportion of blame for the collision. Thus, where both ships are to blame, the Owners will be indirectly liable to the owners of the cargo that they are carrying, even if direct action by them is prevented by the Hague or Hague-Visby Rules. The clause aims to restore the position under the Hague or Hague-Visby Rules by giving the Owners a contractual right to recover against its own cargo owners.

Clause 32 (General Average and New Jason Clause)

These are both standard clauses and are unchanged from the original form other than the deletion of the preamble to the Both to Blame Collision Clause (to make it consistent with the wording used in other BIMCO forms) and the reference to the York-Antwerp Rules updated to the 2016 version.

General Average should be adjusted and settled in London in accordance with the York-Antwerp Rules 2016.

The New Jason provision is aimed at avoiding the situation under U.S. law where the exemption from liability for negligence in the navigation and management of the ship have been held to not have the effect of enabling owners to recover general average contribution where such negligence caused the casualty.

Clause 33 (Strike)

This clause is based on the BIMCO Strike Clause. Some minor amendments have been made, for example, the reference to telegram has been deleted as obsolete. The reference to “BIMCO” in the heading is therefore not included. 

To avoid an overlap between this clause and Subclause 9(h) (Time Counting (Loading and Discharging)), wording has been added to exclude strikes by the master, officers and crew. Such strikes are covered by Subclause 9(h).

Subclause 33(a) is concerned with strikes and lockouts affecting the loading of the cargo. The master or Owners may ask the Charterers to agree to view the laydays as if there was no strike and if no such agreement is reached the Owners may cancel the Charter Party. If part of the cargo has already been loaded the owners must proceed with that part but have the liberty to complete with other cargo.

Subclause 33(b) deals with strikes and lockouts affecting the discharging of the cargo. The Charterers have the option of either ordering the Vessel to a strike free port, or of keeping the Vessel waiting against paying half demurrage after the expiry of laytime until the strike or lock-out ends. Full demurrage will be payable thereafter until completion of discharging. All provisions of the Charter Party and of the WORLDFOODRECEIPT 2017 will apply to delivery at the substitute port subject to an increase in freight if the distance to the substitute port exceeds 100 nautical miles.

Subclause 33(c) contains an exception which is triggered by strikes and lockouts and may be invoked by either the Owners or the Charterers. Neither the Owners nor the Charterers shall be responsible for the consequences of strikes or lock-outs preventing or delaying the actual loading or discharging of the cargo. Thus, this exception cannot be used for any strike which prevents or delays the fulfilment of any other obligation under the Charter Party.

Clause 34 (BIMCO Ice Clause for Voyage Charter Parties)

This is the BIMCO standard ice clause for voyage charter parties.

Clause 35 (War Risks (VOYWAR 2013))

This is the BIMCO standard war risks clause for voyage charter parties.

Clause 36 (War Risk Premium)

War risk premiums for the Vessel and/or crew are for the Owners’ account. If the premium increases or decreases after the contract comes into force, the same will be for the Charterers’ account or benefit as the case may be.

Clause 37 (Agency)

This clause reflects the usual standard practice that the Owners will appoint and pay for agents nominated by the Charterers at ports of loading and discharging.

Clause 38 (Brokerage)

This clause maintains the established arrangement that the Owners are to pay commission on freight, deadfreight and demurrage at the rate and to the brokers specified in Box 20. The provision in WORLDFOOD 99 that dealt with non-execution of the charter party has been deleted since commission is rarely paid for a voyage that is not performed and the previous wording had proved to be imprecise and to have caused disputes.

Clause 39 (Force Majeure)

This clause replaces the previous force majeure clause of WORLDFOOD 99. It is modelled on the ICC (International Chamber of Commerce) model Force Majeure Clause 2003 which BIMCO has used to create a “standard” force majeure provision for its contracts.

The clause excuses the performance without liability of the party invoking force majeure if it can show that the alleged force majeure event falls within any of the listed event in the clause; that its performance is prevented by that event; and that it has taken reasonable steps to avoid or minimise the consequences of the event. 

Courts tend to interpret force majeure clauses narrowly so that only the events listed or similar events will be considered to be force majeure events. 

In order for the force majeure clause to provide protection, the event must be beyond the control of the party that is seeking its protection and its consequences could not have been avoided, nor could it have been reasonably foreseen by such party. Furthermore, a party cannot invoke force majeure if it is relying on its own acts or omissions. A party wishing to invoke force majeure must give notice to the other party in writing within two working days after the event has occurred.

The opening words of the clause: “Except as otherwise provided in this Charter Party…” have been added to emphasise that any conflicting rider clauses will override this force majeure clause. Parties should take care not to add clauses that conflict with this clause.

Clause 40 (Carriage of Unlawful Substances or Merchandise)

This clause remains unchanged from the WORLDFOOD 99 edition, except for the insertion of the word “narcotic” before “drugs” in Subclause 40(c). The wording of the clause is based on the BIMCO US Anti-Drug Abuse Act, 1986 Clause for Time Charters but was amended for WORLDFOOD 99 to reflect the fact that under a voyage charter the Owners can take an active role in minimising the risk of unmanifested narcotic drugs finding their way on board. The Owners do not guarantee that unmanifested narcotic drugs will not be brought on board but promise to exercise due diligence to prevent such an occurrence. Subclause 40(d) provides that the Charterers are entitled to cancel the Charter Party if the Vessel is detained for more than 72 running hours as a result of illegal narcotic substances or unlawful merchandise being found on board before the Vessel is loaded.

Clause 41 (Title to Cargo Clause)

This clause is unique to the WORLDFOOD Charter Party and is required by the WFP because of its unique position as Charterers responsible for the transportation of donated aid cargoes. In such capacity, the WFP does not own the cargo which has been given to it to pass on to someone else. In the absence of a Title to Cargo Clause, the WFP would have no legal right to claim and receive any substantial damages for damage to or loss of cargo.

Clause 42 (Fumigation)

The ability to fumigate the cargo at any time after loading is an essential requirement for the WFP. The previous clause was felt to be unclear and it has therefore been updated. The new wording makes it clear that the Charterers can fumigate the cargo on board at their time, risk and expense. However, any additional time and costs that may be incurred if any subsequent fumigation is found to be necessary after the Owners have signed clean cargo documents should be for the Owners’ account. Where local regulations require the crew to be removed from the vessel during fumigation, the Charterers must meet the cost of their accommodation ashore. Finally, the clause mirrors the provisions of Subclause 9(g) (Time Counting (Loading and Discharging)) in relation to the running of laytime or demurrage should the vessel lose its turn due to the need for any additional fumigation.

Clause 43 (Law and Arbitration)

Disputes under the WORLDFOOD charter party are to be referred to arbitration in London before LMAA arbitrators. However, a change from the previous edition of WORLDFOOD 99 is that the arbitration is to be conducted under the United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules. This change reflects WFP’s special status as a United Nations programme.

As an organisation of the UN system, WFP is subject to the 1946 Convention on the Privileges and Immunities of the United Nations and the 1947 Convention on the Privileges and Immunities of the UN Specialized Agencies. It is thereby immune from the jurisdiction of national courts. This clause therefore allows the WFP to follow the general practice of all UN institutions to refer contractual disputes to international arbitration, regulated by international norms such as the UNCITRAL Arbitration Rules, but allows LMAA arbitrators to continue to be guided by English law except in relation to procedural rules or conflict of laws principles. The clause also provides that the arbitration award shall be final and that the parties waive right of appeal to any court.

The main rule is that disputes should be resolved by three arbitrators. However, if the sum at stake is less than USD 100 000, a single arbitrator can resolve the dispute on documentation alone and without oral hearings.

Clause 44 (Severance)

This clause seeks to avoid a situation where the entire agreement is held to be invalid because a provision is deemed by an arbitrator or other competent authority to be illegal, void or unenforceable. 

WORLDFOODRECEIPT

The cargo receipt has been updated with a new layout which mirrors the standard BIMCO layout for such documents. It should be noted that the box for the date of when the cargo was shipped on board is important for insurance purposes as cargoes should be insured from this date.