New contracts launched for depositing money
Overview
BIMCO has published two new contracts to assist parties when depositing money in a sale and purchase transaction and as security for a claim in a dispute.
Two escrow agreements were adopted at the Documentary Committee meeting on 14 November 2017. They are the first industry standards for depositing money in a sale and purchase transaction, and for depositing money as security for a claim in a dispute.
Lisa-Marie Perrella, chairperson of the drafting team, said:
Up until now, parties have been left to draft individual agreements. These new forms are welcome as very useful and time saving additions for the maritime industry.
The agreement for depositing money when purchasing a ship gives the parties the necessary legal framework while at the same time it protects the person holding the money for them. As the deposit holder is offering to hold the money as a service, it is important that this person is sufficiently protected in the various stages of the process, and not held liable if, for example, the money turns out to be tainted or of dubious origin.
In the contract for depositing security for a claim, provision has been made for clearly identifying the dispute which the deposited money relates to. This is important as the same parties may have several ongoing disputes between themselves. The security can be released in two scenarios – either upon settlement of the parties or upon a final and unappealable award or judgment.
BIMCO is grateful to Lisa-Marie Perrella, Fednav (Chairperson), Stuart Plotnek and Paul Herring, Ince & Co, Christoph Bruhn, Bruhn Shipbrokers, and Magne Andersen, Nordisk Defence Club for their work in developing these new agreements.
Both contracts are available on IDEA. Sample copies and explanatory notes can be viewed below.
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Posted:
22 November 2017
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