New BIMCO ship sale and purchase standard heading for industry consultation
Overview
BIMCO’s Documentary Committee has positively received a new standard Memorandum of Agreement (MOA) for the sale and purchase of ships, thereby opening the doors to wide industry consultation before finalising and publishing the new standard next year.
At the Documentary Committee meeting that took place on 21-22 September, the new BIMCO MOA was presented for review, in line with BIMCO’s strategy to provide contracts for all sectors of the shipping industry. BIMCO has been working on the development of a clearly worded and comprehensive alternative contract for the sale and purchase market that reflects modern practice, and the standard is expected to be published in early 2021.
New structure, easy to navigate
The new MOA takes an innovative approach with captive clauses that spell out in plain English what is being agreed between the parties. It comes in BIMCO’s well-known box layout style with the main terms set out in the boxes of Part I, and the standard terms and conditions in Part II.
The clauses follow the sequence of events as they play out in practice. Three annexes accompany the new contract providing for lists of items that are included or excluded from the sale, and documents to be handed over at delivery by the sellers and buyers. The structure of the new form makes it easy to navigate and simplicity has been key for the drafting team.
Some key features of the new form are:
- Data added into the boxes will automatically appear in the appropriate places in the body of the contract, making it easier to read and not having to flip back and forth through the pages.
- The first four clauses set out the framework and purpose of the contract, what the conditions for effectiveness of the contract are, what the purchase price is, as well as what is included in and excluded from the sale.
- The following clauses address the delivery and sale process and follows the chronology of events as they take place in practice.
- The balance between sellers and buyers has been carefully considered during the drafting process. The buyers have for instance been given a grace period of two additional banking days to lodge the deposit if it is delayed through no fault of the buyers. A definition has been created for “Technical Banking Event” referring to problems in the banking system. If the deposit still does not arrive within the grace period, the contract will be null and void.
- Tailor-made sanctions and anti-corruption clauses have been included, in addition to the newly adopted BIMCO Law and Arbitration Clause.
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Posted:
23 September 2020
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