BIMCO's New Supplytime Annexes: Marine insurance commentary

BIMCO has issued four new annexes for use with their widely adopted Supplytime charterparties.

These new annexes are listed below together with BIMCO’s brief description of each annex.

Helicopter and Helideck Operations Annex C

This annex sets out specific requirements in relation to operating a helideck, including legal, regulatory and certification requirements of the helideck for the area in which the ship is operated as well as safety-related requirements for personnel on board the ship.

Extended Offshore Support Annex D 

When the charterers’ instructions require the ship to remain at sea this annex provides for crew changes, bunkering, victualling, and mandatory surveys and inspections which would normally take place during port visits.

Crew Qualifications Annex E

There is no reference in SUPPLYTIME to the qualifications of the crew - information often required by charterers. This annex permits the owners to provide a list of the nationality of crew and number of each rank as well as specific qualifications of certain crew members depending on the requirements arising from the employment of the ship.

Walk to Work Annex F 

This annex is designed to be used whenever the charterers’ instructions require the vessel to operate a motion compensating gangway system. It deals with legal and safety requirements and allows for an option of either charterers or owners to provide and/or operate the gangway.

BIMCO has indicated that the above annexes have been created as the first phase of documentary annexes that will ultimately be issued to complement the Supplytime charterparty form.

Ince & Co and Shipowners P&I Club legal and P&I insurance overview

Howden has collaborated with Ince & Co and Shipowners P&I Club for a legal and P&I insurance overview to the four annexes so far issued. 

We thank Ms. Natalie Jensen from Ince & Co Middle East LLP, who has offered a view on two questions – what problems do the annexes address, and do the annexes create new imbalances in the contractual relationship? 

What problems do the annexes address?

Users of Supplytime 2017 often draft their own provisions to address activities outside of the main terms of Supplytime 2017. BIMCO has introduced the optional annexes which allow users to make amendments to their individual projects and seek to prevent omissions or conflicting provisions by users which can ultimately lead to disputes and litigation.

There are four new annexes address legal, regulatory, certification and safety requirements, as well as addressing the parties’ responsibilities in respect of these issues. The clarity provided for by the annexes leaves less room for risk of dispute than parties drafting their own provisions which can lead to ambiguity, omissions or conflicting provisions.

Do the annexes create an imbalance between Owners and Charterers?

The annexes are optional and can be amended to suit the appropriate project. It is not that they create an imbalance but rather that they seek to clarify which party is responsible for the issues dealt with by each specific annex. They also effectively create an expectation or starting point in terms of expectation of how these issues will be dealt with and the responsibility split between the parties.

As an example, Annex D (which addresses the vessel’s natural activities, such as crew changes, repairs, etc., where the Charterers’ instructions require that the vessel remains offshore) addresses who has responsibility and who bears the costs in specific scenarios. Where the vessel remains offshore and the Owners cannot embark or disembark the crew at an agreed port, the Charterers are responsible for the transportation to and from the vessel by boat or helicopter. Where the vessel is unable to replenish fuel, water, stores, etc. offshore, the Charterers are responsible for their transportation to the vessel. Where statutory or mandatory inspections of the vessel cannot be deferred and are not able to take place whilst the vessel remains offshore, the Owners are to provide not less than 10 days’ written notice to the Charterers for the vessel to be at an agreed port or
place for the inspection to take place and the vessel is to remain on hire throughout. These terms are sensible and strike a balance between the parties’ obligations where the vessel has been instructed by the Charterers to remain at sea.

P&I insurance overview

We thank Mr. Paul Grehan from Shipowners P&I Club for the following insurance commentary that seeks to address P&I cover considerations.

None of the annexes prejudice Club cover as they all leave the knock-for-knock distribution of risk per Supplytime 2017 in force. It is important however that contractual parties are aware of the additional insurance requirements contained in the annexes – for example the Walk to Work annex requires charterers ensure that they have appropriate cover in the event they install the gangway system, meaning they should have appropriate insurance in place as they bear the risk of loss or damage to the system under clause 17 of
Supplytime.

It is also important that, if owners or charterers use these appendices with an older version of Supplytime (e.g. 1989 or 2005), they update the clause referencing in the annex.
If assureds make any amendments to the clauses within these new annexes then they should provide the contract to their Club for review.

Other insurance considerations

We take this opportunity to remind assureds that when entering into or amending contract terms that detrimentally alter assureds’ liability at law, they should obtain their P&I Club’s approval if they want to have the benefit of their Club’s contractual liability cover extension.

Owners and operators of jack-up accommodation barges should also bear in mind that they need to consider whether they have a liability to persons on board, as additional cover is needed beyond basic P&I cover. Each party’s “Group” definitions contained in the contract should also be reviewed to ensure they reflect the
understood apportionment of liability.

For any questions regarding the contents of this Marine Client Advisor or for any other marine insurance enquiries please do get in touch. 

Howden Insurance Brokers is not a technical, commercial or legal adviser. Any commentary made in this document should not be construed as such, and we do not guarantee in any way the accuracy of the resources used or referenced in this document. In case of doubt, formal advice should be obtained that is directly relevant to your circumstances.