Insights

In response to industry-wide concerns as to whether there will be sufficient supplies of low sulphur fuel available after 2020, the IMO has made provisions in MARPOL. In the event of non-availability, ships are not required to deviate to find compliant fuel and may submit a fuel oil non-availability report, or “FONAR”. In this article we consider the extent of the protection afforded by these provisions and related contractual issues.

In our April, 2019 Soundings (“A question of class”), we reported on the Commercial Court’s ruling that an obligation to maintain a ship in class is a condition of the contract, breach of which will entitle the other party to terminate the charter. The Court of Appeal has now overturned that decision, in Ark Shipping Co LLC v. Silverburn Shipping (IOM) Ltd, “The Arctic” [2019] EWCA Civ 1161, clarifying that the obligation to keep a ship in class is an innominate term.

BIMCO has published an updated version of its widely used Hull Fouling Clause for Time Charter Parties.

The US has demonstrated an intention to continue strengthening sanctions against Venezuela with the issuance of a new Executive Order which covers any trade with the Venezuelan government and also impacts non-US entities.  Caution is highly recommended in relation to any transactions with Venezuela.

In recognition of a marked increase in ship arrests, the BIMCO Documentary Committee has developed two clauses which seek to prescribe a fair balance of risk and responsibility between owners and charterers in the event of an arrest.