ISPS/MTSA Clause for Time Charter Parties 2005

BIMCO ISPS/MTSA Clause for Time Charter Parties 2005

(a)(i) The Owners shall comply with the requirements of the International Code for the Security of Ships and of Port Facilities and the relevant amendments to Chapter XI of SOLAS (ISPS Code) relating to the Vessel and “the Company” (as defined by the ISPS Code). If trading to or from the United States or passing through United States waters, the Owners shall also comply with the requirements of the US Maritime Transportation Security Act 2002 (MTSA) relating to the Vessel and the “Owner” (as defined by the MTSA).

(ii) Upon request the Owners shall provide the Charterers with a copy of the relevant International Ship Security Certificate (or the Interim International Ship Security Certificate) and the full style contact details of the Company Security Officer (CSO).

(iii) Loss, damages, expense or delay (excluding consequential loss, damages, expense or delay) caused by failure on the part of the Owners or “the Company”/”Owner” to comply with the requirements of the ISPS Code/MTSA or this Clause shall be for the Owners’ account, except as otherwise provided in this Charter Party.

(b)(i) The Charterers shall provide the Owners and the Master with their full style contact details and, upon request, any other information the Owners require to comply with the ISPS Code/MTSA. Where sub-letting is permitted under the terms of this Charter Party, the Charterers shall ensure that the contact details of all sub-charterers are likewise provided to the Owners and the Master. Furthermore, the Charterers shall ensure that all sub-charter parties they enter into during the period of this Charter Party contain the following provision:

“The Charterers shall provide the Owners with their full style contact details and, where sub-letting is permitted under the terms of the charter party, shall ensure that the contact details of all sub-charterers are likewise provided to the Owners”.

(ii) Loss, damages, expense or delay (excluding consequential loss, damages, expense or delay) caused by failure on the part of the Charterers to comply with this Clause shall be for the Charterers’ account, except as otherwise provided in this Charter Party.

(c) Notwithstanding anything else contained in this Charter Party all delay, costs or expenses whatsoever arising out of or related to security regulations or measures required by the port facility or any relevant authority in accordance with the ISPS Code/MTSA including, but not limited to, security guards, launch services, vessel escorts, security fees or taxes and inspections, shall be for the Charterers’ account, unless such costs or expenses result solely from the negligence of the Owners, Master or crew. All measures required by the Owners to comply with the Ship Security Plan shall be for the Owners’ account.

(d) If either party makes any payment which is for the other party’s account according to this Clause, the other party shall indemnify the paying party.

Footnote: This Clause replaces previously published ISPS Clause for Time Charter Parties AND the US Security Clause for Time Charter Parties, both of which are now officially withdrawn.

Explanatory notes

The BIMCO ISPS Clauses for Time and Voyage Charter Parties have now been in circulation for over a year. The Clauses have enjoyed widespread use in the industry and are generally acknowledged as having provided a timely and much needed contractual response to concerns regarding the impact of the ISPS Code on charter parties. However, as experience of the practical implementation of the ISPS Code has grown, feedback to BIMCO from the industry has indicated that the Clauses should be updated if they are to continue to enjoy their current widespread use.

The United States is, without question, the country where the ISPS Code is most stringently applied. The original ISPS Clauses were designed to be used in conjunction with the BIMCO US Security Clauses when trading to the United States to ensure that the requirements of the US Marine Transportation Security Act 2002 were met. In response to demand from users and to simplify the documentary process, the revised ISPS Clauses now incorporate an express reference to compliance with the requirements of the MTSA for vessels trading to or from the US (NOTE: where the vessel’s trade does not take it to the US, the provisions relating to MTSA will not apply). The incorporation of a reference to the MTSA has been applied both to the Voyage Charter Party and the Time Charter Party versions of the ISPS Clause.

The ISPS Clause for Voyage Charter Parties has been the subject of particular review by the Documentary Committee in respect of the split of costs and delays. To reflect current commercial  practice, BIMCO has revised the text in Clause (c)(ii) of the Voyage Charter Party Clause to provide that delay will count as laytime or time on demurrage “unless such measures result solely from the negligence of the Owners, Master or crew or the previous trading of the Vessel, the nationality of the crew or the identity of the Owners’ managers”. The exception from laytime of delays due to the vessel’s previous trading, crew nationality or identity of ship managers has been introduced to reflect the owners’ responsibility for ship management and the commercial operation of the vessel in terms of the likely impact on compliance with port security measures at the ports where the owners have contractually agreed for the vessel to trade to. While it is recognised that the balance of the Clause is slightly more favourable to the charterers, BIMCO is of the opinion that this amendment strikes a fairer balance between the parties and will make the Clause more acceptable during negotiations.

In sub-clauses (a)(iii) and (b)(ii) the wording of the provision has been amended to clarify that each party is liable for loss, damages or expense arising out of failure to comply, but not for consequential loss, damages or expense.

Originally published in BIMCO Special Circular No. 5, 15 June 2005 - BIMCO ISPS Clauses Revised

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