Ship Sales Further Trading Clause 2023


The intention and purpose of the BIMCO Ship Sales Further Trading Clause 2023 (the “Clause”) is for the Buyers and Sellers of a Vessel to agree that the Vessel will continue to trade. This provides the Sellers with a reasonable level of protection and reduces any risk that they will be held liable for the actions of the Buyers once proprietary interest in the Vessel has passed onto the Buyers in instances where the Buyers dispose of the Vessel in contravention of any rules and regulations concerning the demolition or dismantling of Vessels.

Ship Sales Further Trading Clause 2023

Ship Sales Further Trading Clause 2023

NOTE: For this Clause to operate, the “Applicable Period” needs to be filled in.

(a)        The Sellers and the Buyers acknowledge and agree that this Agreement is for the sale and purchase of the Vessel for continued trading by the Buyers.

(b)        The Buyers undertake that, for the duration of a period of [insert number of months] commencing on the date when the Vessel is delivered by the Sellers to the Buyers under this Agreement (“Applicable Period”), the Buyers shall continue to trade the Vessel (which includes but is not limited to any anchoring, stationing, laying-up, repair or conversion of the Vessel) unless the Vessel is subject to an actual, constructive or compromised total loss.

(c)        The Buyers further undertake that if, before or during the Applicable Period, the Buyers enter into an agreement to sell (or otherwise transfer ownership in) the Vessel to a new buyer/transferee (“Transferee”):

(i) such agreement shall include provisions, on substantially the same terms as are contained in subclauses (a) and (b) above in respect of the remaining period of the Applicable Period; and

(ii) the Buyers shall perform such due diligence as is necessary to be satisfied that the Transferee shall continue to trade the Vessel.

(d)        If the Buyers are in breach of one or more of the undertakings given in subclauses (b) and (c) above:

*(i)       the Buyers and the Sellers acknowledge that the actual damages that the Sellers would sustain from such breach would be difficult to ascertain, and consequently, the Buyers shall immediately pay upon demand to the Sellers, by way of liquidated damages and not as a penalty, the sum of [insert currency and amount] which the Sellers and the Buyers agree is a legitimate and fair estimate of the Sellers’ anticipated damages; or

*(ii)      the Buyers shall indemnify the Sellers and their affiliates and their respective directors, officers, employees, agents and representatives against all losses, expenses, fines, penalties, demands, liabilities, damages, claims and costs (which shall include legal fees) suffered or incurred by the Sellers and/or their affiliates and their respective directors, officers, employees, agents and representatives arising out of or in connection with such breach(es).

*Subclause d(i) and d(ii) are alternatives. Subclause d(i) shall apply if an amount is inserted therein. In all other circumstances, subclause d(ii) shall apply.

(e)        The Buyers acknowledge that the financial compensation or indemnity as set out in subclauses (d) (i) and (ii) may not be a sufficient remedy for the Sellers and that the Sellers may seek injunctive or other equitable remedial relief from any competent court or tribunal.

(f)        Notwithstanding any provision in this Agreement to the contrary, the Sellers shall be entitled, following a breach by the Buyers of one or more of the undertakings given in subclauses (b) and (c) above, to disclose the existence and content of this Clause and the nature of the Buyers’ breach.

Explanatory notes

Ship Sales Further Trading Clause

Drafting team

The Clause is the result of a collaborative and consensual process between owners, shipbrokers, P&I clubs, and legal experts. BIMCO is grateful to the drafting team for their considerable time, effort and commitment in producing the Clause:

Mr Francis Sarre (Chairperson)  CMB 

Mr Christoph Bruhn                        Bruhn Shipbrokers 

Ms Catherine Lessow                     Enesel ApS

Mr Kasper Holm-Hemmingsen   Mærsk Broker

Mr Matt Hannaford                        Hannaford Turner LLP 

Mr Michael Hope                             NorthStandard

Mr Ola Granhus Medias                Nordisk Defence Club


BIMCO representatives:

Stinne Taiger Ivø

Aron Frank Sørensen

Carl Lindahl

Natalie Wong


Explanatory Notes

The following notes are intended to provide some background to the thinking behind the Clause. These notes explain the scope of the key provisions and clarify how the Clause is intended to operate. The following are (non-exhaustive) comments made in respect of key provisions in the Clause.  Please note that we have not provided commentary on every single subclause as some of these appear to be self-explanatory.  If you have any questions about the Clause, please contact us at and we will be happy to assist.

Further, please note that this Clause cannot operate as a stand-alone clause and must be incorporated into a Memorandum of Agreement for the sale and purchase of the relevant Vessel (for example, BIMCO’s SHIPSALE 22, SALEFORM 2012 etc.).  References to “this Agreement” throughout the Clause refer to such Memorandum of Agreement.


Subclause (b)

In subclause (b) the Buyers give an undertaking that they will continue to trade the Vessel for an agreed period of time after the Buyers have taken delivery of the Vessel.  The only exception is if, during this “Applicable Period”, the Vessel becomes a total loss.  Subclause (b) contains wording to make it clear that the undertaking is not intended to prohibit or restrict the Buyers from taking the Vessel out of service for reasons which apply to trading vessels (such as dry-docking, maintenance, lay-up or repair) or for conversion of the Vessel for a different trading use. 

The Buyers and Sellers must insert a specific number of months for the “Applicable Period”, being the minimum period which the Buyers undertake to continue to trade the Vessel.  This will be a matter of commercial negotiations between the parties and relevant factors may include the specific characteristics of the sale and the age and value of the Vessel. In addition, when determining the appropriate Applicable Period, the parties should consider whether they are subject to any laws or regulations which may have an impact on what is an appropriate Applicable Period (for example,  as to whether under applicable laws the Applicable Period is too short to provide the Sellers with adequate legal protection or, alternatively, whether the enforceability of the undertaking is at risk if applicable laws determine that the Applicable Period is too long).

Subclause (c)

This subclause deals with the situation where the Buyers re-sell the Vessel within the Applicable Period.  Where this occurs, the agreement relating to that onward sale must also contain substantially similar provisions to those contained in subclauses (a) and (b) for the remaining part of the Applicable Period.  As an illustration, if the Buyers and the Sellers have agreed an Applicable Period of 36 months and the Buyers re-sell the Vessel after 12 months; then the remaining part of the Applicable Period shall be (36 – 12 =) 24 months.

There is also an obligation on the Buyers to undertake proper due diligence with a view to ensuring that the new buyers shall continue to trade the Vessel. This will in most cases require the Buyers to enquire with the new buyers what their intentions will be regarding the trading of the Vessel.

Subclause (d)

This subclause sets out the consequences of the Buyers’ breach of the undertakings given under subclauses (b) and (c).  The parties are required to elect one of two alternatives. 

If the parties choose (i) the remedy for the Sellers in the event of the Buyers’ breach is liquidated damages.  Please note that the parties should seek independent legal advice before selecting the liquidated damages alternative to ensure that the provision (and, specifically, the amount of liquidated damages that will be stated as payable by the Buyers) will be enforceable under applicable law. If the parties choose (ii), the Buyers must indemnify the Sellers (including any of its affiliates, respective directors, officers, employees, agents and representatives) for any failure to comply with the undertakings.  If the parties fail to elect an alternative, the default position is alternative (ii).

Subclause (e)

This subclause refers to possible injunctive relief and other equitable remedies (for example, injunctions or orders for specific performance) which may be available to the Sellers regardless of which alternative the parties have chosen in subclause (d). However, please note that in most jurisdictions, equitable relief will always be subject to the discretion of the relevant court/tribunal.

Subclause (f)

This subclause allows the Sellers to disclose the existence and breach of the Clause following a breach by the Buyers notwithstanding any confidentiality provisions that may be contained in the underlying sale and purchase agreement.

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