GRAINCON is a standard grain voyage charter party. It is accompanied by its own bill of lading, the GRAINCONBILL 2016. The latest edition of this contract is GRAINCON, issued in 2003.
Copyright in GRAINCON is held by BIMCO.
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The following is a brief set of notes describing some of the thinking and underlying principles behind the standard provisions. The descriptions are given to provide assistance to owners, brokers and others interested in the practical use of this charter party.
When completing the preamble the owners must indicate when entering their name whether they are the owners or disponent owners of the vessel. The term “disponent owner” is taken to also mean chartered or time chartered owners.
Lines 15-16 offer users the alternative of stipulating either a range of load ports or named ports. If the ports are named in the charter then the responsibility for establishing that they are “safe ports” for the vessel rests with the owners. Where a range of ports are stated it is the charterers’ responsibility to give owners a “safe port” warranty.
To reflect trade practice the provision contains an option to choose quantity of cargo to be loaded in addition to a full or part cargo to be loaded.
Furthermore, a provision has been incorporated allowing for loading at anchorage. While this is rarely done in practice, in some circumstances it could provide a useful emergency backstop for the charterers. A “safely aground” provision which is customary in, e.g., the South American trades has not been incorporated as it was considered an item which should be negotiated separately between the parties on a case-by-case basis.
The last sentence aims at disclaiming any warranty for the vessel’s “readiness” to the effect that “In all instances the Vessel’s expected date of readiness to load is based on all going well, unforeseen circumstances always excepted”.
Furthermore, the clause makes reference to the special situation under sub-clause 18(b) whereby the master can tender notice of readiness while waiting for berth outside port limits, i.e., before obtaining a certificate of the vessel’s readiness to load.
Sub-clause (c) is an “interpellation provision” and deserves special attention. The purpose of the interpellation provisions is that the vessel should not have to proceed on a long ballast voyage towards the loading port not knowing whether or not the charterers will accept the vessel once it arrives. The interpellation provisions in sub-clause (c) strikes a balance between the parties in this difficult situation in as much as the owners may avoid setting out on a long ballast voyage to no avail, whereas the charterers are, at the same time, to declare whether or not they wish to cancel the charter party. However, during discussions with grain traders it became apparent that there was an element of reluctance to have an interpellation provision in a standard grain charter. Consequently, by way of a compromise, sub-clause (c) applies a mechanism where-by the wording of the provision does not apply unless expressly indicated by the parties. Although the provision does not apply by default, it is felt that the inclusion of the wording will assist the parties during negotiations to give due consideration to its possible application.
Furthermore, the clause sets out the procedure for the giving and the receiving of discharging port orders for the first or sole discharging port.
If the charterers fail to give discharging port orders for the first or sole discharging port within 48 hours of the master’s request, any time lost and additional bunkers used will be for the charterers’ account. This is in line with the provisions under Clause 2.
The second option prescribes that separations ordered by the owners will be for their risk and account and that any claims due to the commingling, admixing or contamination of the cargo will be the owners’ responsibility.
In sub-clause (a) a new feature has been introduced to make the form more international. Acknowledging that in some parts of the world Saturdays and Sundays have different consequences as regards working hours the term “or local equivalent” has been added in connection with Saturdays and Sundays. The same phraseology is used in the WORLDFOOD 99 Charter Party.
In sub-clauses (a) and (b) the term “waiting place” has been used to broaden the scope of application of the physical area from which notice of readiness can be served, when no berth is vacant at the time of tendering notice. Furthermore, sub-clause (b) refers back to the inspection provision of Clause 3 (Vessel Inspection).
Sub-clause (c) has been drafted to protect the owners from a potential “Happy Day” scenario whereby the vessel is loaded or discharged by the charterers despite the notice of readiness being invalid, the result being laytime not counting. The provision reads: “Regardless of whether a valid notice of readiness has been tendered laytime or time on demurrage shall begin at 0800 on the next day not excepted from laytime following the commencement of loading or discharging of the cargo”. The effect of this wording is that laytime or time on demurrage will start counting at some point after loading or discharging has commenced irrespective of whether a valid notice of readiness has been tendered. The clause offers a balanced approach because laytime or time on demurrage will only start to count if and when the charterers actually begin to work the vessel, despite the absence of a valid notice of readiness.
Sub-clause (b) is divided into two paragraphs dealing with loading rate and discharging rate, respectively. The loading rate provision provides an option for allowing loading either to be calculated based on an agreed average rate of tons per day or within an agreed number of working days.
Furthermore, wording has been inserted in each sub-clause to take into account time used for loading/discharging during SHEX hours.
Sub-clause (c) deals with the counting of laytime on Saturdays or their local equivalent. In sub-clause (d) provision is made for delays to the vessel waiting for a berth due to weather conditions.
Finally, consistent with the changes made to Clause 18, the term “or the local equivalent” has been appended to all references to Saturdays and Sundays in this clause.
Sub-clause (b) stipulates that shifting expenses out of and back to the same berth shall be for the charterers’ account in those circumstances where shifting has been ordered by the charterers or, for instance, by the port authorities. The penultimate sentence of sub-clause (b) clarifies that shifting expenses incurred as a result of any act, neglect, default or omissions on part of the vessel will be borne by the owners.
While the final paragraph may seem superfluous it was felt that the provision served as a helpful guide to some charterers who are not aware of the consequences of naming the loading or discharging port in the charter party.
The amendments have been made because the existing ice clause was found to be deficient in a number of ways, in particular that the vessel should not be required to follow ice breakers or to force ice. It was also felt that provisions were needed to protect the owners against the risk of ice being experienced on the approach voyage.
The preamble to Clause 29 permits the vessel to follow icebreakers when reasonably required, subject to the owners’ approval and taking into account it’s size, construction and class. There is no obligation for the vessel to force ice.
In sub-clause 29(a)(i), if ice impedes the vessel from arriving at the loading port, the charterers are given three options: (1) nominate an alternative safe and accessible port; (2) agree to reckon laytime as if the port were accessible or; (3) declare that they cancel the charter party. The option must be declared to the owners within 48 running hours, which is the period deemed reasonable to allow the charterers sufficient time to make arrangements either for the cargo to be transferred to or a substitute cargo made available from an alternative port of loading.
Where there is a risk that the vessel may be frozen in at the load port after part of the cargo has been loaded, sub-clause 29(a)(ii) requires the master/owners to notify the charterers that the vessel is leaving for the nearest safe place to await the charterers’ nomination of an alternative safe port. If the charterers fail to nominate a port within the stipulated time the vessel may leave and complete with cargo at another port.
Sub-clause 29(b) provides parallel provisions for the port of discharge.
For further description of the BIMCO General Ice Clause, please see BIMCO Bulletin No. 6/2002, page 25.
The General Clause Paramount has been revised on the basis of recognising the Hague-Visby Rules as the principle liability regime covering the particular contract of carriage. The Paramount Clause has the following main components:
Thus, the first sentence of Clause 34 refers to the Hague-Visby Rules as the governing liability regime providing a clear choice of law as regards which jurisdiction’s Hague-Visby Rules shall apply in trades between two Hague-Visby Rules countries. The wording, irrespective of whether such legislation may only regulate outbound shipments at the very end of this paragraph, is meant to make sure that, in a voyage from a non-Hague-Visby Rules state to a jurisdiction which only applies the Hague-Visby Rules to outward shipments, such Rules will still apply.
The second paragraph includes a fall back provision in line with 3) above effectively providing that in the trades where the Hague-Visby Rules are neither applicable in the country of shipment nor in the country of destination the terms of the Hague-Visby Rules apply. The only exception to this general rule is, however, where the Hague Rules are compulsorily applicable in either the country of shipment or destination, in which case the Hague Rules prevail. Accordingly, due respect has been paid to those states still signatories to the Hague Rules. In the event of clean Hague Rules trades the choice of law provision provides which jurisdiction’s Hague Rules shall apply.
The third paragraph takes care of another of the key components as mentioned under 4) which is that the SDR Protocol 1979 shall also apply in those trades where they are not mandatorily applicable. It is to be realised, however, that those states that are signatories to the Hague-Visby Rules but not the SDR Protocol 1979 may, irrespective of what is provided in this clause, apply the old limitation rules.
The final paragraph expressly exonerates the carrier from all liability for loss or damage to the cargo before loading and after discharge and to deck cargo and live animals. It is realised that this provision may not be upheld in all jurisdictions applying the Hague- or Hague-Visby Rules. Thus, for instance, it will be considered invalid under the Scandinavian maritime codes that contain rules compulsorily applicable when the cargo is in the custody of the carrier in the port, i.e. outside the “tackle-to-tackle” period and for deck cargo and live animals.
The GRAINCON charter party incorporates BIMCO’s Standard War Risks Clause for Voyage Chartering - VOYWAR 1993. This clause is found in a number of modern charter parties published by BIMCO during recent years and has time and again stood the test whenever a war situation has arisen, making it necessary to take a quick decision. The clause contemplates the possible action by terrorists and action or intervention by supranational bodies. It also offers a definition of war and warlike operations.
Sub-clause 41(b) defines what “in writing” means and provides a non-exclusive list of acceptable effective means of sending notices, such as telex, fax, e-mail and registered or recorded mail.
(Printed in BIMCO Bulletin No. 3, 2004)
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