MINREPCON 2018

MINREPCON 2018

Overview

MINREPCON 2018 is a standard contract for minor afloat repairs at a commercial berth or anchorage. It is not meant to be an alternative to REPAIRCON 2018, which is the recommended contract for contracting with ship repairers or major sub-contractors. MINREPCON 2018 is intended to be used by shipowners to conclude written contracts with individuals or sub-contractors performing minor repairs which would normally be reluctant to read or sign a longer contract, such as REPAIRCON 2018. It should be noted that MINREPCON 2018 is a short form and does not include many of the limitations and protections included in REPAIRCON 2018. The latest edition of this contract is MINREPCON 2018, issued in 2018.

Copyright in MINREPCON 2018 is held by BIMCO.

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The  below explanatory notes for MINREPCON 2018 are also available as an e-book from Witherbys.

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The  explanatory notes for MINREPCON 2018 are available as an e-book from Witherbys.

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Introduction

In contrast to REPAIRCON which is the standard agreement for major ship repair works carried out at a contractors’ yard, MINREPCON is the recommended contract for minor works or maintenance. MINREPCON will typically be used for arrangements with a local plumber, electrician or carpenter to attend on board when a vessel is at berth or anchorage.

Local contractors’ own terms are often one-sided or fail to provide a clear apportionment of risk and responsibility. This can lead to difficulties and expose owners to unexpected liabilities in the event of an accident or where either party sustains loss or damage.

MINREPCON was first issued in 2002. In the light of experience and so as to encourage wider usage, the agreement has been revised and updated to provide users with a streamlined and more comprehensive document to meet contemporary requirements. Improvements include the introduction of a liability and limitation regime and modification of the dispute resolution mechanism replacing often problematic “local law” provisions with an agreed choice of law and jurisdiction. In addition, the previous right to exercise a lien over the vessel in the event of non-payment prior to sailing has been deleted leaving the issue to be determined on a case by case basis. However, late payment will attract interest.

BIMCO is grateful to the following Subcommittee members for their work in the development process:

  • Mr Søren Berg, J. Lauritzen, (Chairperson) 
  • Mr Mikael Abrahamsson, Stena RoRo
  • Mr Donald McLean, Lisnave
  • Mr Frank Riley, Skuld P&I Club
  • Ms Nicola Jeanes, Mills & Co

Explanatory Notes

The following Explanatory Notes provide background information to the structure and content of the contract. Owners should ensure that their P&I cover is adequate to respond to any accidents or incidents involving an outside contractor.

PART I

Part I follows the customary BIMCO box-layout style. The boxes are used to enter details of the main terms that the parties agree when the contract is concluded. As a matter of convenience the boxes, where appropriate, contain cross-references to the relevant clauses in Part II.

Box 1 - Place and Date

The date and place (which is likely to be the port) where the contract is agreed must be entered in this box.

Box 2 - Owners (Full style and address)

The shipowners’ name, full postal address and contact details must be entered (Clause 1.1). 

Owners must declare whether or not they are the bareboat charterers of the vessel. This distinction is made to ensure that the contractors are aware of any potential credit risks that may arise as a result of contracting repairs with a party other than the registered owners of the vessel.

Box 3 - Contractors (Full style and address)

The contractors’ name, full postal address and contact details must be entered (Clause 1.2).

Box 4 - Vessel’s Details

The vessel’s full name must be entered and the required list of information completed (Clause 1.3).

Box 5 Description of Contracted Works

Details of the contracted works are to be inserted (Clause 1.4).

Box 6 Time/Date of Commencement of Works 

The time and date when work is to begin must be inserted. 

Box 7 Time/Date of Completion of Works

The stated completion date may be extended in the event of agreed “Additional Works” (Clause 1.9 and 2.14).  

Box 8 Guarantee Period in Months

The guarantee period, to be agreed by the parties, must be entered (Clause 2.15).

Box 9 Labour (working hours/rates)

The costs of labour must be set out covering both ordinary time and overtime together with the cost of materials and services (Clause 1.8).

Box 10 Contract Price and Currency

This must indicate whether the agreed price is on a “Lump Sum”, “Time and Material” or “Combined” basis (Clause 1.7, 1.8 and 2.1). 

Box 11 Payment Date and Method

This covers payment arrangements, the contractors’ bank details and interest in default of due payment (Clause 2.12). 

Box 12 Law and Jurisdiction

The agreed law and court jurisdiction must be identified (Clause 2.17).

Signature Boxes 

It is likely that the Master will sign the contract on behalf of the owners.

PART II

Clause I Definitions

This sets out a list of terms that are used in the agreement.

Clause 2 General Terms

Clause 2.1 Determines the basis of the of the contract price.

Clause 2.2 The contract represents the parties’ entire agreement. Any changes must be mutually agreed, in writing. 

Clause 2.3 Sets the standards for the work which must be to “the reasonable satisfaction of the Master”. 

Clause 2.4 The contractors are responsible for any sub-contractors who may be appointed subject to owners’ approval (which may not be unreasonably withheld).

Clause 2.5 Requires the contractors to undertake their work safely and comply with the vessel’s safety procedures. 

Clause 2.6 In accordance with subclause (a), the contractors are responsible for loss or damage resulting from proved negligence or wilful misconduct. In order to deter false claims being made against the ship for contractors’ equipment, sub-clause (b) excludes owners’ responsibility for loss of or damage to contractors’ property.

Clause 2.7 A knock-for-knock liability regime applies in the event of death or personal injury with each party accepting responsibility for its own personnel and those for whom it is responsible. In addition to providing a clear allocation of responsibility, it is also intended to deter false claims being raised against the vessel and owners.

In line with other BIMCO contracts, which either exclude or are silent on the issue of wilful misconduct in the context of “knock for knock”, the issue is not addressed in MINREPCON. Current legal understanding is that, in the absence of clear wording to the contrary, “wilful misconduct” will fall outside the knock for knock regime. The parties are therefore likely to be responsible for wilful misconduct. However, a high threshold is likely to be set with wilful misconduct arising in the context of misdeeds of the directing mind or will of a company and not by the misbehaviour of a disaffected or deliberately careless employee. 

Clause 2.8 The contractors’ liability is limited to a maximum of ten times the contract price unless otherwise agreed.

Clause 2.9 The right to limitation is balanced by the introduction of an obligation on the contractors to maintain insurance to meet their liabilities.

Clause 2.10 Subject to any agreed guarantee period (Clause 2.15), the contractors’ liability ceases when work has been completed.

Clause 2.11 Satisfactory completion of work must be agreed by the parties in writing. 

Clause 2.12 Sets out the owners’ payment obligations. Late payment will attract interest at the rate stated in Box 11. 

Clause 2.13 As long as it does not interfere with the contractors’ activities, owners may undertake their own work or operations.

Clause 2.14 Defective work is to be rectified by the contractors with the vessel’s Classification Society surveyor providing advice or an opinion in the event of dispute.

Clause 2.15 Where a guarantee period has been agreed, any remedial work is to be undertaken by the contractors or, if not feasible, elsewhere at their cost.

Clause 2.16 This is a standard provision.

Clause 2.17 Requires the parties to state their agreed choice of law and jurisdiction in Box 12.

 

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REPAIRCON 2018 and MINREPCON 2018

Subcommittee members Søren Berg, J. Lauritzen, Donald McLean, Lisnave & Donald Chard, BIMCO discuss and answer questions from the viewers regarding the newly revised REPAIRCON 2018 and MINREPCON 2018 forms in this webinar.

 
 

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