New terminal conditions clause takes balanced approach

Overview

A new, “Terminals Conditions of Use” clause gives owners and operators in the oil, gas, dry bulk and container trades the means to respond to unreasonable terms imposed by terminals as a condition of using their facilities.

There is a growing trend for terminals to impose terms on owners beyond their contractual and legal obligations. Time constraints mean that owners are rarely in a position to try to negotiate, and are unlikely to achieve, more balanced terms. However, acceptance can prejudice P&I cover with expensive implications for owners in the event of an incident.

In order to redress the balance, INTERTANKO has developed a provision for voyage and time charter parties. The new “Terminals Conditions of Use” clause sets out procedures to be followed. Owners forced to agree terms that might compromise their P&I cover are indemnified against their extra liabilities and given the right to fill any insurance gap with additional cover for charterers’ account.

The clause was originally developed for oil and LNG activities although similar issues arise in dry cargo and container trades. Grant Hunter, Head of Contracts and Clauses at BIMCO said “we are grateful to INTERTANKO for agreeing to share their Terminal Conditions of Use Clause with BIMCO. We believe that INTERTANKO’s clause will work equally as well for the dry bulk and container trades as it does in the tanker sector. Our members operate all these ship types, so it makes sense not to re-invent the wheel if an existing clause fits the bill”.

 

Grant Hunter
in London,

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