Emissions Trading Scheme (ETS)Allowances Clause for BIMCO’s ShipManagement Agreement (SHIPMAN)

I have drawn attention to the fact that the “authorities” are closing in on sub-standard vessels in the past. This was discussed openly at our AGM in Malta. Port State interventions have improved the quality of Commercial Shipping, but we should not ignore “Climate Control“ and the drive to reduce carbon

Rules on the quality of vessels, and their polluting propulsion systems, are being tightened all the time.

Members are reminded that vessels that are caught and detained by these Rules may face civil fines; but the delay(s) will also impact on the underlying commercial contracts. Demurrage may be claimed, or hire not paid, and disputes between the parties may arise. Disputes will arise and claims for damages made
(with the innocent party looking to arrest for security).

As part of the increasing rules being tightened (and no doubt because of increased pressure from COP) the IMO has been working on emissions, along with the EU, leading to BIMCO’s Documentary Committee adopting a new “Emmissions Trading Scheme – or “ETS” Allowances Clause” for inclusion in BIMCO’s Ship Management (SHIPMAN) and 3 ETS Clauses for voyage C/Ps.

These were published by BIMCO on 8 December and are “aimed to facilitate collaboration and provide clarity between certain parties as new regulations come into force”.

BIMCO are also pointing out that: “In less than one month our industry will be included in the EU ETS and,
in the future, we can expect similar emission schemes”.

It is to be hoped that these new ETS Clauses will help in meeting the requirements set by the EU.

While the aim behind BIMCO’s ETS Clauses must be that they have been developed for use with any
emission scheme (not just limited to the EU ETS scheme) their purpose is to allocate costs between Shipowners and Shipmangers (and thereby ease compliance with ETS schemes).

The Documentary Committee has also adopted 3 ETS Clauses for Voyage C/Ps. These will need to be studied and understood, no doubt they will also be areas where disputes arise and security demanded.

BIMCO is also working on a clause for Contracts of Affreightment. For further useful comments see page 30 of the free web issue of Port Strategies September issue at: https://webaplicacion.apn.gob.pe/proyecto/wp-content/uploads/2023/09/Port-Strategy-Septiembre-2023.pdf

Members should recognise that there will be disputes, and that the damages claimed for delays could also surface in other contracts – such as for the international sale of commodities, Bills of Lading (dated outside of shipment periods) and Credit Insurance being just three examples.

Richard Faint
Chartered Arbitrator (UK)
e: richard@charterwise.co.uk

Source – https://shiparrested.com/wp-content/uploads/2024/01/TheArrestNews43.pdf

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