Following an intense two year development programme BIMCO has officially published the much awaited NEWBUILDCON - the shipping industry's first International Standard Newbuilding Contract. According to Nils-Gustaf Palmgren, who headed this challenging project, "most existing forms used for shipbuilding are routinely amended and supplemented. NEWBUILDCON incorporates these common amendments and additions in a simply and clearly worded document. It has been uniquely structured in a way that easily guides the parties through the sequence of events involved in a shipbuilding contract".
BIMCO enjoys worldwide renown for its documentary work which stems from the organisation's great success in many sectors of the industry in harmonizing contract terms and raising standards. Deputy Secretary General Søren Larsen says "It has long been BIMCO's ambition to produce a standard document for every single sector of the industry representing the entire lifecycle of a ship from construction through trading to demolition. The development of the NEWBUILDCON contract is the final important part in completing this documentary wheel of life".
The actual drafting work was done by a team of lawyers specializing in shipbuilding contracts who have previously worked on behalf of both buyers and builders - this experience has played an important role in ensuring an appropriate contractual balance and that the interests of the builders and the buyers are properly reflected. BIMCO also benefited from valuable input from Asian and European shipbuilding interests as well as constructive input from classification societies and the insurance industry.
BIMCO's objective in developing a Standard Shipbuilding Contract is to provide builders and buyers with a choice of contract to those currently in use. At present most buyers are obliged to rely on the chosen yard's own contract. In its simplest form the BIMCO Contract provides both parties with an ideal checklist. This will help ensure that the final agreement reached between the parties will contain the essential key provisions required in any shipbuilding contract.
Of key importance is that the BIMCO Contract is not an attempt to impose a set of rigid terms and conditions as a replacement for existing yard contracts. The BIMCO Contract is designed to form an important part of the negotiation process by providing a solid and balanced contractual platform from which the parties can reach agreement. Most importantly say Nils-Gustaf Palmgren "NEWBUILDCON allows the parties to concentrate on the underlying main particulars and specifications of the contract without the need for a wholesale review of the entire contractual terms". He added "NEWBUILDCON is readily adaptable to all types of vessels in all jurisdictions".
One of the many benefits of using NEWBUILDCON, continues Nils-Gustaf Palmgren, is "the clearer legal provisions dealing with important aspects such as permissible delays, guarantees, responsibilities and exclusions from liability, insurance, termination and dispute resolution. It is hoped that some of these clauses will assist in harmonizing contractual provisions in the shipbuilding sector worldwide".
The Contract also introduces a number of novel concepts often absent from existing shipbuilding contracts, such as a clause dealing with the requirements of the IMO Hazardous Materials Inventory and clarifications, such as the Buyer's relationship to the Classification Society.
In summing up NEWBUILDCON Soren Larsen said "this has undoubtedly been BIMCO's most ambitious documentary project to date, but one of which BIMCO is immensely proud. We have been encouraged by the very positive response to the Contract by all those who have seen both the earlier consultation draft and the final published edition. BIMCO believes that the benefits of using NEWBUILDCON will be instantly apparent to anyone who takes the time to read through the Contract. We will be embarking on a series of presentations and seminars to shipyards and shipowners worldwide to raise awareness of NEWBUILDCON and to highlight the benefits of using this excellent new standard form".
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