BARECON 2017: What's New?

By publishing BARECON 2017, BIMCO hopes to bring the industry-standard bareboat charterparty terms fully up to date, reflecting commercial practice, addressing issues recently raised by the UK Courts, and simplifying the form where possible.

In this article, we explore the key differences between this latest incarnation of the BARECON form and its 16 year old forerunner, BARECON 2001, and consider the impact it will have on the bareboat chartering market.

Charter period

Rather than catering only for a single fixed charter period, BARECON 2017 envisages the parties agreeing an extra period on top, exercisable at the charterers' option. The length of this extra period must be stated in box 18 on the face of the form, along with the deadline by which the charterers must give notice to the owners if they wish to extend.

Although owners and charterers sometimes did this ad hoc, by adding bespoke wording, the inclusion of a clear mechanism for extending the charter period in BARECON 2017 is to be welcomed.

Condition on delivery

BARECON 2017 maintains the position under the 2001 form that the charterers cannot claim against the owners for not meeting any conditions, representations or warranties in relation to the vessel once delivery has taken place.

As this imposes a severe restriction on the charterers' rights, BIMCO has decided to extend the obligations on the owners in relation to the condition of the vessel on delivery. The owners now have an absolute obligation to deliver the vessel in a seaworthy condition and, in every respect, ready for the charter service, whereas, under the old form, the owners needed only to "exercise due diligence" in this regard. This is a significant tightening of the owners' obligations on delivery.

To further protect the charterers' interests, BARECON 2017 provides that, if the charterers have inspected the vessel prior to delivery, it shall be delivered in the same condition as at the time of the inspection, fair wear and tear excepted. Charterers would be well-advised to ensure that an inspection is carried out before delivery to take advantage of this protection.

These amendments are helpful in striking a balance between the owners' and charterers' rights on, and after, delivery in relation to the condition of the vessel. When drafting BARECON 2001, the BIMCO sub-committee recognised that the charterers could be exposed in the event of the vessel sustaining damage shortly before delivery, suggesting that the...