pi_circular Compliance & regulationCargo risk Skuld
The new ultra low sulphur fuel regulations under MARPOL Annex VI will require more than ship side preparations, they will also require existing and future charterparties to be reviewed and claused appropriately in order to reduce the risk of disputes between owners and charterers from a number of angles. The Association is grateful to Chalos & Co., New York, for their input on US legal angles to this update. Charterparty issues There are a number of issues that could give rise to disputes between owners and charterers that have their root in the new MARPOL Annex VI regulations which mandate the use of ship fuel not exceeding 0.10% sulphur content by mass in designated Emission Control Areas (ECAs) in North America and Northern Europe from 1 January 2015. Issues include: Trading warranties Readiness of the vessel to enter an ECA Fuel specifications Delays and fines if a violation is alleged Deviations to avoid ECAs or limit time therein Members would be well advised to consider these issues closely before concluding new fixtures and indeed for any existing charters, too. The following is a brief overview of the kinds of issues that may arise. Trading warranties Charters will typically specify the geographical range in which a vessel can trade, and indeed usually provide a list of expressly excluded ports, countries and areas. Indeed this is very important or the shipowner may find the charterer at liberty to trade without limit ( Temple Steamship vs. Sovfracht (1944) 77 Ll.L.Rep. 257 ). If a charter excludes North America and Northern Europe, then the impact of the new MARPOL Annex VI regulations should not be an issue unless it is decided between the parties to alter the trading range to include areas that are ECAs. Should such decision be made then in particular the shipowner will have to carefully review the position to ensure the vessel can physically fulfil any contractual promise to lawfully trade to such areas. If a vessel is chartered out on the basi
Ultra low sulphur fuel and charterparty terms
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