Bimco Novation Agreement

Two of the agreements concern the parties to the time charter, one provides for a change of ownership and the other a change of ownership, while the third relates to a change of purchaser under a shipbuilding contract. BARECONIf the chartering of a ship is the natural choice of BIMCO`s BARECON contract – which is the industry standard for this activity. The last BARECON update was in 2001. In our rapidly changing business environment, businesses are often bought and sold. A common part of these transactions is the maintenance of already profitable trade agreements. A specific innovation agreement is needed to change the identity of a party in the medium term. As part of a charter party, this means that owners or charterers will be replaced. From a legal point of view, an innovation involves the termination of a contract and the replacement of another contract in which the same acts must be done, but by different parties. To succeed in innovation, it is important that all legal requirements are met and that all issues that will have a commercial role are taken into account. The Novation agreements were developed by a team of legal and commercial experts led by Francis Sarre of CMB NV, including Chris Kidd of Ince and Co and Naoko Kaijo of Thomas Miller. Among the issues that need to be addressed to ensure effective innovation is the period during which innovation takes effect and the distinction between the accumulated debts that remain in the initial part and the new commitments that are passed on to the new party; Payment and accommodation of advance notice bunkers that remained on the ship at the time of innovation.

The charter festival was last updated in 1999. The World Food Programme recently asked BIMCO to help companies update and modernize the agreement. The Agency requires shipowners to accept a high degree of flexibility to change ports in the short term, due to the often volatile areas in which they operate. In this respect, the WORLDFOOD charter differs from other standard travel charters. BIMCO`s new agreements cover many of the legal and practical issues that may arise when the contract is terminated. BIMCO has launched a project to establish two standard novation agreements, for which the original charterer will be replaced by a new charterer; and one if the owner is replaced by a new owner. “The provision of standard prefabricated novation agreements will help simplify and streamline the contract development process and ensure the implementation of basic legal infrastructure,” said Francis Sarre, CMB. For more information, please see copies of the three innovation agreements as a result of business changes such as restructuring, selling a business or selling part of the company may require the replacement of an original contracting party.

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