Tanker Chartering Documents: Safe Berths, Waiting Time and Elephants in the Room

Discussions about charter parties can be fairly dry…unless the subject is tanker chartering.

The Society of Maritime Arbitrators (SMA), based in New York, hosted a luncheon presentation describing the efforts of the Association of Ship Brokers and Agents (ASBA) – in conjunction with Copenhagen-based BIMCO, to redraft the widely used ASBATankvoy charterparty. 

Why should anybody care about this? Consider that the existing document used by oil companies, tanker owners and others in the oil, products and chemical supply chains was last revised in 1977—when tankers were single hulled, there was no Marpol Annex 6 (dealing with pollution), no STCW (dealing with crewing issues) and no ISPS (dealing with security). Back then, notices of readiness were delivered by telex machines (the fax machine was still the stuff of futurists). In fact, the well known International Maritime Organization (IMO) was actually known as IMCO (the “C” being for “Consultative”) until the early 1980s. 45 years on, it’s time for a reset. 

The SMA-hosted lunch, held in person in midtown New York, featured a presentation by Stephen Harper, a long-time maritime lawyer and Head of Legal-Shipping at Singapore-based BW Group (a mega owner of oil, products and gas tankers), on how the re-drafting is being carried out. Notably, the luncheon came in the midst of in-person sessions of a working group (from the owning, cargo, legal and chartering realms), officially a “BIMCO / ASBA Subcommittee” that had been meeting virtually, and reviewing the ASBATankvoy charter form across three continents for the past two years. In his remarks, Mr. Harper, the Subcommittee co-chair (alongside New York based tanker broker Soren Wolmar), said: “We have to make sure that we actually get it right, so that we end up with a revised form that will continue to be one of the favored forms in the industry for many years to come.”

The Questions and Answers revealed what was on the mind of the New York crowd. What the questioner described as “The elephant in the room” was the Asbatankvoy Clause 9 – which deals with the “safe berth” (and had been the subject of a ruling by the U.S. Supreme Court in a case concerning a 2004 spill caused by a submerged anchor closely alongside a discharge berth the Delaware River). Mr. Harper said that he was not speaking for the overall Subcommittee, but suggested that: “I think that we will probably leave it the way that the Supreme Court interpreted it”.

In its early 2020 ruling, the Court opined that the wording in the charter form places the onus on the charterer in selecting and warranting that the berth be a safe one (this is an over-simplification, for non lawyer readers)—with no submerged obstructions lurking.

Another group of questions dealt another obligation of charterers concerning the nomination of berths for a vessel’s cargo operations. In what a questioner euphemistically called “waiting time issues”, he asked whether any changes in the wording were contemplated that would apply where a vessel submits a “Notice of Readiness” for cargo operations (also covered in Clause 9- but with a tie-in to Clause 6), and it turns out that the berth is not available. The questioner along with others who chimed in pointed to some ambiguities with the present wording. Mr. Harper, again noting that he could not speak for the entire Subcommittee, said that “I will take that on.” 

What happens now? A BIMCO representative attending the lunch explained that the Subcommittee would be developing a draft of the new Asbatankvoy. He said: “We normally develop a draft clause and then do industry consultations…we get the draft product out there and see what users think of it.” After noting that: “If any of you would like to be part of the consultation, it’s something that we really value.”

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