The drafting team working on the revision of GENCON 94 has agreed on a new Clause 2 for shipowners’ responsibilities. The 1994 version of this clause, sometimes jokingly called the “owners non-responsibility clause” because of the near untouchable position it provides, is not in line with BIMCO’s overall strategy to provide the shipping industry with balanced contracts and clauses. It was in fact Clause 2 that sparked the revision of GENCON 94 to begin with.

The new clause (as set out below as a teaser) offers a more balanced approach and a clear and focused risk allocation. In short, owners have a due diligence obligation to provide a cargoworthy vessel at the beginning of loading, and a seaworthy vessel at the beginning of the voyage. This is a much clearer obligation than under the Hague-Visby Rules (HVR), which operate with the vaguer “before and at the beginning of the voyage” obligation. As such, the new Clause 2 will provide more certainty regarding which points in time the owners’ obligations relate to.

Subclause 2(b) provides an undertaking by the owners to carry and care for the cargo from “tackle to tackle” to ensure that owners do not take on wider responsibility than under the HVR and that P&I cover is intact.

The opening up of the owners’ responsibilities in subclauses 2(a) and (b) is balanced by a wide exclusion clause under subclause 2(c). If the owners have done what they are supposed to do under subclauses 2(a) and (b), they will not be responsible for any losses and will be allowed the same rights and defences as a carrier under the Hague-Visby Rules.

With the new Clause 2, GENCON users will get a clearer picture of owners’ responsibilities – one that is slightly more limited than the HVR but close enough to offer familiarity. This should provide a smooth transition to the new form. The aim is to present the new GENCON charter for adoption in May 2021.

2. Owners’ Responsibilities

(a) The Owners shall exercise due diligence to ensure that the Vessel shall:

(i) at the beginning of loading cargo(es) at each loading port or place under this Charter Party be cargoworthy and properly, manned, equipped and supplied for loading; and

(ii) at the beginning of each cargo carrying voyage(s) be seaworthy and properly manned, equipped and supplied, with cargo safely stowed, trimmed and secured, for the intended voyage.

(b) Subject to any risks or responsibilities that the Charterers have assumed under this Charter Party, the Owners shall from the time when the cargo is loaded to the time that it is discharged properly and carefully carry, keep and care for the cargo.

(c) Subject to subclauses (a) and (b) above, the Owners shall have no liability for loss, damage, delay or failure in performance howsoever caused and shall be entitled to rely on all rights, defences, immunities and limitations of liability that are available to a “Carrier” under the Hague-Visby Rules.

Source: Hellenic Shipping