BIMCO and Intertanko team up to answer scrubber questions

Paul Gunton
Paul Gunton
ShipInsight

24 May 2019


BIMCO and Intertanko have jointly published a set of Q&As addressing the contractual implications owners and charterers should keep in mind when chartering ships fitted with scrubbers. The Q&As highlight the key charter party clauses and concepts which should be reviewed for both time and voyage charter parties.

The Q&As have been produced jointly by Intertanko and BIMCO with the assistance of the North of England P&I Club. They focus on the potential contractual issues that parties should be aware of when chartering scrubber-fitted ships. The objective is to highlight and address the relevant clauses and concepts charterers and owners should take into consideration during their negotiations.

“We are pleased to have worked with BIMCO to provide advice and assistance for owners who have chosen this route to 2020 compliance. We will continue to develop the Q&As as experience of scrubber use develops,” said Michele White, General Counsel at Intertanko.

Both organisations are neutral as to which option should be chosen saying it is up to each individual owner to decide which option is best for their ship’s operation after conducting a proper assessment of the pros and cons of each option including safety and operational issues, price differentials between low and high sulphur fuel oil, fuel availability, capital investment, payback time, trading patterns and charter rates. International, regional and national regulatory requirements may also play a part in this decision.

However, both Associations have been faced with a series of questions from Members who have fitted or are contemplating fitting scrubbers concerning how the use of a scrubber may impact on their contractual arrangements. These questions on both time and voyage chartering issues form the basis of the Q&A section below. They do not address questions relating to the technical and operational impact of installing a scrubber. Such information is available from numerous online sources.

The two parties have decided, for the time being at least, not to develop a “standard” scrubber clause for time or voyage charter parties. The decision to install and operate a scrubber is seen primarily as a matter of commercial negotiation between owners and charterers relating to the division of costs and benefits. The need for a clause will, however, be kept under regular review.

BIMCO’s Head of Contracts and Clauses, Grant Hunter, said, “We regularly receive questions about chartering issues relating to scrubber-fitted ships. These Q&As jointly produced with Intertanko will offer many useful answers as well as guidance.”

The Q&As consist of three parts. The first part deals with the implications of using scrubber-fitted ships under time charter parties, the second part deals with voyage charter parties and the third part addresses general considerations such as enforcement, fines and prohibition of open-loop scrubbers. The main focus is on time charter parties as it is expected that this is where the use of a scrubber will have the greatest impact.

This document will be updated to include any new Q&As which will affect the contractual issues for scrubber-fitted ships.