Bimco publish new virulent disease clauses

Date: 03/02/2015
Author: Philippa Langton
Source: BIMCO

Prompted by the issues raised within the shipping industry as a result of the recent Ebola outbreak, together with the issues raised by the Severe Acute Respiratory Syndrome (“SARS”) outbreak some 10 years ago, BIMCO have now drafted a new set of generic clauses (for voyage and time charters) dealing with infectious or contagious diseases.
 
The wording can be viewed here.

The wording of these clauses is based on the wording of the BIMCO piracy clause, war clause and other clauses addressing similarly extreme situations, so it will be familiar to the industry.
 
In essence, the clauses give the shipowner the ability to refuse to proceed to (or stay at) a port where, in the master’s reasonable judgement, there is a risk of exposure to a highly infectious or contagious disease and/or to a risk of quarantine or other restrictions being imposed on the ship as a result of visiting such port. This is intended to anticipate not only the immediate risks of exposure to the disease but also potential future restrictions on the ship as a result of trading to an affected port.  The latter is a consequence that has caused disruption to many of our Members, since many countries have imposed restrictions on ships coming from West Africa.
 
As with the war and piracy clauses, the Master’s “reasonable judgement” is key. The Master must reasonably consider the level of danger to be real and significant, taking into account available evidence, guidance from relevant sources, such as the World Health Organisation (WHO), and other appropriate background enquiries. The clause is not intended to be triggered in cases of commonplace diseases.
 
The clause also provides the Master with the option to agree to proceed to such a port, with the proviso that the charterer takes responsibility for any expenses and/or delays that may result, including an indemnity in respect of any third party claims.  This might, for example, include claims by bill of lading holders or claims for delay at subsequent ports.  In such a case, shipowners would be advised to consider obtaining appropriate financial security from charterers in respect of potential liabilities.
 
If this clause is to be used, it is important that its provisions are echoed in any corresponding sub-charters or bills of lading, so that a corresponding liberty to deviate applies under all relevant contracts of carriage.  This is required by the wording of the clauses themselves.
 
Members may wish to consider incorporating such clauses into their time and voyage charterparties as a matter of course.  Even though the Ebola epidemic currently shows initial signs of slowing, the application of these clauses is not limited to Ebola but intended also to apply to other diseases of a similar severity that may develop anywhere, at any time and with little warning.
 

Please contact Philippa Langton or your usual Club contact for further information.

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