"Shipman" 98

The final draft of the “Shipman” 1998 form was approved at the BIMCO Documentary Committee meeting in May 1998. The primary objective behind the revision of the “Shipman” (and “Crewman”) agreements, was to make clear the responsibilities of the owner and manager as a result of both STCW 95 and the ISM Code.

The basic form of the contract remains the same. The first amendment at part 1 of the contract is a box for the name of the party responsible for compliance with the ISM Code and this will be as a Technical Manager, where this service is provided. At the beginning of part 2 there are a number of additional definitions including severance costs, crew insurances, management services, ISM Code and STCW 95. There are also changes to the following clauses:-

(a) clause 2

Appointment of Managers.

This has been substantially changed and the list of functions removed;

(b) clause 3

Basis of Agreement.

This provides that the manager shall carry out the management services “as agents for and on behalf of the owners”. This is a fundamental principle of “Shipman” which in the previous contract was buried within clause 2.3;

(c) clause 3.1

Crew Management.

This now contains eight parts, each dealing with one of the functions ordinarily performed by ship managers. “Crewing” has become crew management and its terms enhanced to bring them into line with the relevant parts of the “Crewman” contract. One of the problems of the old “Shipman” was that the crewing provisions were relatively under-developed. This has now been corrected. This clause makes it clear that the managers are obliged to provide suitably qualified crew in accordance with the requirements of STCW 95;

(d) clause 3.2

Technical Management.

This now requires the managers to be responsible for the “development, implementation and maintenance of a Safety Management System (SMS) in accordance with the ISM Code”;

(e) clause 3.3

Commercial Management.

The old headings of “Freight Management” and “Chartering” are no longer specifically referred to, both now being incorporated into the heading of “Commercial Management”;

(f) clause 4

Managers' Obligations.

This clause states that where the managers are providing technical management, they shall be deemed to be 'the company' as defined by the ISM Code, assuming the responsibility for the operation of the ship and taking over the duties and responsibilities imposed by the Code (where applicable);

(g) clause 5

Owners' Obligations.

There is a corresponding obligation on the owners, where the managers are not providing technical management, that they shall be responsible for ISM Code compliance. The owners also remain responsible for STCW 95 compliance if the managers are not supplying the crew;

(h) clause 6

Insurance Policies.

This clause in the old “Shipman” contract was amended by a BIMCO circular in January 1997. There is a minor alteration to that circulated clause and it relates to the refusal by the International Group of P&I Clubs to accept, as co-assured, any third party required by the managers. It has been made clear that this can only be done at the discretion of the underwriters;

(i) clause 11

Responsibilities & Liabilities.

Although amended, there is no fundamental alteration in the division of responsibility as between the owners and managers. There is, however, one major change to make it clear that the managers are not responsible for the negligence of their crew, and that even if they do have responsibility for failing to exercise due diligence in their selection and employment, this responsibility is limited in accordance with the terms of clause 11. The following clause has been added to make this clear:

“Notwithstanding anything that may appear to the contrary in this contract, the managers shall not be liable for any of the actions of the crew, even if such actions are negligent, grossly negligent, or wilful, except only to the extent that they are shown to have resulted from a failure by the managers to discharge their obligations under clause 3.1, in which case their liability shall be limited in accordance with the terms of clause 11.2.1.”

There are some minor amendments to other clauses and these will be covered in the useful preamble to the “Shipman” 98 contract, written by BIMCO which will be attached to the agreement.

Supplies of the “Shipman” 98 agreement will be available from BIMCO's printers from September 1998 onwards. Their details are as follows:-

Fr. G. Knudtzon A/S, Vallensbaekvej 61,

DK-2625 Vallensbaek, Denmark.

Telephone: + 45 4366 0707

Fax: + 45 4366 0708