Background
The Baltic and International Maritime Council (BIMCO) recently published its own standard contract form for ship sale and purchase transactions, SHIPSALE 22.
SHIPSALE 22 is designed to be used in the industry as a standard Memorandum of Agreement (MOA) for ship sale and purchase.
Format
It consists of two parts. The Part I has a box format to summarize the information about the transaction which will be familiar with the frequent users of the other BIMCO contracts, whereas the main contractual clauses are in the Part II.
What’s New?
SHIPSALE 22 tries to provide the industry with a more reliable contract format which requires less time spent to negotiate and draft the contract compared to the prevalent industry standard, SALEFORM 2012, the last edition of the Norwegian Shipbrokers’ Association’s international memorandum of agreement for ship sale and purchase.
BIMCO’s SHIPSALE 22 has several key novelties, including;
updates related with the deposit clause such as a separate deposit holding agreement between the buyer, seller and deposit holder and a disruptive banking event concept that refers to an event out of the control of the parties and delays the deposit holders’ receipt of the deposit.
automatic right to have a buyers’ representative on board after the payment of the deposit,
an option to waive an inspection of the vessel and class records and accept them “as is”
a special focus on the sanctions and anti-corruption with BIMCO’s recent standard wording over these topics
electronic signatures as a response to the developments in the industry especially after the COVID-19 pandemic
as an alternative to physical closing at location, “virtual closing” which has also been a trending practice in the industry over the last few years
Conclusion
SHIPSALE 22 is an attempt to provide a comprehensive and up-to-date contract form for ship sale and purchase transactions, taking into account the recent industry practice. With its format that is similar to other BIMCO contracts, adaptation of the most recent BIMCO clauses, and with several new clauses it may help parties to save time in negotiations and drafting of the memorandum of agreements.
More information and a copy of the SHIPSALE 22 form can be reached here