SPECIAL CIRCULAR

No. 4 4 November 2011

161 Bagsvaerdvej
DK - 2880 Bagsvaerd
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Fax: +45 4436 6868
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Web: www.bimco.org

BIMCO Suite of Bunker Clauses for Time Charter Parties

Background

In October 2009 BIMCO initiated a project to develop a suite of standard bunker clauses for use in time charter
parties. The rationale behind developing the suite is simply to address the ever increasing importance of bunker
issues in time charter parties and the need to ensure that the risk of bunker disputes is minimised by clearly
worded clauses that reflect legislative developments.
Committee at its meeting in Vancouver in June 2011.

The Suite provides clauses covering matters relating to delivery/redelivery bunkers; bunkering operations;
sampling; fuel testing programmes; and ECA trading, all of which are matters that are frequently absent from or
insufficient in many standard time charter parties. Many older time charter forms contain bunker clauses
covering the fundamental principles under the charter, but
vessels are required to carry and use several grades of fuel and where sampling and testing regimes are an
integral part of the process.

Suite of Bunker Clauses should be a direct replacement for the existing bunker
clauses in a time charter - there is, for example, no intention to deal with the actual pricing or quantities of
bunkers, as this will already be dealt with. What the Suite offers is a means of supplementing standard time
charters with bunker provisions that are missing or poorly worded. Each clause within the Suite is designed to be
self-standing and independent of the other clauses in the Suite. As always, users should be careful when
incorporating any additional clauses so that the new clauses do not conflict with existing provisions.

Availability

www.bimco.org
and is also available to idea users via the built-in Clause Library.

Versions:
v1.1 (14 March 2013) Corrected reference to MARPOL Annex IV in explanatory note to Clause 2 to read MARPOL Annex
V1.2 (25 June 2014) Updated reference to the MARPOL Annex VI Guidelines to the latest edition MEPC.(182)59. Amendments made to Clause 2
(Bunkering operations and sampling) and Clause 4 (Fuel testing programme).
Explanatory notes

The following explanatory notes provide some background to the thinking behind each of the clauses in the Suite:

Clause 1 (Bunkering prior to Delivery/Redelivery)

This Clause provides for the bunkering of the vessel by the charterers immediately prior to delivery or by the
owners prior to redelivery provided the bunkering operation does not in any way interfere with or cause delay
under the current charter (particularly in the case of bunkering prior to delivery). Each party is to bunker for their
own account and indemnify the other for any delays, losses, costs and expenses that occur as a result of the
bunkering.

It should be noted that this is a mutual provision each party consenting to the other party to allow bunkering
prior to delivery/redelivery. Although the prior consent of the other party to bunkering before delivery needs to
be obtained, this i.e. it should reflect common commercial
practice so any refusal by either party

Clause 2 (Bunkering operations and sampling)

Sub-clause (a) sets out the co- ing agent and

supplier prior to, during and after delivery of fuels to the vessel.

Sub-clause (b) deals with bunker sampling on which most standard forms of time charter party are silent. The
provision requires a sample to be taken of each grade of fuel delivered. The sampling
procedure is to be conducted in accordance with MARPOL Annex VI Guidelines for the Sampling of Fuel Oil. The
reason the Clause refers to the Guidelines is because it is an established procedure and its incorporation by
reference avoids having a very long provision detailing sampling procedures.

The -divided into a minimum of seven representative sub-samples to be taken from

each grade of fuel loaded: one mandatory MARPOL sample and two samples each for the owners, the charterers
and the bunker suppliers. The minimum number of samples has been chosen to reflect prudent commercial
practice although it is acknowledged that in some cases more samples will be taken.

In terms of the location of the sampling point what is of vital importance is that sampling
is done by drip feed during the bunkering operation; it is of less importance whether the sampling point is at the

Sub-clause (c) requires the charterers to warrant that the bunker suppliers they engage will comply with the
MARPOL sampling procedures when delivering bunkers which, if the bunker supplier is located in a MARPOL
signatory State is, in any event, a mandatory requirement for the supplier.

Sub-clause (d) deals with the loading of different grades and specifications of bunkers into segregated tanks on
board the vessel. The segregation also includes separating fuel supplied by different suppliers, even if
purportedly of the same grade and specification as other suppliers. Bunkers are to be segregated within the

Clause 3 (Bunker quality and liability)

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This Clause requires that the fuels supplied are to comply with ISO 8217:2010 unless the parties have agreed
otherwise. While BIMCO is aware that the 2010 edition of ISO 8217 is not yet enjoying widespread acceptance,
it is felt that BIMCO should not be publishing clauses that refer to old standards.

T although not found in ISO 8217 (Section 5 of the ISO standard refers to
) has been used because it is in such widespread use in the industry, as well
as being found in a number of BIMCO contracts.

Sub-clause (b) deals with loss or damage suffered by the owners (e.g., delay) or the vessel (e.g., physical damage
to or underperformance of the engines) caused by bad or off-spec fuel.
to the consequences of them loading bad fuel, but also to liability for the cost and expense of off-loading the bad
fuel from the vessel and replacing it with suitable fuel.

s, the
last part of the Clause provides the owners with protection against any potential claim by the charterers for
under-performance or increased bunker consumption which can be directly attributed to the bad fuel.

Clause 4 (Fuel testing programme)

There is no strict obligation on owners to participate in fuel testing programmes, although BIMCO believes it to
be a good and prudent practice. However, if owners do participate in such programmes then they may wish to
incorporate this Clause into their time charters.

The Clause has been kept deliberately brief to address simply the chief principle that if the owners have the fuel
tested (at their expense) and it is found not to comply with the agreed specification then the charterers have the
right to s
laboratory confirms the sample of fuel to be off-spec then the charterers are to pay for the analysis, otherwise
the owners must foot the bill. It should be noted that the owners and charterers will have mutually accepted the

findings.

Clause 5 (Bunker Fuel Sulphur Content Clause)

This Clause is the BIMCO Bunker Fuel Sulphur Content Clause published in 2005. The Clause is known to function
well in practice and so it has been incorporated into the Suite without any amendment.

The Clause takes stock of the obligations of owners, time charterers and their bunker suppliers under the
MARPOL regime in respect of fuel sulphur content of fuels. The basic premise is that the charterers must provide
the vessel with fuels of the necessary sulphur content to allow the vessel to trade within the emission control
zones ordered by the charterers. The charterers are also required to use bunker suppliers that operate in
accordance with Regulations 14 and 18 of MARPOL Annex VI. The Clause gives emphasis to the provision of
bunker delivery notes and sampling procedures.

provide
fuel in accordance with the Clause. The responsibility for the storage, management and use of the fuels supplied
rests with the owners as does the emission control requirements of Regulations 14 and 18.

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The owners warrant that the vessel will comply with the emission control regulations of the places she is ordered
to trade by the charterers and that the vessel is capable of consuming the fuels provided.

Clause 6 (Types and Quantities of Bunkers on Redelivery)

The final Clause in the Suite addresses bunkers on redelivery ensuring that whatever various types of fuel were
on board at delivery are also on board at redelivery. If the vessel is delivered to the charterers outside an Emission
Control Area (ECA) where there is no requirement to have low sulphur fuel on board, but the vessel is redelivered
within an ECA, then the charterers are obliged to provide low sulphur fuel in sufficient quantities for the vessel
to be able to reach the next nearest bunker port where further supplies of such fuels are available.

Failure by the charterer to redeliver the vessel in accordance with this Clause will result in a breach of charter
dealt with by background law. BIMCO contemplated adding wording providing a mechanism for compensation
to the owners by the charterers should they redeliver the vessel without with the same types of fuel on board as
at delivery. However, it was decided not to include such a provision as it was felt that it could be a potential
dispute breeder as the charterers could, potentially, use it as an entitlement to redeliver the vessel contrary to
the provisions of the first paragraph.

Grant Hunter
BIMCO Chief Documentary Affairs Officer
November 2011
E-mail: documentary@bimco.org

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 BIMCO Suite of Bunker Clauses for Time Charter Parties*

1. Bunkering Prior to Delivery/Redelivery

Provided that it can be accomplished at ports of call, without hindrance to the working or operation of or
delay to the Vessel, and subject to prior consent, which shall not be unreasonably withheld, the Owners
shall allow the Charterers to bunker for their account prior to delivery and the Charterers shall allow the
Owners to bunker for their account prior to redelivery. If consent is given, the party ordering the
bunkering shall indemnify the other party for any delays, losses, costs and expenses arising therefrom.

2. Bunkering Operations and Sampling

(a) The Chief Engineer shall co-

bunkering. Such cooperation shall
manifold, attending sampling, reading gauges or meters or taking soundings, before, during and/or after
delivery of fuels.

(b) During bunkering a primary sample of each grade of fuels shall be drawn in accordance with IMO
Resolution MEPC.182(59) Guidelines for the Sampling of Fuel Oil for Determination of Compliance with
the Revised MARPOL 73/78 Annex VI or any subsequent amendments thereof. Each primary sample shall
be divided into no fewer than seven (7) samples; one sample of each grade of fuel shall be retained on
board for MARPOL purposes and the remaining samples of each grade distributed between the Owners,
the Charterers and the bunker suppliers.

(c) The Charterers warrant that any bunker suppliers used by them to bunker the Vessel shall comply with
the provisions of Sub-clause (b) above.

(d) Bunkers of different grades, specifications and/or suppliers shall be segregated into separate tanks

capacity as a result of segregating bunkers as aforementioned.

3. Bunker Quality and Liability

(a) The Charterers shall supply fuels of the agreed specifications and grades. The fuels shall be of a stable

otherwise agreed in writing, shall comply with ISO standard 8217:2010 or any subsequent amendments
thereof.

(b) The Charterers shall be liable for any loss or damage to the Owners or the Vessel caused by the supply
of unsuitable fuels and/or fuels which do not comply with the specifications and/or grades set out in sub-
clause (a) above, including the off-loading of unsuitable fuels and the supply of fresh fuels to the vessel.

bunker consumption nor for any time lost and any other consequences arising as a result of such supply.

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4. Fuel Testing Programme

Should the Owners participate in a recognised fuel testing programme one of the samples retained by the
Owners shall be forwarded for such testing. The cost of same shall be borne by the Owners and if the
results of the testing show the fuel not to be in compliance with ISO 8217:2010, or any subsequent
amendment thereof, or such other specification as may be agreed, the Owners shall notify the Charterers
and provide a copy of the report as soon as reasonably possible.

In the event the Charterers call into question the results of the testing, a fuel sample drawn in accordance
with IMO Resolution MEPC.182(59) Guidelines for the Sampling of Fuel Oil for Determination of
Compliance with the Revised MARPOL 73/78 Annex VI or any subsequent amendments thereof, shall be
sent to a mutually agreed, qualified and independent laboratory whose analysis as regards the
characteristics of the fuel shall be binding on the parties concerning the characteristics tested for. If the
fuel sample is found not to be in compliance with the specification as agreed in the paragraph above, the
ount.

5. Bunker Fuel Sulphur Content Clause for Time Charter Parties 2005

(a) Without prejudice to anything else contained in this Charter Party, the Charterers shall supply fuels of
such specifications and grades to permit the Vessel, at all times, to comply with the maximum sulphur
content requirements of any emission control zone when the Vessel is ordered to trade within that zone.

The Charterers also warrant that any bunker suppliers, bunker craft operators and bunker surveyors used
by the Charterers to supply such fuels shall comply with Regulations 14 and 18 of MARPOL Annex VI,
including the Guidelines in respect of sampling and the provision of bunker delivery notes.

The Charterers shall indemnify, defend and hold harmless the Owners in respect of any loss, liability,
delay, fines, costs or expenses arising or resulting from the Charterers' failure to comply with this Sub-
clause (a).

(b) Provided always that the Charterers have fulfilled their obligations in respect of the supply of fuels in
accordance with Sub-clause (a), the Owners warrant that:

(i) the Vessel shall comply with Regulations 14 and 18 of MARPOL Annex VI and with the requirements
of any emission control zone; and

(ii) the Vessel shall be able to consume fuels of the required sulphur content when ordered by the
Charterers to trade within any such zone.

Subject to having supplied the Vessel with fuels in accordance with Sub-clause (a), the Charterers shall

failure to comply with Regulations 14 and 18 of MARPOL Annex VI.

(c) For the purpose of this Clause, "emission control zone" shall mean zones as stipulated in MARPOL
Annex VI and/or zones regulated by regional and/or national authorities such as, but not limited to, the
EU and the US Environmental Protection Agency.

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 6. Types and Quantities of Bunkers on Redelivery

Unless agreed otherwise, the Vessel shall be redelivered with the same types and about the same
quantities of fuels as on delivery; however, the types and quantities of fuels on redelivery shall always be
appropriate and sufficient to allow the Vessel to reach safely the nearest port at which fuels of the
required types are available.

*NOTE: Users are recommended to select only those clauses from the Suite below that are required to supplement the bunker provisions of their time charter
party where it does not address the issue or the existing wording is felt to be insufficient. Each clause in the Suite functions as a free-standing clause
independent of the other clauses in the Suite.