Posted: 04/07/2024
Following a two-year review process involving shipowners, managers, P&I clubs, and insurance and legal experts, the latest revision of BIMCO’s go-to contract for ship management, SHIPMAN 2024, is here.
Earlier revisions of SHIPMAN released in 1998 and 2009 remain in regular use, but have increasingly necessitated parties incorporating a spread of BIMCO or similar clauses as riders, in order to retro-adapt the contract to legislative and industry developments in the intervening years. Contrastingly, the new SHIPMAN 2024, only recently approved by BIMCO’s documentary committee, is more of a one-stop shop, ready to tackle the intricacies of modern-day crew, commercial and technical management, along with responsibility for emissions trading, and insurance procurement.
New to SHIPMAN 2024 are provisions dealing with sanctions, cyber security, anti-corruption, and access to, and ownership of, vessel data. The agreement also reflects managers’ rights to use affiliates, and to predelivery costs and fees.
SHIPMAN follows the same layout as previously, with a box layout in part I comprising 36 boxes for the insertion of party-specific details in relation to the various clauses appearing in part II, which contains 28 standard clauses as well as annexes A to E, where details of the relevant vessels, crew and fees could be set out.
Clause 3 sets out the authority of the managers and, consistent with earlier revisions, establishes that SHIPMAN 2024 is an agency agreement, most suited to the provision of a range of management services rather than crew management alone. A non-exhaustive list of the technical services the managers will provide is in clause 4, with the parties setting out in box 6 the selection of services they have opted for. Pursuant to clause 8, it remains the case that managers are obliged to use ‘best endeavours’ to provide management services in accordance with ‘sound management practice’, and to protect and promote the interests of the owners in all matters related to the services.
Following the inclusion of the maritime sector in the EU Emissions Trading Scheme effective from April 2023, BIMCO has incorporated into SHIPMAN 2024 its ETS SHIPMAN Emission Trading Scheme Allowances Clause 2023, regulating the provision of emissions data between the parties and any emissions scheme management services provided by the managers.
A more controversial new feature of SHIPMAN 2024 is that owners must pay a pre-delivery management fee to the managers, intended to address the fact that managers often start work before the commencement date in the agreement. If the owner and manager do not include a figure in box 15 for the predelivery fee, the sum will automatically be calculated as one twelfth of the annual management fee. Until now, parties had routinely amended SHIPMAN 2009 to clarify their position in respect of predelivery services. The pre-delivery management fee remains payable under SHIPMAN 2024 even if delivery of the ship does not occur for any reason other than default by the managers. Therefore, the shipowner is on risk for third party events or acts of God that prevent delivery, and must pay the predelivery fee regardless; a matter falling beyond the scope of the force majeure clause.
Further new clauses introduced into SHIPMAN 2024 deal with data access and protection. Clause 21 grants owners the right to access ship-related data via the managers’ information platform for the duration of the agreement, while safeguarding the manager’s ownership and intellectual property rights in that platform. However, clause 22 provides that all the data relating to the vessel and its operation remain owners’ property.
A new personal data protection clause requires owners and managers to comply with any applicable data protection regulations including the EU GDPR. Clause 27 requires both parties to have in place plans and procedures to respond to a cyber security incident and exercise reasonable endeavours to maintain their cyber security. Clause 40 stipulates that the agreement and all data shared in connection with its performance shall be confidential.
Owners and managers had to insert their own sanctions clauses in SHIPMAN 2009 to deal with the ever-expanding packages of anti-Russian sanctions being implemented by the USA, EU and the UK. Contrastingly, SHIPMAN 2024 includes as standard a revised version of the BIMCO Sanctions Clause for Time Charter Parties 2020, amended to work within a ship management setting.
A new change of control clause allows the parties to terminate on at least one month’s notice of change of control. This also reflects the changed relationship following sanctions regulation.
SHIPMAN 2024 has been released ahead of AUTOSHIPMAN, the first ship management contract for autonomous ships, which is being modelled on SHIPMAN and is currently in a ‘beta’ testing phase with its stakeholders. It is anticipated that AUTOSHIPMAN will be primarily utilised by the growing inland water sector that is operating remotely controlled vessels.
In summary, the new SHIPMAN 2024 is better suited to modern geopolitical developments and should serve as a more complete foundation for contractual negotiations between owners and managers. However, it remains to be seen whether the new changes regarding predelivery fees and the corresponding redefinition of what constitutes ‘delivery’ will suit the appetite of every shipowner.
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