Abstract
In 2017, the majority of the United Kingdom Supreme Court held in its judgment in the Gard Marine and Energy v China National Chartering (The Ocean Victory) case that, in bareboat charters under the ‘BARECON 89’ form, if both the owner and the charterer are jointly insured under a hull policy, the damages caused to the vessel by the charterer cannot be claimed by the insurer by way of subrogation after indemnifying the owner. The interpretation of the charter party leads to the conclusion that the liability between the parties is excluded. Faced with the Supreme Court’s decision, the Baltic and International Maritime Council (BIMCO) adopted a new standard bareboat charter agreement only a few months later, the ‘BARECON 2017’ form, which amends, among other clauses, the one related to insurance. The present paper analyses (i) the new wording of the clause mentioned above and (ii) its incidence on the relationship between the parties of both the charter agreement and the insurance contract and its consequences for possible third parties. Despite BIMCO’s attempt to change the solution adopted by the Supreme Court and his willingness to allow the insurer to claim in subrogation against the person who causes the loss, the consequences, as it will be seen, do not differ much in practice when the wrongdoer is the co-insured charterer. On the contrary, when the loss is caused by a time charter or a sub-charter, in principle, there will be no impediment for the insurer to sue him.
Highlights
Under a bareboat charter agreement, the owner of a vessel grants its possession to the charterer in return for payment, defined as hire
Such agreements are more often than not based on internationally accepted standard forms, e.g. those drafted by the Baltic and International Maritime Council, and arguably include one or more clauses dedicated to hull and indemnity insurance
With the need to adapt the forms to new trends, the ruling mentioned above led Baltic and International Maritime Council (BIMCO) to adopt a new bareboat charter party: the ‘BARECON 2017’ Standard Agreement
Summary
Under a bareboat charter agreement, the owner of a vessel grants its possession to the charterer in return for payment, defined as hire Such agreements are more often than not based on internationally accepted standard forms, e.g. those drafted by the Baltic and International Maritime Council ( on, BIMCO), and arguably include one or more clauses dedicated to hull and indemnity insurance. Insurance clauses have given rise to numerous controversies over the years, especially concerning the insurer’s subrogation in the owner’s rights when the person responsible for the casualty is the demise charterer himself. Some of these cases are The Yasin ([1979] 2 Lloyd’s Rep. 45 QBD), Petrofina (UK.) Magnaload Ltd ([1983] 2 Lloyd’s Rep. 91), Stone Vickers Ltd v Appledore Ferguson. The insurance provisions in Clause 17 have had some significant changes
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