The documentary work of the Baltic and International Maritime Council

The documentary work of the Baltic and International Maritime Council

By Grant Hunter

One of the primary aims of BIMCO's documentary work is to produce charter parties and other shipping documents that strike a fair and equitable balance between the parties in a language readily understood by both. And it is BIMCO's belief that such a consistent approach to the development of shipping documentation should serve to minimise the likelihood of charter party disputes arising in the first instance.

It is a fundamental concern of the BIMCO documentary committee that the right balance of fairness and equity is struck in each and every document it produces. BIMCO provides a documentary service not just for its own members, but for the entire shipping industry. It has been estimated that over three-quarters of transactions within the shipping industry take place using BIMCO-approved forms. If the formula for devising documents is correct, the number of problems associated with a particular document will be reduced. Fewer problems with the documents in use mean fewer court cases and less arbitration proceedings.

BIMCO is the world's principle organisation responsible for the development of maritime contracts and other related forms. The responsibility for maritime documentation is a sizeable undertaking.

The Forms of Approved Documents - BIMCO's annually updated portfolio of documents - contains over a hundred separate charter parties, bills of lading and other forms, plus over a hundred clauses issued, supported or recommended by BIMCO.

BIMCO's documentary committee

The composition of the documentary committee within BIMCO reflects the wide spectrum of shipping, legal, commercial, broking and insurance opinion and expertise among its global membership. The documentary committee consists of a chairman, two vice-chairmen, the members of the BIMCO executive committee, up to thirty owner-members each representing a different country, representatives from club members, a small number of observers from various shipping bodies, and representatives from the BIMCO secretariat.

Developing new standard documents

BIMCO has always adapted to and been driven by industry demands for standard documentation. It carefully considers any suggestions for new documents that it may receive from members and other shipping-related bodies. If the documentary committee feels that the proposed new document warrants development, then -subject to the secretariat's existing workload - the project will be added to the schedule and a specialist subcommittee appointed. A BIMCO subcommittee normally consists of three to five experts drawn from various shipping disciplines relevant to the document being developed.

BIMCO has always adapted to and been driven by industry demands for standard documentation.

The subcommittees are generally evenly divided between shipowning/operating and shipbroking interests, with legal expertise provided by a P&I club representative. Where appropriate, the work of a subcommittee is conducted in broad consultation with trade organisations.

The development of a new charter party can be a time-consuming business. It is frequently several years after the documentary committee has added the document proposal to its work programme before a final approved form is adopted by BIMCO for use by the industry.

The appointed subcommittee will initially identify the specific requirements of the project and then produce a draft document. As the documentary committee only meets twice a year, this initial stage of document development cannot realistically take much less than six months to complete.

The documentary committee will generally provide comment and guidance on the proposed document and ask the subcommittee to continue its work. Then a final draft of the document will be put up to the documentary committee for adoption at its next meeting. However, it is rarely possible to reach consensus on a new document and complete the drafting process within the space of two documentary committee meetings, and proposed documents are often sent back to the sub-committees for further work.

On average it takes between eighteen months and two years to devise a new document and have it finally adopted by the documentary committee. A similar process applies to the revision of existing documents.

Marketing documents

The adoption of a document by the documentary committee is not the final stage of the process as the form must be printed and proof-read before being distributed. Finally, the new or revised document must be properly marketed and targeted at the sector of the industry for which it was devised.

The rate at which a new or revised document is taken up and used by the industry may be extremely slow, with many ships continuing to be fixed using older versions of a particular charter party. BIMCO can only recommend that shipping adopts new versions of its documents.

The challenge of outdated documents

An imprecisely worded and outdated document that has nevertheless been tried and tested by the courts and arbitration proceedings is often more appealing to users than is a modernised form.

Often, users will adopt some of the thinking behind a new or revised document and incorporate the ideas into older forms.

But it remains one of BIMCO's most enduring challenges to encourage the shipping industry to let go of outdated documents and to start using modern, balanced versions.

Current documentary work

Many diverse trades are covered by BIMCO standard documents, and requests for new specialist documents are frequently received. This year BIMCO has undertaken the development of and adopted a number of new documents for trades that hitherto depended on general-purpose forms.

It remains one of BIMCO's most enduring challenges to encourage the shipping industry to let go of out -dated documents and start using modern, balanced versions.

One of the BIMCO documentary products most eagerly awaited is the voyage charter party for cruise vessels, code-named CRUISEVOY. This is the first time the cruise industry has had a standard charter party available for the chartering of a cruise vessel by one or more tour operators.

The variety of forms produced by BIMCO is not limited to traditional charter parties and bills of lading. In recent years, BIMCO's documentary work has extended to new areas such as fuel purchasing and container leasing.

In 1996, BIMCO's documentary committee initiated a review of its general clause paramount as applied to a number of charter parties, bills of lading and waybills issued by BIMCO.

The revised clause will be incorporated into all BIMCO documents as they are revamped or developed.

Arbitration

Of the large number of standard clauses produced by BIMCO, one of the most important is the standard law & arbitration clause. The documentary committee recently approved a revision of this clause, and a subcommittee has been formed to undertake the work.

Particular attention is being paid to the wording of the clause in the light of the English Arbitration Act 1996 and the LMAA Terms 1997. BIMCO is extremely keen that its standard clause should be consistent with the provisions of the LMAA's own standard arbitration clause with respect to the arbitration products offered to parties.

BIMCO intends to take the opportunity offered by the 1996 act to tighten up the appointment procedure in its own standard arbitration clause.

Monitoring maritime policy and law

An essential element of BIMCO's work is to monitor developments in international maritime law and policy. BIMCO is a long-standing observer in numerous international maritime forums, such as IMO and the CMI.

BIMCO has continually demonstrated its ability to adapt to the needs of a rapidly changing industry and to remain an influential voice in international shipping.