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Covid-19 disputes under shipping contracts

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Covid-19 has been responsible for chaos and disruption around the world, and shipping is no exception.

Apart from the human tragedy element (i.e. crew members on board ships not being permitted by the local authorities to disembark in order to be changed with new crew members), delays under time charterparties on account of Covid-19 raise off-hire questions. Is the vessel off-hire under the time charterparty when authorities quarantine a vessel and/or do not permit her to berth, as a standard precaution at the port or due to a crew change or due to a Covid-19 infection on board the vessel? Apart from the applicable off-hire provisions, the charterparty may contain the BIMCO Infectious or Contagious Diseases Clause for Time Charter Parties 2015 which affects the answer to this question, of which there is now a 2022 version. It may also contain the BIMCO COVID-19 Crew Change Clause for Time Charter Parties 2020 concerning crew changes.

There may also be delays under charterparties, raising laytime issues, and the BIMCO Infectious or Contagious Diseases Clause for Voyage Charter Parties 2015 may feature in a given charterparty as well.

Ship sale contracts (MOAs) and shipbuilding contracts tend to contain tailor-made provisions concerning delays in delivery caused by Covid-19 but applying those provisions to the particular factual scenario may be easier said than done.

We have been instructed on numerous disputes arising from Covid-19 related delays under shipping contracts. If you have any problems arising from the effect of Covid-19 under your shipping contacts, do not hesitate to reach out to us.

By: LCI Law
Date Posted: August 3, 2022
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