Demmurage a Practical Guide for Tanker Masters

Demurrage A Practical Guide

for Tanker Masters

INTERTANKO The International Association of Independent Tanker Owners

Published by

INTERTANKO

The International Association of Independent Tanker Owners Bogstadvn. 27B

P.O. Box 5804 Majorstua N-0308 Oslo

Norway

All rights reserved. No part of this publication may be reproduced in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or incidentally to some other use of this publication) without the written permission of the copyright owner. Applications for the copyright owner's written permission to reproduce any part of this publication should be addressed to the publisher.

© INTERTANKO 1998

Whilst every effort has been made to ensure that the information contained in this publication is correct, neither the authors nor INTERTANKO can accept any responsibility for any errors or omissions or any consequences resulting therefrom.

No reliance should be placed on the information contained in this publication without independent verification.

INTERTANKO December 1998

An INTERTANKO Publication

ACKNOWLEDGEMENTS

This publication has been written by Jonathan Hare, Senior Lawyer at SKULD, Oslo, and a member of INTERTANKO's Documentary Committee, and John Fawcett-Ellis, Solicitor and Deputy Manager of INTERTANKO's Legal and Documentary Section. INTERTANKO is grateful to the authors for the hard work they have put into this publication and for producing a user-friendly guide that will prove invaluable to tanker officers and others ashore. The authors would like to thank Nigel Burt and Sven-Olof Brunstedt, who are also members of INTERTANKO's Documentary Committee, for their helpful suggestions and comments.


LIST OF CONTENTS PAGE

PART 1 - INTRODUCTION

1. Introduction 1

PART II - GENERAL PRINCIPLES

2. (a) Freight " 1 (b) Worldscale 2 (c) Laytime 2 (d) Demurrage 2 (e) The charterparty 3 (f) Laydays cancelling ("Laycan") 3

PART III - COMMENCEMENT OF LAYTIME - STARTING THE LAYTIME CLOCK AT LOAD/DISCHARGE PORTS 4

3. (a) The vessel must have arrived at the destination 4 (b) The vessel must be ready to load/discharge 4 (c) The vessel must have tendered a valid Notice of Readiness ("NOR") 5

PART IV - IMPORTANT ISSUES CONCERNING NOR

4. (a) It is important that masters tender NOR as soon as possible 7 (b) Can NOR be tendered before the commencement of laydays? 7 (c) Is it necessary to tender NOR if the vessel is to load or discharge

at more than one berth? 7 (d) Multiple charterers 8 (e) If the vessel is to load at the same berth it has just finished discharging at 8 (f) Port combinations 8 (g) Notice period 8 (h) Shellvoy 5 - Tendering of NOR 8 (i) If the vessel proceeds straight to berth 9

PART V - EXCEPTIONS TO LAYTIME AND DEMURRAGE 10

5. (a) Weather 10 (b) Shifting from anchorage to berth 11 (c) Shifting between berths 11 (d) Lightering and ship-to-ship transfers 11 (e) Ballasting and deballasting 11 (f) Vessel problems and owners' fault 12 (g) Shore problems 13 (h) Lining up 13


PART VI - COMPLETION OF LAYTIME - STOPPING THE LAYTIME CLOCK 13

PART VII - BILLS OF LADING

7. (a) Introduction 14 (b) The Early Departure Procedure 15 (c) Delivering a cargo to a U.S. port - SCAC 16 (d) Cargo consignee fails to deliver the original Bills of Lading 16

PART \TII - PUMPING CLAUSES & COW

8. (a) Some typical clauses 16 (b) Interpretation of the clauses 18 (c) Practical points to watch 19 (d) COW 20

PART I X - CLAIMING DEMURRAGE

9. Introduction 22 (a) "Once on demurrage always on demurrage" 22 (b) Half rate demurrage 22 (c) Accompanying documents - time limits 23 (d) Arbitration 24 (e) INTERTANKO's Freight and Demurrage Information Pool ("FDIP") 24 (f) Help concerning laytime matters? 24

PART X - DOCUMENTS - AS EVIDENCE

10. Documents as evidence 25

PART XI - SUMMARY OF VESSEL'S STAY IN PORT

11.(a) Arrival and tender of Notice of Readiness 25 (b) Waiting at anchorage (if applicable) 26 (c) Notice time 26 (d) Shifting from anchorage to berth 26 (e) Pre-loading time / pre-discharging time 26 (f) Deballasting 26 (g) Time before commencement of loading 27 (h) Loading 27 (j) Disconnecting of hoses 27 (k) Time between hoses off and sailing 27 (1) Discharging 27 (m) Any references to ballasting should preferably be avoided 27 (n) Time between discharging and disconnecting of hoses 28 (o) Disconnecting of hoses 28 (p) Time between hoses off and sailing 28


APPENDIX A - SPECIMEN NOR 29

Notice of Readiness 30

APPENDIX B - SPECIMEN LETTERS OF PROTEST 31

1. Slow discharge 32 2. Slow discharge/Shore restriction 33 3. COW not permitted 34 4. Delay in berthing 35 5. Low loading rate/other delays 36 6. Discharge/Shore restrictions 37

APPENDIX C - CHARTERPARTY FORMS 38

1. Asbatankvoy 2. Shellvoy5 3. BPVOY4

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Demurrage - A Practical Guide for Tanker Masters

PART I - INTRODUCTION

1. The subject of demurrage has been written about at length by a number of authors. Indeed, in 1992 INTERTANKO published its "Tanker Demurrage Claims Procedure Guidelines ", written as a guide to the process of compiling a demurrage claim. What INTERTANKO is seeking to do with this new publication is to provide practical guidance to the master and officers of a tanker on the subject of demurrage and the commercial considerations that must be borne in mind. In addition, it is important for masters to be aware of the various charterparty requirements concerning laytime and demurrage. Also this publication combined with "Tanker Demurrage Claims Procedure Guidelines" will prove useful to those ashore who handle demurrage claims.

Delay can occur in the payment of a demurrage claim for a number of reasons including poor/inaccurate documentation. What this publication seeks to do is to provide assistance to those on board the vessel who are responsible for completing the documentation that the demurrage calculation is based upon. If the vessel can provide correct and accurate information to the shore personnel, this will be invaluable to owners in helping to ensure that claims are paid promptly.

Throughout this guide examples have been used from Asbatankvoy and Shellvoy 5 (with the 1 December 1996 amendments/additions/deletions issued July 1997) and also BPVOY4.

The authors, though lawyers, have sought to write this guide without being overly legalistic and references to cases have been kept to a minimum. So that this guide may be useful to those with varying degrees of knowledge on the subject, the basic terms and principles have been restated. Readers who wish to delve more deeply into the subject of demurrage are referred to the learned work by John Schofield, "Laytime and Demurrage " now in its third edition. Also readers may wish to refer to "Commencement of Laytime" by Donald Davies and "Laytime and Demurrage in the Oil Industry", written by Malcolm Edkins and Ray Dunkley. All these books are published by LLP Limited.

PART II - GENERAL PRINCIPLES

2. (a) Freight

No discussion on the subject of demurrage would be complete without a few words on the subject of freight.

Freight is the return to the shipowner for undertaking the voyage requested by the voyage charterer. Freight can be contrasted with hire, which is the return paid to the shipowner by the time charterer of a vessel.

In the crude oil and petroleum products trade, freight is payable on discharge, whereas in the parcel and chemical trades a large proportion of the freight is payable in advance.

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What does the freight cover? Freight covers the voyage between the load port and the discharge port together with a specified amount of time for the loading and discharging operations, known as laytime.

What does freight not cover? Deviations, stoppages awaiting charterers' orders, shifting between berths and any unusual time or costs due to charterers' orders.

2. (b) Worldscale

Worldscale, or WS as it is sometimes called, stands for the New Worldwide Tanker Nominal Freight and Demurrage Information Pool Scale. It is a schedule of freight rates applying to tankers carrying oil in bulk. The quoted freight rates are nominal ones as they are intended solely as a standard of reference. Freight rates are often fixed as a percentage of Worldscale, e.g. Wordscale 90 means 90% of the published Worldscale rate.

The Worldscale Schedule is published each January and is available on an annual subscription. It is produced by two non-profit organisations, Worldscale Association (London) Ltd. and Worldscale Association (NYC) Inc. As their names suggest the Associations are based in London and New York.

The published rates are based on a nominal tanker of 75,000 mt making a round voyage. Calculations have been made for over 1000 voyages taking account expenses such as bunker consumption and port costs. Using Worldscale greatly simplifies the negotiation of tanker charters.

This is only a very brief introduction to Worldscale. Should readers require further information they are recommended to read the INTERTANKO publication "New Worldscale - A New Chartering Tool" published in 1988.

2. (c) Laytime

This is the contractual time bought by charterers as part of the freight payment for loading and discharging the vessel. For all fixtures on Worldscale the amount of laytime is 72 hours unless the parties have agreed otherwise in the charterparty.

If the charterers exceed the amount of agreed laytime, then they are in breach of the charterparty.

2. (d) Demurrage

Demurrage is the agreed amount of compensation payable by the charterer to the shipowner for exceeding the agreed laytime. Demurrage is usually expressed in the form of a daily amount.

Demurrage is of considerable commercial significance to shipowners and can on occasions make the difference between a profit or a loss on a particular fixture. It is for this reason that the master must ensure that the relevant provisions in the charterparty are followed and that the logs and statements of facts are accurate and provide sufficient information.

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2. (e) The charterparty

There are a number of standard charterparty forms that are used. These standard forms are often amended and lengthy additional terms are usually incorporated. The most common forms of charterparty are Asbatankvoy, Shellvoy 5, BPYOY3, Exxonvoy 90 and Mobilvoy 96. Many charterers have adopted their own" standard terms that are used in conjunction with Asbatankvoy. The most recent new form of charterparty is BPVOY4, which replaces its predecessor BPVOY3. Whilst BP have used BPVOY4 for all fixtures made after 1 July 1998, other charterers have the option of using BPVOY3.

Most of the charterparties have been drafted by oil major charterers and are therefore in many respects more favourable to charterers than owners. In addition charterparties have become increasingly detailed with many additional clauses to the printed ones. Consequently it is important for masters to pay particular attention to the charterparty provisions.

Voyage charterparties can be divided into port and berth charterparties. The distinction between the two is important in relation to who bears the burden of delay. In general, in a port charterparty if there is delay between the vessel arriving at the port and berthing, charterers will bear the risk of this. Whereas in a berth charterparty the risk of delay in getting to the berth will be owners'. There are qualifications to these general principles and these will be examined in detail in the pages that follow.

In order to illustrate the issues that the master needs to be aware of in relation to demurrage, we will use the Asbatankvoy form and BPVOY4 as examples of port charterparties and Shellvoy 5 as an example of a berth charterparty. In addition, we will examine some the frequently used amendments and additional terms. The majority of fixtures are based on port charterparties.

We shall now consider the vessel's stay at the load and discharge ports in relation to the calculation of laytime.

2. (f) Laydays cancelling ("Laycan")

The expression "laycan" denotes the range of dates between the earliest date the vessel can commence loading and the latest date, the "laydays" after which the charterer has the option to cancel the fixture.

Asbatankvoy clause 5:

"LA YDAYS. Laytime shall not commence before the date..."

Shellvoy 5 clause 11:

"Should the vessel not be ready to load by noon local time on the termination date set out in Part 1(C) charterers shall have the option of terminating this charter..."


PART III - COMMENCEMENT OF LAYTIME - STARTING THE LAYTIME CLOCK AT LOAD/DISCHARGE PORTS

In order for laytime to commence, three requirements must be complied with. These are:

(a) the vessel must have arrived at the destination; (b) the vessel must be ready to load/discharge;

(c) the vessel must have tendered a valid Notice of Readiness ("NOR").

We will now deal with each of these requirements in turn.

3. (a) The vessel must have arrived at the destination

The often used phrase to describe this requirement for the commencement of laytime is that the vessel must have become an "arrived ship". In order to ascertain whether a vessel has become an arrived ship, it is necessary to ascertain whether the charterparty is a berth or a port charter.

If the charter is a berth charter, then a vessel will only be an arrived ship once the vessel is at the specified berth.

If the charter is a port charter such as Asbatankvoy, the vessel will be an arrived ship if she -., is unable to proceed directly to a berth but is at the place where waiting ships usually lie.

i.e. the customary anchorage.

The vessel must be an arrived ship before NOR can be tendered.

The Johanna Oldendorf [1973] 2 Lloyd's Rep. 285: The current state of the law was stated by Lord Reid, who said "Before a ship can be said to have arrived at a port she must, if she cannot proceed immediately to a berth, have reached a position within the port where she is at the immediate disposition of the charterer. If she is at a place where waiting ships lie, she will be in such a position,.." In that case when the vessel was at the Bar anchorage, she was an arrived ship because this was within the legal, administrative, fiscal areas of the port of Liverpool/Birkenhead, In the London arbitration 5/90 (LMLN 274, 5 May 1990) the vessel was ordered to Haldia in India, which although a separate port from Calcutta, came under the control of the Calcutta Port Trust. The vessel gave NOR on her arrival at the Sandheads anchorage some two hours steaming from Haldia. Sandheads was outside the legal limits of the jurisdiction of the Calcutta Port Trust Nevertheless they exercised de facto control of the anchorage giving orders as to the anchorage and arranging pilots.

If the vessel can proceed directly to its berth, then, as with a berth charter, it does not reach its specified destination until arrival in berth.

Often charterparties expressly state where a NOR may be given (see section 3. (c) regarding notices of readiness).

3. (b) The vessel must be ready to load/discharge

When the vessel has arrived at the specified destination she must then meet the second requirement necessary for the commencement of laytime. She must in all respects be ready to load. Readiness to load encompasses physical and legal readiness.


A tanker will be physically ready to load if all her tanks are fit to receive the particular cargo she is required to load.

A vessel will still be physically ready to load even if she has to discharge slops or dirty tank washings ashore or even to deballast. In order for a-vessel to.be legally ready, she must have all her papers in order i.e/all permits and consents required must have been obtained. The usual clearances required are from the customs, health and immigration authorities, although exactly what is required will vary from port to port. Provided that the master has no reason to believe that such clearances will be withheld, he may declare his vessel ready.

In addition, with the advent of the International Safety Management ("ISM") Code, the vessel will have to have on board a valid Document of Compliance ("DOC"). Also in practice the vessel will have to have on board a copy of the Safety Management Certificate ("SMC") as this may have to be produced to port state control.

If the vessel is trading to the United States, there are various regulations which the vessel must comply with, an example of which is the Tank Vessel Examination Letter ("TVEL") which is issued by the United States Coast Guard. After the vessel has been inspected, a certificate is issued which is valid for one year. The situation may arise where the vessel's certificate has come up for renewal, so when the vessel tenders NOR the TVEL has expired. Consequently the NOR will not be valid and the vessel will have to re-tender NOR when the TVEL has been granted

The obtaining of free pratique is usually a formality. Therefore, a vessel will be considered ready even if a certificate of free pratique has not been granted.

If after tendering a notice of readiness any of the legal formalities are not obtained, then the vessel will not have been ready and a new notice of readiness will have to be tendered.

BPV0Y4 has a specific provision covering free pratique. For an NOR to be valid, clause 63.3 must be complied with, which provides:

"free pratique has been granted or is granted within six (6) hours of the master tendering NOR. If free pratique is not granted within six (6) hours of the master tendering NOR, through no fault of owners, agents or those on board the vessel, the master shall issue a protest in writing ("NOP") to the port authority and the facility at the port ("Terminal") failing which laytime or, if the vessel is on demurrage, demurrage shall only commence when free pratique has been granted..."

The obligation on the master to issue a protest in writing if free pratique is not given is mandatory. The master must note the time that he made the request for a certificate of free pratique. It is also important for the master to apply for a certificate of free pratique as soon as possible after the vessel's arrival at the port.

3. (c) The vessel must have tendered a valid Notice of Readiness ("NOR")

Whilst under the general law NOR need only be given at the loadport. Tanker charterparties all require NOR to also be given at the discharge port.

Asbatankvoy clause 6 provides:

" Upon arrival at customary anchorage at each port of loading or discharge..."

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The master should take particular care when tendering the NOR to ensure that it is tendered at the correct place and to the correct parties.

Charterparties expressly provide for tendering of NOR, for example Asbatankvoy clause 6 provides:

"NOTICE OF READINESS. Upon arrival at customary anchorage at each port of loading and discharget the Master or his agent shall give the charterer or his agent notice by letter, telegraph, wireless or telephone that the vessel is ready to load or discharge cargo..."

Several points should be noted about this requirement. An NOR must be tendered at the customary anchorage. This means that the vessel must have come to a complete stop before the NOR is given. The NOR may be given in any of the ways listed. It is also desirable for a master to give the NOR in written form even if it is initially given by telephone or VHF radio.

The requirement is for the NOR to be given and received. It does not have to be accepted unless the charterparty specifies otherwise. The terms of the charterpany should be checked to see if there is the additional requirement of the NOR being accepted.

Since the tendering of the NOR is an essential requirement for the commencement of laytime, the exact time of tender must be noted and there must be proof of it having been done.

Masters often tender the NOR to the vessel's agent. In the tanker business it would be rare for the agent not to be available 24 hours a day. Therefore, whatever time the vessel arrives, NOR must be tendered. It may be that the voyage instructions will provide that the master also has to tender the NOR to the installation/terminal. Careful note should be taken of the voyage instructions and in particularr those sections dealing with the giving of notices.

Often masters give NOR by VHF radio. In such a situation there is no evidence in writing as to the NOR having been given. The master should carefully note the time of the transmission and to whom the NOR was given. He should subsequently prepare and send a written confirmation of NOR having been given.

Wherever possible the master should try to obtain confirmation of receipt of a written NOR. A signature marked "for receipt only" will be acceptable. See the model NOR at Appendix A, page 29.

If the vessel does not have to wait at the customary anchorage, when should NOR be tendered? In this situation NOR will be tendered upon picking up the pilot or at the pilot station, whichever occurs first provided that the vessel is an arrived ship (see 3(a) above). If the vessel is not an arrived ship, then to avoid charterers arguing that the NOR was tendered prematurely it will also have to be given when the vessel enters the area under the control of the port authority.

It is important that NOR is given at the correct time: The reason for this is that if an NOR is tendered too early it will not be valid and it will be necessary to re-tender the NOR. The same is true if the vessel fails an inspection. Once the vessel has passed the inspection and is therefore ready for cargo operations, a fresh NOR must be tendered. The time(s) of giving NOR must be accurately noted.


BPVOY4 provides:

"6. NOTICE OF READINESS ("NOR ")

6.1 "Upon arrival of the vessel at each loading or discharge port the master or agents shall tender NOR to charterers or to their order when the vessel is ready in all respects to carry out charterers1 orders in accordance with the provisions of this charter. Such NOR may be tendered either by letter, telex, facsimile or telephone (but if NOR is tendered by facsimile or telephone it shall subsequently be confirmed promptly by telex). Owners shall provide charterers with an NOR certificate signed by the master and a terminal representative in respect of each port at which the vessel loads or discharges."

Several points need to be noted about this clause. The master should be aware that if NOR is given by facsimile or telephone, it must subsequently be confirmed promptly by telex. It should also be noted that there is no provision for NOR to be given by VHF radio. In addition, confirmation is required in the form of an NOR certificate, which must be signed by both the master and a terminal representative and then given to the charterers.

PART IV - IMPORTANT ISSUES CONCERNING NOR

4. (a) It is important that masters tender NOR as soon as possible

The master should tender NOR as soon as possible in order that laytime commences at the earliest possible time. If the master does not tender NOR at the earliest possible time, then potentially the owners' entitlement to demurrage will be reduced or taken away entirely. The commercial interests of the owners must be balanced against the risk of a premature, invalid NOR being tendered. Therefore, the practice to be followed must be to tender NOR as early as possible, and if the master is in doubt as to its validity, then a second NOR should be tendered which is expressly given without prejudice to the validity of the first NOR.

4. (b) Can NOR be tendered before the commencement of laydays?

Charterparties vary on this point so it is important to know whether the master is able to tender a-valid NOR if the vessel arrives early, i.e. before the first layday.

For example Shellvoy 5 clause 13 (1) (a) provides "...Notice shall not be tendered before the commencement of laydays...", whereas Asbatankvoy does not place such a restriction on when a valid NOR can be tendered. If the charterparty provided that the vessel was not permitted to tender NOR before the commencement of laydays and the vessel did this, then that NOR would not be valid and a fresh NOR would have to be tendered.

BPVOY4 provides in 6.2 "NOR shall not be tendered, nor shall the vessel proceed to berth, prior to the commencement date stated in section G of part 1 without charterers' prior agreement in writing. Accordingly, the master must pay particular attention to this.

4. (c) Is it necessary to tender NOR if the vessel is to load or discharge at more than one berth?

Charterparties usually provide that only one NOR has to be given in each port. If the vessel is loading or discharging at more than one berth, it is customary and advisable to tender NOR at each installation. However, this does not bear any relevance to laytime. Once


laytime has commenced it runs unaffected by any use of further berths, and shifting between berths is for charterers' account.

If the vessel is loading/discharging at several berths for different charterers, again NOR should be tendered at each berth. The vessel should proceed to the first available berth. Shifting between berths in this situation will be for owners' account.

4. (d) Multiple charterers

If the vessel is carrying cargoes for multiple charterers then NOR should be presented to each individual charterer/receiver/shipper on the vessel's arrival.

4. (e) If the vessel is to load at the same berth it has just finished discharging at

Here the vessel would have to tender NOR once the tanks have been inspected and the vessel is in all respects ready to load. If NOR was tendered earlier, i.e. prior to the vessel's tanks being ready, then such an NOR would be invalid. As stated earlier, if an NOR is not valid when tendered, it does not automatically become valid once the conditions for tendering a valid NOR have been fulfilled.

4. (f) Port combinations

Occasionally the vessel will load and/or discharge at two ports so closely connected that they are considered as one port by Worldscale for the purpose of freight calculation.

Yokohama and Kawasaki are one example of this. The effect of this is that the tender of NOR at the customary anchorage applies for Yokohama and the cost and rime of proceeding from Yokohama to Kawasaki is charterers', including tugs, pilot, etc. In practice owners' operations ashore will handle all practicalities so it should not be necessary for the master to know all port combinations.

4. (g) Notice period

Charterparties usually provide for a period of six hours' notice, during which laytime does not run. However, if the vessel berths within the six-hour notice period, then time will usually commence to run from when the vessel is all fast.

For example, Asbantankvoy clause 6 provides "...laytime...shall commence upon the expiration of six (6) hours after receipt of such notice or upon the vessel's arrival in berth (Le., finished mooring when at a sealoading or discharging terminal and all fast when loading or discharging alongside a wharf), whichever first occurs."

4. (h) Shellvoy 5 - Tendering of NOR

As we explained earlier, Shellvoy 5 is an example of a berth charterparty and this has particular consequences for the commencement of laytime.

If the vessel proceeds straight to the berth, then the first part of Clause 13 (1) (a) applies. This provides:

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"Time at each loading or discharging port shall commence to run 6 hours after the vessel is in all respects ready to load or discharge and written notice of readiness thereof has been tendered by the master or owners' agents to charterers or their agents and the vessel is securely moored at the specified loading or discharging berth..."

Therefore, the master must tender NOR" when the vessel is all fast at the berth.

If the vessel is delayed and cannot proceed direct to the berth, then the second half of clause 13 (1) (a) applies. This states:

"However, if the vessel does not proceed immediately to such berth time shall commence to run 6 hours after (i) the vessel is lying in the area where she was ordered to wait or, in the absence of any such specific order, in a usual waiting area and (U) written notice of readiness has been tendered and (iii) the specified berth is accessible."

The most difficult aspect of this clause is (iii). The clause goes on to state that a berth shall be deemed inaccessible "only so long as the vessel is or would be prevented from proceeding to it by bad weather, tidal conditions, ice, awaiting daylight, pilot or tugs, or port traffic control requirements (except those requirements resulting from the unavailability of such berth or the cargo)". Therefore, a berth will be accessible if the berth is occupied by another vessel or if the charterers order the vessel to wait due to the terminal's requirements. In such a situation the master should record accurately the reason for any delay and when that reason started and finished. For example, if there are restrictions on night time berthing at the port and the charterers have ordered the vessel to wait, the master should record when the night time berthing restrictions are lifted as only then will the berth be accessible.

NOR should be tendered by the vessel when she has arrived at the waiting area for the berth. Again, the vessel must have come to a complete stop before the NOR is tendered.

Details of the reasons for the berth being inaccessible will need to be logged.

BPVOY4 provides in clause 63.2

"in the case of the vessel not berthing upon arrival and being instructed to anchor, she has completed anchoring at an anchorage where vessels of her type customarily anchor at the port or, if she has been instructed to wait, she has reached the area within the port where vessels of her type customarily wait"

The master should note on the statement of facts the time that the vessel has completed anchoring rather than the time the vessel has come to a complete stop. It should also be noted that the anchorage must be within the port before the NOR will become effective.

4. (i) If the vessel proceeds straight to berth

Under Shellvoy 5 NOR can be tendered when the vessel is ready in all respects and the vessel is securely moored.

Some forms of charterparty provide that laytime shall commence after the notice period has expired or when the vessel is "allfast". Asbatankvoy has this provision. The term "all fast" means that the vessel is securely moored but not that the gangway is also in place. Exxonvoy 90 specifically states in clause 1 (d), "Arrival in berth " means that the vessel shall be "all fast with gangway down and secure when loading or discharging alongside a wharf/berth "


BPV0Y4 in clause 6.3.1 provides:

"in the case of the vessel proceeding directly to the loading or discharging place, she is securely moored and her gangway, if it is to be used, is in place,"

Therefore the master must note in the statement of facts the time that the gangway is in place if the vessel proceeds straight to berth.

Generally, the master should avoid noting in the statement of facts that the gangway is in place unless this is specifically required under the terms of the charterparty.

PART V - EXCEPTIONS TO LAYTIME AND DEMURRAGE

5. Once the laytime clock starts, time continues to run for charterers' account until cargo operations have finished. However, there are exceptions to this general rule.

• The charterparty will contain one or more clauses which set out circumstances in which time will not count towards laytime or demurrage. This covers events which are regarded as being owners' responsibility, such as a breakdown of the vessel's equipment.

• Sometimes delay may be caused in circumstances which are not referred to in the charterparty clause but which are still the result of fault on the part of owners. Charterers do not normally have to pay for time lost in this way.

Once laytime or demurrage starts to run it is always the charterers who must prove that time is interrupted. It is therefore important that the Statement of Facts contains

• a precise description of the events *

• when they started and finished

• what delay (if any) was caused to cargo operations.

A letter of protest should normally also be given concerning such delay.

5. (a) Weather

Since the weather is beyond the control of both owners and charterers, it is common for charterparties to include a sharing of responsibility for time lost.

It is important that weather conditions are recorded fully and accurately. Bad weather will only affect time running if it actually causes delay. If the weather is not bad enough to affect the normal working of the vessel, or if there are other reasons causing the delay, the statement of facts should not refer to the weather or, if it does, it should be clearly stated

. . that the weather was irrelevant to the time which the vessel took to load or discharge.

The standard Asbatankvoy charterparty provides that demurrage incurred by reason of storm is only payable at half rate (Clause 8). The clause does not take effect until the vessel goes on demurrage and would not apply if the weather was bad but did not amount to a "storm ". For further details on what constitutes a "storm " see section 9(b) below.

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Most modem charterparties contain a more widely written clause, such as the Conoco I Weather Clause:

"Delays in berthing for loading or discharging and any delays after berthing which are due to weather conditions shall count as one-half laytime or as time on demurrage, at one-half demurrage rate."

BPVOY4 provides that one-half laytime or demurrage shall count for delay arising due to adverse weather or adverse sea state conditions (Clause 17). It also includes "adverse tidal conditions which could not reasonably have been predicted ".

Since SHELLVOY 5 is a berth charterparty, time will not usually count before the vessel reaches the berth, even though the delay in berthing is due to bad weather or tidal conditions. However, there is no half-rate provision so that once laytime starts to run or the vessel goes on demurrage, the charterer remains responsible in full.

5. (b) Shifting from anchorage to berth

The movement of the ship from anchorage to berth is customarily regarded as part of the voyage. Since it is the owners' responsibility to bring the ship to its destination, time will not count during this inward passage. The statement of facts should therefore accurately record the time when the vessel has weighed anchor and actually departs from the anchorage (which will probably not be at the same as time as the pilot boarded) and when she is all fast alongside the berth. If the charterparty includes a requirement that the gangway is in place (e.g. Exxonvoy 90 clause 1(d)), this should also be noted.

Any unusual delays during the inward voyage should also be noted, for example waiting due to other traffic manoeuvring within the port.

5. (c) Shifting between berths

Although charterers often have the right to require the vessel to discharge at more than one berth, they must do so at their own time and expense (see for example Asbatankvoy Clause 9 and BPVOY4 Clause 5.3).

5. (d) Lightering and ship-to-ship transfers

Time continues to run when cargo is loaded or discharged into or from a lighter or another ship. Time will count in the same way as if the vessel was loading or discharging alongside berth. If lightering takes place outside port or if the entire cargo is discharged into lighters, Notice of Readiness is probably necessary (Shellvoy5 Clause 13(2) and BPVOY4 Clause 8).

5. (e) Ballasting and deballasting

Charterers sometimes try to avoid counting time when the vessel is carrying "out ballasting or deballasting. However, most charterparties contain a clause which only excludes time which is actually lost because of deballasting. The use of segregated ballast tanks ("SBT') will normally prevent any delay to cargo operations. If this is the case, it is best to avoid reference to ballasting or deballasting. If reference is made to ballasting or deballasting, it should be made clear whether or not delay has been caused and, if so, how much.

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Asbatankvoy dates back to the time before SBT and states in Clause 7 that "time consumed by the vessel in ... discharging ballast water or slops wilt not count as used laytime".

The approach in more modern charterparties is to exclude, time but only if there has actually been delay. For example, Shellvoy 5 provides in Clause 14 (b) that:

"time shall not count ...when spent in handling ballast except to the extent that cargo operations are carried on concurrently and are not delayed thereby."

In BPVOY4, Clause 18.2.3 states that time shall not count when spent or lost

"in, or in connection with, the handling of ballast unless this is carried out concurrently with loading or discharging of cargo such that no loss of t i m e is involved."

Since these clauses only prevent time counting when ballast handling is concurrent with cargo handling, it is probably best to wait until cargo operations start before ballasting or deballasting, if this can be done without causing any delay.

5. (f) Vessel problems and owners' fault

All charterparties contain a clause which prevents time running when time is lost for reasons which are owners' responsibility. Charterers are not willing to pay for time lost due, for example, to a strike by the crew or breakdown of the vessel's pumps.

Asbatankvoy Clause 7 mentions delay due to "the vessel's condition or breakdown or inability of the vessel's facilities to load or discharge cargo within the time allowed". Clause 8 also excludes "demurrage for delay caused by strike, lockout, stoppage or restraint of labour for Master, officers and crew of the vessel, or tugboat or pilots".

The exclusions in' modem charterparties adopt a similar approach but are more widely worded. Shellvoy5 provides in Clause 14(c) that time shall not count when lost as a result of

(i) breach of this charter by owners; or (ii) any cause attributable to the vessel, including breakdown or inefficiency of the vessel; or (iii) strike, lock-out, stoppage or restraint of labour of master, officers or crew of the vessel or tug boats or pilot.

Clause 18.2 of BPVQY4 contains similarly exclusions for time lost or spent

"as a result, whether directly or indirectly, of breakdown, defect, deficiency or inefficiency of, or other cause attributable to the vessel, Master, officers, crew, owners or their servants or agents; or

as a result of a labour dispute or strike involving the Master, officers or crew the vessel."

It is important to remember that even if there is a problem of the kind referred to in these clauses, it is. only relevant if it causes delay to cargo operations- For-instance, a boiler breakdown during loading operations which does not affect the vessel's ability to receive cargo will not entitle charterers to exclude time counting. If a problem occurs, charterers may try to deduct time when no time has been lost. Alternatively, they may try to deduct the entire period of the duration of the defect when the actual delay to loading or


discharging may be shorter. For these reasons, it is very important to keep an accurate record of the nature of the problem and the length of delay (if any) caused.

5. (g) Shore problems

Just also problems on board are generally owners' responsibility, problems ashore will usually be for charterers' account. However, there may be circumstances beyond the control of the charterers, in which case the effects on charterers are reduced by a half-rate demurrage provision.

Clause 8 of Asbatankvoy provides that if demurrage is incurred

"by reason of fire, explosion, storm, or by a strike, lockout, stoppage, or restraint of labor or by breakdown of machinery or equipment in or about the plant of the charterer, supplier, shipper or consignee of the cargo, the rate of demurrage shall be reduced one-half"

Shellvoy 5 (Clause 15.2) and BPVOY4 (Clause 17) contain similar wording.

It is not always easy for the master to find out exactly what is happening ashore when delays occur. Access to information at many terminals is restricted and operators may be particularly reluctant to give full disclosure when they fear that they will be held responsible for the delay. However, every effort should be made to obtain as much information as possible. The agent represents the master and regular contact must be maintained with the agent to ascertain as much information as possible about these delays. It is the agent's duty to make these enquiries.

5. (h) Lining up

After connecting hoses, it is necessary to open both the ship and shore valves. Equally, the valves must be closed before hoses are disconnected. This is often referred to as lining up.

Some terminals are in the habit of referring to time spent in.lining up as "delay". This is not correct as this is a normal part of cargo operations. The statement of facts should therefore avoid reference to lining up. If this is unavoidable, the time spent in actually lining up by both the ship and the terminal should be specified and it should be made clear that this.is not accepted as being "delay".

PART VI - COMPLETION OF LAYTIME - STOPPING THE LAYTIME CLOCK

6. The completion of laytime is comparatively straightforward. Laytime either expires after all the agreed laytime has been used up or upon the completion of cargo operations if these are concluded within the allowed laytime. If the agreed laytime has been used up and cargo operations are still continuing, then the vessel will earn demurrage at the agreed rate.

Most tanker charters contain a specific provision dealing with the end of laytime.

Asbatankvoy clause 11 provides:

"Laytime shall continue until the hoses have been disconnected".

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BPV0Y4 clause 7.33 provides:

" Laytime or, if the vessel is on demurrage, demurrage shall run until the cargo hoses have been finally disconnected upon completion of loading or discharging, and the master shall procure that hose disconnection is effected promptly..."

Most charterers provide for laytime to continue for a short period after the hoses have been disconnected. This is to allow for the necessary documents to be completed.

BPVOY4 clause 73.3 provides:

"...if the vessel is detained solely for the purposes of awaiting cargo documents at loadport for more than three (3) hours beyond the final disconnection of cargo hoses, laytime or if the vessel is on demurrage, demurrage shall recommence after such period of three (3) hours and terminate upon the completion of cargo documentation."

The master should note the time of final disconnection of cargo hoses. In addition, the master should note the time of presentation of the cargo documents.

If the charter does not expressly provide for a period of time for the cargo documents to be completed at the load port, it is usual for owners to allow a short period for this to be completed. If the vessel is delayed beyond this time, then the owners will have a claim for detention.

Shellvoy 5 clause 13 (1) (b) provides:

"Time shall:-

(i) continue to run until the cargo hoses have been disconnected

(ii) recommence two hours after disconnection of hoses if the vessel is delayed for charterers purposes and shall continue until the termination of such delay provided that if the vessel waits at any place other than the berth, any time or part of the time on passage to such other place that occurs after two hours from disconnection of hoses shall not count"

Clause 13 (4) provides:

"For the purposes of this clause 13..."time" shall mean laytime or time counting for demurrage, as the case may be".

The effect of this provision is that the charterers are allowed a period of two hours in which to complete the cargo documentation. If this takes more than two hours, then laytime or if the vessel is on demurrage, demurrage shall recommence.

PART VII - BILLS OF LADING

7. (a) Introduction

Bills of lading originated in the fourteenth century as a non-negotiable receipt issued by a shipowner for cargo received. Subsequently the bill of lading also incorporated the terms of the contract of carriage in order to resolve disputes between cargo owners and carrier. Finally by the eighteenth century the bill of lading acquired its third characteristic, that of


being negotiable by endorsement, in order to meet the needs of traders who wished to sell the cargo before it reached its destination. These functions of a bill of lading have given rise to many and varied complex problems. There are specialist texts that deal with these issues, so this guide will confine itself to dealing only with bills of lading as they affect laytime and demurrage.

Bills of Lading are normally prepared by the shipper and are then presented to the master for signature. Three sets of original bills of lading are usually issued.

Very often the ship's agent will sign the bills of lading. This is where either the "Early Departure Procedure" is in operation or where an error has been discovered in the original bills of lading and a fresh set has to be issued.

7. (b) The Early Departure Procedure

Where a vessel is delayed leaving the load port due to the bills of lading not being ready, it is possible for the owners and charterers to agree that an Early Departure Procedure shall be adopted. The following is INTERTANKO's recommended form of such a clause.

Early Departure Procedure ("EDP")

"In an effort to minimise time loss, the Master is requested, in appropriate cases, to authorise load port agents to issue Bills of Lading on behalf of the carrier. this authorisation should be limited to the signing and releasing of the Bills of Lading only, and be valid only when all details, including quantity/quality of cargo have been approved by the Master. If possible, agents should be required to telefax a copy of the Bills of Lading for the Master's approval prior to utilising their authorisation to sign and release."

It is imperative that load port agents authorised as aforesaid are given the same general instructions as to issuance of bills of lading as the master. The master in this respect is requested to issue all letter of authorisation to the agents, giving permission to issue bills of lading on behalf of the carrier.

It must be emphasised that EDP should only be used when a delay of significant length is threatened or when otherwise instructed by owners. The master is requested to use his judgement in predicting delays and to act or refrain from acting accordingly in his own discretion.

Such procedures are regularly invoked at some loading locations and give rise to few problems provided the procedure is followed correctly. It should be noted that if the procedure is invoked and, for instance, there is a discrepancy between the shore and the ship's cargo loaded figures, then the agent must endeavour to use the ship's figures in the bill of lading and if this is not possible then a letter of protest should be issued.

We wish to emphasise that a master should never sign blank bills of lading under any circumstances. We understand that vessels calling at Zirku Island have in the past been warned that unless the master signs blank bills of lading, the vessel will not be permitted to call there again. Even in these circumstances the master must refuse to sign blank bills of lading.


7.(c) Delivering a cargo to a US port - SCAC

US regulations provide that all ocean bills of lading covering cargoes entering US ports shall have a "Standard Carrier Alpha Code" ("SCAC"). The SCAC is a unique two to four letter code assigned to transportation companies for identification purposes. The regulations provide that all bills of lading shall contain a unique identifier consisting of up to sixteen characters in length. The first four characters will be the carrier's SCAC and the remaining element will consist of up to twelve characters in length and may be either alpha and/or numeric.

The numbering requirement is incorporated into Custom's regulations governing the arrival and entry of vessels. Failure to comply with this requirement may delay the vessel when delivering a cargo to the US port and therefore any time lost due to failure to comply with this regulation would be for owners' account. For example, clause 36.1 of BPVOY4 provides:

"If Charterers require the vessel to discharge at a port within the jurisdiction of the US Customs Service, the Master shall insert Owners Unique Identifier on each Bill of Lading accompanying a shipment of imported cargo in accordance with US Customs Regulations (10 CFR Parts 4 and 178). Owners shall provide Charterers and Agents on request with details of their Unique Identifier in respect of any cargo carried hereunder.

36.2 If the Master fails to insert Owners' Unique Identifier under this Clause 36 Owners shall be liable for any delays resulting therefrom and any time lost thereby shall not count as laytime or, if the Vessel is on demurrage, as demurrage."

7. (d) Cargo consignee fails to deliver the original Bills of Lading

In order for the consignee of the cargo to take delivery of the cargo the original Bills of Lading must be presented. Very often this is not possible as the bills are still somewhere in the banking system. It is usual for the charterparty to provide that the charterer will provide the owners with an indemnity. For an example of this see clause 30 in BPVOY4, which appears in Appendix C.

If the bill of lading or an acceptable letter of indemnity is not available at the discharge " port, then the owners are within their rights to instruct their vessel not to discharge the cargo, with all time counting as used laytime or demurrage.

PART VIII - PUMPING CLAUSES & COW

8. (a) Some typical clauses

The basic provisions of pumping clauses are quite simple:

Owners warrant that the vessel is capable of discharging her entire cargo within 24 hours or maintaining a pressure of 100 psi at the vessel's manifold provided shore facilities permit.


Some clauses are much longer. The main principles are the same but there will be more detailed requirements which must be properly observed. If not, owners may lose their right to claim demurrage simply because the specified procedures have not been followed.

An example is Clause 19 of BPVOY4, which is too long to be set out in full here. The most relevant parts of the Clause from- the point of view of those working on board are as follows:

BPVOY4

19.3 "Owners undertake that

19.3.2. The Vessel shall discharge cargo at the maximum safe rate and in any event shall, in the case of cargoes of one or more segregated grades/parcels discharged concurrently or consecutively, discharge a full cargo within twenty-four (24) hours, or pro rata in the case of a part cargo, or shall maintain a minimum discharge pressure of seven (7) bar at the Vessel's manifold throughout the bulk discharge provided always that the cargo is capable of being received within such time or at such pressure. If restrictions are imposed by the Terminal during discharge, or if physical attributes of the Terminal restrict the discharge rate or pressure, Owners shall only be relieved of the aforesaid obligation for the period and to the extent such restrictions or attributes impede the discharge rate or pressure. The Terminal shall have the right to gauge discharge pressure at the Vessel's manifold.

19.6 If the full cargo cannot be delivered to the Vessel at the rate requested by the Master or within the time allowed in Clause 19.3.1 or if the Terminal is unable to receive the full cargo within twenty-four (24) hours or at a discharge pressure of seven (7) bar measured at the Vessel's manifold, the Master shall present a Note of Protest ("NOP") to a Terminal representative detailing any Terminal restrictions and/or deficiencies as soon as they are imposed and/or become apparent and shall use all reasonable endeavours to have the NOP signed by the Terminal representative. If the Master is unable to obtain a signature from the Terminal representative he shall present a further NOP recording the failure of the Terminal representative to sign the original NOP. In the case of restrictions imposed by the Terminal or arising from physical attributes of the Terminal, the Master shall ensure that such restrictions are clearly recorded in the Vessel's Pumping Log.

19.7 No claim by Owners in respect of additional time used in the cargo operations carried out under this Clause 19 shall be considered by Charterers unless it is accompanied by the following supporting documentation:

19.7.1 The Vessel's Pumping Log signed by a senior officer of the Vessel and a Terminal representative showing at hourly intervals the pressure maintained at the Vessel's manifold throughout the cargo operations; and

19.7.2 Copies of all NOPs issued, or received, by the Master in connection with the cargo operations; and

19.7.3 Copies of all other documentation maintained by those on board the Vessel or by the Terminal in connection with the cargo operations."

Part I of SHELLVOY5 contains a guarantee by Owners that the vessel can


"discharge a full cargo (whether homogenous or multi grade) within 24 hours or can maintain a back pressure of 100 PSI at the vessel's manifold and Owners guarantee such minimum performance provided shore facilities permit The discharge guarantee shall only be applicable provided the kinematic viscosity does not exceed 600 centistokes at the discharge temperature required by Charterers. If the kinematic viscosity only exceeds 600 centistokes on part of the cargo or particular grade(s) then the discharge guarantee shall continue to apply to all other cargo/grades".

These clauses contain two separate warranties: that the vessel is capable of

(a) discharging in 24 hours,

or

(b) maintaining 100 psi (7kg/cm2) at the vessel's manifold.

Occasionally, a different figure may be specified. EXXONVOY 90 and VELAVOY 9.4 are unusual in specifying higher figures for larger vessels (lOOpsi under 60,000 mt deadweight, 125psi for 60,000 - 160,000mt~dwt and 150psi greater than 160,000mt dwt.).

8. (b) Interpretation of the clauses

Although these pumping warranties seem straightforward, they are one of the most i. common sources of dispute between owners and charterers.

The following points are to be noted.

"the vessel is capable of discharging..."

,; The warranties are setting down requirements of what the vessel is capable of. The owners .?r are nor giving an absolute warranty that the vessel will discharge in 24 hours or maintain

lOOpsi in all circumstances. The vessel will still be capable of discharging in 24 hours even if it did not actually do so because, for example, hoses are not supplied in sufficient numbers or sizes, or the terminal requests the master to reduce pressure.

"...in 24 hours qr_ maintain lOOpsi... "

The vessel need only comply with either of the warranties. If the vessel takes more than 24 hours to discharge but still maintains the required pressure, owners will have fulfilled their obligations and charterers have no grounds for complaint. Often charterers automatically deduct all time in excess of 24 hours but they are wrong to do so. However, if discharge time does exceed 24 hours, it is essential that the owners are in a position to prove that the warranted pressure has been maintained.

"at the vessel's manifold..." The relevant pressure is at the discharge manifold at the ship's rail. The owners' warranties do not apply to pressures measured ashore.

"...during the entire period of discharge..."

Some clauses require the vessel to maintain the required pressure throughout discharge. This is in practice impossible since there will inevitably be some drop in pressure for operational reasons, for example when stripping, crude oil washing or changing tanks. Some charterers are realistic enough to understand that time cannot be deducted when


pressure drops for short periods for routine operational reasons. This is acknowledged in some, charterparties (such as BPVOY4 above) which state that the pressure requirements apply during bulk discharge.

"...provided shore facilities permit"

A particular example of when the vessel is capable of discharging in 24 hours or maintaining lOOpsi but does not actually do so is when shore facilities prevent this. This is expressly dealt with by the inclusion of words such as. "provided shore facilities permit." Many disputes are over whether slow discharge is the result of deficiencies in the vessel or shore facilities.

Given that many clauses require the vessel to maintain a minimum of lOOpsi if the vessel does not discharge in 24 hours, it is important that the master notes and protests on each occasion the shore conditions prevent the vessel from complying with this warranty.

8. (c) Practical points to watch

There is unlikely to be any dispute as to whether the vessel has managed to discharge in 24 hours. The main problem which owners usually face is proving that the vessel actually maintained or was capable of maintaining the warranted pressure. It is therefore vital that all necessary letters of protest are given and that proper pumping logs are kept.

It is good practice to invite the terminal to observe the manifold pressure so that the receivers can verify the pressure for themselves. Some charterparty clauses give the receivers the right to do this (e.g. BPVOY4).

Pumping logs

The pumping logs need to be submitted to charterers with the demurrage claim. The logs must be completed fully and accurately so that owners.can prove that pressure has been maintained. If the pressure has fallen below lOOpsi, sufficient information must appear in

. the logs to enable owners to calculate how long discharge would have taken if adequate pressure had been maintained.

The master should avoid any reference to internal stripping.

Many charterparties impose a requirement that the pumping logs must be signed by a terminal representative. It is a sensible practice whatever the charterparty says. If the clause is one that does require a signature, it is essential that this formality is complied with. While some terminals will generally co-operate, others will not. If the terminal representative refuses to sign, a letter of protest must be given and a note made in the statement of facts/time sheet.

• Ensure pressure is recorded hourly (at least) and accurately.

• Inform the terminal that their representative will be asked to sign the logs on completion of loading.

• Invite the terminal, to observe and monitor pressure.

• If the terminal representative refuses to sign the logs, deliver a letter of protest.

• Remember that the responsible officer must sign the logs.

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Letters of Protest

It is essential for. the master to issue a letter of protest to record any occurrences which may be relevant to ..the time taken to discharge. This should be delivered to the terminal and to charterers. Some charter parties (such as BPVOY4 Clause 19.6 set out above or Exxonvoy

"90 Clause 18 f) expressly require letters of protest to be given in specified cases and, if the master fails to do so, owners will probably be unable to dispute that the vessel is responsible for time lost. If in doubt, issue a protest!

Common examples of circumstances where letters of protest should be issued are as follows:

• insufficient number of hoses

• inadequate hose size

• instructions to discharge grades consecutively

• refusal by the terminal to allow the vessel to maintain full pressure

• terminal conditions which affect the discharge rate, such as the distance from the manifold to shore tanks or shore tanks well above sea level

"f- • refusal by the terminal to sign the pumping logs

• cargo viscosity

.' • inherent vice, i.e. due to the characteristics of the cargo

See Appendix B for examples of letters of protest, pages 31-37.

Information of this kind should also be recorded in the statement of facts/time sheet

Finally, make sure all relevant documents (pumping logs, letters of protest, statements of fact/time sheets) are sent to owners immediately. Without them, owners will probably be unable to submit their demurrage claim to charterers. The charterparty is likely to contain a time limit within which owners must submit their claim with supporting documents. Unnecessary risks with time limits must be avoided!

8. (d) COW Clauses

Although all modern charterparty forms contain a clause specifically dealing with crude oil washing ("COW"), there is no standard approach. COW clauses commonly include three main elements: . . .

• a warranty by owners about the efficiency of the COW system and the ability of the crew to operate it

e an obligation on owners to carry out COW (a) on the instructions of charterers, (b) on the instructions of any competent authority (such as the port authorities), and (c) to meet the requirements of the International Convention for the Prevention of Pollution from Ships 1973 and then modified by the Protocol of 1978, all of which is known as "MARPOL 73/78"


• an addition to the period allowed for discharge BPVOY4 contains the following clause:

19.8 "Owners undertake that the vessel is equipped with a fully functional Crude Oil Washing System and that the officers and crew are properly qualified as. evidenced by appropriate certification) and experienced in the operation of such system. Whilst charterers may instruct Owners to carry out additional crude oil washing in all tanks that contained the cargo the Master shall, in any event, arrange for crude oil washing of the cargo tanks at the discharge port to the MARPOL minimum standard, as set out in the Vessel's Crude Oil Washing Operation and Equipment Manual.

When the Vessel carries out crude oil washing to the MARPOL minimum standard, in the absence of instructions from Charterers to carry out additional crude oil washing, there shall be no increase in the time allowed for discharge of the cargo. If Charterers instruct Owners to carry out additional crude oil washing then the period referred to in Clauses 19.3.2 or 19.5, as the case may be, shall be increased by 25per-cent (25%).

Owners shall carry out crude oil washing concurrently with discharge of the cargo and the Master shall provide a crude oil washing log identifying each tank washed, and stating whether such tank has been washed to the MARPOL minimum standard or has been the subject of additional crude oil washing."

The standard version of SHELLVOY5 contains a simpler clause:

20. "If the vessel is equipped for crude oil washing Charterers shall have the right to require the vessel to crude oil wash those tanks in which the cargo is carried. If crude oil washing is required by Charterers or any competent authority, any additional discharge time thereby incurred shall count against laytime or, if the vessel is on demurrage, for demurrage, and the number of hours specified in Part I(A)(vii) shall be increased by 0.75 hours per cargo tank washed,"

However, later versions of this clause usually reduce the additional allowance to 0.6 hours per tank and cap the extra time allowed by providing that this is "always subject to a maximum increase of 8 hours". The amended wording also goes on to state that if the vessel fails to maintain 100 psi throughout discharge, then any extra time (i.e. in excess of 24 hours plus the additional COW allowance) shall not count. Since crude oil washing is an integral part of discharge operations, the basic principle is that extra time should be for charterers' account. However, this is subject to a number of provisos, including the following:

• the COW system and the crew must function efficiently

• discharge must still be completed within the extended period allowed (i.e. the time specified in the pumping warranties - usually 24 hours - plus the additional time allowed for COW)

• the vessel may still be expressly required to maintain pressure throughout this extended period

• some clauses do not specify that time in COW will count if undertaken to comply with MARPOL or on instructions from someone other than charterers

It is important that an accurate and detailed record is kept of COW operations. A letter of protest should be issued immediately if any delays are attributable to the terminal. When crude oil washing is carried out on charterers' instructions, this should be recorded in the statement of facts.


PART IX - CLAIMING DEMURRAGE

9. Introduction

The rate of demurrage is something that is a matter of commercial negotiation between the owners and the charterers. Demurrage is usually expressed as a daily rate and will be payable pro rata.

Demurrage will continue until the vessel is once again at the complete disposal of the owners.

9. (a) "Once on demurrage always on demurrage"

One of the most often quoted phrases is "once on demurrage always on demurrage". What does this actually mean? It is usually taken to mean that unless an exceptions clause specifically refers to demurrage, it will only apply during the running of laytime. The reason for this is because by exceeding the agreed amount of laytime, the charterers are in breach of the charter. Demurrage is the agreed amount of damages payable in the event that the charterers exceed the agreed amount of laytime.

- The owners' shore-based staff will calculate the amount of demurrage payable by the charterers. Owners will base their calculation on the information provided by the vessel, in

. particular the statement of facts.

The master should ensure that the port log and the pumping logs are sent to the owners' offices as soon as practical after the completion of each call at port

9. (b) Half rate demurrage

Whilst the demurrage rate is agreed by the parties to be a daily rate, the charterparty usually details certain circumstances that give rise to demurrage at half the agreed rate. The reason behind this is that the circumstances giving rise to demurrage accruing at half the normal rate are beyond either owners' or charterers* control. We. will now consider examples of clauses which provide for this. Asbatankvoy clause 8 provides:

"If, however, demurrage shall be incurred at ports of loading and/or discharge by reason of fire, explosion, storm or by a strike, lockout, stoppage or restraint of labour or by breakdown of machinery or equipment in or about the plant of the charterer, supplier, shipper or consignee of the cargo, the rate of demurrage shall be reduced by one-half..." .

The half rate demurrage reason which gives rise to most disputes is the term "storm ". Firstly, the delay must be caused by the storm due to the wording "incurred,..by reason of...storm". Secondly, the word "storm" is interpreted differently in London and New York. In London arbitrators have taken the view that storm means such weather conditions as are described on the Beaufort scale as storm, i.e. wind force 10 (48-55 knots) and sea-conditions of:

"Very high waves with long overhanging crests. The resulting foam, in great patches, is blown in dense white streaks along the direction of the wind. On the whole, the surface


of the sea takes on a white appearance. The tumbling of the sea becomes heavy and shock-like. Visibility affected."

New York arbitrators take a slightly more liberal view of the meaning of storm. They have - held that the weather must be violent enough or turbulent enough to have caused something

of an unusual commotion or disturbance in port. They have also held that mere bad weather which closes the port for cargo operations was not sufficient.

Consequently, a master should avoid noting down that cargo operations were interrupted by storm.

Shellvoy 5 clause 15 (2) provides:

"If, however, all or part of such demurrage arises out of or results from fire or explosion or strike or failure/breakdown of plant and/or machinery at ports of loading and/or discharging in or about the plant of charterers, shippers or consignees of the cargo (not being afire or explosion caused by the negligence or wilful act or omission of charterers, shippers or consignees of the cargo or their respective servants or agents), act of God, act of war, riot, civil commotion,..., the rate of demurrage shall be reduced by half..."

It is noteworthy that there is no inclusion of delay due to weather conditions.

BPVOY4 clause 17 provides:

"Any delay arising from adverse tidal conditions which could not reasonably have been predicted, adverse weather, adverse sea state conditions, blockage of access to a port due to casualty or wreck, fire, explosion, breakdown or failure of equipment, plant or machinery in or about any loading or discharge port, act of God, act of war, labour strike, riot, civil commotion, or arrest or restraint of princes, rulers or peoples shall count as one half lay time or, if the vessel is on demurrage, at one half of the demurrage rate..."

This clause provides a very comprehensive list of causes of delay that give rise to laytime or demurrage counting at the half rate. Delay due to weather which qualifies for half laytime or demurrage to apply is only in respect of adverse weather or adverse sea state conditions.

\ One of the additional terms that is often incorporated in the charterparty is the Conoco weather clause, which states: "Delays in berthing for loading or discharging and any delays after berthing which are due to weather conditions shall count as one half laytime or as time on demurrage at one half demurrage rate". .?

This clause covers delays due to weather conditions and does not mention any qualification in regard to the severity of the weather conditions. There must be a causal link between the weather conditions and the delay.

9. (c) Accompanying documents - time limits

Masters should be aware that many charterparties have terms that include time limits for submitting demurrage claims. It is therefore essential that the master provides documents that are legible and submits them to the owners* office ashore in good time. In addition, some of the clauses specify certain requirements as to signatures that are needed.


BPVOY4 clause 20.1 provides: ,

"Charterers shall be discharged and released from all liability in respect of any claim for demurrage, deviation or detention which owners may have under this charter unless a claim in writing has been presented to charterers, together with all supporting documentation substantiating each and every constituent part of the claim, within ninety (90) days of the completion of discharge of the cargo carried hereunder."

Other charterers1 terms are more onerous; for instance the Saudi Arabia charterer International Oil Overseas Inc. has the following clause in their standard trading clauses;

"Owners agree that charterers shall be released from all liability for payment of demurrage, unless the claim has been submitted to charterers in writing and fully certified original supporting documents, which shall include but not be limited to original signed notice of readiness submitted and accepted and duly signed time sheets and statement of facts duly countersigned by terminal representatives within (60) days of completion of discharge."

Unless the requirements of such clauses are strictly followed, owners will not be able to make any claim for demurrage. Therefore, it is good practice for the master to always ensure that all documents are countersigned by terminal representatives.

9. (d) Arbitration : The majority of charterparties provide that disputes shall be settled by arbitration. Usually

this takes place in London or New York. Arbitration in London is conducted under the terms of the London Maritime Arbitrators' Association. In New York, arbitration is carried out under the terms of the Society of Maritime Arbitrators.

Very often the results of arbitrations concerning demurrage claims turn on documents that are the master's responsibility to prepare such as NORs. It is important to stress that a master must check carefully the terms of the charterparty concerning laytime and demurrage before undertaking a voyage. If the master is in anyway in doubt he should contact the shore staff and seek guidance.

9. (e) INTERTANKO's Freight and Demurrage Information Pool ("FDIP")

INTERTANKO has long been concerned, on behalf of its members, at the delays that often occur in the handling of an owner's demurrage claims. INTERTANKO has sought to tackle this problem in a number of ways. In 1983, INTERTANKO set up a Freight and Demurrage Information Pool ("FDD?") to assist members in their disputes with charterers concerning demurrage. A large number of INTERTANKO members currently belong to the FDIP. The FDIP gives opinions on laytime calculations, seeks to restore a dialogue between owners and charterers, and tries to ensure that charterers handle claims promptly. The FDIP has sought to redress the balance in a market where all too often charterers are in the driving seat.

9. (f) Help concerning laytime matters? ̂

If the master is in doubt or needs assistance concerning laytime matters, then he should contact owners without delay. Owners in turn have access to their P & I club, INTERTANKO, and others for advice.


PART X - DOCUMENTS - AS EVIDENCE

10. DOCUMENTS ^

If charterers do not agree the demurrage claim, owner's ability to recover the claim or negotiate a settlement will depend in part on how diligent the master and crew have been in documenting the facts. If a dispute ends up in the hands of lawyers and goes to arbitration, the facts set out in the documentation will be subject to very close scrutiny. Once the Master despatches the documents at the end of the voyage, he may hear nothing further from owners and not know of those cases in which a dispute develops. Masters should bear in mind that the outcome of an arbitration lasting some years over substantial amounts of money may depend on how good a job they and their officers have done in maintaining documentation.

The following guidelines should be borne in mind

• Pay careful attention to the NOR to ensure that it is given - in the right form - at the right time - to the right person.

• If there is any doubt about the validity o f an NOR, serve another which states that it is without prejudice to the validity of the earlier one.

• Check the individual requirements of each charterparty.

• If there are any possible grounds at all to protest, issue a Letter of Protest.

• Obtain a signature acknowledging receipt of ail documents issued on behalf of the vessel; if this is refused, issue a letter of protest.

• If a document is presented to the vessel, take the time needed to check the contents and, if there are any inaccuracies, remarks should be recorded.

• Acknowledge receipt of a document by signing "for receipt only", unless completely satisfied about the accuracy and truth of its contents.

• If in doubt, ask owners for instructions.

PART XI - SUMMARY OF VESSEL'S STAY IN PORT

11. (a) Arrival and tender of Notice of Readiness

The commencement of laytime requires tendering of Notice of Readiness. It is therefore essential that this notice is given at the earliest possible time. Since tendering NOR is one of the prerequisites to the commencement of laytime, it is essential that NOR is given at the correct place. The master should have regard to the charterparty. If there is doubt the master should tender early and then re-tender.


11. (b) Waiting at anchorage (if applicable)

If, after tendering NOR, the vessel is instructed to wait at anchorage, the vessel should anchor as near as possible to the eventual berth with minimum deviation from the direct line to berth. The actual time to anchor will be performed in the "notice time".

11. (c) Notice time

Most charterparties will provide for the first 6 hours after tendering NOR to be charterers' free time for preparations. This time will run continuously until used, unless the vessel is all fast in berth before expiry of 6 hours, in which case laytime will commence from all fast in berth.

11. (d) Shifting from anchorage to berth

This time does not count as laytime. It is important to observe that shifting is a word for movement and starts with actual departure from anchorage and ends with the vessel being "all fast" at the berth. Many time sheets will show only time for pilot boarding and if departure from anchorage occurs after the pilot has boarded. It is essential that time for departing anchorage is reflected in the time sheet, as otherwise charterers will seek to have time deducted from an earlier time.

.; It should also be observed that all fast is the time of finished with engine ("FWE") and not when gangway is down, which is a different matter. Time of departing anchorage and time of all fast should always be quoted in messages to owners. As shifting is owners' time, it should be as fast as possible.

If the vessel leaves anchorage but must slow down or interrupt the voyage because there is ,. an unexpected delay in the previous vessel leaving berth, a remark should be made in

respect of the time lost in slowing, down as owners will then charge this lost time to charterers.

11. (e) Pre-loading time / pre-discharging time

Apart from the eventual clearance of the vessel, this is a period of mixed activities such as shore/ship planning of cargo operations, connecting ballast/cargo hoses, and tank inspection. If these activities are permitted during clearance formalities, the master should not accept any reference in the statement of facts for delay caused by the vessel's clearance if cargo preparation/work was being carried out without interruptions.

11. (f) Deballasting

Deballasting will not count as laytime. However, laytime will continue to run if the vessel has segregated ballast tanks and/or if deballasting is effected concurrently with loading.

1. Segregated ballast tanks

Since charterers normally allow time to run while deballasting if it is carried out currently ""'"''' """with loading, the vessel should always await commencement of loading prior to

deballasting. If the vessel is allowed to berth but cargo is not ready, then laytime will be interrupted if the vessel commences deballasting while waiting for cargo.


For segregated ballast vessels the master should in addition try to avoid any references to deballasting in the statement of facts unless the installation insists. .

2. Ballast in cargo tanks

Vessels which do not have segregated ballast tanks cannot avoid interruption in laytime for; deballasting, unless this is carried out concurrently with cargo operations.

11. (g) Time between commencement of loading

Many installations will try to identify "ship lining up" as-being a delay. This is wrong as the "lining up" is an integrated and unavoidable part of the preparation for loading which does not qualify for interruption of laytime and will often be carried out concurrently with other charterers' activities such as tank inspection. Any reference to lining up should preferably be avoided since time will already have begun to run.

11. (h) Loading

Laytime continues throughout loading unless there is something wrong with the vessel causing delay or an exceptions clause applies.

11. (i) Time between loading and disconnecting of hoses

This time spent for ullaging, sampling etc. is part of laytime.

11. 0) Disconnecting of hoses.

Laytime continues until all hoses have been disconnected. This time should always be recorded in the statement of facts/logs.

11. (k) Time between hoses off and sailing.

After loading there will be a period of establishing the loaded quantity to be inserted in the bills of lading. As the vessel will require some time before she is ready to sail, it has been accepted that charterers are not delaying the vessel if they present cargo documents within "reasonable time". "Reasonable time" is generally taken to be 2-3 hours. Any additional time carl give rise to a claim for detention of the vessel.

Master should therefore always note the time when cargo documents are received.

11. (1) Discharging

Laytime continues to run throughout discharging unless there is something wrong with the vessel causing delay or an exceptions clause applies.

Please observe carefully references to pumping warranties (see Part VIH).

11. (m) Ballasting. ^

The master should only mention commencement of ballasting at the earliest when discharging has been completed, as any ballasting before disconnecting hoses has been carried out is on charterers' time unless carried out concurrently with discharging.


If time for ballasting must be shown prior to disconnection, the master' should make a remark on the time sheet and port log that ballasting did not interfere with discharging.

11. (n) Time between discharging and disconnecting of hoses.

This is time spent for various activities including inspection for obtaining dry certificate etc. Time continues to run.

11. (o) Disconnecting of hoses.

Time continues to run until all hoses have been disconnected. This time should always be noted in the statement of facts/logs .

11. (p) Time between hoses off and sailing.

Laytime has ceased to run. Should the vessel be detained for charterers' purposes beyond what is reasonable, a claim for detention may be made.


APPENDIX A - SPECIMEN NOTICE OF READINESS

.

NOTICE OF READINESS

To: Date:

Port

I hereby give formal notice that the m.t under my command has arrived and is in every respect ready to load/discharge in accordance with the terms and conditions of the charterparty dated/contract dated Time to commence in accordance with the terms and conditions of the above mentioned charterparty.

Notice of readiness tendered on at hours

Master Representative of Charterers/Receivers/Terminal

An LNTERTAiNKO Publication -29-

APPENDIX B - SPECIMEN LETTERS OF PROTEST

LETTER OF PROTEST

To: Date:

Vessel Voyage No. Port Berth Cargo

I hereby give formal notice that discharge of the above cargo has been delayed/prolonged for the following reasons:

• Instructions from the terminal were received at... hrs on to pump at the reduced rate of

• Only .... hoses have been provided when the vessel is capable of discharging into .... hoses.

• The hoses provided have a diameter of.... inches when the vessel is capable of discharging into hoses with a diameter of.... inches.

• Instructions have been given by the terminal to discharge grades separately, as follows

Instructions have been given by the charterers/terminal to carry out COW/stripping.

Conditions at the terminal have prevented the vessel from discharging at her full capacity. (Insert details)

Other. (Insert details)

Master Representative of Charterers/Receivers/Terminal


ICB SHIPPING AB To ; S&P.L., Bos Terminal No.l Por t : FOB, France Bate : 03" September 1998.

M.T. CELEBES

LETTER OF P R O T E S T

Dear Sir,

DELAYS DUE TO LINE DISPLACEMENT / HIGH BACK PRESSURE I STOPPAGE DUE TO TERMINAL REASONS / RESTRICTED DISCHARGE RATE.

This is to inform you that on behalf of my Principals and Owners, 1 hold you responsible for the following, and the consequences which may arise therefrom, at the same time reserving the right to revert on the above subject.

A) Line displacement The vessel carried out Line Displacement as per the Terminal's requirements on the 01** Sept 1998 from 2148 hrs LT to 2324 hrs LT followed by calculations after line displacement. Vessel resumed discharge on the 01* Sept 1998 at 2342 hrs LT after calculations. During the aforesaid period the vessel was restricted in her full discharging capability.

B)High Back Pressure Upon resuming discharge on the 01* Sept 1998 at 2342 hrs Lt until the 02nd Sept 1998 0445 hrs LT, the vessel experienced severe high back pressure and was restricted zo the shore maximum pressure of 10.5 Kgs/cm2. During this period the attained average discharge rate was 8000 m3/hr.

C\ Stoppage dm to Terminal Reasons The vessel ceased discharge on the 02"* Sept 1998 from 0445 hrs LT to 0530 hrs Lt as per Terminal reasons.

D ) R e s t r i c t e d D i s c h a r g e R a t e

The vessel was restricted to a discharge rate of 7500 m3/hr on the 02ad Sept 1998 from 0530 hrs to 0720 hrs LT as per Terminal Reasons.

Therefore, on behalf of my Owners/Charterers and any or all other Third Parties that are or may be concerned, I formally protest and hold you and your Principals responsible for the consequences, if any, caused due to these delays. I further reserve the rights of my Owners/Charterers to refer to this matter at a later date, time or place.

Yours truly,

M.T. "CELEBES'

Master

Capt. Mansur Ahmed Master

Received;

For Fos Terminal No.l


ICB SHIPPING AB

To .-Mobil.Oil Terminal .„ M.T. Granite Port : Qua Tboe Terminal, Nigeria. Date : 29th August 1998.

LETTER OF PROTEST

Dear Sirs,

With reference to the loading operation at Quo Iboe Terminal, •Nigeria, the vessel notes protest for the following, and reserves the right to extend it at a time and place convenient.

A) Low Loading Rate by Terminal: Rate from Shore : 59,073 Bbls/hr. Connections : 2 X 16*. Ship's Capability : 70,0p0 Bbls/hr. Connections : 4 X \6*.

fl) Free Water found as per Ullage Report 3,6 barrels including traces In other tanks.. All tanks to be loaded were, free of water except Slop Stbd (refer to Slop certificate) prior to loading as per OBQ report. A more correct assessment of Tree water will be possible at discharge port, because insufficient settling time on completion of loading.

C) Difficult ullage measuring due to sea /weather condition at SBM Ullages were taken whilst vessel was rolling moderately under influence of sea / weather condit ions. Any discrepancies in on board quantifies at load port and at discharge port arc likely to originate

from the above incident.

D) Delays : 24/OS/OS - 000 i to 27/08/98 - 1720 ; Awaiting NNPC Clearance for loading. 27/08/98 - 1720 to 28/08/98 - 0800 ; Awaiting berthing instructions. 28/08/9 S- 1200 to 1348 ; Awaiting Shore Readiness for loading. 29/08/98 - 0830 to ' V0^: Awaiting C«rgo Papers.

On behalf of my Owners / Charterers and any or all other third parties that are or may be concerned, hold you and your principals responsible for the consequences, if any for the above

Yours sincerely,

Received: . .

Master

(Capi. S. Vatsa) M.T. Granite Terminal Representative.

N i -Muriff •

,1 Ht t tHU I»LL »»**• c u : i or*. ff-Ti * * r i • W i

**., TU*44 »T»JI i ) 7 » l i !T»


ICB SHIPPING AB To : Mobil Oil Terminal M.T. Granite fort; Qua Iboc Terminal, Nigeria. Date : 29th August 1998.

L E T T E R O F P R O T E S T

Dear Sits,

With reference to the loading operation at Quo tboc Terminal, Nigeria, the vessel notes protest Tor the following, and reserves the right to extend it at a lime and place convenient.

Vessel tendered NOR on 24th / 000 i IT and vessd received permission to berth on 24ih / 1015 LT. Vessel was all fast to SBM No. 1 on 24th / 1142 LT and was awaiting loading operations to commence as terminal had not received NNPC clearance. Subsequently vessel was unberthed on 25th / 1912 LT to make berth available for another vessel. Vessel anchored awaiting NNPC clearance for berthing / loading. NNPC clearance was received on 27th / 1720 T.Tr vessel reberthed on 28lh / 1018 LT and loading was commenced 28ih / 1348 LT.

On behalf of my Owners / Charterer* and any or all other third parties that arc or may be concerned, I hold you and your principals responsible for the consequences, if any for the above.

Yours sincerely,

Received:

(Cap*. S. Vatsa) M.T. Granite G.CKAY JiX^y -*

Terminal Keprescnti it O.k: ****** „ art. aa.r »»»*«* plT) 7Tttl A Mi *I7 l f »**. i«frt


N&.T A R G O N A U T

To: Messrs....... ; . - •

Port :

Dace:

L E T T E R O F P R O T E S T

Dear Sirs,

NOT PERMUTING CRUDE OIL WASHING j . . . .

This is to inform you that the regulation 13 B of Annex I to MARPOL 73/78 specifics that a Crude Oil

Washing procedure shall be used during discharge of cargo. Crude Oil Washing is an essential part of the

discharge operation in order to rninimize the amount of cargo remaining on board.

I hereby protest against your failure to comply with the above regulation by not permitting my vessel to

carry out said Crude Oil Washing operation in your port

The vessel refuses to accept any liability whatsoever for any claims, losses or damages that might arise

now or in the future due to this condition.

Yours truly,

Master

M/T - T/T

Received:

Terminal Representative

An 1NTERTANKO Publication - 3 5 -

Vessel : S.S. 'Sterna Continent'

Port : Durban Berth : SBM Date : June 20,1998

To : Messrs. SBM - Managers Durban •

N O T E O F P R O T E S T

Dear Sirs, - Delays in Port -

During the discharging of the vessel at your Terminal, the following conditions were noted which prolonged the vessel's stay in port:

From: To: Remarks:

1. IS/H54 - 18/1224 : Slow discharging rate 8.0 kg* maximum manifold's pressure due line displacement terminal request

2. 18/2006 - 18/2036 : Awaiting terminal readiness to commence discharging Iranian Light Crude

, 3. 18/2042 - 18,7115 ; Slow discharging rate 8.0 kgs maximum manifold's pressure due line displacement terminal request

4. 20/0006 - 20/0024 : Awaiting terminal readiness to commence discharging Arabian Light Crude

5.20/0036 - 20/0100 Slow discharging rate 8.0 legs maximum manifold's pressure due line displacement terminal request

On behalf of my Owners/Operators and/or Charterers, I am holding yon responsible for any claim, damage or loss that may arise due to the above facts, and X hereby reserve the right of my Owners/Operators and/or Charterers to refer to this matter at a later time and to take such action as may be deemed necessary.

Yours faithfully Terminal Representative cc: Stenabulk, Sweden

cc: Ship's Jlle . S U M Sulk AS T e l ; + 45 31 ,g5 s0 go Org nr; 5362*3-2236 EH Z-S' S-405 \9 C3tebor- ? a x * 4i 31_12 06 51 VAT nr SE556243223601 r^L "- :

Sweden TCIEX; 2559 Ste.T* S Site S^yreUe: Gawborg — —«*?"

| T An INTERTANKO Publication ; •"'•• : - 3 7 -

APPENDIX C - CHARTERPARTY FORMS

1. Asbatankvoy

2. ShelIvov5

3. BPVOY4


Uiociation of Ship Brokers & Agents (U.S.A.), Inc.

October 1977

CODE WORD FOE THIS CHARTER PARTY:

ASBATANKVOY

TANKER VOYAGE CHARTER PARTY

PREAMBLE

Place Date

IT IS THIS DAY AGREED between _ . -_

gartered owner/owner (hereinafter called the "Owner") of the .— . , .

(S/MS _ (hereinafter called the "Vessel")

. - . . — _ _ . (hereinafter called the "Charterer")

t ransportat ion herein provided for will be performed subject to the terms and conditions of this Char ter Party, which includes this Preamble

Par t I and P a r t II. In the event of a conflict, the provisions of Par t I will prevail over those contained in Par t II.

PART I

K. Description and Position of Vessel:

Deadweight: tons (2240 Ibs.t Classed:

Loaded draft of Vessel on assigned summer freeboard ft. in. in salt water .

Capacity for cargo: ' tons (of 2240 lbs. each) % more or less. Vessel's option.

Coated: • Yes Q No

Coiled: Q Yes G No Last two cargoes:

Now: *« Expected Ready:

B\ Laydays:

Commencing: Cancelling:

C, Loading Port(s)

Charterer 's Option

D. Discharging Port(s):

Charterer 's Option

C. Cargo:

Charterer's Option

f. Freight Rate: per ton (of 2240 lbs. each

0, Freight Payable to: at

. *

Freight Rate: per ton iof 2240 ibs. each.

3. Freight Payable to: at

i. Total Laytime in Running Hours:

Demurrage per day:

J. Commission of & is payable by Owner to

on the actual amount freight, when and as freight is paid.

K. The place of General Average and arbitration proceedings to be London/New York (strike out one).

L. Tovalop: Owner warrants vessel to be a member of TOVALOP scheme and will be so maintained throughout duration of this charter.

M. Special Provisions:

IN WITNESS WHEREOF, the parties have caused this Charter, consisting of a Preamble, Parts I and II, to be executed in duplicate as of the day and year first above written. -

Witness the signature of:

By: •

Witness the Signature of: . -

By:

PART II

1. W A R R A N T Y - V O Y A G E - C A R G O . The vessel, classed as specified in Part I hereof, and to be so mainta ined during the currency of this Charter , wa l l , wi th all convenient dispatch, proceed as ordered to Loading P o r t ( i ) named in accordance wi th Clause 4 hereof, or so near thereunto as she may safely get (always af loat ) , and being seaworthy, and having all pipes, p u m p * and heater coils in good work ing order, and being in every respect f i t ted for the voyage, so far as the foregoing condit ions can be attained by the exercise of due diligence, perils of the sea and any other cause of whatsoever k ind beyond the Owner's and /or Master's control excepted, shall load (always af loat ) f r o m the factors of the Charterer's full and complete cargo of petroleum and/or its products in bu lk , not exceeding what she can reasonably stow and carry over and above her bunker fuel,consumable stores,boiler feed, culinary and drinking, water , and complement and their effects (sufficient space to be left in the tanks to provide for the expansion of the cargo), and being so loaded shall fo r thw i th proceed, as ordered on signing Bills of Lading, direct to the Discharging Port(s) . or so near thereunto as she may safely get (always af loat ) , a n d deliver said cargo. If heating of the cargo is requested by the Charterer, the O w n e r shall exercise due dil igence to maintain the temperatures requested.

2. F R E I G H T . Freight shall be at the rate st ipulated in Part 1 and shall be computed on intake quant i ty (except deadweight as per Clause 3) as shown on the Inspector's ( ertif-icate of Inspection. Payment of freight shall be made by Charterer without discount upon delivery of cargo at dest inat ion, less any disbursements or advances made to the Master or Owner 's agents at ports of loading and/or discharge and cost of insurance thereon. No deduct ion of freight shall be made for water and/or sediment contained in the cargo. The services of the Petroleum Inspector shall be arranged and paid for by the Charterer who shall furnish the Owner w i th a copy of the Inspector's Cert i f icate.

3. D E A D F R E I G H T . Should the Charterer fail to supply a full cargo, the Vessel may, at the Master's o p t i o n , and shall, upon request of the Charterer, proceed on her voyage, provided that the tanks in which cargo is loaded are sufficiently filled to put her in seaworthy condit ion. In that event, however, deadweight shall be paid at the rate specified in Part I hereof on the difference between the intake quant i ty and the quantity the Vessel w o u l d have carried if loaded to her m i n i m u m permissible freeboard for the voyage..

4 . N A M I N G L O A D I N G A N D D I S C H A R G E P O R T S . (a) T h e Charterer shall name the loading port or ports at least twenty-four (24 )

hours prior to the Vessel's readiness to sail f rom the last previous port of discharge, or f rom bunkering por t for the voyage, or upon signing this Charter if the Vessel has already sailed. However . Charterer shall have the opt ion of ordering the Vessel to the following destinations for wireless orders:

On a voyage to a port or ports in: ST. K I T T S C a r i b b e a n or U.S. G u l f loading port(s) P O R T S A I D Eastern Mediterranean or Persian G u l f loading port(s)

( f r o m ports west of Port Said.) ( b ) If lawful and consistent wi th Part I and w i t h the Bills of Lading, the Charterer

shall have the opt ion of nominat ing a discharging port or ports by radio to the Master on or before the Vessel's arrival at or o f f the fol lowing places:

Place On a voyage to a port or ports in: L A N D ' S END United K ingdom/Cont inent (Bordeaux /Hamburg range*

or Scandinavia ( including Denmark ) S U E Z Mediterranean ( f r o m Persian Gul f ) G I B R A L T E R Mediterranean ( f r o m Western Hemisphere) . (c ) Any extra expense incurred in connect ion w i t h any change in loading or discharg

ing ports (so named) shall be paid for by the Charterer and any t ime thereby lost to the Vessel shall count as used layt ime.

5. / L A Y D A Y S . Layt ime shall not commence before the date stipulated in Part I. except w i t h the Charterer's sanction. Should the Vessel not be ready to load by 4 :00 o'clock P.M. (local l ime) on the cancelling date stipulated in Part 1. the Charterer shall have the opt ion of cancelling this Charter by giving Owner notice of such cancellation within twenty- four ( 2 4 ) hours after such cancellation date: otherwise this Charter to remain in full force and effect.

6. N O T I C E OF R E A D I N E S S Upon arrival at customary anchorage at each port of loading or discharge, the Master or his agent shall give the Charterer or his agent notice by letter, telegraph, wireless or telephone that the Vessel is ready to load or discharge cargo, berth or no ber th , and lay t ime . as hereinafter provided, shall commence upon the expiration of six ( 6 ) hours after receipt of such notice, or upon the Vessel's arrival in berth ( i .e. , finished moor ing when at a sealoading or discharging terminal and all fast when loading or discharging alongside a w h a r f ) , whichever first occurs. However , where delay is caused to Vessel getting into berth after giving notice of readiness for any reason over which Charterer has no cont ro l , such delay shall not count as used lay t ime.

7 . H O U R S F O R L O A D I N G A N D D I S C H A R G I N G . T h e number o f running hours specified as layt ime in Part I shall be permi t ted the Charterer as lay t ime for loading and discharging cargo; but any delay due to the Vessel's condi t ion or breakdown or Inability of the Vessel s facilities to load or discharge cargo wi th in the t ime al lowed shall not count as used lay t ime. If regulations of the Owner or port authorit ies prohibit loading or discharging of the cargo at night, t ime so lost shall not count as used laytime; if the Charterer, shipper or consignee prohibits loading or discharging at night , time so lost shall count as used lay t ime . T i m e consumed by the vessel in moving f r o m loading or discharge port anchorage, to her loading or discharge ber th , discharging ballast water or slops, wi l l not count as used lay t ime.

S. D E M U R R A G E . Charterer shall pay demurrage per running hour and pro rata for a part thereof at the rate specified in Part I for all t ime that loading and discharging and used layt ime as elsewhere herein provided exceeds the al lowed lay t ime elsewhere herein specified. I f , however, demurrage shall be incurred at ports of loading and /or discharge by reason of fire, explosion, storm or by a strike, lockout , stoppage or restraint of labor or by breakdown of machinery or equipment in or about the plant of the Charterer , supplier, shipper or consignee of the cargo, the rate of demurrage shall be reduced one-half of the amount stated in Part I per running hour or pro rata for part of an hour for demurrage so incurred. T h e Charterer shall not be liable for any demurrage for delay caused by strike. lockout , stoppage or restraint of labor far Master, off icers and crew of the Vessel or tugboat or pilots.

7 (a) .QUARANTINE-. 'Should the Charterer send the Vessel to any port or place where a quarantine exists, any delay thereby caused to the Vessel shallcbumVas-used^ lay t ime; but should the quarantine not be declared until the Vessel is on passage to such port, the Charterer shall not be liable Tor any resulting delay.

(b). FUMIGATION. If the Vessel, prior to or after entering upon this Charter, has docked or. docks at any wharf which is not rat-free or stegomyia-free, she shall, before proceeding to a rat-free or stegomyia-free wharf, be fumigated by the Owner at his expense, except that if the Charterer ordered the Vessel to an infected wharf the Charterer shall bear the expense of fumigation.

18. CLEANING. The Owner shall clean the tanks, pipes and pumps of the Vessel to the satisfaction of the Charterer's Inspector- The Vessel shall n o t be responsible for any admixture If more than one. quality of oil is shipped, nor for leakage, contamination or deterioration in quality of the-cargo unless the admixture, leakage, contamination or. deterioration results from (a) unseaworthiness existing at the time of loading or at the inception of the voyage which was discoverable by the exercise of due diligence, or (b) error or fault of the servants of the Owner in the loading, care or discharge of the cargo.

19. GENERAL EXCEPTIONS C L A U S E . T h e Vessel , her Master and Owner shall not , unless otherwise in this Charter expressly provided, be responsible for any loss or damage, or delay or failure in performing hereunder, arising or resulting f r o m : - any act,

neglect, default or barratry of the Master, pilots, mariners or other servants of the Owner in the navigation or management of the Vessel; fire, unless caused by the personal design or neglect of the Owner; collision, stranding or peril, danger or accident of the sea or other navigable waters; saving or attempting to save life or property; wastage in weight or bulk, or any other loss or damage arising from inherent defect , quality or vice of the cargo; any act or omission of the Charterer or Owner, shipper or consignee of the cargo, their agents or representatives; insufficiency of packing; insufficiency or inadequacy of marks; explosion, bursting of boilars, breakage of shafts, or any latent defect in hull, equipment or machinery; unseaworthiness of the Vessel unless caused by want of due diligence on the part of the Owner to make the Vessel seaworthy or to have her properly manned, equipped and sup -plied; or from any other cause of whatsoever kind arising without the actual fault or privity of the Owner. And neither the Vessel nor Master or Owner, nor the Charterer, shall, unless otherwise in this Charter expressly provided, be responsible for any loss or damage or delay or failure In performing hereunder, arising or resulting from:—Act of God; act of war; perils of the seas; act of public enemies, pirates or assailing thieves; arrest or restraint of princes, rulers or people; or seizure under legal process provided bond is promptly furnished to release the Vessel or cargo; strike or lockout or stoppage or restraint of labor from whatever cause, either partial or general; or riot or civil c o m m o t i o n .

20 . ISSUANCE AND TERMS OK BILLS OF LADING (a) The Master shall, upon request, sign Bills of Lading in the form appearing below

for all cargo shipped but without prejudice to the rights of the Owner and Charterer under ' the terms of this Charter. The Master shall not be required to sign Bills of Lading for any port which, the Vessel cannot enter, remain at and leave in safety and always afloat nor for any blockaded port.

fb) The carriage of cargo under this Charter Party and under all Bills of Lading issued for the cargo shall be subject to the statutory provisions and other terms set forth or specified in sub-paragraphs (i) through (vii) of this clause and such terms shall be incorporated verbatim or be deemed incorporated by the reference in any such Bill of Lading. In such sub-paragraphs and in any. Act referred to therein, the word "carrier" shall include the Owner and the Chartered Owner of the Vessel.

(i) CLAUSE PARAMOUNT. This Bill of Lading shall have effect subject to the provisions of the Carriage of Goods by Sea Acts .o f the United States , approved April 16, 1936, except that if this Bill of Lading unissued at a place where any other Act. ordinance or legislation gives statutory effect to the International Convention fur the Unification of Certain Rules relating to Bills of Lading at Brussels, August 1924 . then this Bill of Lading shall have effect, subject to the provisions of suchAct, ordinance or legislation. The applicable Act. ordinance or legislation (hereinafter called the "Act" ) shall be deemed to be incorporated herein and nothing herein contained shall be deemed a surrender by the Owner of any of its rights or immunities or an increase of any of its responsibilities or liabilities under the Act. If any term of this Bill of Lading be repugnant to the Act to any extent, such term shall be void to that extent but no further.

(ii) JASON CLAUSE. In the event of accident, danger, damage or disaster before or after the commencement of the voyage, resulting from any cause whatsoever, whether due to negligence or not, for which, or for the consequence of which, the Owner is not responsible, by statute, contract or otherwise, the cargo shippers, consignees orowners of the cargo shall contribute with the Owner in General Average to the payment of any sacrifices, losses or expenses of a General Average nature that may be made or incurred and shall pay salvage and special charges incurred in respect of the cargo. If a salving ship is owned or operated by the Owner, salvage shall be paid for as fully as if the said salving ship or ships belonged to strangers. Such deposit as the Owner or his agents may deem sufficient to cover the estimated contribution ofthe cargo and. any salvage and special charges thereon shall, if required, be made by the cargo, shippers, consignees orowners of the cargo to the carrier before delivery.

(iii) GENERAL AVERAGE. General Average shall be adjusted, stated and settled according to York/Antwerp Rules 1950 and. as to matters not provided for by those rules, according to the laws and usages at the port of N e w York or at t h e portofLondon, whichever place is specified in Part I of this Charter. If a General Average statement is required, it shall be prepared at such port or place in the United States orUnited Kingdom, whichever country is specified in Part I of this Charter, as may be selected by the Owner, unless otherwise mutually agreed, by an Adjuster appointed by the Owner and approved by the Charterer. Such Adjuster shall attend to the sett lement and the col lection of the General Average, subject to customary charges. General Average Agreements and/or security shall be furnished by Owner and/or Charterer, and/or Owner and/or Consignee of cargo, if requested. Any cash deposit being made as security to pay General Average and/or salvage shall be remitted to the Average Adjuster and shall be held by him at his risk in a special account In a duly authorized and licensed bank at the place where the General Average statement is prepared.-

(iv) BOTH TO BLAME, If the Vessel comes into collision with another Ship as a result of (he negligence of the other ship and any act. neglect or default of the Master, mariner, pilot or the servants of the Owner in the navigation or in the management of the Vessel. the owners of the cargo carried hereunder shall indemnify the Owner against all loss or liability to the other or non-carrying ship or her owners in so far as such loss or liability represents loss of, or damage to. or any claim whatsoever of the owners of said cargo, paid or payable by the other or recovered by the.other or non-carrying ship or her owners as part of their claim against the carrying ship or Owner. The foregoing provisions Shall also apply where the owners, operators or those in charge of any ships or objects other than, or in addition to, the colliding ships or object are at fault in respect of a collision or contact.

(v) LIMITATION OF LIABILITY. Any provision of this Charter to the contrary notwithstanding, the Owner shall have the benefit of all limitations of, and exemptions from, liability accorded m the owner or chartered owner of vessels by any statute or rule or law for the time being in force.

(vi) WAR RISKS: (a) If any port of loading or of discharge named in this Charter Party or to which the Vessel may properly be ordered pursuant to the terms of the Bills of Lading be blockaded, or .

(b) If owing to any war. hostilities, warlike operations, civil war, civil commotions, revolutions or the operation of international law (a) entry to any such port of loading or of discharge or the loading or discharge of cargo at any such port be considered by the Master or Owners in his or their discretion dangerous or prohibited or (h) it be considered by the Master or Owners in his or their discretion dangerous or impossible for the Vessel to reach any such port of loading or discharge - the Charterers shall have the right to order the cargo or such part of it as may be affected to be loaded or discharged at any other safe port of loading or of discharge within the range of loading or discharging ports respectively established under the provisions of the Charter Tarty (provided such other port is not blockaded or that entry thereto or loading or discharge of cargo thereat is not in the Master's or Owner's discretion dangerous or prohibited). If in respect of a port of discharge no orders be received from the Charterers within 48 hours after they or their agents have received from the Owners a request for the nomination of a substitute port, the Owners shall then be at liberty to discharge the cargo at any safe port which they or the Master may in their or his discretion decide on (whether within the range of discharging.ports established under the provisions of the Charter Party or not) a na such discharge shall be deemed to be due provisions of the contract or contracts of affreightment so far as cargo so discharged is

concerned, in the event of the cargo being loaded or discharged at any such other port within the respective range of loading or discharging ports established under the provisions of the Charter Parly, the Charter Party shall be read in respect of freight and all other conditions whatsoever as if the voyage performed were that originally designated. In the event, however, that the Vessel discharges the cargo at a port outside the range of discharging ports established under the provisions of the Charter Party, freight shall be paid as Tor the voyage originally designated and all extra expenses involved in reaching the actual port of discharge and or discharging the cargo thereat shall be paid by the Charterers or Cargo Owners. In the latter event the Owners shall have a lien on the cargo for all such extra expenses.

(c) The Vessel shall have liberty to comply with any directions or recommendations as to departure, arrival, routes, ports of call, stoppages, destinations, zones, waters, delivery or in any otherwise whatsoever given by the government of the nations under whose flag the Vessel sails or any other government or local authority including any de facto government or local authority or by any person or body acting or purporting to act as or with the authority of any such government or authority or by any committee or person having; under the terms of the war risks insurance on the vessel the right to give any such directions or recommendations. If by reason of or in compliance with any such directions or recommendations, anything is done or is not done such shall not he deemed a deviation.

If by reason of or in compliance with any such direction or recommendation the Vessel does not proceed to the port or ports of discharge originally designated or to which she may have been ordered pursuant id the terms of the Bills of Lading, the Vessel may proceed to any safe port of discharge which the Master or Owners in his or their discretion may decide on and there discharge the cargo. Such discharge shall be deemed to be due fulfillment of the contract or contracts of affreightment and the Owners shall be entitled to freight at if discharge has been effected at the port or ports originally designated or to which the vessel may have been ordered pursuant to the terms of the Bills of Lading. All extra

expenses involved in reaching and discharging the cargo at any such other port of discharge shall be paid by the Charterers and/or Cargo Owners and the Owners shall have a lien on the cargo for freight and all such expenses.

(vii) DEVIATION CLAUSE. The Vessel shall have liberty to call at any ports in any order, to sail with or without pilots, to low or to be towed, to go to the assistance of vessels in distress, to deviate for the purpose of saving life or property or of landing any ill or injured person on board, and to call for fuel at any port or ports in or out of the regular course of the voyage. Any salvage shall be for the sole benefit of the Owner.

2 1. LIEN. The Owner shall have an absolute lien on the cargo for all freight, deadfreight, demurrage and costs, including attorney fees, of recovering the same, which Tien shall continue after delivery of the cargo into the possession of the Charterer, or of the holders of any Bills of Lading covering the same or of any storage man.

22. ' AGENTS. The Owner shall appoint Vessel's agents at all ports. 23. BREACH. Damages for breach of this Charter shall include all provable dam

ages, and all costs of suit and attorney tecs incurred in any action hereunder.

24. ARBITRATION. Any and all differences and disputes of whatsoever nature arising out of this Charter shall be put to arbitration in the City of New York or in the City of London whichever place is specified in Part I of this charter pursuant to the taws relating to arbitration there in force, before a board of three persons, consisting of one arbitrator to be appointed by the Ovmer, one by the Charterer, and one by the two so chosen. The decision of any two of the three on any point or points shall be final. Either party hereto may call for such arbitration by service upon any officer of the other, wherever he may be found, of a written notice specifying the name and address of the arbitrator chosen by the first moving party and a brief description of the disputes or differences which such part desires to put to arbitration. If the other party shall not, by notice served upon an officer of the first moving party within twenty days of the service of such first notice, appoint its arbitrator to arbitrate the dispute or differences specified, then the first moving party shall have the right without further notice to appoint a second arbitrator, w h o shall be a disinterested person with precisely the same force and effect-as if said second arbitrator has been appointed by the other party. In the event that the two arbitrators fail to appoint a third arbitrator within twenty days of the appointment of the second arbitrator, either arbitrator may apply to a Judge of any court of maritime jurisdiction in the city above-mentioned for the appointment of a third arbitrator, and the appointment of such arbitrator by such Judge on such application shall have precisely the same force and effect as if such . arbitrator had been appointed by the two arbitrators. Until such time as the arbitrators finally close the hearings either party shall have the right by written notice served on the arbitrators and on an officer of the other parly to specify further disputes or differences under this Charter for hearing and determination. Awards made in pursuance to this clause may include costs, including a reasonable allowance for attorney's fees, and judgement may be entered upon any award made hereunder in any Court having jurisdiction in the premises.

25. SUBLET. Charterer shall have the right to sublet the Vessel. However, Charterer shall always remain responsible for the fulfillment of this Charter in all its terms and conditions.

26. OIL POLLUTION CLAUSE. Owner agrees to participate in Charterer's program covering oil pollution avoidance. Such program prohibits discharge overboard of all oily water, oily ballast or oil in any form of a persistent nature, except under extreme circumstances whereby the safety of the vessel, cargo or life at sea would be imperiled.

Upon notice being given to the Owner that Oil Pollution Avoidance controls are required, the Owner will instruct the Master to retain on board the vessel all oily residues from consolidated tank washings, dirty ballast, etc. , in one compartment, after separation of all possible water has taken place. All water separated to be discharged overboard.-

If the Charterer requires that demulsifiers shall be used for the separation of oil/ water, such demulsifiers shall be obtained by the Owner and paid for by Charterer.

The oil residues will be pumped ashore at the loading or discharging terminal, either as segregated oil, dirty ballast or co-mingled with cargo as it is possible for Charterers to arrange. If it is necessary to retain the residue on board co-mingled with or segregated from the cargo to be loaded. Charterers shall pay for any deadweight so incurred.

Should it be determined that the residue is to be co-mingled or segregated on board, the Master shall arrange that the quantity of tank washings be measured in conjunction with cargo suppliers and a note of the quantity measured made in the vessel's ullage record.

The Charterer agrees to pay freight as per the terms of the Charter Party on any consolidated tank washings, dirty ballast, etc., retained on board under Charterer's instructions during the loaded portion of the voyage up to a maximum of 1% of the total deadweight' of the vessel that could be legally carried for such voyage. Any extra expenses incurred by the vessel at loading or discharging port in pumping ashore oil residues shall be for Charterer's account, and extra time, if any, consumed for this operation shall count as used lay time.

Issued July I987

Cods word for this Charter Party

"SHELLVOY 5"

Voyage Charter Party LONDON. 19

PREAMBLE I

IT IS THIS DAY AGREED between

of (hereinafter referred to as "Owners ' ' ) being owners disponent owners of the 3

motor/steam tank vessel called 4

(hereinafter referred to as' ' t h e vessel') 5

and of n

(A) Description of vessel

(hereinafter referred to as "Charterers")

that the service for which provision is herein made shall be subject to the terms and conditions of this charter which includes Part I and Part II In the event of any conflict between the provisions of Part I and Part II hereof, the provisions of Part I shall prevail

PART 1

Owners guarantee 'hat at the date hereof the vessel

(i) Is classed

(ii) Has a deadweight of of m

tonnes (1000 kg ) on a salt-water draft on assigned summer freeboard

tonnes (1000 kg 1 '% more or less in Owners (iii) Has a capacity available for the cargo of option

(iv) Is fully f itted with heating systems for all cargo tanks capable of maintaining cargo at a temperature of up to degrees Celsius.

(v) Has tanks coated as follows .

(vi) Is equipped with cranes-derricks capable of lifting to and supporting at the vessel s port and starboard manifolds submarine hoses of up to tonnes (1000 kg.) in weight

(vii) Has cargo pump* capable of discharging a full cargo within hours or maintaining 3 back pressure of at the vessel's manifold f provided shore facilities permit and the cargo doe* not

have a kinematic viscosity exceeding 600 centistokes at the discharge temperature required by Charterer*)

(VIII) Has or wil l have carried the Following three cargoes immediately prior to loading under this charter -

Last

(is) Has a crude oil washing system complying with the requirement* of the International Convention for the Prevention of Pollution from Ships 1973 as modified by the Protocol of 1978 ( ' ' M A R P O l 73/78 '') Has an operational inert gas system.

(xi) Has on hoard all papers and certificates required by any applicable law. in force as at the date of this charter, to enable the vessel to perform the charter service without any delay.

(xii) Is entered in P& I Club

(B) Position.' . Readiness

iC) Laydays

Now

Commencing Noon Local Time on

Terminating Noon Local Time on

Expected ready to load

(Commencement Date)

(Termination Date)

Issued July 1987

PARTI

" S H E L L V O Y 5 "

PAGE 2

(D) Loading . Port(s)/

Range

(E) Discharging Port(sV Range

(F) Cargo description

one or more ports at Charterers' option

one or more ports at Charterers' option

Charterers' option

42 43 44

45 46 47

48 49

Maximum temperature on loading degrees Celsius

(G) Freight rate At % of the rate for the voyage as provided for in the Worldwide Tanker Nominal Freight Scale current at the date of commencement of loading (hereinafter referred to as "Worldscale") per ton (2240lbs)/tonne (lOOOKg).

50

51

53

(H) Freight payable to

54 55

(I) Laytime

(J) Demurrage per day (or pro rata)

(K) ETAs

running hours

All radio messages sent by the master to Charterers shall be addressed to

56

57 58 59

60

(L) Special provisions

61 62

Signatures IN W I T N E S S W H E R E O F , the parties have caused this charter consisting of the Preamble, Parts 1 and II to be executed as of the day and year first above written. . . . . . . . . . ••--••.•

63 64

By 65

By 66

Issued July 1987 "SHELLV0Y5"

Condition of vessel

Cleanliness of tanks

Voyage

PART II 67

1. Owners shall exercise due diligence to ensure that from the time when the obligation to proceed to the 68 loading port(s) attaches and throughout the charter service - 69

(a) the vessel and her hull, machinery, boilers, tanks, equipment and facilities are in good order and 70 condition and in every way equipped and fit for the service required; and 71

(b). the vessel has a full and efficient complement of master, officers and crew; 72 and to ensure that before and at the commencement of any laden voyage the vessel is in all respects fit to carry the 73 cargo specified in Pan 1(F). 74

- r

2. . Whilst loading/carrying and discharging cargo the master shall at all times use due diligence to keep 75 the tanks, lines and pumps of the vessel clean for the cargo specified in Part 1(F). It shall be for the master alone to . 7 6 decide whether the vessel's tanks, lines and pumps are suitably clean. However, the decision of the master shall 77 be without prejudice to the right of Charterers, should any contamination or damage subsequently be found, to 78 contend that the same was caused by inadequate cleaning and/or some breach of this or any other Clause of this .."*.. 79 charter. 80

3. Subject to the provisions of this charter the vessel shall perform her service with utmost despatch and 81 shall proceed to such berths as Charterers may specify, in any port or ports within Part 1(D) nominated by 82 Charterers, or so near thereunto as she may safely get and there, always safely afloat, load a full cargo, but no: in 83 excess of the maximum quantity consistent with the International Load Line Convention for the time being in 84 force and, being so loaded, proceed as ordered on signing bills of lading to such berths as Charterers may specify 85 in any port or ports within Part 1(E) nominated by Charterers, or so near thereunto as she may safely get and 86 there, always safely afloat, discharge the cargo. 87

Charterers shall nominate loading and discharging ports, and shall specify loading and discharging berths, in 88 sufficient time to avoid delay or deviation to the vessel. Subject to the foregoing, and provided it does not cause 89 delay or deviation to the vessel. Charterers shall have the option of ordering the vessel to safe areas at sea for 90 wireless orders. 91

In this charter, "berth" means any berth, wharf, dock, anchorage, submarine line, a position alongside any 92 vessel or lighter or any other loading or discharging point whatsoever to which Charterers are entitled to order the 93 vessel hereunder, and "port" means any port or location at sea to which the vessel may proceed in accordance 94 with the terms of this charter. 95

Safe berth 4. Charterers' shall exercise due diligence to order the vessel only to ports and berths which are safe for the vessel and to ensure that transhipment operations conform to standards not less than those set out in the latest edition of ICS/OCIMF Ship-to-Ship Transfer Guide (Petroleum). Notwithstanding anything contained in this charter. Charterers do not warrant the safety of any port, berth or transhipment operation and Charterers shall not be liable for loss or damage arising from any unsafely if they can prove that due diligence was exercised in the giving of the order.

Freight 5. Freight shall be earned concurrently with delivery of cargo at the nominated discharging port or pons and shall be paid by Charterers to Owners without any deductions in United States Dollars at the rate(s) specified in Pan 1(G) on the gross Bill of Lading quantity as furnished by the shipper (subject to Clauses 8 and 40). upon receipt by Charterers of notice of completion of final discharge of cargo, provided that no freight shall be payable on any quantity in excess of the maximum quantity consistent with the International Load Line Convention for the time being in force.

If the vessel is ordered to proceed on a voyage for which a fixed differential is provided in Worldscale, such fixed differential shall be payable without applying the percentage referred to in Pan KG).

If cargo is carried between ports and/or by a route for which no freight rate is expressly quoted in Worldscale, then the parties shall, in the absence of agreement as to the appropriate freight rate. apply to Worldscale Association (London) Ltd., or Worldscale Association (NYC) Inc. for the determination of an appropriate Worldscale freight rate.

Save in respect of the time when freight is earned, the location of any transhipment at sea pursuant to Clause 26(2) shall not be an additional nominated port for the purposes of this charter (including this Clause 5) and the freight rate for the voyage shall be the same as if such transhipment had not taken place.

Dues and 6. Dues and other charges upon the vessel, including those assessed by reference to the quantity of cargo other charges loaded or discharged, and any taxes on freight whatsoever shall be paid by Owners, and dues and other charges

upon the cargo shall be paid by Charterers. However, notwithstanding the foregoing, where under a provision of Worldscale a due or charge is expressly for the account of Owners or Charterers then such due or charge shall be payable in accordance with such provision.

Loading and 7. The cargo shall be loaded into the vessel at the expense of Charterers and. up to the vessel's permanent discharging hose connections, at Charterers' risk. The cargo shall be discharged from the vessel at the expense of Owners cargo and. up to the vessel's permanent hose connections, at Owners' risk. Owners shall, unless otherwise notified by

Charterers or their agents, supply at Owners" expense ail hands, equipment and facilities required on board for mooring .and unmooring and connecting and disconnecting hoses for loading and discharging.

Deadweight 8 Charterers need not supply a full cargo, but if they do not freight shall nevertheless be paid as if the vessel had been loaded with a full cargo.

The term "full cargo" as used throughout this charter means a cargo which, together with any collected washings (as defined in Clause 40) retained on board pursuant to the requirements of MARPOL 73/78. fills the vessel to either her applicable deadweight or her capacity stated in Part I(A)(iii), whichever is less, while leaving sufficient space in the tanks for the expansion of cargo.

% 97 98 99

100 101

102 103 104 105 106 107

108 109

110 111 112 113

114 115 116

117 UK 119 120 121

122 123 124 125 I26

127 128

129

131 132

Shifting

Charterers" failure to give orders

9. Charterers shall have the right to require the vessel to shift at ports of loading and/or discharging from a loading or discharging berth within port limits and back to the same or to another such berth once or more often on payment of all additional expenses incurred. For the purposes of freight payment and shifting the places grouped in Port and Terminal Combinations in Worldscale are to be considered as berths within a single port. If at any time before cargo operations are completed it becomes dangerous for the vessel to remain at the specified berth as a result of wind or water conditions. Charterers shall pay all additional expenses of shifting from any such berth and back to that or any other specified berth within port limits (except to the extent that any fault of the vessel contributed to such danger).

Subject to Clause 14(a) and (c) time spent shifting shall count against laytime or if the vessel is on demurrage for demurrage.

10. If the vessel is delayed due to Charterers' breach of Clause 3 Charterers shall, subject to the terms hereof, compensate Owners in accordance with-Clause 15(1) and (2) as if such delay were time exceeding the lavtime.

133 134 135 136 137 138 139 140

141 142

143 144 145

Laydays/ Termination

The period of such delay shall be calculated 146 (i) from 6 hours after Owners notify Charterers that the vessel is delayed awaiting nomination of loading 147

pon until such nomination has been received by Owners, or 148 (ii) from 6 hours after the vessel gives notice of readiness at the loading port until commencement of 149

loading 150 as the case may be. subject always to the same exceptions as those set out in Clause 14. Any period of delay 151 in respect of which Charterers pay compensation pursuant to this Cause 10 shall be excluded from any 152 calculation of time for laytime or demurrage made under any other Clause of this charter. 153

Periods of delay hereunder shall be cumulative for each port, and Owners may demand compensation after 154 the vessel has been delayed for a total of 20 running days, and thereafter after each succeeding 5 running days of 155 delay and at the end of any delay. Each such demand shall show the period in respect of which compensation is 156 claimed and the amount due. Charterers shall pay the full amount due within 14 days after receipt of Owners' 157 demand. Should Charterers fail to make any such payments Owners shall have the right to terminate this charter 158 by giving written notice to Charterers or their agents, without prejudice to any claims which Charterers or 159 Owners may-have against each other under this charter or otherwise. 160

11. Should the vessel not be ready to load by noon local time on the termination date set out in Pan 1(C) 161 Charterers shall have the option of terminating this charter unless the vessel has been delayed due to Charterers' 162 change of orders pursuant to Clause 26. in which case the laydays shall be extended by the period of 163 such delay. 164

However, il Owners reasonably conclude that, despite the exercise of due diligence, the vessel will not be 165 ready to load by noun on the termination date. Owners may. as soon as they are able to state with reasonable 166 certainty a new date when the vessel will be ready, give notice to Charterers declaring the new readiness date and 167 asking Charterers to elect whether or not to terminate this charter. Unless Charterers within 4 days after such 168 notice or within 2 days after the termination date (whichever is earlier) declare this charter terminated. Part I( C) 169 shall be deemed to be amended such that the new readiness date stated shall be the commencement date and the 170 second day thereafter shall be the termination date. 171

Laytime

Notice of readiness/ Running time

The provision; of this Clause and the exercise or non-exercise by Charterers of their option to terminate shall not preiudice any claims which Charterers or Owners may have against each other.

12 The laytime lor loading, discharging and all other Charterers' purposes whatsoever shall be the number of running hours specified in Part 1( I). Charterers shall have the right to load and discharge at all times, including night, provided that they shall pay for all extra expenses incurred ashore.

13 (1)Subject to the provisions of Clauses 13(3) and 14. if the vessel loads or discharges cargo other than by transhipment at sea

(at T i m e at each loading or discharging port shall commence to run 6 hours after the vessel is in all respects ready to load or discharge and written notice thereof has been tendered by the master of Owners' agents to Charterers or their agents and the vessel is securely moored at the specified loading or discharging berth. However, if the vessel does not proceed immediately to such berth time shall commence to run 6 hours after (i) the vessel is lying in the area where she was ordered to wait or. in the absence of any such specific order, in a usual waiting area and (ii) written notice of readiness has been tendered and (iii) the specified berth is accessible. A loading or discharging berth shall be deemed inaccessible. only for so long as the vessel is or would be prevented from proceeding to it by bad weather, tidal conditions, ice. awaiting daylight pilot or tugs, or port traffic control requirements ( except those requirements resulting from the unavailability of such berth or of the cargo).

If Charterers fail to specifv a berth at any port, the first berth at which the vessel loads or discharges the cargo or any part thereof shall be deemed to be the specified berth at such port for the purposes of this Clause.

Notice shall not he tendered before commencement of laydays and notice tendered by radio shall qualify as written notice provided it is confirmed in writing as soon as reasonably possible:

(h) Time shall continue to run (i) until cargo hoses have been disconnected, or

172 173

174 175 176

177 178 179 180 181 182 183 184 185 186 187 188 189 190

191 192 193

194 195 196

197 198

( i i ) i l the vessel is delayed for Charterers' purposes for more than one hour after disconnection of cargo hoses, until the termination of such delay provided that if the vessel waits at any place other than the berth, time on passage to such other place, from disconnecting of hoses to remooring/anchorage at such other place, shall not count.

199 200 201 202

Suspension of time

Demurrage

Vessel inspection

Cargo inspection

Cargo measurement

Inert gas

Crude oil washing

(2) If the vessel loads or discharges cargo by transhipment at sea time shall count from the arrival or 20? the-vessel at transhipment area or from commencement of the laydays, whichever is later, and. subject 10 204 Clause 14{c), shall run until transhipment lias been completed and the vessels have-separated. 205

C3) Notwithstanding anything else in this Clause 13. if Charterers start loading or discharging the 206 vessel before time would otherwise start to run under this charter, time shall run from commencement of such 20" loading or discharging. 208

(4) For the purposes of this Clause 13 and of Clause 14 "time" shall mean laytime or time counting 20V for demurrage, as the case maybe. 210

14.- Time shall not count when 212

(a) spent on inward passage from the vessel's waiting area to the loading or discharging berth 213 specified by Charterers, even if lightening occurred at such waiting area; or 214

(b) spent in handling ballast except to the extent that cargo operations are carried on concurrently ' 215 and are not delayed thereby; or 21»

(c) lost as a result of 2!" (i) breach of this Charter by Owners; or 2!8 (ii) any cause attributable to the vessel~ including breakdown or inefficiency of the vessel: or 219 (iii) strike, lock-out. stoppage or restraint of labour of master, officers or crew of the vessel or 220

tug boats or pilot. 221

15. (1) Charterers shall pay demurrage at the rate specified in Part I(J). 222

If the demurrage rate specified in Part I(J) is expressed as a percentage of Worldscale such percentage shall 223 be applied to the demurrage rate applicable to vessels of a similar size to the vessel as provided in Worldscale or. 224 for the purpose of clause 10 and/or if this charter is terminated prior to the commencement of loading, in the 225 Worldwide Tanker Nominal Freight Scale current at the termination date specified in Part I{C). 22b

Demurrage shall be paid per running day or pro rata for part thereof for all time which, under the provisions 22" of this charter, counts against laytime or for demurrage and which exceeds the laytime specified in Par: If I) 22b Charterers' liability for exceeding the laytime shall be absolute and shall not in any case be subject to the 229 provisions of Clause 32. 230

(2) If. however, all or part of such demurrage arises out of or results from fire or explosion at ports of 231 loading and/or discharging in or about the plant of Charterers, shippers or consignees of the cargo (not being a 232 fire or explosion caused by the negligence or wilful act or omission of Charterers, shippers or consignees of 2 ." the cargo or their respective servants or agents), act of God. act of war. riot, civil commotion, or charterers 23-restraint of princes rulers or peoples, the rate of demurrage shall be reduced by half for such demurrage or such 235 part thereof. 236

(3) Owners shall notify Charterers within 60 days after completion of discharge if demurrage has 237 been incurred and any demurrage claim together with supporting documentation shall be submitted within 90 238 days after completion of discharge. If Owners fail to give notice of or to submit any such claim within the time 239 limits aforesaid. Charterers' liability for such demurrage shall be extinguished. 240;

16. Charterers shall have the right, but no duty, to have a representative attend on board the vessel at any 241 loading and/or discharging ports (except locations at sea) and the master and Owners shall co-operate to facilitate 242 his inspection of the vessel and observation of cargo operations. However, such right, and the exercise or 243 non-exercise thereof, shall in no way reduce the master's or Owners" authority over, or responsibility to 244 Charterers and third parties for, the vessel and every aspect of her operation, nor increase charteres 245 responsibilities to Owners or third parties for the same.- 246

17. Without prejudice to Clause 2 hereof. Charterers shall have the right to require inspection of the 247 • vessel's tanks at loading and/or discharging pons (except locations at sea) to ascertain the quantity and quality of 248 the cargo, water and residues on board. Depressurisation of the tanks to permit inspection and/or ullaging shall 249 be carried out in accordance with the recommendations in the latest edition of the International Safetv Guide tor 250 Oil Tankers and Terminals. Charterers shall also have the right to inspect and take samples from the bunker tanks 251 and other non-cargo .spaces. Any delay to the vessel caused by such inspection and measurement or associated 252 depressurising/repressurising of tanks shall count against laytime. or if the vessel is on demurrage, for demurrage. 253

18. The master shall ascertain the contents of ail tanks before and after loading and before and alter 254 discharging, and shall prepare tank-by-tank ullage reports of the cargo, water and residues on board which shall 255 be promptly made available to Charterers or their representative if requested. Each such ullage report shall show 256 actual ullage/dips, and densities at observed and standard temperature (15"Celsius). All quantities shall be 257 expressed in cubic metres at both observed and standard temperature. 258

19. The vessel's inert gas system (if any) shall comply with Regulation 62. Chapter 11-2 of the 1V7- Safety of 259 Life at Sea Convention as modified by the Protocol of 1978 and Owners warrant that such system shall be 260 operated in accordance with the guidance given in the IMO publication "Inert Gas Systems (1983)". Should the 261 inert gas system fail. Section 8 (Emergency Procedures) of the said IMO publication shall be strictly adhered to 262 and time lost as a consequence of such failure shall not count against laytime or, if the vessel is on demurrage. for 263 demurrage. 264 20. If the vessel is equipped for crude oil washing Charterers shall have the right to require the vessel to 265 crude oil wash those tanks in which the cargo is earned. If crude oil washing is required by Charterers or any 265 competent authority. any additional discharging time thereby incurred shall count against laytime or. if the vessel 266 is on demurrage, for demurrage, and the number of hours specified in Part I(A)(vii) shall be increased by 0.75 267 hours per cargo tank washed. 268

Ouarantine

Agency

Charterers" obligation at shallow draft port/ Lightening in port

Charterers' orders/ Change of orders Pan cargo transhipment

Healing of cargo

21. Any additional insurance on the cargo required because of the age of the vessel shall be for Owners' account

22. The vessel shall not be required to force ice or to follow icebreakers. If the master fjnds that a nominated port is inaccessible due to ice, the master shall immediately notify Charterers requesting revised orders and shall remain outside the ice-bound area; and if after arrival at a nominated port there is danger of the vessel being frozen in. the vessel shall proceed to the nearest safe and ice free position and at the same time request Charterers to give revised orders.

In either case if the affected port is (i) the first or only loading port and no cargo has been loaded. Charterers shall either nominate another

port, or give notice cancelling.this charter in which case they shall pay at the demurrage rate in part I (J) for the time from the master's notification aforesaid or from notice of readiness on arrival as the case maybe, until the time such cancellation notice is given;

(ii) a loading port and part of-the cargo has been loaded, Charterers shall cither nominate another port or order the vessel to proceed on the voyage without completing loading in which case Charterers shall pay for any deadweight arising therefrom;

(iii) a discharging port. Charterers shall either nominate another port or order the vessel to proceed to or return to and discharge at the nominated port. If the vessel is ordered to proceed to or return to a nominated port. Charterers shall bear the risk of the vessel being damaged whilst proceeding to or returning to or at such port, and the whole period from the lime when the master's request for revised orders is received by Charterers until the vessel can safely depart after completion of discharge shall count against laytime or, if the vessel is on demurrage, for demurrage.

If. as a consequence of Charterers revising orders pursuant to this clause, the nominated port(s) or the number or rotation of ports is changed freight, shall nevertheless be paid for the voyage which the vessel would otherwise have performed had the orders not been so revised, such freight to be increased or reduced by the amount by which, as a result of such revision of orders.

(a) the time used including any time awaiting revised orders (which shall be valued at the demurrage rate inPart I(J)),

(b) the bunkers consumed (which shall be valued at the bunker costs at the port at which bunkers were last taken)and

(c) the port charges for the voyage actually performed are greater or less than those that would have been incurred on the voyage which, but for the revised orders under this Clause, the vessel would have performed.

23. Time lost due to quarantine shall not count against laytime or for demurrage unless such Quarantine was in force at the time when the affected port was nominated by Charterers-

24. The vessel's agents shall be nominated by Charterers at nominated ports of loading and discharging

Such agents, although nominated by Charterers, shall be employed and paid by Owners.

25. (I) (a) If the vessel, with the quantity of cargo then on board, is unable due to inadequate depth of water in the port safely to reach any specified discharging berth and discharge the cargo there always safety afloat Charterers shall specify a location within port limits where the vessel can discharge sufficient cargo into vessels or lighters to enable the vessel safely to reach and discharge cargo at such discharging berth, and the vessel shall lighten at such location.

(b) If the vessel is lightened pursuant to Clause 25(1 )(a) then, for the purposes of the calculation of laytime and demur rage, the lightening place shall be treated as the first discharging berth within the port where such lightening occurs.

26. (1) If, after loading and/or discharging ports have been nominated. Charterers wish to vary such nominations or their rotation. Charterers may give revised orders subject to Part 1(D) and/or (E). as the case may be. Charterers shall reimburse Owners at the demurrage rate provided in Part I(J) for any deviation of delay which may result therefrom and shall pay at replacement price for any extra bunkers consumed.

Charterers shall not be liable for any other loss or expense which is caused by such variation unless promptly on receipt of the revised orders Owners notify Charterers of the expectation of such loss or expense in which case unless Charterers promptly revoke such orders. Charterers shall be liable to reimburse Owners for any such loss or expense proven.

(2) Subject to Cause 33(6), Charterers may order the vessel to load and/or discharge any part of [he cargo by transhipment at sea in the vicinity of any nominated port or en route between two nominated ports in which case Charterers shall reimburse Owners at the demurrage rate specified in Part I{J) for any- additional steaming time and/or delay which maybe incurred as a consequcnce of proceeding to and from the location at sea of such transhipment and, in addition. Charterers shall pay at replacement price for any extra bunkers consumed

27. If Charterers require cargo heating the vessel shall, on passage to and whilst at discharging port(s) maintain the cargo at the loaded temperature or at the temperature stated in Part I(A)(iv). whichever is the lower . Charterers may request that the temperature of the cargo be raised above or lowered below that at which it was loaded, in which event Owners shall use their best endeavours to comply with such request and Charterers shall pay at replacement price for any additional bunkers consumed and any consequential delay to the vessel shall count against laytime or, if the vessel is on demurrage, for demurrage.

270 271

272 273 274 275 276

277 278 279 280 281 282 283 284 285 286 287 288 289 290

291 292 293 294 295 296 297 298 299 300 301

302 303

304

305

306 307 308 309 310

311 312 313

314 315 316 317

318 319 320 321

322 323 324 325 326

327 328 329 330 331 332

ETA 28. Owners undertake that; unless Charterers require otherwise, the master shall: (a) advise Charterers by radio immediately on leaving the final port of call on the previous ,voyage or

within 48 hours after the time and date of this charter, whichever is the later, of (he time and date of the vessel's expected arrival at the first loading port or. if the loading range is in the Arabian Gulf, the time of her expected arrival off Quoin Island;

(b) confirm or amend such advice not later than 72 hours and again not later than 24 hours before the vessel is due at the first loading port or. in the case of a loading range in the Arabian Gulf, off Quoin Island;

(c) advise Charterers by radio immediately after departure from the final loading port. of the vessel's expected time of arrival at the first discharging port or the area at sea to which the vessel has been instructed to proceed for. wireless orders, and confirm or amend such advice not later than 72

'• hours and again not later than 24 hours before the-vessel is due at such port or area: (d) immediately radio any variation of more than six hours from expected times of arrival at loading

or discharging ports. Quoin Island or such area a t sea to Charterers: . . . (e) address all radio messages in accordance with Part!{K).

Owners shall be responsible for any consequences or additional expenses arising as a result of non-compliance with this Clause.

Packed cargo

Subletting/ Assignment

29. Charterers have the option of shipping products and/or general cargo in available dry cargo space, the quantity being subject to the master's discretion. Freight shall be payable at the bulk rate in accordance with Clause 5 and Charterers shall pay in addition all expenses incurred solely as a result of the packed cargo being carried. Delay occasioned to the vessel by the exercise of such option shall count against laytime or. if the vessel is on demurrage, for demurrage.

30. Charterers shall have the option of sub-chartering the vessel and.or of assigning this charter to any person or persons, but Charterers shall always remain responsible for the due fulfilment of all the terms and conditions of this charter.

Liberty

options

Jills of lading

31. The vessel shall be at liberty to tow or be towed, to assist vessels in all positions of distress, to call at any port or ports for bunkers, to sail without pilots, and to deviate for the purpose of saving life or property or for the purpose of embarking or disembarking persons spares or supplies by helicopter or for any other reasonable purpose.

32. (a) The vessel, her master and Owners shall not. unless otherwise in this charter expressly provided, be liable for any loss or damage or delay or failure arising or resulting from any act. neglect or default of the master, pilots, mariners or other servants of Owners in the navigation or management of the vessel: fire unless caused by the actual fault or privity of Owners: collision or stranding: dangers and accidents of the sea: explosion, bursting of boilers, breakage of shaft* or any latent defect in hull, equipment or machinery-, provided, however, that Part 1(A) and Clauses 1 and 2 hereof shall be unaffected by the foregoing. Further, neither the vessel, her master or Owners, nor Charterers shall, unless otherwise in this charter expressly provided, he liable lor any loss or damage or delay or failure in performance hereunder arising or resulting from act of God. act o! war. act of public enemies, seizure under legal process, quarantine restrictions, strikes, lock-outs, restraints of labour, nots, civil commotions or arrest or restraint of princes rulers or people.

(b) Nothing in this charter shall be construed as in any way restricting, excluding or waiving the right of Owners or of any other relevant persons to limit their liability under any available legislation or law

(c) Clause 32(a) shall not apply to or affect any liability of Owners or the vessel or any other relevant person in respect of

(i) loss of or damage caused to any berth, jetty, dock, dolphin, huoy. mooring line, pipe or crane or other works or equipment whatsoever at or near any port to which the vessel may proceed under this charter, whether or not such works or equipment belong to Charterers. or

(ii) any claim (whether brought by Charterers or any other person | arising out of ,my loss of or damage to or in connection with the cargo. Any such claim shall be subject to the Hague-Visby Rules or the Hague Rules.as the case maybe, which ought pursuant to Clause 37 hereof to have been incorporated in the relevant bill of lading (whether or not such Rules were so incorporated), or. if no such bill of lading is issued, to the Hague- Visby Rules.

33. (1) Subject to the provisions of this Clause Charterers may require the master to sign lawful hills of lading for any cargo in such form as Charterers direct.

(2) The signing of bills of lading shall be without prejudice to this charter and Charterers hereby indemnify Owners against all liabilities that may arise from signing bills of lading to the extent that ihe same impose liabilities upon Owners in excess of or beyond those imposed by this charter.

(3) All bills of lading presented to the master for signature, in addition to complying with the requirements of Clauses 35. 36 and 37. shall include or effectively incorporate clauses substantially similar to the terms of Clauses 22. 33(7) and 34.

(4) All bills of lading presented for signature hereundcr shall show a named port of discharge If when bills of lading are presented for signature discharging port(s) have been nominated hereunder, the discharging port(s) shown on such bills of lading shall be in conformity with the nominated port(s) It at the time of such presentation no such nomination has been made hereunder, the discharging port(s) shown on such hills of lading must be within Part 1(E) and shall be deemed to have been nominated hereunder by virtue of such presentation.

(5) Article III Rules 3 and 5 of the Hague-Visby Rules shall apply to the particulars included in the bills of lading as if Charterers were the shippers, and the guarantee and indemnity therein contained shall apply to the description of the cargo furnished by or on behalf of Charterers.

(6) Notwithstanding any other provisions of this charter. Owners shall not be obliged to comply with 402 any orders from Charterers to discharge all or part of the cargo - 403

(i) at any port other than that shown on the bills of lading (except as provided in Causes 22 or 404 34) and/or 405

(ii) without presentation of an-original bill of lading 406 unless they have received from Chanerers both written confirmation of such orders and an indemnity acceptable 407 to Owners. . 408

(7) The master shall not,be required or bound to sign bills of lading for any blockaded port or for any 409 port which the master or Owners in his or their discretion consider dangerous or impossible to enter or reach. 410

(8) Charterers hereby warrant that on each and every occasion that they issue orders under Clauses 411 22. 26.34 or 38 they will have the authority of the holders of the bills of lading to give such orders, and that such 412 bills of lading will not be transferred to any person who does not concur therein. 413

War risks 34. (1) If 414 (a) any loading or discharging port to which the vessel may properly be ordered under the 415

provisions of this charter or bills of lading issued pursuant to this charter be blockaded, or 416 (b) owing to any war, hostilities, warlike operation, civil commotions, revolutions, or the 417

operation of international law (i) entry to any such loading or discharging port or the loading 418 or discharging of cargo at any such port be considered by the master or Owners in his or their 419 discretion dangerous or prohibited or (ii) it be considered by the master or Owners in his or 420 their discretion dangerous or impossible or prohibited for the vessel to reach any such 421 loading or discharging port, 422

Charterers shall have the right to order the cargo or such part of it as may be affected to be loaded or discharged at 423 any other loading or discharging port within the ranges specified in Pan 1(D) or (E) respectively (provided such 424 other port is not blockaded and that entry thereto or loading or discharging of cargo thereat or reaching the same 425 is not in the master's or Owners' opinion dangerous or impossible or prohibited). 426

(2) If no orders be received from Charterers within 48 hours after they or their agents have received 427 from Owners a request for the nomination of a substitute port, then 428

(a) if the affected port is the first or only loading port and no cargo has been loaded, this charter 429 shall terminate forthwith; 430

(b) if the affected port is a loading port and part of the cargo has already been loaded. 431 the vessel may proceed on passage and Charterers shall pay for any deadweight so 432 incurred: 433

(c) if the affected port is a discharging port. Owners shall be at liberty to discharge the cargo at 434 any port which they or the master may in their or his discretion decide on (whether within 435 the range specified in Pan 1(E) or not) and such discharging shall be deemed to be due 436 fulfilment of the contract or contracts of affreightment so far as cargo so discharged is 437 concerned. 438

(3) If in accordance with Clause 34(1) or (2) cargo is loaded or discharged at any such other port. 439 freight shall be paid as for the voyage originally nominated, such freight to be increased or reduced by the amount 440

which, as a result of loading or discharging at such other port. 441 (a) the time on voyage including any time awaiting revised orders (which shall be valued at the 442

demurrage rate in Part I(J)). 443 lb) the bunkers consumed (which shall be valued at the bunker costs at the port at which 444

bunkers were last taken), and 445 (c) the port charges 446

for the voyage actually performed are greater or less than those which would have been incurred on the voyage 447 originally nominated Save as aforesaid, the voyage actually performed shall be treated for the purpose of this 448 Charier as if it were the voyage originally nominated. 449

(4) The vessel shall have liberty to comply with any directions or recommendations as to departure. 450 arrival, routes, ports of call, stoppages, destinations, zones, waters, delivery or in any otherwise whatsoever 451 given by the government of the nation under whose flag the vessel sails or any other government or local authority 452 including any de facto government or local authority or by any person or body acting or purporting to act as or 453 with the authority of any such government or authority or by any committee or person having under the terms of 454 the war risks insurance on the vessel the right to give any such directions or recommendations. If by reason of or in 455 compliance with any such directions or recommendations anything is done or is not done, such shall not be 456 deemed a deviation. 457

If by reason of or in compliance with any such directions or recommendations the vessel does not proceed to 458 the discharging port or ports originally nominated or to which she may have been properly ordered under the 459 provisions of this charter or bills of lading issued pursuant to this charter, the vessel may proceed to any 460 discharging port on which the master or Owners in his or their discretion may decide and there discharge the 461 cargo. Such discharging shall be deemed to be due fulfilment of the contract or contracts of affreightment and 462 Owners shall be entitled to freight as if discharging had been effected at the port or pons originally nominated or 463 ;o which the vessel may have been properly ordered under the provisions of this charter or bills of lading issued 464 pursuant to this charter. All extra expenses involved in reaching and discharging the cargo at any such other 465 discharging port shall be paid by Charterers and Owners shall have a lien on the cargo for all such extra expenses. 466

Both to blame clause

33. If the liability for any collision in which the vessel involved while performing this charter falls to be determined in accordance with the laws of the United States of America.the following clause which shall be included in all bills of lading issued pursuant to this charter shall apply.-

"If the vessel comes into collision with another vessel as a result of the negligence of the other vessel and any act. neglect or default of the master, mariner, pilot or the servants of the Carrier in the navigation or in the management of the vessel, the owners of the cargo carried hereunder will indemnify the Carrier against: all loss or liability to the other or non-carrying vessel or her owners in so far as such loss or liability, represents loss of. or damage to, or any claim whatsoever of the owners of the said cargo, paid or payable by the other or non-carrying vessel or her owners to the owners of the said cargo and set off. recouped or recovered by the other or non-carrying vessel or her owners as part of their.claim against the carrying vessel or the Carrier

The foregoing provisions shall also apply where the owners, operators or those in charge of any vessel or vessels or objects other than, or in addition to. the colliding vessels or object's are at fault in respect of a collision or contact."

General average/ New Jason Clause

clause paramount

36. General average shall be payable according to the York.'Antwerp Rules. 1974. and shall be adjusted in London, but should the adjustment be made in accordance with the law and practice of the United States of America, the following clause, which shall be included in all bills of lading issued pursuant to this charter, shall apply

"ln the event of accident, danger, damage or disaster before or after the commencement of the voyage, resulting from any cause whatsoever, whether due to negligence or not. tor which, or for the consequence of which, the Carrier is not responsible, by statute, contract or otherwise, the cargo, shippers, consignees or owners of the cargo shall contribute with the Carrier in general average to the payment of any sacrifices, losses or expenses of a general average nature that may be made or incurred and shall pay salvage and special charges incurred in respect of the cargo.

If a salving vessel is owned or operated by the Carrier, salvage shall be paid tor as fully as if the said salving vessel or vessels belonged to strangers. Such deposit as the Carrier or its agents may deem sufficient to cover the estimated contribution of the cargo and any salvage and special charges thereon shall, if required, be made by the cargo, shippers, consignees or owners of the cargo to the Carrier before delivery."

37. The following clause shall be included in all bills of lading issued pursuant to this charter -

-CLAUSE PARAMOUNT

Back loading

Bunkers

Oil pollution prevention

(1) Subject to sub-clause (2) hereof, this bill of lading shall be governed by. and have effect subject to. the rules contained in the International Convention for the Unification of Certain Rules relating to Bills of Lading signed at Brussels on 25th August 1924 (hereafter the "Hague Rules" las amended by the Protocol signed at Brussels on 23rd February 1968 (hereafter the "'Hague-Visby Rules"). Nothing herein contained shalt be deemed to be either a surrender by the Carrier of any of his rights or immunities, or an increase of an\ of his responsibilities or liabilities under the Hague-Visby Rules.

(2) If there is governing legislation which applies the Hague Rules compulsonlyto this hill of lading. to [he exclusion of the Hague-Visby Rules, then this bill of lading shall have effect subject to the Hague Rules Nothing herein contained" shall be deemed to be either a surrender by the Carrier of any of( his- rights, or immunities or an increase of any of his responsibilities or liabilities under the Hague Rules.

(3) If any term of this bill of lading is repugnant to the Hague-Visby Rules, or the Hague Rules it applicable, such term shall be void to that extent but no further.

(4) Nothing in this bill of lading shall be construed as in any way restricting, excluding or waiving the right of any relevant party or person to limit his liability under any available legislation and or law "

38. Charterers may order the vessel to load a part cargo at any nominated discharging port and to discharge such part cargo at a port(s) to be nominated by Charterers within the range specified in Part IIH) and within the rotation of the discharging ports previously nominated, provided that -such part cargo is of the description specified in Part 1(F) and that the master in his absolute discretion determines that this cargo can he loaded, segregated and discharged without risk of contamination by. or of. any other cargo remaining on board

Charterers shall pay a lump sum freight in respect of such part cargo caiculated at the demurrage rale specified in PartI(J)on any additional time used by the vessel as a result of loading, carrying or discharging such part cargo.

Any additional expenses, including port charges, incurred as a result of loading or discharging such part cargo shall be for Charterers' account.

39. Owners shall give Charterers or any other company in the Royal Dutch Shell (group of Companies first option to quote for the supply of bunker requirements for the performance of" this charter.

40. (1) Owners shall ensure that the master shall.-(a) complv with MARPOL 73"S including in particular and without limitation Regulation

Chapter II of the International Contention for the Prevention of Pollution from Ships 1973 (b) collect the drainings and any tank washings into a suitable tank or tanks and. alter maximum

separation of free water, discharge the bulk of' such water overboard. consistent with the above regulations: and

(c) [hereafter notify Charterers promptly of the amounts of oil and tree water so retained on board and details of any other washings retained on hoard from earlier voyages (together called the "collected washings").

{2) On being so notified. Charterers, in accordance with their rights under this Clause (which shall 532 • • include without limitation the right 10 determine the disposal of the collected washings), shall before the v e s s e l ' s . 533.

arrival at the loading berth (or if already arrived as soon as possible thereafter) give instructions as to how the 534 collected washings shall be dealt with. Owners shall ensure that the master on the vessel's arrival at the loading S3S berth (or if already arrived as soon as possible thereafter) shall arrange in conjunction with the cargo suppliers 536 for the measurement of the quantity of the collected washings and shall record the same in the vessel's ullage 537 record. 538

(3) Charterers may require the collected washings to be discharged ashore at the loading port, in 539 which case no freight shall be payable on them. 540

(4) Alternatively Charterers ma> require either that the cargo be loaded on top of the collected 541 washings and the collected washings be discharged with the cargo, or that they be kept separate from the cargo in 542 which case Charterers shall pay for any deadweight incurred thereby in accordance with Clause 8 and shall, if 543 practicable. accept discharge of the collected washings at the discharging port or ports. 544

In either case, provided that the master has reduced the free water in the collected washings to a minimum 545 consistent with the retention on board of the oil residues in them and consistent with sub-Clause (l)(a) above, 546 freight in accordance with Clause 5 shall be payable on the quantity of the collected washings as if such quantity 547 were included in a bill of lading and the figure therefor furnished by the shipper provided, however, that 548

(i) if there is provision in this charter for a lower freight rate to apply to cargo in excess of an 549 agreed quantity, freight on the collected washings shall be paid at such lower rate (provided 550 such agreed quantity of cargo has been loaded) and 551

(ii) if there is provision in this charter" for a minimum cargo quantity which is less than a full 552 cargo, then whether or not such minimum cargo quantity is furnished, freight on the 553 collected washings shall be paid as if such minimum cargo quantity had been furnished. 554 provided that no freight shall be pay able in respect of any collected washings which are kept 555 separate from the cargo and not discharged at the discharge port. 556

(5) Whenever Charterers require the collected washings to be discharged ashore pursuant to this 557 Clause. Charterers shall provide and pay for the reception facilities, and the cost of any shifting therefor shall be 558 tor Charterers' account. Any time lost discharging the collected washings and'or shifting therefor shall count 559 against laytime or. if the vessel is on demurrage, for demurrage. 560

TOVALOP 41 0wners warrant that the vessel. 561 (i) is a tanker owned by a Participating Owner in TOVALOP 562

and 563 (ii) is entered in the P&l Club stated in Part I(A)(xii) 564

and will so remain during the currency of this charter. 565

When an escape or discharge of Oil occurs from the vessel and causes or threatens to cause Pollution 566 Damage, or when there is the Threat of an escape or discharge of Oil (i.e. a grave and imminent danger of the 567 escape or discharge of Oil which, if it occurred, would create a serious danger of Pollution Damage, whether or 568 not an escape or discharge in fact subsequently occurs), then Charterers may. at their option upon notice to 569 Owners or master, undertake such measures as are reasonably necessary to prevent or minimise such Pollution 570 Damage or to remove the Threat, unless Owners promptly undertake the same. Charterers shall keep Owners 571 advised of the nature and result of any such measures taken by them and. if time permits, the nature of the 572 measures intended to be taken by them. Any of the aforementioned measures taken by Charterers shall be 573 deemed taken on Owners' authority and as Owners' agents, and shall be at Owners'expense excep: to the extent 574 that: ' 575

(11 any such escape or discharge or Threat was caused or contributed to by Charterers, or 576 (2) by reason of the exceptions set out in Article III. paragraph 2. of the 1969 International 577

Convention on Civil Liability for Oil Pollution Damage or any protocol there to. Owners are or. 578 had the said Convention applied to such escape or discharge or to the Threat, would have been. 579 exempt from liability for the same, or 580

(3) the cost of such measures together with all other liabilities, costs and expenses of Owners arising 581 out of or in connection with such escape or discharge or Threat exceeds the maximum liability 582 applicable to the vessel under TOVALOP as at the lime of such escape or discharge or threat. 583 save and insofar as Owners shall be entitled to recover such excess under either the 1971 584 International Convention on the Establishment of an International Fund for Compensation for 585 Oil Pollution Damage or under CRISTAL 586

PROVIDED ALWAYS that if Owners in their absolute discretion consider said measures should be 587 discontinued. Owners shall so notify Charterers and thereafter Charterers shall have no right to continue said 588 measures under the provisions of this Clause and all further liability to Charterers under this Clause shall 589 thereupon cease. 590

The above provisions arc not in derogation of such other rights as Charterers or Owners may have under this 591 charter or may otherwise have or acquire by law or any international convention or T O V A L O P . 592

The term "TOVALOP" means the Tanker Owner ' Voluntary Agreement Concerning Liability for Oil 593 Pollution dated 7th January 1969. as amended from time to time, and the term "CRISTAL" means the Contract 594 Regarding an Interim Supplement to Tanker Liability for Oil Pollution dated 14th January 1971. as amended 595 from time to time. The terms "Participating Owner". "Oil" and. "Pollution Damage" shall for the purposes of 596 this clause have the meanings ascribed to them in TOVALOP.

Lien 42. Owners shall have an absolute lien upon the cargo and alt subfreights for all amounts due under this 598 charter and the cost of recover) thereof including any expenses whatsoever arising from the exercise of such lien. 599

596 597

Law and ,43. (a) This charter shall be construed and the relations between the panics determined in accordance MX) litigation with the laws of England • .,., 601

(b) any dispute arising under this charter shall be decided by the English Courts to whose jurisdiction 602 • the parties hereby agree. 603

(c) Notwithstanding the foregoing, but without prejudice to any parly's right to arrest or maintain 604 the arrest of any maritime property, either party may. by giving written notice of election to the other party, elect 605 to have any such dispute referred to the arbitration of a single arbitrator in London in accordance with the 606 provisions of the Arbitration Act 1950. or any statutory modification or re-enactment thereof for the time being 607 in force. 608

(i) A party shall lose its right to make such an election only if: 609 (a) it receives from the other party a written notice of dispute which- . 610

(1) states expressly that a dispute has arisen out of this charter: 611 (2) specifies the nature of the dispute; and 612 (3) refers expressly to this clause 43(c) and: 613

(b) it fails to give notice of election to have the dispute referred to arbitration not later than 614 30 days from the date of receipt of such notice of dispute. 615

(ii) the parties hereby agree that either party may- 616 (a) appeal to the High Court on any question of law arising out of an award: 617 (b) apply to the High Court for an order that the arbitrator state the reasons for his award, 618 (c) give notice to the arbitrator that a reasoned award is required, and 619 (d) apply to the High Court to determine any question of" law arising in the course of the 620

reference. 621

(d) It shall be a condition precedent to the right of any party to a stay of any legal proceedings in 622 which maritime property has been, or may be. arrested in connection with a dispute under this charter, that that 623 party furnishes to the other party security to which that other party would have been entitled in such legal 624 proceedings in the absence of a stay. 625

" instruction 44. The side headings have been included in this charter tor convenience of reference only and shall in no 626 way affect the construction hereof. 627

BPVOY4

VOYAGE CHARTER PARTY

© BP SHIPPING LIMITED 1st Edition-June 1998

Registered in England and Wales: No. 140132 Office:- Breakspear Park, Breakspear Way, Hemel Hempstead, Herts, HP2 4UL

INDEX TO CLAUSES - BFVOY4

Clause Page

1. Condition of Vessel 5 2. - Chartering Questionnaire 5 3. Loading/Compliance with Charterers' Voyage Orders 5 4. Estimated Times of Arrival 6 5. Loading and Discharge Port/Shifting 7 6. Notice of Readiness ("NOR") 7 7. Laytime/Demurrage 8 8. Cargo Transfers 9 9. Documentation 11 10. Drugs & Alcohol Policy 11 11. Cleaning of Vessel's Tanks, Pumps and Pipelines 11 12. Inert Gas System ("IGS") 12 13. Closed Cargo Operations 12 14. Oily Residues/Clean Ballast 12 15. Agency 13 16. Cancellation 13 17. Half Laytime/Half Demurrage/Force Majeure 14 18. Suspension of Laytime/Demurrage 14 19. Loading and Discharge of Cargo and Crude Oil Washing and Stripping 15 20. Claims Time Bar 18 21. Slack Tanks/Even Keel 18 22. Revised Charterers' Voyage Orders for Loading or Discharge Ports 19 23. Vessel/Cargo Inspections/Bunker Surveys 19 24. Maintenance of Cargo Temperature 20 25. Cargo Heating 20 26. Liberty 21 27. Traffic Separation and Routeing 21 28. Ice on Voyage and Ice at Loading and Discharge Ports 21 29. Quarantine 22 30. Bills of Lading and Indemnities 22 31. Freight Rate 23 32. Address Commission 24 33. Cargo Retention 24 34. Dues and Other Charges 24 35. Cargo Insurance 25 36. Coding of Cargo Documentation - US Customs Regulations 25 37. USCG Certificate of Financial Responsibility/USCG Regulations 26 38. Exceptions 26 39. War Risks 26 40. Both-to-Blame Collision 28 41. General Average 29 42. New Jason 29 43. Clause Paramount 29 44. Oil Pollution Insurance 29 45. Oil Pollution Prevention 30 46. Lien 30 47. Sub-Letting 31 48. Administration 31 49. Law 31

1

Codeword for this Charterparty "BPVOY4"

VOYAGE CHARTER PARTY . -

1 Date :

2 It is this day agreed between

3 of ; :

4

5 ("Owners") being owners/disponent owners of the motor/steam tank vessel (delete as

6 applicable) called \ ; ("Vessel")

7 and

8 of

9 \ : ;

10 ("Charterers") that the service for which provision is herein made shall be subject to the 11 terms and conditions of this Charter which comprises PART 1 and PART 2 and the "BP 12 Shipping Questionnaire" (which term shall mean the document attached as Appendix 1 13 of this Charter or such subsequent editions of the BP Shipping Questionnaire as may 14 be correct as at the date of this Charter).

15 Unless tbe context otherwise requires, words denoting tbe singular include the plural 16 and vice versa.

17 In tbe event of any conflict between tbe provisions of PART 1 and PART 2 of this 8 Charter, the provisions of PART 1 shall prevail

19 In the event of any conflict between the provisions of PART 1 or PART2 of this Charter 20 and any provisions in the BP Shipping Questionnaire, the provisions of PART 1 or 21 PART 2 of this Charter shall prevail

9

22 P A R T I

23 A. Name of Vessel ; : ;

24 B. Description of Vessel 25 Owners undertake that the Vessel conforms to the following description:-

26 (1) Summer Deadweight (SDWT) on assigned summer freeboard Tonnes

27 (2) Salt Water draught (on SDWT) Metres

28 (3) Flag ' .

29 (4) Year Built :

30 (5) Length Overall Metres

31 (6) Beam ' Metres

32 (7) Cargo tank capacity at 98% excluding slop tanks Cu. Metres

33 (8) Capacity of slop tanks at 98% Cu. Metres

34 (9) . T h e Vesse l is (delete as applicable) Segregated Ballast Tanker (SBT)/Clean Ballast Tanker (CBT)

3 5 (10). Crude Oil "Washing (COW) (delete as applicable] YES/NO

36 (11) Inert Gas System (IGS) (delete as applicable) YES/NO

37 (12) Closed Cargo Operations (delete as applicable) YES/NO

38 . (13) The Vessel has (delete as applicable) Double Bottom/Double Sides

39 (14) Tonnes Per Centimetre Immersion (TPC) Tonnes

40 (15) Bow to Centre of Manifold (BCM) Metres

41 (16) Derricks/Cranes - Number and Capacity.; :

42 __ 43 , 44 (17) Tongue Type Bow Chain Stoppers:-

45 (a) Number _

46 (b) Safe Working Load Tonnes

47 (c) Nominal Diameter of Chain Millimetres

48 (18) Keel to Top of Mast (KTM) . Metres

49 (19) Tank Coatings (Type) : :

50 (20) Heating Coils (Type) '.

51 (21) Classification Society and Class Notation '.

52 (22) Gross Tonnage (GT) \ [ Tonnes

53 (23) Suez Canal Net Registered Tonnage (SCNRT) Tonnes

54 (24) Panama Canal Net Registered Tonnage (PCNRT) ; Tonnes

55 (25) Charter Speed (weather and safe navigation permitting) Knots ("Charter Speed")

56 (26) Maximum Speed (weather and safe navigation permitting) Knots ("Maximum Speed")

57 (27) Last Cargoes:- (a) Last

58 (b) Second Last ; , .

59 '(c) Third" Last :

60 C. Cargo Quantity '

61

PARTI

j

99 PART 2

100 1. CONDITION OF VESSEL

101 Owners shall, before, at the commencement of, and throughout the voyage carried 102 out hereunder, exercise due diligence to make and maintain the Vessel, her tanks, 103 pumps, valves and pipelines tight, staunch, strong, in good order and condition, in 104 every way fit for the voyage and fit to carry the cargo stated in Sections C and D of 105 PART 1, with the Vessel's machinery, boilers and hull in a fully efficient state, and 106 with a full complement of Master, officers and crew who are fully qualified (as 107 evidenced by internationally recognised certification and, where applicable, 108 endorsements), and are experienced and competent to serve in the capacity for 109 which they are hired. Owners undertake that the Vessel shall be operated in 110 accordance with the recommendations set out in the 1996 Edition of ISGOTT, as 111 amended from time to time.

112 2. CHARTERING QUESTIONNAIRE

113 2.1 Prior to agreement being reached between Owners and Charterers on the terms 114 and conditions of this Charter, Owners have either:-

115 2.1.1 completed and submitted, or have authorised their brokers to complete 116 and submit, the BP Shipping Questionnaire; or

117 , 2.1.2 confirmed, or have authorised their brokers to confirm, in writing to 118 Charterers that each and even' response given by Owners in the BP 119 Shipping Questionnaire last completed and submitted to Charterers in 120 respect of the Vessel remains correct and accurate in every particular,

121 in each case on the date Stated in Section M of PART 1.

122 2.2 Notwithstanding the date on which the BP Shipping Questionnaire was last 123 completed by Owners and submitted to Charterers in respect of the Vessel, it is 124 a condition of this Charter that the responses in the BP Shipping Questionnaire 125 are correct as at the date hereof. If any response proves to be incorrect, and as 126 a consequence Charterers are likely to. or do, suffer prejudice or are likely to, 127 or do, incur loss, damage, cost or expense, Charterers shall be entitled either:-

128 2.2.1 to cancel this Charter forthwith without prejudice to any other rights 129 available to them under this Charter or otherwise under English law; or

130 2.2.2 to recover, by deduction from freight or otherwise, the said loss, damage, 131 cost and expense.

132 3. LOADING/COMPLIANCE WITH CHARTERERS' VOYAGE ORDERS

133 3.1 Subject to the provisions of this Charter the Vessel shall proceed to the loading 134 . port (the term "port" shall include any port, berth, dock, loading or discharging 135 anchorage or offshore location, submarine line, single point or single buoy 136 mooring facility, alongside vessels or lighters, or any other place whatsoever as 137 the context requires) stated in Section E of PART 1, or to such other port 138 (always within the Ranges stated in Section E of PART 1) as is separately or 139 subsequently identified in Charterers' Voyage Orders (which term shall mean 140 any written instruction issued by Charterers in respect of the Vessel at any time 141 during the period of this Charter, including any amendments, corrections or 142 revisions thereto), or so near thereto as she may safely reach and there load the 143 cargo stated in Sections C and D of PART 1 subject to any clarification of cargo 144 loading instructions as may be provided in Charterers' Voyage Orders.

145 3.2 Owners undertake that the Vessel is able to load, carry and discharge the 146 quantities, grades and segregations of cargo stated in Sections C and D of PART 147 l without loading on top of tank washings ("slops'). Charterers shall not be

5

148 liable for any loss, damage (including deadfreighu, cost or expense incurred by 149 Owners by reason of the Vessel being unable to load in accordance with this 150 undertaking. Loading on top of slops shall not be .permitted without 151 Charterers' prior agreement in writing.

152 The cargo loaded on board the Vessel shall not exceed the quantity which she 153 can reasonably stow and carry over and above her equipment and provisions 154 and shall.in any case not exceed the quantity permitted by the International 155 Load Line Convention, 1966, or any modification or amendment thereof as may 156 be applicable to the voyage to be performed hereunder.

157 3-3 Owners undertake that the Vessel shall, upon completion of loading the cargo, 158 proceed at the speed stated in Section B.25 of PART 1 ("Charter Speed"), or at 159 such other speed, not exceeding the speed stated in Section B.26 of PART 1 160 ("Maximum Speed"), as may be stated in Charterers' Voyage Orders, to the 161 discharge port stated in Section F of PART 1, or to such other port or location 162 permitted under this Charter, in accordance with Charterers' Voyage Orders, or 163 so near there to as she may safely reach, and deliver the cargo in consideration 164 of the payment of freight as provided in Clause 31.

165 3.4 Charterers shall have the right at any time during the voyage to instruct Owners 166 to adjust the Vessel's speed. Charterers shall not instruct Owners to increase 167 . the Vessel's speed such as to require the Vessel to proceed in excess of the 168 Maximum Speed. If Owners increase the speed of the Vessel in accordance 169 with Charterers' Voyage Orders, any increase in the freight rate consequent 170 thereon shall be calculated in accordance with the Example set out in Clause 171 31.

172 3.5 If the Vessel fails to maintain Charter Speed, or Owners fail to comply with any 173 instructions in Charterers' Voyage Orders requiring an increase of speed 174 pursuant to this Clause 3, Owners shall, subject to Clause 38, be liable for all 175 loss, damage, cost and expense arising as a direct consequence thereof save to 176 the extent that Owners can prove that such failure was attributable either to 177 adverse weather conditions and sea state or to the requirements for the safe 178 navigation of the Vessel. Charterers shall be entitled to deduct any such loss, 179 damage, cost and expense from any demurrage due to Owners hereunder 180 without prejudice to any other rights available to Charterers under this Charter 181 or otherwise under English law. 182 4. ESTIMATED TIMES OF ARRIVAL

i63 4.1 If the Master fails to comply.with any of the following provisions any delay 184 resulting therefrom, either at the loading or discharge port, shall not count as 185 laytime or, if theVessel is on demurrage, as demurrage and Owners shall be 186 responsible for any additional loss, damage, cost and expense incurred by 187 Charterers arising from such "non-compliance.

188 4.2 The Master shall send messages by telex to Charterers, the Agents (which term 189 wherever used in this Charter shall mean the Vessel's agents under Clause 15) 190 and to any other parties as required by Charterers (hereafter referred to 191 collectively as the "ETA Notify Parties"), advising the date and estimated time of 192 the Vessel's arrival ("ETA"). Such messages shall be sent upon the Vessel's 193 sailing from the last discharge port and seven (7) days and seventy-two (72), 194 forty-eight (48) and twenty-four (24) hours prior to the Vessel's ETA at each 195 loading port. If the Vessel is at sea or elsewhere when ordered by Owners to 196 proceed to a loading port the Master shall, if the Vessel is less than seven (7) 197 days or seventy-two (72), forty-eight (48) or twenty-four (24) hours from that 198 loading port, immediately notify- the ETA Notify Parties of the Vessel's ETA at 199 that loading port. Thereafter, the Master shall advise the ETA Notify Parties of 200 the Vessel's ETA at such of the times as aforesaid as are applicable or 201 immediately provide them with such other ETAs as Charterers may require.

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202 4.3 The Master shall send messages by telex to the ETA Notify Parties advising the 203 Vessel's ETA at each discharge port, together with information as to the Vessel's 204 expected arrival draught on even keel, immediately upon the Vessel leaving the 205 final loading port and thereafter, where applicable, seven (7) days, seventy-two 206 (72), forty-eight (48) and twenty-four t24) hours prior to the Vessel's ETA at 207 each discharge port or immediately provide the ETA Notify Parties with such 208 other ETAs as Charterers may require.

209 4.4 The Master shall also advise the ETA Notify Parties by telex of any variation of 210 more than six (6) hours, in estimated times of arrival at the loading and/or 211 discharge ports.

212 4.5 Charterers may require Owners to provide them with copies of all telexes 213 (showing answerbacks) to be sent under this Clause 4 and Owners shall 214 promptly comply with such requirement.

215 5. LOADING AND DISCHARGE PORT/SHIFTING

216 5.1 The Vessel shall be loaded and discharged at any port in accordance with 217 • Charterers' Voyage Orders. Before instructing Owners to direct the Vessel to 218 any port, Charterers shall exercise due diligence, to ascertain that the Vessel can 219 always lie safely afloat at such port, but Charterers do not warrant the safety of 220 any port and shall be under no liability in respect thereof except for loss or 221 damage caused by Charterers' failure to exercise due diligence.

222 5.2 Charterers shall have the option of instructing Owners to load the Vessel at 223 more than one berth at each loading port and to discharge at more than one 224 berth at each discharge port in which event Owners shall, in the first instance, 225 pay expenses arising from any of the following movements of the Vessel:-

226 5.2.1 unmooring at. and pilotage and towage off, the first loading or discharge 227 berth;

228 5.2.2 mooring and unmooring at, and pilotage and towage on to and off, any 229 intermediate loading or discharge berth; and

230 5.2.3 mooring at, and pilotage and towage on to, the last loading or discharge 231 berth.

232 Charterers shall reimburse Owners in respect of expenses properly incurred, 233 arising from any of the aforementioned movements, upon presentation by 234 Owners of all supporting invoices evidencing prior payment by Owners.

235 5-3 Charterers shall reimburse Owners in respect of any dues and/or other charges 236 incurred in excess of those which would have been incurred if all the cargo 237 required to be loaded or discharged at the particular port had been loaded or 238 discharged at the first berth only. Time used on account of shifting shall count 239 as laytime or, if the Vessel is on demurrage, as demurrage, except as otherwise 240 " provided in Clauses 17 and 18.2.

241 5.4 For the purpose of the payment of freight, the places grouped in the section 242 "Port and Terminal Combinations", in the "New Worldwide Tanker Nominal 243 Freight Scale" as amended from time to time ("Worldscale"), shall be considered .244 as berths within a single port and Charterers shall pay shifting expenses in 245 accordance width the provisions of this Clause 5:

246 6. NOTICE OF READINESS ("NOR")

247 6.1 Upon arrival of the Vessel at each loading or discharge port the Master or 248 Agents shall tender NOR to Charterers or to their order when the Vessel is 249 ready in all respects to carry out Charterers' orders in accordance with the 250 provisions of this Charter. Such NOR may be tendered either by letter, telex,

7

251 facsimile or telephone (but if NOR is tendered by facsimile or telephone it shall 252 subsequently be confirmed promptly by telex). Owners shall provide 253 Charterers with an NQR. Certificate signed by the Master" and a Terminal 254 representative in respect of each port at which the Vessel loads or discharges.

255 6.2 NOR shall not be tendered, nor shall the Vessel proceed to berth, prior to the 256 Commencement Date stated in Section G of PART 1 without Charterers' prior 257 agreement in writing.

258 6.3 Notwithstanding tender of a valid NOR by the Vessel such NOR shall not be 259 effective, or become effective, for the purposes of calculating laytime, or if the 260 Vessel is on demurrage, demurrage unless and until the following conditions 261 have been met:-

262 6.3-1 in the case of the Vessel proceeding directly to the loading or discharging 263 place, she is securely moored and her gangway, if it is to be used, is in 264 place; or

265 6.3-2 in the case of the Vessel not berthing upon arrival and being instructed to 266 anchor she has completed anchoring at an anchorage where vessels of

7 her type customarily anchor at the port or, if she has been instructed to 268 wait, she has reached the area within the port where vessels of her type 269 customarily wait; and

270 6.3.3 free pratique has been granted or is granted within six (6) hours of the 271 Master tendering NOR. If free pratique is not granted within six (6) hours 272 of the Master tendering NOR, through no fault of Owners, Agents, or 273 those on board the Vessel, the Master shall issue a protest in writing 274 ("NOP") to the port authority and the facility at the port ("Terminal") 275 failing which laytime or, if the Vessel is on demurrage, demurrage shall 276 only commence when free pratique has been granted; and

277 6.3-4 in the case of calls at US ports, a US Coast Guard Tanker Vessel 278 Examination Letter( "TVEL") has been issued, or in the case of calls at 279 non-US ports where any similar certificate is required to be issued by a 280 state authority at those ports prior to loading or discharging of cargo, 281 such certificate has been issued.

282 7. IAYTIME/DEMURRAGE

283 7.1 Charterers shall be allowed the number of hours stated in Section I of PART 1, 284 together with any period of additional laytime arising under Clause 7.3.1, as 285 laytime for loading and discharging and for any other purposes of Charterers in 286 accordance with the provisions of this Charter.

287 7.2 Sundays and holidays shall be included in respect of laytime for loading and 288 discharging, unless loading or discharging on the Sunday or holiday in question 289 is prohibited by law or regulation at the loading or discharge port. Charterers 290 shall have the right to require the Vessel to load and discharge during the 291 night, unless loading or discharging at night is prohibited by law or regulation 292 at the loading or discharge port.

293 7.3 Subject as provided elsewhere in this Charter-

294 7.3-1 laytime for the purposes of loading shall not commence before 0600 295 hours local time on the Commencement Date stated in Section G of PART 296 1, unless with Charterers' prior agreement in writing, in which event 297 laytime shall commence when the Vessel commences loading. If the 298 Vessel, with Charterers' prior agreement in writing, has commenced 299 loading prior to 0600 hours local time on the Commencement Date, then 300 the time from the commencement of loading to 0600 hours local time on 301 the Commencement Date shall constitute additional laytime.

302 7.3-2 Laytime or. if the Vessel is on demurrage, demurrage shall commence, at 303 each loading and each, discharge port, upon the expiry of six (6) hours 304 after a valid NOR has become effective as determined under Clause 6.3, 305 berth or no berth, or when the Vessel commences loading, or 306 discharging, whichever first occurs.

307 7.3.3 Laytime or, if the Vessel is on demurrage, demurrage shall run until the 308 cargo hoses have been finally disconnected upon completion of loading 309 or discharging, and the Master shall procure that hose disconnection is 310 effected promptly; provided always that if the Vessel is detained solely 311 for the purposes of awaiting cargo documents at loadport for more than 312 three (3) hours beyond the final disconnection of cargo hoses, laytime or 313 if the Vessel is on demurrage, demurrage shall recommence after such 314 period of three (3) hours and terminate upon the completion of cargo 315 documentation. If, after completion of loading or discharging, the Vessel 316 is required to proceed to an anchorage for Charterers' purposes, then the 317 time spent moving from the berth to the anchorage shall not count as 318 part of the period of three (3) hours referred to above or as laytime or, if 319 the Vessel is on demurrage, as demurrage. 320 7.4 . Charterers shall pay demurrage at the rate stated in Section j of PART 1 per 321 running day, and pro rata for part of a running day, for all time that loading 322 and discharging and any other time counting as laytime exceeds laytime under 323 this Clause 7. If, however, demurrage is incurred by reason of the causes 324 specified in Clause 17, the rate of demurrage shall be reduced to one-half of 325 the rate stated in Section J of PART 1 per running day. or pro rata for part of a 326 running day, for demurrage so incurred.

327 8. CARGO TRANSFERS

328 8.1 Charterers shall have the option of transferring the whole or part of the cargo 329 (which shall include topping-off and lightening) to or from any other vessel 330 including, but not limited to, an ocean-going vessel, barge and/or lighter (the 331 Transfer Vessel). Such transfers may take place at an In-port Transfer 332 Position, an Additional Port Transfer Position and/or a Transshipment Area, 333 which terms shall have the following meanings when used in this Charter-

334 8:1.1 "ln-port Transfer Position":-335 A position within a nominated loading or discharge port within the 336 Ranges stated in Sections E and F of PART 1 where part of the cargo is 337 transferred to or from a Transfer Vessel, provided that cargo operations 338 other, than transfers to or from Transfer Vessels also take place within 339 this port.

340 8.1.2 "Additional Port Transfer Position":-341 A position at a port in the Ranges stated in Sections E and F of PART 1, 342 or en route thereto, where part of the cargo is transferred to or from a 343 Transfer Vessel, provided that the only cargo operations taking place at 344 this port are transfers to or from Transfer Vessels, but the position is not 345 the first or sole loading position or last or sole discharge position under 346 this Charter.

347 8.1.3 "Transshipment Area":-348 A position at a port in the Ranges stated in Sections E and F of PART 1, 349 where the whole or part of the cargo is transferred to or from a Transfer 350 . Vessel, provided that the only cargo operations taking place at this port 351 are transfers to or from Transfer Vessels, and the position is the first or 352 sole loading position or last or sole discharge position under this Charter.

353 . A l l transfers of cargo to or from Transfer Vessels shall be carried out in 354 accordance with the recommendations set out in the latest edition of the

9

355 "ICS/OCIMF Ship to Ship Transfer Guide (Petroleum/. Owners undertake that 356 the Vessel and her crew shall comply with such recommendations, and 357 similarly Charterers undertake that the Transfer Vessel and her crew shall 358 comply with such recommendations. Charterers shall provide and pay for all 359 necessary equipment including suitable fenders and cargo hoses. Charterers 360 shall have the right, at their expense, to-appoint supervisory personnel to 361 attend on board the Vessel, including a mooring master, to assist in such 362 transfers of cargo.

363 8.2 In-port Transfer Position. 364 An In-port Transfer Position shall not constitute • an additional loading or 365 discharge port for the purposes of calculating freight and the freight rate for the 366 voyage shall be the same as if no cargo transfer at such In-port Transfer 367 Position had taken place. If the Vessel moves from an In-port Transfer Position 368 to berth, or vice versa, such movement shall not be deemed to constitute 369 shifting under Clause 5. Charterers shall reimburse Owners for any additional 370 port costs incurred by Owners in complying with Charterers' instructions under 371 this Clause 8.2.

372 Subject to the exceptions and exclusions of laytime and/or demurrage found '3 elsewhere in this Charter, including but not limited to those under Clauses 17

374 and 18, the time used at an In-port Transfer Position shall count as laytime or, 375 if the Vessel is on demurrage, as demurrage. If an In-port Transfer Position is 376 the first position at which loading or discharge takes place within that port then 377 laytime shall commence in accordance with Clauses 7.3.1 and 7.3-2. If an In-378 port Transfer Position is the last position at which loading or discharge takes 379 place within that port then laytime shall end when unmooring has been 380 completed and fenders have been removed from the Vessel.

381 83 Additional Port Transfer Position. 382 Except for the purposes of calculating laytime and/or demurrage, the Additional 383 Port Transfer Position shall not constitute an addituonaloading or discharge 384 port and the freight rate for the voyage shall be the same as if no cargo transfer 385 at such Additional Port Transfer Position had taken place.

386 Subject to the exceptions and exclusions of laytime and/or demurrage found 387 elsewhere in this Charter (save that the provisions of Clause 18.1 shall not 388 apply to this Clause 8.3), the time used at an Additional Port Transfer Position 389 shall count as laytime or, if the Vessel is on demurrage, as demurrage. Laytime 390 or, if the Vessel is on demurrage, demurrage, shall commence when a valid

91 NOR has been tendered at the Addidonal Port Transfer Position and has 392 become effective as determined under Clause 6.3, and shall end when 393 unmooring has been completed and fenders have been removed from the 394 Vessel. For this purpose Charterers shall not have the benefit of the period of 395 six (6) hours provided in Clause 7.3.2.

396 Any additional period by which the steaming time taken to reach the next 397 loading or discharge port via an Additional Port Transfer Position exceeds the 398 . time that should have been taken had the Vessel proceeded to the next port 399 directly shall count as laytime or, if the Vessel is on demurrage, as demurrage. 400 Such additional period shall be the time required for the Vessel to steam the 401 additional distance at the average speed actually achieved by the Vessel during 402 the voyage or the Charter Speed as stated in Section B.25 of PART 1, whichever 403 is the higher.

404 Charterers shall pay Owners for additional bunkers consumed for steaming the 405 additional distance at the price paid by Owners, net of all discounts and 406 rebates, for the last bunkers lifted.

407 Charterers shall reimburse Owners For any additional port costs incurred by 408 Owners in complying wirh Charterers' instructions under this Clause 8.3-

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409 8.4 Transshipment Area. 410 A Transshipment Area shall be deemed to be a port for the purposes of 411 calculating freight and the freight rate for the voyage shall be the rate as 412 published in Worldscale for the relevant Transshipment Area. If a rate is not 413 already published for the relevant Transshipment Area the rate shall be the rate 414 determined by Worldscale on the application of either party.

415 Subject to the exceptions and exclusions of laytime and/or demurrage found 416 elsewhere in this Charter, including but not limited, to those under Clauses 17 417 and 18, the time used at a Transshipment Area shall count as laytime or, if the 418 Vessel is on demurrage, as demurrage. Laytime or, if the Vessel is on 419 demurrage, demurrage, shall commence and end in accordance with Clause 7.3.

420 9. DOCUMENTATION

421 9.1 Owners undertake that for the duration of this Charter the Vessel shall have on 422 board all such valid documentation as may, from time to time, be required to 423 enable the Vessel to enter, carry out all required operations at, and leave, 424 without let or hindrance, all ports to which the Vessel may be directed under 425 the terms of this Charter and Owners hereby expressly undertake that:-

426 9.1.1 they shall be responsible for any loss, damage, delay, cost or expense; 427 and.

4 2 8 9.1.2 time shall not count as laytime or, if the Vessel is on demurrage, as 429 demurrage, during any period in which the Vessel is not fully and freely 430 available to Charterers,

431 as a result of action, or the threat thereof, taken against her by any government, 432 government organisation, competent authority, person or organisation, owing 433 to her flag, failure to have on board valid documentation as aforesaid or any 434 dispute relating to the wages, or crew employment policy of Owners or to the 4 3 5 .:• condition of the Vessel or her equipment.

436 10. DRUGS AND-ALCOHOL POLICY

437 10.1 Owners undertake that they have, and shall maintain for the duration of this 438 Charter, a policy on Drugs and Alcohol Abuse applicable to the Vessel (the "D 439 & A Policy") that meets or exceeds the standards in the OCIMF Guidelines for 440 ' the Control of Drugs and Alcohol Onboard Ship 1995 as amended from time to 441 time. .

442 10.2 Owners . shall exercise due diligence to ensure that the D & A Policy is 443 understood and complied with on and about the Vessel. An actual impairment, 444 or any test finding of impairment, shall not in and of itself mean that Owners 445 have failed to exercise due diligence.

446 10.3" Owners undertake that to the best of their knowledge, information and belief, 447 having made due inquiry, neither the Master, nor any officer or crew member 448 has any un-spent convictions whatsoever concerning drug or alcohol abuse.

449 11. CLEANING OF VESSEL'S TANKS, PUMPS AND PIPELINES

450 Without prejudice to Clause 1, Owners shall exercise due diligence to ensure that the 451 Vessel presents for loading with her tanks, pumps and pipelines properly cleaned to 452 the satisfaction of any inspector appointed by or on behalf of Charterers and ready 453 for loading the cargo described in Sections C and D of PART. 1. Any lime used to 454 clean tanks, pumps and pipelines to Charterers' inspector's satisfaction shall not count 455 as laytime or, if the Vessel is on demurrage, as demurrage and shall, together with 456 any costs incurred in the foregoing operations, be for Owners' account.

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457 12. INERT GAS SYSTEM ("IGS")

458 12.1 Owners undertake that the Vessel is equipped with a fully functional IGS which 459 is in full working order, and is or is capable of being fully operational on the 460 date hereof and that they shall .so..maintain the IGS for. the duration of this 461 Charter, and that the Master," officers" and crew are properly qualified (as 462 evidenced by appropriate certification) and experienced in, the operation of the 463 IGS. Owners further undertake that the Vessel shall arrive at the loading port 464 with her cargo tanks fully inerted and that such tanks shall remain so inerted 465 throughout the voyage and the subsequent discharging of the cargo. Any time 466 lost owing to deficient or improper operation of the IGS shall not count as 467 laytime or, if the Vessel is on demurrage, as demurrage.

468 12.2 The Vessel's IGS shall fully comply with Regulation 62, Chapter II-2 of the 469 SOLAS Convention 1974 as modified by its Protocol of 1978 and any 470 subsequent amendments and Owners undertake that the IGS shall be operated 471 by the Master, officers and crew in accordance with the operational procedures 472 as set out in the IMO publication entitled "Inert Gas Systems" (IMO 860E) as 473 amended from time to time.

74 12.3 If Charterers so'require, Owners shall arrange for the Vessel's tanks to be de-475 pressurised to facilitate gauging and sampling or to be de-inerted or gas freed 476 to facilitate inspection, in each case in accordance with the operational 477 procedures referred to in Clause 12.2. Any time taken to de-pressurise, gauge, 478 sample and re-pressurise, or to de-inert or gas free, inspect and re-inert 479 thereafter shall count as laytime or, if the Vessel is on demurrage, as 480 demurrage.

481 13. CLOSED CARGO OPERATIONS

482 13.1 Owners undertake that the Vessel complies with, and shall be operated for the 483 duration of this Charter in accordance with, the recommendations regarding 484 closed loading and closed discharging operations as set.out in the 1996 Edition 485 of ISGOTT as amended from time to time.

486 13.2 If the Vessel has closed sampling equipment, such equipment, shall be used, 487 when appropriate, during this Charter.

488 14. OILY RESIDUES/CLEAN BALLAST

189 14.1 The Vessel shall arrive at the loading port with clean ballast as defined in 490 Regulation 1 (16) of Regulations for the Prevention of Pollution by Oil in Annex 491 1 of MARPOL unless otherwise agreed. Owners shall instruct the Master to 492 retain on board all oily residues of a persistent nature remaining in the Vessel 493 from the previous cargo. The Master shall, during tank washing, collect the 494 resultant slops into one cargo tank and after maximum separation of the free 495 water, discharge the water so separated overboard. Upon completion of this 496 operation the Master shall notify Charterers by telex of the origin and estimated 497 tonnage of the slops remaining in the said cargo tank, giving a separate 498 estimated quantity for both oil and water. The Master shall further advise 499 whether during deballasting operations it will be necessary to transfer any 500 quantity of ballast water into the cargo tank containing slops. The Master shall 501 minimise the quantity of water retained which in any event shall not exceed 502 0.15% of the Vessel's current summer deadweight tonnage. In discharging all 503 water separated as aforesaid the Master shall comply with the requirements of 504 the International Convention for the Prevention of Pollution from Ships 1973. as 505 amended by its Protocol of 1978 (MARPOL 73/7S), insofar as these do not 506 conflict with any applicable law. 507 14.2 Upon the Vessel's arrival at the loading port the Master, in conjunction with 508 cargo suppliers, shall arrange for the quantity of all segregated slops to be 509 measured (inclusive of any ballast water) and shall make a note in the Vessel's

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510 ullage record of the quantity so measured. The Master shall provide Charterers 511 with a slops certificate countersigned by a Terminal representative.

512 14.3 Without prejudice to the provisions of Clause 3.2 Charterers shall be entitled to 513 instruct Owners to load the cargo on top of slops from previous voyages and 514 to discharge such slops together with the cargo loaded, hereunder, in which 515 case freight shall be paid under Clause 31 at 50% of the Freight Rate stated in 516 Section H of PART 1 on the net oil quantity of slops, up to a tonnage 517 equivalent to 1% of the Vessel's summer deadweight; otherwise no freight shall 518 be payable on slops. Notwithstanding the foregoing, if the provision for freight 519 for the voyage is on a lump sum basis then Charterers shall have no liability to 520 pay freight on slops. Irrespective of whether Charterers exercise their right to 521 determine the disposal of slops, nothing herein shall give, or be construed as 522 giving. Owners permission to contravene any applicable laws, conventions or 523 regulations regarding the discharge of slops or oily residues. If Charterers 524 instruct Owners to discharge slops ashore at a loading port where slop 525 reception facilities are available, the time used for discharging slops shall not 526 count against laytime or, if the Vessel is on demurrage, as demurrage and all 527 expenses incurred shall be for Owners' account 528 If a Terminal representative insists that ballast is discharged ashore and, as a 529 result thereof, a freight differential in Worldscale applies, Charterers shall not be 530 liable to pay the freight differential but, in lieu thereof, shall reimburse Owners 53 1 in respect of the cost actually incurred by them, upon receipt by Charterers of 532 ... full supporting documentation from Owners. Charterers shall only be liable to 533 reimburse Owners for quantities of ballast discharged up to a maximum 534 equivalent to 30% of the Vessel's current summer deadweight.

535 14.4 Charterers shall have no liability to pay deadweight to Owners pursuant to this 536 Clause 14 unless Charterers have initially instructed Owners to load the cargo 537 on top of slops but have subsequently instructed Owners to. keep slops 538 segregated.

539 15- AGENCY ..

540 Charterers shall nominate Agents at loading and discharge ports but such Agents shall 541 be employed, instructed and paid by Owners.

542 16. CANCELLATION

543 16.1 Time shall be of the essence in relation to the arrival of the Vessel at the first 544 loading port under this Charter. Owners undertake to advise Charterers 545 promptly if at any time Owners or .the Master have reason to believe that the 546 Vessel may not arrive at the first loading port by the Cancelling Date stated in 547 Section G of PART 1 or by any new cancelling date determined under this 548 Clause 16.

549 16.2 If the Vessel is not ready to load by the Cancelling Date stated in Section G of 550 PART 1 or by any new cancelling date determined under this Clause 16 551 Charterers shall have the option of cancelling this Charter which option shall be 552 exercisable within forty-eight (48) hours after the Cancelling Date or any new 553 cancelling date determined under this Clause 16.

554 16.3 If at any time it appears to Charterers that the Vessel's arrival at the first loading 555 port will be delayed beyond the Cancelling- Date or beyond any new 556 cancelling date determined under this Clause 16, Charterers may require 557 Owners to notify Charterers in writing of the date and time that they expect the 558 Vessel to be ready to load. In such case, Owners shall provide such 559 information in writing within twelve (.12) hours of Charterers' request.

560 If the date and time so notified by Owners falls after the Cancelling Date then 561 Charterers shall have the option of cancelling this Charter which option shall be

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562 exercisable within ninety-six (96) hours (Sundays and holidays excepted) of 563 receipt of the said notice from Owners or within forty-eight (48) hours after the 564 Cancelling Date, whichever is earlier.

565 If Charterers do not exercise their option to cancel this Charter then the new 566 cancelling date for the purpose of this Clause 16 shall, be twelve (12) hours 567 after the date and time notified by Owners, or such other date and time as may 568 be mutually agreed.

569 16.4 If Owners fail, or fail timeously, to respond in writing to Charterers when 570 required to do so under Clause 16.3, Charterers shall have the option of 571 cancelling this Charter, which option shall be exerciseable within ninety-six (96) 572 hours (Sundays and holidays excepted) after the period allowed for Owners' 573 response under Clause 16.3.

574 16.5 Whether or not Charterers exercise their option to cancel this Charter shall be 575 entirely without prejudice to any claim for damages which Charterers may have 576 in respect of the Vessel not being ready to load by the Cancelling Date stated in 577 Section G of PART 1 or by any new cancelling date determined under this 578 Clause 16. .

579 16.6 Where the Vessel arrives after the Cancelling Date, or if the Vessel arrives by or 580 after any new cancelling date determined under this Clause 16, laytime shall 581 commence either when the Vessel commences loading or twenty-four (24) 582 hours after tendering of a valid NOR that has become effective under Clause 583 6.3, whichever first occurs. However, where-the arrival of the Vessel after the 584 Cancelling Date, or after the new cancelling date as the case may be, results 585 solely from Charterers' instructions under Clause 22.1, laytime shall commence 586 in accordance with the provisions of Clauses 7.3.1 and 7.3-2.

587 17. HALF IAYTIME/HALF DEMURRAGE/FORCE MAJEURE

588 Any delay arising from adverse tidal conditions which could not reasonably have 589 been predicted, adverse weather, adverse sea state conditions, blockage of access to a 590 port due to casualty or wreck, fire, explosion, breakdown or failure of equipment. 591 plant or machinery in or about any loading or discharge port, Act of God, act of war, 592 labour dispute, strike, riot, civil commotion, or arrest or restraint of princes, rulers or 593 peoples shall count as one half laytime or, if the Vessel is on demurrage, at one half 594 of the demurrage rate provided always that the cause of the delay was not within die 595 reasonable control of Charterers or Owners, as the case may be, or their respective 596 servants or agents.

597 18. SUSPENSION OF LAYTIME/DEMURRAGE

598 18.1 Time shall not count against laytime or, if the Vessel is on demurrage, as 599 demurrage when spent or lost:-

600 18.1.1 on an inward passage, including awaiting daylight, tide, opening of 601 locks, pilot or tugs or moving from an anchorage, even if topping 602 off and/or lightening has taken place at that anchorage, until the 603 Vessel is securely moored and the Vessel's gangway, if it is to be 604 used, is in place at the berth or other loading or discharge port as 605 ordered by Charterers;

606 18.1.2 on an outbound passage to an in-port Transfer Position, which 607 passage shall be deemed to commence upon the disconnection of 608 cargo hoses and end upon the'Vessel's arrival at such In-port 609 Transfer position; or

610 18.1.3 as a result of a labour dispute, or strike, involving tugs or pilots.

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611 18.2 Nor shall time count against laytime or, if the Vessel is on demurrage, as 612 demurrage when spent or lost:-

613 18.2.1 as a result, whether directly or indirectly, of breakdown, defect, 614 deficiency or inefficiency of, or other cause attributable to, the 615 Vessel, Master, officers, crew. Owners or their servants or agents;

616 18.2.2 as a result of a labour dispute, or strike, involving the Master, 617 officers or crew of the Vessel;

618 18.2.3 in. or in connection with, the handling of ballast unless this is 619 carried out concurrently with loading or discharging of cargo such 620 that no loss of time is involved;

621 18.2.4 in. or in connection with, the discharging of slops unless the 622 discharging is carried out concurrently with loading or discharging 623 of cargo such that no loss of time is involved; or

624 18.2.5 in cleaning tanks, pumps and pipelines under Clause 11.

625 18.3 Nothing contained in this Clause 18 shall be affected by the provisions of 626 Clause 38.

627 19 . PART A. LOADING AND DISCHARGE OF CARGO

628 19.1 For the purposes of this Clause 19:-

629 "full cargo"" shall mean the quantity of cargo stated in Section C of.PART 630 1 or the total cargo actually loaded as ascertained by adding 631 together the quantities of cargo loaded under each Bill of 632 Lading issued under this Charter, whichever is the greater,

633 "part cargo" shall mean either the total cargo actually loaded, if less than 634 , the quantity stated in Section C of PART 1, or the quantity of 635 each parcel loaded or discharged separately, as the context 636 may require;

637 "bulk discharge" shall mean the period of time taken by the Vessel to 638 discharge the full cargo or part cargo, as the case may be, 639 excluding any time during which only tank stripping and/or 640 crude oil washing operations are being performed.

641 19.2 The cargo shall be pumped into the Vessel at the expense and risk of 642 Charterers and pumped out of the Vessel at the expense and risk of Owners, in 643 each case only as far as the Vessel's manifold.

644 Owners shall, if requested, make available the personnel, equipment and 645 facilities on board the Vessel which are required for the connection and 646 - disconnection of hoses for loading and discharging. Any delay resulting from 647 the failure by Owners to provide such personnel, equipment and facilities shall 648 not count as laytime or, if the Vessel is on demurrage, as demurrage. The 649 Master may require shore supervision of, and approval for, the connection and 650 disconnection of hoses.

651 19.3 Owners..undertake that-

652 19.3-1 the Vessel shall load cargo at the maximum safe rate and in any 653 event shall load a full cargo within a maximum period of twenty-654 four (24) hours, or pro-rata in the case of a part cargo, provided 655 always that the cargo is capable of being supplied within such 656 time-, and

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657 19.3.2 the Vessel shall discharge cargo at the maximum safe rate and in 658 any event shall, in the case of cargoes of one or more segregated 659 grades/parcels discharged concurrently or consecutively, discharge 660 a full cargo within twenty-four (24) hours, or pro rata in the case of 661 .a part cargo, or shall maintain a minimum discharge pressure of 662 seven (7) bar at the Vessel's manifold throughout the bulk 663 discharge provided always that the cargo is capable of being 664 received within such time or at such pressure. If restrictions are 665 imposed by the Terminal during discharge, or if physical attributes 666 of the Terminal restrict the discharge rate or pressure, Owners shall 667 only be relieved of the aforesaid obligation for the period and to 668 the extent such restrictions or attributes impede the discharge rate 669 or pressure. The Terminal shall have the right to gauge discharge 670 pressure at the Vessel's manifold. 671 19.4 Any additional time used as a result of the inability of the Vessel to discharge 672 the full cargo within twenty-four (24) hours, or pro rata in the case of a part 673 cargo, or to maintain a minimum discharge pressure of seven (7) bar at the 674 Vessel's manifold throughout the discharge or failure by the Vessel to meet any 675 lesser performance required pursuant to a restriction imposed by the Terminal 676 shall be for Owners' account and shall not count as laytime or, if the Vessel is 677 on demurrage, as demurrage.

678 19.5 In the case of multiple grades of cargoes where the total time taken to 679 discharge the full cargo is in excess of twenty-four (24) hours Cor pro rata in 680 the case of a part cargo) and the Vessel fails to maintain a minimum discharge 681 pressure of seven (7) bar throughout the discharge, each grade carried will be 682 assessed separately as follows:-

683 19.5.1 The twenty-four (24) hours' allowance (.pro rated in the case of a 684 part cargo) plus the appropriate crude oil washing allowance, if 685 any, calculated in accordance with Clause 19.8, shall be 686 apportioned to each grade, which is discharged consecutively, in 687 the ratio that the quantity of that grade discharged bears to the total 688 quantity of all grades of cargo discharged consecutively. This ratio 689 shall be calculated by dividing the quantity of each grade that is 690 discharged consecutively by the aggregate bill of lading quantities 691 for all grades discharged consecutively. For the purposes of this 692 apportionment, where two (2) or more grades are discharged 693 concurrently, the quantities so discharged shall be aggregated and 694 treated as one grade. 695 19.5.2 The allowance apportioned to each grade pursuant to Clause 19.5.1 696 shall then be offset against the total time actually taken to discharge 697 that grade. Any excess time will not count against used laytime or, 698 if the Vessel is on demurrage, as demurrage. However, if the 699 Vessel maintains a minimum discharge pressure of seven (7) bar 700 throughout the bulk discharge of a particular grade then the time 701 taken to discharge that grade will count in full against used laytime 702 or, if the Vessel is on demurrage, as demurrage.

703 19.6 If the full cargo cannot be delivered to the Vessel at the rate requested by the 704 Master or within the time allowed in Clause 19.3.1 or if the Terminal is unable 705 to receive the full cargo within twenty-four (24) hours or at a discharge 706 pressure of seven (7) bar measured at the 'Vessel's manifold, the Master shall 707 present a Note of Protest ("NOP") to a Terminal representative detailing any 708 Terminal restrictions and/or deficiencies as soon as they are imposed and/or 709 become apparent and shall use all reasonable endeavours to have the NOP 710 signed by the Terminal representative. If the Master is unable to obtain a 711 signature from the Terminal representative he shall present a further NOP 712 recording the failure of the Terminal representative to sign the original NOP. In 713 ..the case of restrictions imposed by the Terminal or arising from physical

16

714 attributes of the Terminal, the Master shall ensure that such restrictions are 715 clearly recorded in the Vessel's Pumping Log.

716 19.7 No claim by Owners in respect of additional time used in the cargo operations 717 carried out under this Clause 19 shall be considered by Charterers unless it is 718 accompanied by the following supporting documentation:-

719 19.7.1 the Vessel's Pumping Log signed by a senior officer of the Vessel 720 and a Terminal representative showing at hourly intervals the 721 pressure maintained at the Vessel's manifold throughout the cargo 722 operations; and

723 19.7.2 copies of all NOPs issued, or received, by the Master in connection 724 width the cargo operations; and

725 19.7.3 copies of all other documentation maintained by those on board 726 the Vessel or by the Terminal in connection with the cargo 727 operations.

728 19. PART B. CRUDE OIL WASHING AND STRIPPING

729 19.8 Owners undertake that the Vessel is equipped with a fully functional Crude Oil 730 Washing System and that the officers and crew are properly qualified (as 73 1 evidenced by appropriate certification) and experienced in the operation of 732 such system. Whilst Charterers may instruct Owners to carry out additional 733 crude oil washing in all tanks that contained the cargo the Master shall, in any 734 event, arrange for crude oil washing of the cargo tanks at the discharge port to 735 the MARPOL minimum standard, as set out in the Vessel's Crude Oil Washing 736 Operation and Equipment Manual.

737 When the Vessel carries out crude oil washing to the MARPOL minimum 738 standard, in the absence of instructions from Charterers to carry out additional 739 crude oil washing, there shall be no increase in the time allowed for discharge 740 of the cargo. If Charterers instruct Owners to carry out additional crude oil 741 washing then the period referred to in Clauses 19.3-2 or 19.5, as the case may 742 be, shall be increased by twenty-five per cent (25%).

743 Owners shall carry out crude oil washing concurrently with discharge of the 744 cargo and the Master shall provide a crude oil washing log identifying each 745 tank washed, and stating whether such tank has been washed to the MARPOL 746 minimum standard or has been the subject of additional crude oil washing.

747 19.9 Owners shall, provided always that the Vessel maintains a minimum discharge 748 pressure of seven (7) bar during bulk discharge or meets such lesser 749 performance required pursuant to a restriction imposed by the Terminal or 750 ' arising from physical attributes of the Terminal, be allowed a period of not 751 more than two (2) hours per segregated grade/parcel for final draining and 752 stripping purposes unless such final draining and stripping is carried out 753 " concurrently with discharge of another grade/parcel. Any time taken for final 754 draining and stripping'purposes in excess of such allowance shall not count as 755 used laytime or, if the Vessel is on demurrage, as demurrage.

756 PUMPING ASSESSMENT - EXAMPLE 757 3 GRADES 758 (1) Fuel Oil 35,000 B/L < 7 BAR 759 COW (2) Arab Heavy 40,000 B/L < 7 BAR 760 COW (3) Arab Light 45,000 B/L > 7 BAR

761 DISCHARGE TIME

762 (1) 00.00 1ST June 11.50 1ST June 763 11.50 ln June 12.00 1CT June Change Grade

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764 (2) 12.00 1CT June 04.50 2M& June 765 04.50 2ND June 05.00 2 nd June Change Grade

766 (3) 05.00 2 nd June 20.00 2nd June 767 Full COW required therefore additional 25% Pumping Time allowed

768 Hrs Mins 769 Graded) VS.OOO MT 770 771 772

773 774 775 776

777 778 779

780

781 Stripping allowance given for grade (3) pumping in excess of seven 1,7.1 bar

782 Hrs Mins 783 Total Excess Pumping Time -784 (A) + (B) + (C) TJ 40,

785 20. CLAIMS TIME BAR

786 20.1 Charterers shall be discharged and released from all liability in respect of any 787 claim for demurrage, deviation or detention which Owners may have under this 788 Charter unless a claim in writing has been presented to Charterers, together 789 with all supporting documentation substantiating each and every constituent 790 part of the claim, within ninety (90) days of the completion of discharge of the 791 cargo carried hereunder.

792 20.2 Any other claim against Charterers for any and all other amounts which are 793 alleged to be for Charterers' account under this Charter shall be extinguished, 794 and Charterers shall be discharged from all liability whatsoever in respect

95 thereof, unless such claim is presented to Charterers, together with full /96 supporting documentation substantiating each and every constituent part of the 797 claim, within one hundred and eighty (180) days of the completion of 798 discharge of the cargo carried hereunder. .

799 21. SLACK TANKS/EVEN KEEL

800 21.1 Notwithstanding the provisions of Clause 31, if Charterers are unable to supply 801 the quantity of cargo stated in Section C of PART 1 the Vessel shall not be 802 required to proceed to sea until such of her tanks are filled as will place her in 803 a seaworthy condition, and freight shall be paid as if the Vessel had loaded the 804 quantity of cargo stated in Section C of PART 1.

805 21.2 If for any reason the Vessel is unable to trim to even keel for arrival at a 806 discharge port Owners shall notify Charterers by telex stating the Vessel's 807 expected arrival draught forward and aft. Such notification shall be given as 808 soon as practicable after Owners have received Charterers' Voyage Orders and 809 no later than the Vessel's departure from the loading port.

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810 22. REVISED CHARTERERS VOYAGE ORDERS FOR LOADING OR DISCHARGE 811 PORTS

812 22.1 If at any time after the date of this Charter, Charterers, notwithstanding that they 813 may have nominated a loading or discharge port, wish to issue revised 814 Charterers' Voyage Orders and instruct Owners to stop and/or divert the Vessel 815 to an alternative port within any Ranges stated in Section E or F of PART 1, or 816 cause her to await orders at one or more locations. Owners shall issue such 817 revised instructions to the Master as are necessary to give effect to such revised 818 Charterers' Voyage Orders and the Master shall comply with such revised 819 instructions as soon as the Vessel is free of any previous charter commitments.

820 22.2 lf:-

821 22.2.1 solely by reason of Owners' compliance with such revised 822 Charterers' Voyage Orders, the Vessel suffers delay causing her to 823 arrive at the nominated port after the Cancelling Date stated in 824 Section G of PART 1 or any new cancelling date determined under 825 Clause 16.1, then the Cancelling Date or the new cancelling date. 826 as the case may be, shall be extended by the period of such delay.

827 22.2.2 the Vessel arrives at the noritinated port after the Commencement 828 Date stated in Section G of PART 1, then any period during which 829 the Vessel has been awaiting orders prior to her arrival, less any 830 time by which the Vessel's arrival at the nominated port would, but 831 for Charterers' instructions to await orders, have preceded the 832 Commencement Date, shall count as laytime or, if the Vessel is on 833 demurrage, as demurrage.

834 22.2.3 the Vessel is, after loading, instructed by Owners to stop and await 835 orders at Charterers' request then all lime spent by the Vessel 836 awaiting orders shall count as laytime or, if the Vessel is on 837 demurrage, as demurrage.

838 22.3 Any additional period by which the steaming time taken to reach the alternative 839 port exceeds the time that should have been taken had the Vessel proceeded 840 to such port directly shall count as laytime or, if the Vessel is on demurrage, as 841 demurrage. Such additional period shall be .the time required for the Vessel to 842 steam the additional distance at the average speed actually achieved by the 843 Vessel during the voyage or the Charter Speed as stated in Section B.25 of 844 PART 1 whichever is the higher. Charterers shall pay Owners for additional 845 bunkers consumed for steaming the additional distance at the price paid by 846 Owners, net of all discounts or rebates, for the last bunkers lifted.

847 23- VESSEL/CARGO INSPECTIONS/BUNKER SURVEYS

848 23.1 Charterers shall be entitled to cause their representative (.which term includes 849 any independent surveyor appointed by Charterers) to carry out inspections of 850 the Vessel and/or observe cargo operations and/or ascertain the quantity and 851 quality of the cargo, water and residues on board, including the taking of cargo 852 samples, inspection and copying of the Vessel's logs, documents and records 853 (which shall include the personal notes of the crew, the rough log book and 854 computer generated data) at any loading and/or discharge port. Charterers'

" 855 representative may also conduct any of the aforementioned operations at or off 856 any other port to which Charterers may require the Master to divert the Vessel 857 at any time after leaving any loading port. Charterers shall obtain the consent 858 of the owners of any cargo on board at the time before requiring the Vessel to 859 be diverted.

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860 Charterers' representative shall be entitled to survey, and take samples from, 861 any or all of the Vessel's cargo tanks, bunker fuel tanks and non-cargo spaces 862 at any place referred to above.

863 . 23.2 Charterers' exercise of, or failure to exercise, any of their rights under the 864 foregoing provisions shall be entirely without prejudice to the respective rights 865 and obligations of the parties.

866 23.3 Any delay arising solely as a result of any inspection, survey or sampling under 867 Clause 23.1 shall count as laytime or, if the Vessel is on demurrage, as 868 demurrage.

869 23.4 Any delay arising from instructions from Charterers to Owners to divert the 870 Vessel shall be calculated by reference to the additional period by which the 871 steaming time taken to reach the next loading or discharge port exceeds the 872 time that would have been taken had the Vessel proceeded to such port 873 directly and Owners shall be compensated for such delay and bunkers 874 consumed for steaming during such additional period in accordance with the 875 provisions of Clause 22.3.

876 23.5 Charterers shall also reimburse Owners in respect of port expenses reasonably 877 incurred solely by reason of Charterers' instructions to divert the Vessel.

878 24. MAINTENANCE OF CARGO TEMPERATURE

879 Charterers shall have the right to instruct Owners to maintain the loaded temperature 880 of the cargo up to a maximum of 60°C. Owners undertake that the Vessel is capable 881 of maintaining the cargo temperature up to 60° throughout the laden voyage and 882 discharge of the cargo and that the Master shall advise Charterers, daily at noon local 883- time, of the temperature of such cargo in each of the Vessel's Links. If the Vessel fails 884 to maintain the required temperature Owners shall be responsible for any resulting 885 loss, damage, cost or expense incurred by Charterers (including, without limitation, 886 any requirement that the Vessel must vacate the berth) and any time lost thereby shall 887 not count as laytime or, if the Vessel is on demurrage, as demurrage.

888 25. CARGO HEATING

889 Charterers shall have the right to instruct Owners to raise' the temperature of me cargo 890 above the loaded temperature up to a maximum temperature of 60°C in each of the 891 Vessel's cargo tanks provided always that the length of the voyage is such as to 892 permit the temperature rise required. In such case the Master shall advise Charterers 893 daily, at noon local time, of the temperature of the cargo in each of the Vessel's tanks. 894 Charterers shall reimburse Owners for the cost of additional bunkers consumed to 895 raise the temperature of the cargo as aforesaid. The quantity of bunkers so 896 consumed shall be calculated in accordance with the following formulae, as 897 substantiated by copies of the Vessel's cargo ullage and tank temperature records for 898 the entire laden voyage, copies of which are to be provided with Owners' claim for 899 reimbursement.

900 Single Hull:-901 Bunkers consumed (MT) - Quantity of cargo (MT) subject to temperature increase 902 X 903 Increase in cargo temperature (CC) X 0.0001

904 Double Hull:-905 Bunkers consumed (MT) - Quantity of cargo (MT) subject to temperature increase 906 X 907 Increase in cargo temperature (°C X 0.00007

908 The price for the additional bunkers consumed shall be the price paid by Owners, 909 .; net of ail discounts or rebates, for the last bunkers lifted. Upon presentation of their

20

910 claim Owners shall provide Charterers with the invoices for the last bunkers lifted and 911 evidence of payment of same. .

912 26. LIBERTY

913 The Vessel shall have liberty to sail with or without pilots, to tow or go to the 914 assistance of vessels in distress and to deviate for the purpose of saving life and 915 property, or for any other reasonable purpose.

916 Unless specifically agreed to the contrary by Charterers. Owners undertake that the 917 Vessel will not stop or deviate for the purpose of replenishing bunkers on a laden 918 passage.

919 27. TRAFFIC SEPARATION AND ROUTEING

920 Owners shall instruct the Master to observe regulations and recommendations as to 921 traffic separation and routeing as issued, from time to time, by responsible 922 organisations or regulating authorities including, but not limited to, the IMO. the UK 923 Chamber of Shipping (or equivalent), or as promulgated by the State of the flag of 924 the Vessel or the State in which management of the Vessel is exercised.

925 28. ICE ON VOYAGE AND ICE AT LOADING OR DISCHARGE PORTS

926 28.1 If on passage to the loading or discharge port the Master finds that the port is 927 inaccessible owing to ice he shall immediately request Charterers by telex to 928 revise Charterers' Voyage Orders and pending a response from Charterers the 929 Vessel shall remain outside the area of ice-bound water. Any time lost awaiting 930 such revised Charterers' Voyage Orders shall count as laytime or. if the Vessel is 931 on demurrage, as demurrage.

932 28.2 Upon receipt of such request Charterers shall instruct Owners to order the 933 Vessel to proceed to an alternative ice-free and accessible port within the 934 Ranges stated in Sections E and F of PART I and where there are facilities for 935 loading or discharging the cargo, as the case may be. In this event freight shall 936 be paid at the rate applicable under this Charter to such alternative loading or 937 discharge port. Any additional period by which the steaming time taken to 938 reach the alternative port exceeds the time that should have been taken had 939 the Vessel proceeded to such port directly shall count as laytime or, if the 940 Vessel is on demurrage, as demurrage. Such additional period shall be the 941 time required for the Vessel to steam the additional distance at the average 942 speed actually achieved by the Vessel during the voyage or the Charter Speed 943 as Stated in Section B.25 of PART 1, whichever is the higher. Charterers shall 944 pay Owners for additional bunkers consumed for steaming the additional 945 distance at the price paid by Owners, net of all discounts or rebates, for the last 946 bunkers lifted. 947 28.3 If, on or after the Vessel's arrival at the loading or discharge port, there is a 948 danger of her being frozen in. the Vessel shall proceed tothe nearest safe and 949 ice-free position and at the same time the Master shall request Charterers by 950 telex to revise Charterers' Voyage Orders. Upon receipt of such request 951 Charterers shall instruct Owners to order the Vessel either to proceed to an 952 alternative ice-free and accessible port, within the Ranges stated in Sections E 953 and F of PART 1, where there is no danger of the Vessel being frozen in and 954 where there are facilities for loading or discharging cargo, or to return to and 955 load-or discharge at the port originally nominated, or to remain at the safe and 956 ice-free position to await orders. If the Vessel is ordered to such an alternative 957 port the sums to be paid by Charterers to Owners in respect of freight, 958 additional steaming time and additional bunkers shall be calculated and 959 compensated in accordance with the provisions of Clause 2S.2, but if Charterers 960 instruct Owners to load or discharge the Vessel at the port originally 961 nominated, then, subject to Clauses 7, 8, 17, 18 and 19 the whole of the time 962 from the receipt of NOR to load or discharge on the Vessel's first arrival at the

21

963 port originally nominated until the cargo hoses have been disconnected after 964 the completion of loading or discharging shall count as laytime or, if the Vessel 965 is on demurrage, as demurrage. Any delay caused by ice at the port originally 966 nominated after the final disconnection of the cargo hoses shall count as 967 Iaytime or, if the Vessel is on demurrage, as demurrage.

968 If Charterers instruct Owners to order the Vessel to remain at the safe and ice-969 free position and await orders then any time lost awaiting orders shall count as 970 Iaytime or,' if the Vessel is on demurrage, as demurrage.

971 29- QUARANTINE .

972 If Charterers require the Vessel to proceed to any port at which, at the time when the 973 Vessel is ordered to that port, there is quarantine then time spent or lost whilst the 974 Vessel is detained due to such quarantine shall count as Iaytime or, if the Vessel is on 975 demurrage, as demurrage. However, if quarantine is subsequently declared whilst the 976 Vessel is on passage to such port Charterers shall not be liable for any delay caused 977 by such quarantine.

978 30. BILLS OF LADING AND INDEMNITIES

979 30.1 Bills of Lading shall be. signed as Charterers direct, without prejudice to this 980 Charter. Charterers hereby indemnify Owners:-

981 30.1.1 against all liabilities that may arise from the signing of Bills of 982 Lading in accordance with the directions of Charterers to the extent 983 that the terms of such Bills of' Lading impose more onerous 984 liabilities than those assumed by Owners under the terms of this 985 Charter; and

986 30.1.2 against claims brought by holders of Bills of Lading against Owners 987 bv reason of any deviation required by Charterers under Clauses 988 22, 23 or 28.

989 30.2 All Bills of Lading issued under this Charter shall be deemed to contain War 990 Risks, Boch-to-BIame Collision and New Jason clauses.

991 30.3 If a Bill of Lading is not available at any discharge port to which the Vessel may 992 be ordered by Charterers under this Charter or if Charterers require Owners to 993 deliver cargo to a party and/or at a port other than as set out in the Bills of 994 Lading, then Owners shall nevertheless discharge such cargo in compliance 995 with Charterers' instructions, upon presentation by the consignee nominated by 996 Charterers ("the Receiver") of reasonable identification to the Master and in 997 consideration of Charterers undertaking:-

998 30.3.1 to indemnify Owners (which term shall, for the purpose of this 999 Clause, include Owners' servants and agents) and to hold Owners

1000 harmless in respect of any liability, loss, damage, cost or expense 1001 of whatsoever nature which Owners may sustain by reason of 1002 delivering the cargo to the Receiver in accordance with Charterers' 1003 instructions;

1004 30.3.2 to provide Owners on demand, in the event of any proceedings 1005 being commenced against Owners in connection with the delivery 1006 of the cargo as aforesaid, from time to time, with sufficient funds to 1007 defend the same;

1008 30.3.3 to provide Owners on demand with such bail or other security as 1009 may be required if, in connection with the delivery of the cargo as 1010 aforesaid, the Vessel, or any other vessel or property belonging to 1011 Owners, should be arrested or detained or, if the arrest or 1012 detention thereof should be threatened, in order to prevent such

22

1013 arrest or detention, or to secure the release of such Vessel or 1014 property and to indemnify Owners in respect of any loss, damage, 1015 cost or expense caused by such arrest or detention whether or not 1016 the same be justified; and

1017 30.3.4 to produce and deliver to Owners all original Bills of Lading in 1018 respect of the cargo loaded by the Vessel as soon-as same shall 1019 have arrived and/or come into the possession of Charterers 1020 whereupon Charterers' liability hereunder shall cease.

1021 The provisions of the foregoing undertakings shall be governed by English 1022 Law. 1023 1024 31. FREIGHT RATE

1025 31-1 The Freight Rate shall be that stated in Section H of PART 1. If the cargo 1026 quantity stated in Section C of PART 1 is a minimum quantity, then the freight 1027 payable for any cargo loaded in excess of the said minimum quantity shall, 1028 notwithstanding this Clause 31, be at the Overage rate stated in Section H of 1029 PART 1, unless a lump sum freight has been agreed in which case no Overage 1030 shall be payable. Where the Freight Rate stated in Section H of PART 1 is 1031 expressed as a percentage of Worldscale the Worldscale rate shall be the rate in 1032 force at the date of this Charter.

1033 31.2 If Charterers instruct Owners to order the Vessel to increase speed under 1034 Clause 3 the Freight Rate shall be increased as provided in Section H of PART 1 1035 for each knot of increased speed above the Charter Speed and pro rata for 1036 fractions of a knot up to the Maximum Speed. Such increase shall be 1037 calculated in accordance with the following example:

1038 Example: The Vessel proceeds at Charter Speed of 10 knots, the rate 1039 for which is Worldscale 40. After 10 days the Master is instructed to 1040 complete the voyage at 12 knots. The remainder of the voyage takes 20 1041 days. The increased speed option provides for a premium of 0.5 of a 1042 Worldscale point per knot of increased speed over Charter Speed.

1043 The freight rate for the above voyage would be calculated as follows: 1044 Voyage freight rate= (W40 x 10 days) + W41' x 20 days) 1045 ' 3 0 (total voyage days) 1046 = W40.67 1047 01 point premium for 12 knots Maximum Speed)

1048 If the Vessel fails to maintain the speed ordered, due to breakdown or any 1049 other reason whatsoever beyond Charterers' control, the freight rate shall be 1050 calculated based on the average speed actually achieved by the Vessel using BP 1051 Worldwide Marine Distance Tables to assess the length of the voyage between 1052 pilot stations at the loading and discharge ports but the freight rate shall not be 1053 - less than the Freight Rate at Charter Speed.

1054 31.3 If a lump sum freight is agreed for the voyage this shall be in respect of the 1055 overall voyage of the Vessel from the first loading port to the final discharge 1056 port.

1057 Charterers shall be entitled to load and discharge at additional ports within the 1058 Ranges stated in Sections E and F of PART 1. If the lump sum freight stated" in" 1059 Section H of PART 1 specifically includes additional loading or discharge ports 1060 or if a further lump sum payment is agreed for additional loading or discharge 1061 ports then no other payment shall, subject to Clauses 5 and 34. be made by 1062 Charterers and laytime or, if the Vessel is on demurrage, demurrage shall count 1063 in accordance with the provisions of this Charter.

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1064 In the absence of any agreement in respect of lump sum freight for additional 1065 loading or discharge ports Charterers shall reimburse Owners for any additional 1066 port costs incurred by Owners in complying with Charterers' instructions. Time 1067 used at the additional ports, including time which would otherwise be excluded 1068 under. Clause 18.1 (subject to the exceptions and exclusions. of laytime and/or 1069 demurrage found elsewhere in this Charter, including but hot limited to those 1070 under Clauses 17 and 18) shall count as laytime or, if the Vessel is on 1071 demurrage, as demurrage. Laytime, or, if the Vessel is on demurrage, 1072 demurrage shall commence upon tender of a valid NOR which has become 1073 effective as determined under Clause 6.3 and shall end when cargo hoses have 1074 been finally disconnected. The provisions of Clause 22.3 shall also apply, and 1075 reference in Clause 22.3 to the term "alternative port" shall for the purposes of 1076 this Clause 31.3 be deemed to be a reference to "additional port". 1077 31.4 Freight shall be payable immediately after completion of discharge, on the 1078 gross quantity of cargo loaded by the Vessel as evidenced by the Bills of Lading 1079 furnished by the shippers, less any sum derived from the operation of Clauses 1080 2, 32 and 33 and less any disbursements or advances made to the Master or 1081 Agents at loading and/or discharge ports, any sums payable by Owners under 1082 Clause 34, and any additional cargo insurance premium for Owners' account 1083 under Clause 35, provided that no freight shall be payable on any quantity that 1084 submerges, at any stage of the voyage, the marks appropriate under the 1085 International Load Line Convention, 1966, or any modification or amendment 1086 thereof, to the voyage to be performed under this Charter.

1087 31.5 All payments due to Owners under this Charter shall be remitted by Charterers 1088 to the account stated in Section K of PART 1.

1089 32. ADDRESS COMMISSION

1090 Charterers shall deduct 1.25% address commission from freight (including fixed and 1091 variable freight differentials), and any deadweight and demurrage payable under this 1092 Charter.

1093 33. CARGO RETENTION

1094 33-1 If any quantity of cargo remaining on board the Vessel ("ROB") upon 1095 completion of discharge is judged by an independent surveyor appointed by 1096 Charterers to be liquid, or if Charterers can show that the ROB would have 1097 been liquid if Owners and/or the Master, officers and crew had followed 1098 Charterers' instructions for the management of the cargo, then Charterers shall 1099 be entided to deduct from freight the value of such quantity of cargo calculated 1100 on the basis of the free on board ("FOB") value at the loading port plus freight 1101 thereon calculated in accordance width Clause 31 hereof.

1102 33-2 For the purpose of this Clause 33, any quantity of ROB shall be regarded as 1103 liquid if sampling and testing, which testing shall be performed as soon as 1104 practicable after sampling, shows the ROB to have had a dynamic viscosity of 1105 less than 600 centipoise at its temperature when sampled from the Vessel's tank 1106 or. if Charterers' heating instructions have not been complied width, at the 1107 temperature that would have been applicable in the Vessel's tank if such 1108 instructions had been complied with.

1109 Any quantity of ROB which is of insufficient depth to be sampled shall also be 1110 regarded as liquid if the independent surveyor, judges it to be liquid after using 1111 other means of testing including, without limitation, a representative number of 1112 dips across each tank.

1113 33-3 The independent surveyor's findings shall be final and binding upon Owners 1114 and Charterers save for instances of arithmetical error in calculation.

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1115 33.4 Charterers hereby agree to indemnify Owners against any liability to a Bill of 1116 Lading holder resulting from non-delivery of any such cargo in respect of 1117 which a deduction from freight is made under this Clause 33 provided always 1118 that Charterers shall under no circumstances be liable to indemnify Owners in 1119 an amount greater than the amount of freight so deducted.

1120 33.5 For the purpose of this Clause 33, slops shall not be included in the measured 1121 and reported liquid volume of oil on board the Vessel prior to loading.

1122 33.6 For the avoidance of doubt this Clause 33 refers solely to liquid cargo ROB 1123 from the cargo loaded hereunder and any measured volume of liquid oil on 1124 board the Vessel prior to loading shall be deducted from any calculation made 1125 under this Clause 33-

1126 34. DUES AND OTHER CHARGES

1127 34.1 If, under Sections 4 and 5 of Part B of the Preamble of Worldscale, a due or 1128 charge is expressly stated to be for the account of Owners or Charterers then 1129 such due or charge shall be payable accordingly. Dues and other charges 1130 payable by Charterers under Section 5 of Part B of the Preamble of Worldscale 1131 shall in the first instance be paid by Owners and Charterers shall reimburse 1132 Owners upon presentation of all supporting invoices by Owners.

1133 34.2 If freight for a voyage is not based on Worldscale but is calculated on some 1134 " other basis such as, with out limitation, an agreed lump sum amount or a per 1135 tonne amount. Charterers shall not be liable for any costs covered by 1136 Worldscale, under a fixed or variable freight differential (Section D of 1137 Worldscale), such costs being deemed to be included in the agreed freight. 1138 However Sections 4 and 5 of Part B of the Preamble of Worldscale shall still 1139 apply.

1140 34.3 if a charge is imposed upon Charterers by the owner of a berth by reason of 1141 prolonged occupation of the berth by the Vessel for reasons beyond the 1142 control of Charterers, their servants or agents then such charge shall be paid by 1143 Owners.

1144 35- CARGO INSURANCE

1145 Any additional premiums which may be charged by cargo underwriters on any cargo 1146 insurance in respect of the cargo carried hereunder by reason of the Vessel's age 1147 and/or condition shall be for Owners' account, and Charterers shall be entitled to 1148 deduct the cost of any such additional premium from freight payable under Clause 1149 31-

1150 36. CODING OF CARGO DOCUMENTATION - US CUSTOMS REGULATIONS

1151 36.1 If Charterers require the Vessel to discharge at a port within the jurisdiction of 1152 the US Customs Service, the Master shall insert Owners' Unique Identifier on 1153 each Bill of Lading accompanying a shipment of imported cargo in accordance 1154 with US Customs Regulations (19 CFR Parts 4 and 178). Owners shall provide 1155 Charterers and Agents on request with details of their Unique Identifier in 1156 respect of any cargo carried hereunder.

1157 36.2 If the Master fails to insert Owners' Unique Identifier under this Clause 36 1158 Owners shall be liable for any delays resulting therefrom and any time lost 1159 thereby shall not count as laytime or, if the Vessel is on demurrage, as 1160 demurrage.

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1161 37. UNITED STATES COAST GUARD ("USCG") CERTIFICATE OF FINANCIAL 1162 RESPONSIBILITY/UNTTED STATES COAST GUARD REGULATIONS

1163 37.1 Owners undertake that the Vessel shall carry on board a valid USCG Certificate 1164. of Financial Responsibility ('COFR") as 'required under the. US. Federal Oil 1165 Pollution Act 1990 and that for the duration of this Charter the said COFR shall 1166 - be maintained in all respects valid for trading to ports in the USA. Owners 1167 further undertake that the Vessel shall cany on board copies of the Vessel's 1168 Federal Oil Spill Response Plan and any US State specific Response Plan 1169 (individually and collectively "Response Plan") that have been approved by the 1170 USCG or by the appropriate State Authority respectively and that the Master 1171 shall operate the Vessel fully in accordance with the said Response Plan.

1172 37.2 Owners undertake that the Vessel shall for the duration of this Charter either 1173 comply with all applicable USCG Regulations or carry on board appropriate 1174 waivers from the USCG if in any respect whatsoever the Vessel does not so 1175 comply.

1176 38. EXCEPTIONS

1177 38.1 The provisions of Articles III (.other than Rule 8;, IV, IV bis and VIII of the 1178 Schedule to the Carriage of Goods by Sea Act, 1971 of the United Kingdom 1179 shall apply to this Charter and shall be deemed to be inserted in extenso herein. 1180 This Charter shall be deemed to be a contract for the carriage of goods by sea 1181 to which the said Articles apply, and Owners shall be entitled to the protection 1182 of the said Articles in respect of any claim made hereunder.

1183 38.2 Charterers shall not, unless expressly provided otherwise in this Charter, be 1184 responsible for any loss, damage, cost, expense, delay or failure in performance 1185 hereunder arising or resulting from Act of God, act of war, hostilities, seizure 1186 under legal process, quarantine restrictions, labour disputes or strikes 1187 threatened or actual, riots, civil commotions, arrest or restraint of princes, rulers 1188 or people.

1189 39. WAR RISKS

1190 39.1 For the purpose of this Clause 39 the words:-

1191 "Owners" shall include the shipowners, bareboat charterers, disponent 1192 owners, managers or other operators who are charged with the 1193 management and/or operation of the Vessel, and the Master; and

1194 "War Risks" shall include any war (whether actual or threatened), act of war, 1195 civil war. hostilities, revolutions, rebellion, civil commotion, warlike 1196 operations, the laying of mines (whether actual or reported), acts 1197 of piracy, acts of terrorists, acts of hostility or malicious damage, 1198 blockades (whether imposed against ail vessels or imposed 1199 selectively against vessels of certain flags or ownership, or against 1200 certain cargoes or crews or otherwise howsoever), by any person, 1201 body, terrorist or political group, of the Government of any state 1202 whatsoever, which, in the reasonable judgment of the Master 1203 and/or Owners, may be dangerous or are likely to be or to 1204 become dangerous to the Vessel, her cargo, crew or other persons 1205 on board the Vessel.

1206 39.2 If at any time before the Vessel commences loading, it appears, in the 1207 reasonable judgement of the Master and/or Owners, that performance of the 1208 contract of carriage, or any part of it. may expose, or is likely to expose, the 1209 Vessel, her cargo, crew or other persons on board the Vessel to War Risks, 1210 Owners may give notice to Charterers cancelling this Charter, or may refuse to 1211 perform such part of it as may expose, or may be likely to expose, the Vessel,

1212 her cargo,, crew or other persons on board the Vessel to War Risks provided 1213 always that if either Section E or F of PART 1 provides for a loading or 1214 discharging Range, as the case may be, and the Vessel, her crew, other persons 1215 on board, or cargo may be exposed, or may be likely to be exposed, to War 1216 Risks, at the port originally nominated by Charterers, then Owners shall first 1217 require Charterers to nominate a safe port which lies within the relevant Range, 1218 and may only cancel this Charter.if Charterers shall not have nominated such 1219 safe port within forty-eight (48) hours of receipt of such request.

1220 39-3 Owners shall not be required to continue to load cargo for any voyage, or to 1221 sign Bills of Lading for any port, or to proceed or continue on any voyage, or 1222 on any part thereof,.or to proceed through any canal or waterway, or to 1223 proceed to or remain at any port whatsoever, where it appears, either after the 1224 loading of the cargo commences, or at any stage of the voyage there after 1225 before the discharge of the cargo is completed, that, in the reasonable 1226 judgement of the Master and/or Owners, the Vessel, her cargo (or any part 1227 thereof), crew or other persons on board the Vessel (or any one or more of 1228 them) may be, or are likely to be, exposed to War Risks. If it should so appear, 1229 Owners may, by telex, request Charterers to nominate a safe port for the 1230 discharge of the cargo or any part thereof, and if within forty-eight (48) hours 1231 of the receipt of such telex, Charterers shall not have nominated such a port, 1232 Owners may discharge the cargo at any safe port of their choice (including the 1233 loading port) in complete fulfilment of their obligations under this Charter. 1234 Owners shall be entitled to recover from Charterers the extra expenses of such 1235 discharge and, if the discharge takes place at any port other than the loading 1236 port, to receive the full freight ;as though the cargo had been carried to the 1237 discharge port originally nominated. Any additional period by which the 1238 steaming time taken to reach the port at which the cargo is discharged exceeds 1239 the time which would have been taken had the Vessel proceeded to the 1240 original discharge port directly, and bunkers consumed for steaming during 1241 such additional period, shall be calculated and compensated in accordance with 1242 the provisions of Clause 22.3. 1243 39-4 If at any stage of the voyage after the loading of the cargo commences, it 1244 appears, in the reasonable judgement of the Master and/or Owners, that the 1245 Vessel, her cargo, crew or other persons on board the Vessel may be, or are 1246 likely to be, exposed to War Risks on any part of the route (including any canal 1247 or waterway) which is normally and customarily used in a voyage of the nature 1248 contracted for, and there is another longer route to the discharge port, Owners 1249 may give notice to Charterers that this route should be taken. In such case this 1250 Charter shall be read in respect of freight and all other conditions whatsoever 1251 as if the voyage performed were that originally designated. 1252 However if the Vessel discharges the cargo at a port outside the Ranges stated 1253 in Section F of PART 1, freight shall be paid as for the voyage originally 1254 designated and any additional period by which the steaming time taken to 1255 reach the discharge port exceeds the time which would have been taken to 1256 . reach the originally designated discharge port directly, and bunkers consumed 1257 for steaming during such additional period, shall be calculated and 1258 compensated in accordance with the provisions of Clause 22.3. Any additional 1259 port, canal or waterway expenses incurred by Owners as a result of the Vessel 1260 discharging outside the Ranges stated in Section F of PART 1 as aforesaid shall 1261 be for Charterers' account and Charterers shall reimburse to Owners any 1262 amounts due under this Clause 39.4 upon receipt of Owners' invoice together 1263 with fall supporting documentation. 1264 39.5 The Vessel shall have liberty:-

1265 39.5.1 to comply with all orders, directions, recommendations or advice 1266 as to departure, arrival, routes, sailing in convoy, ports of call, 1267 stoppages, destinations, discharging of cargo, delivery or in any 1268 way whatsoever which are given by the government of the state

27

1269 under whose flag the Vessel sails, or other government to whose 1270 laws Owners are subject, or any other government which so 1271 requires, or any body or group acting with the power to compel 1272 compliance with their orders or directions;

1273 39.5.2 • to comply with the orders-direction or recommendations of any 1274 war risks underwriters who have the authority to give the same 1275 under the terms of the war risks insurance applicable to the Vessel;

1276 39-53 to comply with the terms of any resolution of the Security Council 1277 of the United Nations, any directives of the European Community, 1278 the effective orders of any other supranational body which has the 1279 right to issue and give the same, and with national laws aimed at 1280 enforcing the same to which Owners are subject, and to obey the 1281 orders and directions of those who are charged with their 1282 enforcement;

1283 39.5.4 to discharge at any other port any cargo or part thereof which may 1284 render the Vessel liable to confiscation as a contraband carrier;

1285 39.5.5 to call at any other port to change the crew or any part thereof or 1286 other persons on board the Vessel if there is good reason to 1287 believe that they may be subject to internment, imprisonment or 1288 other sanctions; and

1289 39.5.6 if cargo has not been loaded or has been discharged by Owners 1290 under this Clause 39. to load other cargo for Owners' own benefit 1291 and carry it to any . other port or ports whatsoever, whether 1292 backwards or forwards or in a contrary direction to the ordinary or 1293 customary route.

1294 39.6 If in compliance with Clauses 39.2 to 39.5 anything is done or not done, such 1295 shall not be deemed to be a deviation, but shall be considered as due fulfilment 1296 by the party concerned of its obligations under this Charter.

1297 40. BOTH-TO-BLAME COLLISION

1298 40.1 if the liability for any collision in which the Vessel is involved while performing 1299 this Charter falls to be determined in accordance with the laws of the USA, or 1300 the laws of any State which applies laws similar to those applied in the USA in 1301 the circumstances envisaged by this Clause 40, the following provision shall 1302 apply:-

1303 "If the Vessel comes into collision with another vessel as a result of the 1304 negligence of the other vessel and any act. neglect or default of the Master, 1305 mariner, pilot or the servants of the carrier in the navigation or in the 1306 management of the Vessel, the owners of the goods carried hereunder will 1307 indemnify the carrier against all loss or liability to the other or non-carrying 1308 vessel or her owners in so far as such loss or liability represents loss of, or 1309 damage to, or any claim whatsoever of the owners of, said goods, paid or 1310 payable by the other or non-carrying vessel or her owners to the owners of 1311 said goods and set off, recouped or recovered by the other or non-carrying 1312 vessel or her owners as part of their claim against the carrying vessel or carrier.

1313 The foregoing provisions shall also apply where the owner, operators or those 1314 in charge of any vessel or vessels or objects other than, or in addition to, the 1315 colliding vessels or objects are at fault in respect of collision or contact."

1316 40.2 Whilst Charterers shall procure that all Bills of Lading issued under this Charter 1317 shall contain a provision in the foregoing terms, to be applicable where the 1318 liability for any collision in which the Vessel is involved falls to be determined 1319 under the preamble of this Clause 40 Charterers neither warrant nor undertake

1320 that such provision shall be effective. In the event that such provision proves 1321 ineffective Charterers shall, notwithstanding anything to the contrary herein 1322 provided, not be obliged to indemnify Owners.

1323 41. GENERAL AVERAGE

1324 General.Average._shall.be adjusted and settled, in London in accordance with the. 1325 York-Antwerp Rules, 1994 or any modification or re-enactment thereof for the time 1326 being in force. 1327 1328 42. NEWJASON

1329 If, notwithstanding Clause 41, General Average is adjusted in accordance with the law 1330 and practice of the USA, the following provision shall apply:-

1331 "In the event of accident, danger, damage or disaster before or after the 1332 commencement of the voyage, resulting from any cause whatsoever, whether due to 1333 negligence or not, for which, or for the consequence of which, the carrier is not 1334 responsible, by statute, contract or otherwise, the cargo shippers, consignees or 1335 owners of the cargo shall contribute with the carrier in general average to the 1336 payment of any sacrifices, losses or expenses of a general average nature that may be 1337 made or incurred and shall pay salvage and special charges incurred in respect of the 1338 cargo.

1339 If a salving ship is owned or operated by the carrier, salvage shall be paid for as fully 1340 "as if the said salving ship Or ships belonged to strangers. Such deposit as the carrier 1341 -or his agents may deem sufficient to cover the estimated contribution of the cargo 1342 and any salvage and special charges thereon shall, if required, be made by the cargo 1343 shippers, consignees or owners of the cargo to the carrier before delivery".

1344 43. CLAUSE PARAMOUNT

1345 All Bills of Lading issued under this Charter shall be deemed to contain the following 1346 Clause Paramount:-

1347 "CLAUSE PARAMOUNT

1348 (1) This Bill of Lading shall have effect subject to any national law making the 1349 International Convention for the unification of certain rules of law relating to 1350 bills of lading signed at Brussels on 25th August 1924 (The Hague Rules) or the 1351 Hague Rules as amended by the Protocol signed at Brussels on 23rd February 1352 1968 (The Hague/Visby RulesJ compulsorily applicable to this Bill of Lading. If 1353 any term of this Bill of Lading be repugnant to that legislation to any extent, 1354 such term shall be void to that extent but no further. Neither the Hague Rules 1355 nor the Hague/Visby Rules shall apply to this Bill of Lading where the goods 1356 carried hereunder consist of live animals or cargo which by this Bill of Lading is 1357 suited as being carried on deck and is so carried.

1358 (2)" Save where the Hague or Hague/Visby Rules apply by reason of (1) above, this 1359 Bill of Lading shall Lake effect subject to any national law in force at the port of 1360 shipment or place of issue of the Bill of Lading making the United Nations 1361 Convention on the Carriage of Goods by Sea 1978 (the Hamburg Rules) 1362 compulsorily applicable to this Bill of Lading in which case this Bill of Lading 1363 shall have effect subject to the Hamburg Rules which shall nullify any 1364 stipulation derogating therefrom to the detriment of the shipper or consignee!

1365 (3) Where the Hague, Hague/Visby or Hamburg Rules are not compulsorily 1366 applicable to this Bill of Lading, the carrier shall be entitled to the benefits of all 1367 privileges, rights and immunities contained in Articles 1 to V1I1 of the 1368 Hague/Visby Rules.

29

General.Average._shall.be

1369 (4) Nothing in this Bill of Lading shall be construed as in any way restricting, 1370 excluding or waiving the right of any relevant party or person to limit his 1371 liability under any available legislation and/or law".

1372 44. OIL POLLUTION INSURANCE

1373 44.1 Owners warrant that they have, and shall maintain in force throughout the 1374 period of this Charter, the following oil pollution insurances:-

1375 44.1.1 the standard oil pollution insurance cover (currently US$500 1376 million) available, from time to time, from their Protection and 1377 Indemnity Club; and

1378 44.1.2 any additional oil pollution insurance cover (currently US$200 1379 million) which is. or becomes, available from market, or other 1380 sources provided always that the security of the provider of the 1381 cover is acceptable to Charterers.

1382 45- OIL POLLUTION PREVENTION

383 45.1 Owners undertake that the Vesseh-

1384 45.1.1 is a tanker owned by a member of the International Tanker 1385 Owners Pollution Federation Limited and will so remain 1386 throughout the period of this Charter.

1387 45.1.2 is entered in the P & I Club stated in Section 9.1 of the BP Shipping 1388 Questionnaire last completed by or on behalf of Owners and will 1389 so remain unless Owners have given Charterers prior written notice 1390 of their intention to change. Owners warrant however, that the 1391 Vessel will only be entered in a P & I Club within the International 1392 Group of P & I Clubs.

1393 45.2 When an escape or discharge of Oil occurs from the Vessel and causes or 1394 threatens to cause Pollution Damage, or when there is the Threat of an escape 1395 or discharge of Oil (i.e. a grave and imminent danger of the escape or 1396 discharge of Oil which, if it occurred, would create a serious danger of 1397 Pollution Damage, whether or not an escape or discharge in fact subsequently 1398 occurs), then upon notice to Owners or Master. Charterers shall have the right 1399 (but shall not be obliged) to place onboard the Vessel and/or have in 1400 attendance at the incident one or more Charterers' representatives to observe 1401 the measures being taken by Owners and/or national or local authorities or 1402 their respective servants, agents or contractors to prevent or minimise Pollution 1403 Damage and, in Charterers' absolute discretion, to provide advice, equipment 1404 or manpower or undertake such other measures, at Charterers' risk and 1405 expense, as are permitted under applicable law and as Charterers believe are 1406 reasonably necessary to prevent or minimise such Pollution Damage or to 1407 remove the Threat of an escape or discharge of Oil. 1408 45-3 The provisions of this Clause 45 shall be without prejudice to any other rights 1409 and/or duties of Charterers or Owners whether arising under this Charter or 1410 under applicable law or under any International Convention.

1411 45.4 In this Clause the terms "Oil". "Threat" and "Pollution Damage" shall have the 1412 same meaning as that defined in the Civil Liability Convention 1969 or any 1413 Protocol thereto.

1414 46. LIEN

1415 Owners shall have a lien upon the cargo for all freight, deadfreight, demurrage and 1416 . the cost of recovery thereof.

1417 47. SUB-LETTING

1418 Charterers may sub-let the Vessel without prejudice to the respective rights and 1419 obligations of either partv under this Charier. 1420 1421 48. ADMINISTRATION

1422 48.1 Unless otherwise specifically requested by either Owners or Charterers, ho 1423 formal charterparty shall be prepared and signed. The terms and conditions of 1424 this Charter shall be evidenced by a recap fixture telex ("Recap Fixture Telex") 1425 issued by Charterers' broker to Owners and Charterers and shall be confirmed 1426 as correct by return telexes from both parties to the said broker who shall 1427 acknowledge receipt of such confirmation telexes to both parties within forty-1428 eight (48) hours after the lifting of subjects and a charterparty in the format of 1429 this Charter, as modified by the Recap Fixture Telex and bearing the same date 1430 as the Recap Fixture Telex, shall be deemed to have been signed by Owners 1431 and Charterers.

1432 48.2 If either party requires a formal charterparty to be prepared and signed then 1433 Owners shall procure that Owners' broker shall prepare a charterparty in the 1434 format of this Charter, as modified by the Recap fixture Telex, and bearing the 1435 same date as the Recap Fixture Telex and shall arrange for signature thereof by 1436 both Owners and Charterers.

1437 49. LAW

1438 The construction, validity and performance of this Charter shall be governed by 1439 English Law. The High Court in London shall have exclusive jurisdiction over any 1440 dispute which may arise out of this Charter.

1441 In Witness Whereof the parties have caused this Charter to be executed as of the date 1442 first above written

1443 .,,. 1444 for and on behalf of

1445 1446 OWNERS

1447 1448 for and on behalf of

1449 1450 CHARTERERS

APPENDIX 1

THE BP SHIPPING QUESTIONNAIRE

Demmurage a Practical Guide for Tanker Masters

Documents

Transcript of Demmurage a Practical Guide for Tanker Masters