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A new Gencon for a modern maritime adventure

Posted: 21/11/2022

A century ago, the then-named Documentary Council of the Baltic and White Sea Conference first released its Uniform General Charter. The contracting terms were presumably adequate for purpose, as BIMCO only made its first revision of the flagship form - now code-named 'Gencon' - in 1976. The voyage charter contract was revised again in 1994 in a form that is widely familiar.

However, the 2022 centennial edition comprises a thorough reworking and modernisation and, at 19 pages, the latest Gencon is more comprehensive than the previous versions. The authors have clearly targeted the ambiguities in the 1994 wording that have arisen through the subsequent decades of new industry practices. 

Liability for cargo operations - which still firmly rests with charterers - is now described in lucid detail covering matters such as compliance with IMO recommendations and disposal of dunnage. Formerly bespoke situations such as slot charters of part cargoes and liability for commingling cargoes are now expressly described. There is even a clause that allocates liability for shortage and overlanding claims caused by the delivery of cargo to multiple receivers from the same holds.  

Gencon 2022 makes it clear where the parties stand on these issues, reducing the need for costly litigation. While there is much to be said for this, chartering interests may be expected to take issue with how some of this liability is allocated. For example, charterers are now expressly entitled to fumigate the cargo at their responsibility, which is a fair allocation of risk if charterers want the convenience of using the vessel as a fumigation chamber. 

Less logical, however, is the stipulation that fumigation time will count at the demurrage rate but with unused laytime deducted at the 50% despatch rate. Essentially, this means laytime spent fumigating is exhausted at double-speed which may leave charterers feeling short-changed.

Other new contractual provisions dealing with everyday matters such as stevedore damage, hold cleanliness and the tender of notice of readiness when the berth is unavailable appear plausible and may avoid the need for some familiar Gencon 1994 amendments.

Various BIMCO standard clauses customarily incorporated as charter rider provisions also now appear in the body text of Gencon 2022 and deal with current affairs such as war risks, sanctions and electronic bills of lading. The addition of the BIMCO Law and Arbitration Clause 2020 means that the LMAA Arbitration Terms now automatically apply and the insertion of the parties’ email addresses for service at boxes 30 and 31 usefully ensures that arbitration notices may be validly served by email.

The new Congenbill 2022 - to be used in conjunction with the charter party - further supports the effectiveness of arbitration. Clause 7 of Congenbill 2022 makes clear that the charter party arbitration clause is specifically incorporated and exclusively applies to all disputes under the bill of lading as certain jurisdictions require the bill of lading terms to specifically incorporate the arbitration clause in order for it to apply.

The principal Gencon 2022 charter clauses are also more detailed, in some cases spelling out legal truisms for the benefit of commercial users. Clause 13(b) even states that 'demurrage shall accrue continuously and without interruption'.

Like its predecessor, Gencon 2022 does not contain a safe port warranty. However, some safety risk is transferred to charterers. Clauses 3 and 4 expressly entitle the master to vacate cargo operations for reasons of safety. Lighterage operations are also stated to be at the charterers’ risk along with any extra expenses required to make the places of loading and discharge safe.

Notably absent is the owner’s responsibility clause that protects owners from liability for loss or damage to goods unless there has been a personal want of due diligence by the owners or their management to make the ship seaworthy. Parties often circumvented this through the addition of a clause paramount but clause 2 of Gencon 2022 now applies a Hague-Visby regime. 

At first blush, charterers might be glad of such a change, although a closer reading reveals that owners may rely on the Hague-Visby defences and limitations for all claims of whatsoever nature concerning owners’ performance and not merely those relating to cargo. This is even true of the Hague-Visby time-bar which means that charterers only have one year to bring a claim for breach of charter whereas owners have six years. 

Clause 2 also does not incorporate Art. III rule VIII Hague-Visby Rules, so owners are not prevented from limiting their liability further than provided for in the rules. This issue may also be resolved through the insertion of a clause paramount.

Gencon 2022 comprises detailed clauses conscientiously drafted to resolve the legalities of an array of modern shipping practices. Undeniably, the contract wording has the attractions of certainty that make it easy for commercial parties to accurately price their bargains.  

However, savvy charterers alive to some of the more subtle allocations of risk may promptly develop routine amendments as this new flagship contract enters popular usage. In any case, with so many eventualities already catered for, fixture drafting time ought to be significantly reduced.

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