The new REPAIRCON 2018
BIMCO has just released a new version of the standard form of contract to be used for the repair of ships, known as REPAIRCON 2018.
The previous version, dated 2002, had proven to be of widespread use and successful, but given the time passed it was agreed that some upgrading was certainly needed.
In this article, we highlight the most significant changes to be taken into account by shipowners and shipyards when using this new 2018 version.
Part I remains basically the same, although with some changes of numbers.
Box 7, in which the vessel is described, now includes specific lines to name the type of vessel and its IMO number. This information was in any event added by prudent contractual parties but was not specifically named in the previous version, giving therefore some grounds for such crucial information to be left out.
There is a new Box 15, in which the contractor’s bank account is to be named. This is to avoid the misunderstandings or disputes arising out of the fact that the contractor sometimes failed to provide this information or to inform the Owner about any change in its bank account. It will also no doubt contribute to help the parties avoiding cyber fraud should the Owner receive an email asking for payment to another bank account which is later to be found does not belong to the Contractor.
Clause 1 – Definitions
The Works to be performed under the contract are not called “Specification Works” anymore, but “Scope of Work”. Its meaning however, remains the same.
Clause 2 – Performance and Approval of the Work
(a) Performance of Works
The performance of the Works by the Contractor is now described in more detail than its predecessor in that it is not only to be done in accordance with the “regulatory bodies” but, precisely, in accordance to the Contractor’s regulatory bodies, the Vessel’s Flag State, the Classification Society and any other expressly stated by the parties.
These were the bodies usually sitting in the minds of the parties when discussing their ship repair contracts, but this new version now contributes to clarify the issue by naming them so as to avoid any misunderstanding.
Significantly, the words which obliged to perform the Works “in accordance with best local practice” have disappeared in the new 2018 version. Now the Contractor has to perform the Works “within normal working hours”.
In the case of a reduction of time, the Owner’s entitlement to credit the cost saved has also been deleted from the 2018 version.
Owners are further deprived of not only not giving their consent to the use of suitable equivalent material when a specified material is not available, but also, they cannot “delay” providing such approval. This will no doubt embrace many dispute situations in which the parties could have been tempted to play around with time, in particular in the face of the impact that such delay can have on the redelivery date.
(b) Contractors’ Right to Subcontract
Although the wording in the 2018 version has been cleaned up, the Contractor’s duty remains the same: the shipyard will remain liable for the performance of their obligations under the contract irrespective of the use of subcontractors.
(c) Approvals and Certificates
The new 2018 version clarifies that the Owner is responsible for obtaining and maintaining approvals and certificates from the Vessel’s Flag State and the Classification Society.
Clause 3 – Owners’ and Contractors’ Representatives
(a) Owner’s representative
The new REPAIRCON version refers to the Owner’s Representative in the singular and does not seem to allow several persons to hold such a position. One person, and one only, must be appointed by the Owner to represent it as before the shipyard.
(b) Contractor’s Representative
As a new feature, REPAIRCON 2018 imposes the duty on the shipyard to name a Representative to act as “the primary point of contract with the Owners’ representative”. It further states that “daily meetings” are to be held on board the Vessel between both parties’ representative.
Clause 4 – Owners’ Work
In its previous 2002 version this matter was a minor subsection of Clause 3, but given its significance, it has now been given a separate clause.
Although its content remains the same, the 2018 version adds that any subcontractor engaged by the Owners must comply with the Contractors’ safety and environmental rules. This was a common discussion between the parties, given the increasing pressure on shipyards to comply with those rules and to make sure anyone in its premises complied with them. This new addition will help to avoid any such discussion between the parties.
Clause 6 – Financial Provisions
Payment by the Owners’, provided no particular payment terms have been agreed, has now to be made “before” redelivery. In the previous version, payment had to be made “at” Redelivery, which of course caused undesired situations, given that “at” implies that it can be made simultaneously with Redelivery, which was, if not impossible to meet, a source of unnecessary and unwanted delays.
By making it now prior to Redelivery, there is no doubt that the shipyard must receive payment before Redelivery takes place.
Clause 7 – Liquidated Damages for Delay
Damages for the delay have also earned a separate section in this new 2018 version. But the consequences for the Contractors’ remains the same as in the 2002 version.
Clause 8 – Liabilities and Indemnities
After some wording clean up, this section remains basically the same, except for the fact that the lack of liability of the parties for consequential losses has now been moved to a new Clause 9 (d), to which the parties have to refer to in relation to this very important exclusion.
Clause 15 – Anti-Corruption Clause
A new Anti-Corruption Clause is included in this new version, so to make sure that both parties into the contract comply with any such legislation. Such clauses are usually part of Master Services Agreements and similar agreements previous to the REPAIRCON, so it seems logical that they are also expressly incorporated into it in this new version.
Clause 16 – Dispute Resolution
A new option has been added in subsection (c) allowing the parties to choose between the usual London and New York clauses and now also to choose Singapore. It is yet to see how successful Singapore will be, but to be included in the new 2018 standard version is clearly a valuable aid to promote dispute resolution there.
Annex A – Scope of Work
Out of the three annexes, A is the one which has suffered the most significant changes.
To start with, as stated above, its name has changed. It is now called “Scope of Work” and not “Specifications of Work”.
Further, the new 2018 version helps to clarify the position where the Owner sends its request, its technical specification, and the Contractor sends what it can do in the light of it, which does not necessarily always mean that it is agreeing to all the work requested or in the manner requested. It also asks to make reference to any correspondence passing between the parties so as to incorporate it into the contract and therefore help to clarify what the parties have agreed to perform under the contract.
Finally, Annex A offers some guidance as to the battle of the terms and conditions of the parties. It is common that both parties try to incorporate their own T&C’s by several means: maybe referring to them in emails, in any other sort correspondence, in their websites, etc. all of which does not contribute to the legal certainty desired in this type of contracts.
The REPAIRCON 2018 clarifies that this is not the place where to put those terms and conditions and that they should be named in Box 21 and set out properly in Part II, so that the parties have one single document embracing their whole agreement, and not several documents spread around which may be difficult, if not impossible, to enforce.
A sample copy of the new REPAIRCON 2018 can be downloaded here: https://www.bimco.org/contracts-and-clauses/bimco-contracts/repaircon-2018