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Asian yards set to benefit from newbuilding contract

Asian yards set to benefit from newbuilding contract

London: Asian shipbuilders, particularly those in China, are set to benefit from Bimco's standard newbuilding contract, Newbuildcon, launched last week. The new document, a result of more than two years of discussion and drafting, is designed as a flexible instrument which can be easily tailored to individual contracts and should reduce the chance of newbuilding disputes.

      According to Bimco Deputy Secretary General Søren Larsen, the aim is not to impose the new contract, with rigid terms and conditions, to replace the existing yard contracts already in use. Rather, it is a standard document that provides a flexible basis for negotiation and is likely to benefit both owners and builders. "Newbuildcon is readily adapted to all types of vessels in all jurisdictions," Larsen told journalists in Copenhagen this week.

      There are a string of potential benefits, according to Nils-Gustak Palmgren who headed the team that developed Newbuildcon, including "clearer legal provisions dealing with important aspects such as permissible delays, guarantees, responsibilities and exclusions from liability, insurance, termination and dispute resolution. It is hoped that some of these clauses will assist in harmonising contractual provisions in the shipbuilding sector worldwide," he declared. The drafting group included lawyers from Ince & Co and Eversheds, with insurance representation from the UK P&I Club.  [05/11/07]