This client alert looks at some of the revisions made to the form in the 2017 update and explores some of the areas which may merit further consideration when using it.
Type: Client Alerts
Clause 14 of the 2017 form – Liabilities and Indemnities
Clause 14 has been revised extensively and, for the most part, for the better. Of particular note are the new exclusion of liability provisions which correct the 2005 form’s troublesome blurring of the lines between consequential and direct losses. This important revision resolves a well-known issue in the 2005 form which was all too often ignored.
The revisions to the definitions of “Charterers’ Group” and “Owners’ Group” are certainly an improvement. That said, the 2017 form definition of “Charterers’ Group”, for example, would benefit from clarification. In view of the use of the conjunction “and” at the end of each limb of the definition of “Charterers’ Group” (each limb listing the entities or groupings of entities encompassed within the “Charterers’ Group”), it is not clear in each instance what is intended by the references to “…any of the foregoing” in limbs (ii), (iii) and (iv). It would be preferable to refer, for example, in limb (iii) of the definition to “Affiliates of any of (i) and / or (ii)” in place of “Affiliates of any of the foregoing” and indeed it may, in certain circumstances, be necessary to expand limb (iii) to cover limb (iv) (“contractors and sub-contractors (of any tier)”), so that limb (iii) would read “Affiliates of any of (i), (ii) and / or (iii)”.
It is noteworthy that in the phrase “…arising out of or in any way connected with the performance or non-performance of this Charter Party…” in Clause 14 (a)(i), as with the 2005 form, no reference is made to partial performance. In that regard, when using the 2017 form, the new Clause 14 (a)(i) might benefit from amendment.