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BIMCO has last week released its two eagerly awaited standard clauses (the ‘2020 Marine Fuel Sulphur Content Clause for Time Charter Parties’ and the ‘2020 Fuel Transition Clause for Time Charter Parties’).

Both are intended to address the International Maritime Organisation’s (“IMO”) revised sulphur content limits with regards the consumption and carriage of marine fuel (per Regulation 14 of Annex VI of the International Convention for the Prevention of Pollution from Ships, 1973 as modified by the Protocol of 1978 “MARPOL”) which enter into force on 1 January and 1 March 2020 respectively. As the name suggests, the latter is intended to deal with the transitional period between such milestones only, whereas the former is effectively a timely update to its predecessor, the ‘Fuel Sulphur Content Clause for Time Charter Parties 2005’.

Authors: Marcus P. Dodds

Definitions and Taiwan

In the 2020 Fuel Transition Clause for Time Charter Parties, the definition of ‘Sulphur Content Requirements’ is, it seems, intended to be wide enough to encompass Emission Control Areas (as defined in Regulation 13 of Annex VI of MARPOL) (“ECA”) and equivalent (local, national or regional) restrictions on sulphur content in marine fuels. However, the definition of ‘Compliant Fuel’ is restricted to mean fuel that complies with regulations coming into effect as from 1 January 2020. It therefore does not address existing ECA restrictions and equivalents or anomalies, such as the Taiwanese early introduction of the revisions to Regulation 14 of Annex VI, effective from 1 January 2019.

BIMCO’s earlier Fuel Sulphur Content Clause for Time Charter Parties 2005 requires charterers to provide fuels that comply with maximum sulphur content requirements within “any emission control zone”. However, this only addresses “zones as stipulated in MARPOL Annex VI and/or zones regulated by regional and/or national authorities”. It seems arguable, therefore, that the early introduction of the revisions to the ‘global’ limits in Regulation 14 of Annex VI of MARPOL does not fit within such description, as this does not create a zone within the ordinary meaning of that word or the context of ECA, which is what was clearly contemplated. Accordingly, although not mentioned in the ‘Explanatory Notes’ provided by BIMCO, adopting the Fuel Sulphur Content Clause for Time Charter Parties 2020 and its wider ambit of “any sulphur content…related requirements as stipulated….by any other applicable lawful authority” is helpful in this respect, even for time charters expecting to redeliver ahead of 1 January 2020.