BIMCO Force Majeure Clause 2022

As detailed in our earlier article here, we considered what “force majeure” is – purely a contractual term and the scope of its operation is defined by what has been included within the relevant clause of the particular contract. The COVID-19 pandemic led to an increased focus upon force majeure clauses in charterparties, which we reported on here, where we considered the disruption caused by COVID-19 and how it affected vessel owners and charterers’ ability to perform existing contracts.

In response to the unforeseen events and disruption experienced in recent years, largely by the COVID-19 pandemic, BIMCO has published a new force majeure clause – the BIMCO Force Majeure Clause 2022 (the “Clause”).

BIMCO says that the Clause is designed to help parties prepare for the unexpected, something which vessel owners and charterers are experiencing more and more of due to extreme weather conditions caused by climate change, the COVID-19 pandemic and now the Russia-Ukraine conflict.

The Clause has been drafted to provide a comprehensive “code” for the parties, to assist in resolving situations which may arise from unexpected events which impact upon the performance of the contract.

Designed for use with all types of agreements, the Clause comes with a “health warning” which is explained in the ‘Explanatory Notes’ to the Clause. BIMCO emphasises that the Clause is a model clause and, therefore, should not be included in a contract without careful review of it in the context of other clauses within the contract and it may need to be adapted accordingly.

The “health warning” also sets out that the Clause might not work as intended in period time charter parties with a broad trading range.  This is largely because if the vessel is ordered to a place where a force majeure event occurs, then charterers will normally be able find alternative employment for the vessel, thereby resolving the force majeure.

The Explanatory Notes also include special considerations and recommendations in relation to charterparties and contracts of affreightment, with additional subclauses which can be added to the Clause which relate to laytime/demurrage or hire, and what should happen if there is cargo on board the vessel.

Members considering incorporating the Clause into their charterparties should consider carefully how the clause will operate in relation to the contract as a whole and give particular thought to the issues flagged in the Explanatory Notes to the Clause.

If Members have any queries in this regard, we recommend that they contact their usual FD&D case handler(s).