BIMCO Launches Anti-Corruption Clause
BIMCO has launched an anti-corruption clause for charter parties that gives owners and charterers a contractual platform for cooperative action to resist demands for illegal payments from port officials and others.
The clause can be used in any jurisdiction because it applies the anti-corruption laws applicable to each of the parties and the local law of the place where the ship is located.
A key provision of BIMCO’s Anti-Corruption Clause is a mechanism for owners to issue a note of protest if an illegal demand is made and the demand is not withdrawn.
This triggers a co-operative response by charterers and owners to the demand. A safeguard for the owners if they issue a protest to resist a demand and the ship is delayed is that charterers cannot place the ship off-hire.
A set of accompanying explanatory notes are being prepared, setting out the background to the clause and explaining the thinking behind each of its six sub-clauses.
BIMCO Anti-Corruption Clause for Charter Parties
(a) The parties agree that in connection with the performance of this Charter Party they shall each:
(i) comply at all times with all applicable anti-corruption legislation and have procedures in place that are, to the best of its knowledge and belief, designed to prevent the commission of any offence under such legislation by any member of its organisation or by any person providing services for it or on its behalf; and
(ii) make and keep books, records, and accounts which in reasonable detail accurately and fairly reflect the transactions in connection with this Charter Party.
(b) If a demand for payment, goods or any other thing of value (“Demand”) is made to the Master or the Owners by any official, any contractor or sub-contractor engaged by or acting on behalf of Owners or Charterers or any other person not employed by Owners or Charterers and it appears that meeting such Demand would breach any applicable anti-corruption legislation, then the Master or the Owners shall notify the Charterers as soon as practicable and the parties shall cooperate in taking reasonable steps to resist the Demand.
(c) If, despite taking reasonable steps, the Demand is not withdrawn, the Master or the Owners may issue a letter of protest, addressed or copied to the Charterers. If the Master or the Owners issue such a letter, then, in the absence of clear evidence to the contrary, it shall be deemed that any delay to the Vessel is the result of resisting the Demand and (as applicable):
(i) the Vessel shall remain on hire; or
(ii) any time lost as a result thereof shall count as laytime or (if the Vessel is already on demurrage) as time on demurrage.
(d) If either party fails to comply with any applicable anti-corruption legislation it shall defend and indemnify the other party against any fine, penalty, liability, loss or damage and for any related costs (including, without limitation, court costs and legal fees) arising from such breach.
(e) Without prejudice to any of its other rights under this Charter Party, either party may terminate this Charter Party without incurring any liability to the other party if
(i) at any time the other party or any member of its organisation has committed a breach of any applicable anti-corruption legislation in connection with this Charter Party; and
(ii) such breach causes the non-breaching party to be in breach of any applicable anti-corruption legislation.
Any such right to terminate must be exercised without undue delay.
(f) Each party represents and warrants that in connection with the negotiation of this Charter Party neither it nor any member of its organisation has committed any breach of applicable anti-corruption legislation. Breach of this Sub-clause (f) shall entitle the other party to terminate the Charter Party without incurring any liability to the other.