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Shipbuilding & Repair Contracts. Attorney-at-Law/Partner Axel Øwre Advoco Advokatfirma DA UiO/NIFS October 20, 2010. Scope. Chapter 4 in Scandinavian Maritime Law, 2nd ed. 2004, page 83 - 106 or “Innføring i Sjørett 7 . utgave 20 10 , side 6 7 – 90 ”. Starting point. Ship

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shipbuilding repair contracts

Shipbuilding & Repair Contracts

Attorney-at-Law/Partner

Axel Øwre

Advoco Advokatfirma DA

UiO/NIFS

October 20, 2010

scope
Scope
  • Chapter 4 in Scandinavian Maritime Law, 2nd ed. 2004, page 83 - 106

or

  • “Innføring i Sjørett 7. utgave 2010, side 67 – 90”
starting point
Starting point

Ship

Management

Customer 1

Financing

Customer 2

?

Ship owning Company

Charterer

Insurance

Customer 3

shipbuilding contracts
Shipbuilding contracts

Shipbuilding Contract

(a sales contract)

Builder/Seller

(“Shipyard”)

Buyer/Purchaser

(“Ship owning Company”)

Question 1: Just Builder & Buyer ?

shipbuilding contracts cont d
Shipbuilding contracts-cont’d

Sales Contract

Purchaser/Buyer

Contractor/Seller

Shipbuilding Contract

Builder

(“Shipyard”)

5

shipbuilding contracts cont d6
Shipbuilding contracts-cont’d

Purchaser/Buyer

(Owner/Leasing Company)

Bareboat Charterer

Charter

Party

Shipbuilding Contract

Builder

(“Shipyard”)

shipbuilding standard contracts
Shipbuilding – standard contracts
  • Yard friendly contracts

SAJ Form – Japanese Shipbuilders. Often adjusted, but need to be adjusted to secure balance

AWES Form – Association of West European Shipbuilders

Norwegian standard Shipbuilding Contract [Duis p 17 – 67]

  • Buyer friendly contracts

Few owners do have their own standard, but those who has need to be a major in order to gain accept for such a document

  • Agreed contracts

Standard form Shipbuilding Contract 2000 – considered to be balanced

Bimco’s Newbuildcon 2007. Different organized but risk wise meant to be in line with Standard form Shipbuilding Contract 2000

  • Does market competition means anything for the content of a shipbuilding contract?
shipbuilding contracts cont d8
Shipbuilding contracts-cont’d

A few topics worth focusing on, apart from main dimensions and characteristics, speed, warranty of quality etc. :

  • Design responsibility
  • Buyer’s supplies
  • Contingency fund
  • Buyers representative
  • Security for instalments paid to the Builder by the Purchaser
  • Who is the Owner during the building period
shipbuilding the future
Shipbuilding – the future
  • Even more competition
  • Labour costs
  • Subsidies
  • Japan >> Korea >> China >> India (?) >> ?
  • Where – not necessarily in just one country
  • (In this respect and with effect as from 01.07.2009 an alteration in the Norwegian Maritime Code Section 31 went into force.)
  • Who sets the standard ?
  • Environmental requirements – need for long term strategy
  • Other risk factors
interested parties in additon to the builder and the buyer
Interested parties in additon to the Builder and the Buyer

Among such parties you may find:

  • Contractors
  • Authorities
  • Insurance companies
  • Financial institutions
  • Charterers
repair contracts
Repair Contracts
  • In general
  • Some basic differences regarding facts and power to negotiate when comparing with shipbuilding
  • Formalities – efficiencies and thoroughness; advice and decisions – who decides?
repair contracts cont
Repair Contracts cont.
  • Standard contracts ? [Repaircon Duis p 2 – 11]
  • General conditions
  • Individual repair contracts
  • Scope of work sometimes more difficult to define compared with shipbuilding contracts. Why?
  • What about quality of work?
repair contracts cont13
Repair Contracts cont.
  • Delivery time
  • Price and manner of payment
  • Sanctions available for breach of contract
  • Other damages

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