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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. 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

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  1. Shipbuilding & Repair Contracts Attorney-at-Law/Partner Axel Øwre Advoco Advokatfirma DA UiO/NIFS October 20, 2010

  2. Scope • Chapter 4 in Scandinavian Maritime Law, 2nd ed. 2004, page 83 - 106 or • “Innføring i Sjørett 7. utgave 2010, side 67 – 90”

  3. Starting point Ship Management Customer 1 Financing Customer 2 ? Ship owning Company Charterer Insurance Customer 3

  4. Shipbuilding contracts Shipbuilding Contract (a sales contract) Builder/Seller (“Shipyard”) Buyer/Purchaser (“Ship owning Company”) Question 1: Just Builder & Buyer ?

  5. Shipbuilding contracts-cont’d Sales Contract Purchaser/Buyer Contractor/Seller Shipbuilding Contract Builder (“Shipyard”) 5

  6. Shipbuilding contracts-cont’d Purchaser/Buyer (Owner/Leasing Company) Bareboat Charterer Charter Party Shipbuilding Contract Builder (“Shipyard”)

  7. 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?

  8. 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

  9. 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

  10. Interested parties in additon to the Builder and the Buyer Among such parties you may find: • Contractors • Authorities • Insurance companies • Financial institutions • Charterers

  11. 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?

  12. 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?

  13. Repair Contracts cont. • Delivery time • Price and manner of payment • Sanctions available for breach of contract • Other damages www.advoco.no

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