NYPE 2015 - The New Charter Party Form

On 15 October 2015, a new version of the New York Produce Exchange Time Charter form was issued (NYPE 2015).

NYPE 2015 is the product of a co-operative effort between BIMCO, the Association of Shipbrokers and Agents (ASBA), who are the copyright holders of the NYPE form, and the Singapore Maritime Foundation (SMF) and is jointly authored by the three organisations.

It is the result of three years work during which there was extensive industry consultation. As with any joint drafting exercise there will doubtless have been compromises.

In their press release, BIMCO described the objective of the NYPE revision as being “to produce a dry cargo charter party that reflects contemporary commercial practice and legal developments that have taken place in the past twenty years … which takes proper stock of the most commonly applied amendments and additional clauses used by practitioners in the dry cargo sector.”

It is significantly longer than previous NYPE editions, now amounting to 57 typed clauses and there is also a four-page form requiring a detailed description of the chartered vessel.

That said, according to Inga Froysa, Chairperson of the BIMCO NYPE revision sub-committee:

“Users of the current NYPE form will certainly still recognise and be familiar with the core elements of the time charter party, but they can also expect to see some significant changes and improvements.

Notably, the contract incorporates many of the rider clauses that are routinely added to the existing NYPE – but we have made sure that any new clauses incorporated into the new NYPE are relevant, balanced and consistent with the other provisions.”

Of particular note is that NYPE 2015 is designed for adaption for either a single trip or a standard period. 

There are some additional clauses that apply only to period time charters (where the minimum charter period exceeds five months) and Members are advised to check carefully whether the additional clauses should or should not apply in the context of their own agreement.

It also includes provision to state whether the “Owners” are the legal or registered owners of the ship, or whether they are operating the ship under a bareboat (demise) agreement or are time chartering the ship from another entity.

Other notable changes include:

• The parties’ option either to agree that the ship will be delivered ready to receive cargo, or that it will be ready to receive cargo at the first loading port if different from the delivery place. It is important that parties make a careful selection and delete the option not to apply. If parties overlook this then the owners, by default, will be under a strict obligation to deliver the ship at the delivery place ready to receive cargo.
• Provisions designed to give greater certainty to the effect of delivery and re- delivery notices and in particular restricting the ability to give further employment orders contrary to the notices already given. This is intended to reverse the problem created by the “Zenovia” [2009].
• Clause 9 regarding bunkers, which whilst comprehensive in scope (dealing with prices, quality, sampling etc), extends over 3 pages in length!
• The right to damages after withdrawal for non-payment of hire and also a right to suspend service. The grace period notice required before withdrawal now applies even if the non-payment of hire was intentional.
• Amendment to the “Owners to Provide” clause to include “lubricating oil”.
• Amendment to the “Charterers to Provide” clause to include “customary pilotage”.  
• A clause specifically for speed and performance (as opposed to the mere speed and consumption description found in the NYPE 1993). Notably the performance warranty is to apply “throughout the duration of this charterparty” and so is a continuing warranty. There is also provision for the parties to resolve any speed and consumption claims by referring such disputes to an “expert” or “alternative weather service”, “whose determination shall be final and binding”.
• There is a detailed slow steaming clause (Clause 38) expressly to permit Charterers to give orders contrary to the traditional bill of lading obligation to prosecute voyages “with utmost despatch”.

Rider Clauses

NYPE 2015 includes within its text a number of BIMCO clauses often added as Rider Clauses. However, Members should note NYPE 2015 does not include a number of BIMCO clauses that Members might now regard as necessary inclusions, such as BIMCO’s:

• Asian Gypsy Moth Clause.
• Bunker Non-Lien Clause.
• Cargo Fumigation Clause.
• Anti-Corruption Clause.

Only time will tell whether the authors of NYPE 2015 have indeed met their objective of producing a version of NYPE that has “global appeal”.

Perhaps an objective indicator will be when the authors of Wilford on Time Charter Parties feel it necessary to issue a new edition to reference NYPE 2015.

In the meantime, NYPE 2015 was published by BIMCO with a 32 page booklet of explanatory notes. Members will however undoubtedly have queries on NYPE 2015, and are asked to raise these with their usual FD&D contact.