IBIA has reviewed the BIMCO Bunker Terms 2018 and some of our members have participated in the redrafting of the document. The revised BIMCO Standard Bunker Terms and Conditions, which replace the 2015 edition, were approved by BIMCO’s Documentary Committee on 2 May.
BIMCO’s new Bunker Terms were developed by a cross-industry group which included a number of bunker trader representatives whose companies together apparently account for 25% of the total bunker volume sold globally. “I think it is a positive step for the industry that representatives for the bunker traders and shipowners have agreed on a standard set of terms, which both parties consider fair and balanced,” says Francis Sarre, Chair of the BIMCO
In a press release, BIMCO highlighted the introduction of a maximum limit of the parties’ liabilities as a key change that it believes will lead to wider adoption of the contract. The default limit is the invoice value, but not less than US$500,000.
The previous BIMCO Bunker Terms edition had unlimited liability, which has been one of the main reasons why suppliers have been reluctant to use it to a larger extent, according to Henrik Zederkof, Senior Director of Bunker Holding Group and an IBIA board member.
Zederkof, who took part in the redrafting of the BIMCO bunker terms, says the 2018 revision has addressed some of the main concerns about the 2015 edition and sees it as a positive step towards a more professional industry.
“I believe the introduction of the 1-page election sheet, which allows for customisation of provisions in the BIMCO Bunker Terms, is both a very good and flexible solution,” Zederkof notes.
The election sheet allows the parties to specify certain aspects including legal jurisdiction, time limits for claims, and the liability limit.
BIMCO’s Sarre hopes that the changes will lead to a wide adoption of the standard terms across the industry, which “should save time on drafting contracts and get greater clarity on the contractual obligations and liabilities in the contract. This will hopefully bring more transparency to the bunker industry.”
IBIA’s Chief Executive Officer, Justin Murphy, observes: “IBIA members span the entire industry value chain including suppliers, traders, brokers, ship owners/operators and bunker buyers. IBIA is supportive of BIMCO’s initiative to develop more balanced Terms and Conditions from the perspective of both buyers and sellers of bunker fuels.”
The terms and conditions offered by the revised BIMCO document are “a major step in the right direction” says Zederkof, who predicts this will lead to a much higher use of the BIMCO Bunker Terms 2018 than the previous edition.
IBIA welcomes efforts to achieve better alignment in the industry to improve efficiency, transparency and compliance across the board, and as such we would like feedback from our members regarding the new BIMCO Bunker Terms on how to support these efforts.