New Terms for BIMCO Standard Bunker Contract Expected Next Week

The new Terms are expected next week. File Image / Pixabay

BIMCO today said its Documentary Committee is expected to adopt a new version of the standard contract Bunker Terms next week in New York.

"We are quietly confident that the Bunker Terms will be adopted in the first week of May. A lot of work has gone into developing a contract that strikes the right balance between the needs of the bunker suppliers and the buyers, and I believe we’ve been successful," said Francis Sarre, Chairman of the BIMCO Documentary Committee.

Having attempted to create such standard language in the past, including the FUELCON Marine Fuels Purchasing Agreement in the 1990s and the Standard Bunker Contract in 2002, BIMCO's most recent standard terms were released at the end of 2014.

Among the factors leading to a review of the current terms was a 2016 ruling by the UK Supreme Court in the so-called "Res Cogitans" OW Bunker UK test case as part of the fallout from the former bunkering giant's bankruptcy.

BIMCO says changes in the new form include detailed delivery provisions for when the bunkers must be delivered, both in situations when the vessel is ready to receive fuel within the agreed delivery window and when it is not.

"In terms of payment, the default credit period is 30 days, which corresponds to general market practice. To remove the credit period altogether would not be realistic considering that it is estimated that the bunker industry today is financed by USD 10-20 billion and buyers would not have the liquidity to cope without the credit," says BIMCO.

The new BIMCO Bunker Terms also include provisions regarding claims management for quantity, quality and delay claims.

The orgnaisation says its Documentary Committee consists of over 60 people from across the shipping industry, including shipowners and ship operators, while those helping to draft the new terms included the International Bunker Industry Association (IBIA) and bunker trader representatives that together account for 25% of the total bunker volume sold globally.