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At the end of 2011, BIMCO approved, in consultation with the
shipping industry, a new version of the memorandum of agreement for
ship sale and purchase, SALEFORM 2012.
The revision process, undertaken by BIMCO and the Norwegian
Shipbrokers' Association, sought to identify the key clauses
most commonly amended, remove ambiguity from the previous version
and reflect current commercial practice.
The principal differences between SALEFORM 2012 and its
predecessor, SALEFORM 1993 are summarised below:
Deposit arrangements have been modernised.
Parties may choose their own percentage of the Purchase Price as
the Deposit (or a default figure of 10% of the Purchase Price
applies if not specified). A Deposit Holder is introduced (which
may not necessarily be a bank, but with the default position being
the appointment of the Seller's Bank if another entity is not
specified) and the trigger for lodging the Deposit is more clearly
fixed.
The trigger for payment of Purchase Price is
now tied into the issuing of the Notice of Readiness, with the
Purchase Price being paid 3 Banking Days after the Notice of
Readiness is tendered.
Notice of Readiness provisions have been
updated to include a requirement that notice is given at specified
intervals of (i) the date on which the Notice of Readiness is
intended to be given and (ii) the intended date and place of
delivery to assist Buyers to make delivery arrangements.
A new provision requires Buyers to declare their option to
complete a divers inspection 9 days prior to
delivery, which must take place in the presence of a Classification
Society surveyor. A further revision ensures Sellers cannot tender
Notice of Readiness before the divers inspection is completed. The
allocation of costs in connection with the divers inspection is
more clearly delineated.
Cancelling Date - the time period for Buyers
to accept or reject a new Cancelling Date (if the original
Cancelling Date has been missed) has been shortened to three
Banking Days.
Any repairs necessary as a result of the
divers inspection which do not affect class are now
permitted to be deferred until the next scheduled
drydocking. The Purchase Price will be reduced accordingly and the
method of calculating such reduction is explained.
The costs connected with survey of the tailshaft
system have been clarified, and the perceived ambiguity in
SALEFORM 1993 relating to costs of drydocking the Vessel has been
addressed.
Sellers must now more clearly identify spares and
excluded items in clause 7. Further, hired
items and those belonging to third parties on board at
inspection which have not been excluded from the sale are to be
replaced at Sellers' expense prior to delivery unless
specifically excluded.
The calculation method for bunkers and lubricating
oils now offers two alternatives, being Seller's
actual net price or current market price at port of delivery.
Changes to clause 8 regarding
documentation have been made largely to reflect
market practice. In addition, the grace period to allow such
documentation to be put in place following Notice of Readiness has
been removed in clause 14.
The scope of the Seller's warranty regarding
encumbrances in clause 9 has been
expanded.
The Condition on Delivery clause now provides
that the Vessel is to be delivered free of cargo and
stowaways.
Buyers' representatives on board will now
be required to sign Sellers' P&I Club's standard letter
of indemnity.
The Arbitration provisions have been expanded
in clause 16, particularly where the Agreement is
to be governed by English law.
New clauses to deal with Notices and
Entire Agreement have also been added.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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