Renovation of REPAIRCON and MINREPCON
BIMCO's Documentary Committee approved the newly updated versions of REPAICON 2018 and MINREPCON 2018 in November last year. In this newsletter, we will introduce these standard contracts, as well as give an overview of the key alterations made to REPAIRCON and MINREPCON.
The standard contract REPAIRCON has become an increasingly popular contract for ship owners requiring work performed on their vessels. The contract can be used on work ranging from larger repair works to unscheduled emergency work. It may also be used for ship conversion work as well, however, this will require several amendments to the contract.
The last version of the REPAIRCON dates back to 2002. The purpose of last year's update was to ensure that the contract reflects the commercial practice at the repair yards and the recent legal developments. However, it should be noted that there are only a limited number of material amendments made by BIMCO.
A noteworthy amendment made to REPAIRCON is the amendment made to Clause 2 (a)(i) concerning performance of works. While the predecessor required the works to be performed in accordance with "the provisions of the Contract" and "the requirements of the Parties' regulatory bodies" to the reasonable satisfaction of the Owner, the 2018 version requires, in addition, that the works comply with the "Contractor's regulatory bodies, the Vessel's Flag State, Classification Society and other regulatory bodies stated in the Scope of Work" attached as Annex A to the contract.
Furthermore, material amendments have been made to the limitation of liability for the Contractor:
In REPAIRCON 2002, the limit for liquidated damages for delay is capped to the amounts set by the parties in Box 16 and by the contractors total liability cap in Box 15(a). However, if the parties leave these boxes empty, then the liquidated damages will be an uncapped risk for the Contractor. In REPAIRCON 2018, Clause 7 has been amended to include a default cap for liquidated damages amounting to ten per cent of the Contract Price, should the parties leave Box 17 (b) blank.
A carve out has also been introduced to the total liability cap in the REPAIRCON 2018 . The REPAIRCON 2018 makes a carve out for the contractors guarantee works (set out in Clause 7) from the total liability cap in clause 6 (iv)(1). This is a further strengthening of the Owner's position against the Contractor.
BIMCO has also introduced a Contractor's representative in the 2018 version of REPAIRCON. The contract now provides for daily meetings between the Parties representatives, who both are authorized to act on behalf of the relevant Party in respect of approval of plans, drawings, calculations and documents and agreeing and signing Work Variation Forms and invoices.
In contrast to several of the new standard contracts published by BIMCO in 2017 and 2018, the REPAIRCON 2018 has only incorporated one new boilerplate clause; i.e. an adjusted BIMCO Anti-Corruption Clause. Thus, the contract does not provide for any sanctions clause nor designated entities clause.
Similar to the newly updated standard, the REPAICON has updated its Dispute Resolution Clause, which also provides for arbitration in Singapore and Singapore/English law as an option.
Overall, the REPAIRCON 2018 appears to be a solid update of this commonly used standard and provides for a strengthened position for the Owners in general. This also reflects the current market trend, where the contractors and yards are in greater need of work and thus the commercial leverage has shifted to a greater extent than the situation was back in 2002. What is apparent from the updated REPAIRCON, is that BIMCO has improved the language and the overall structure of several of the contract's main clauses.
The standard contract MINREPCON is intended for minor afloat repairs at commercial berths or at anchorage and is therefore not an alternative to REPAIRCON.
The intended use of this standard contract is for owners to conclude written contracts with individuals or sub-contractors performing minor repairs that would normally not require a longer and more comprehensive contract. MINREPCON is a short form, without many of the limitations and protections provided for in REPAIRCON.
The MINREPCON 2018 is an update of the earlier version from 2003. In contrast to the REPAIRCON 2018, the MINREPCON has undergone a full review with several material amendments.
BIMCO has introduced the following new regulation into the standard form:
- Clause 2.6: Regulation of liability of loss/damage for negligence and willful misconduct.
- Clause 2.7: Regulation of liability for death and personal injury for own personnel.
- Clause 2.8: Limitation of liability for Contractor being limited to ten times the Contract Price.
- Clause 2.9: Contractors duty to keep suitable insurance in place during the Contract.
It should also be noted that Clause 2.12 has been amended, so that the Contractor no longer has a right to exercise a lien over the Vessel in accordance to the contract.
An important amendment to the MINREPCON is also the introduction of an updated law and jurisdiction clause. In the 2003 version of the contract, the law and jurisdiction would follow the place if signing of the contract. Now the MINREPCON has a similar box as other BIMCO standards, where the Parties agree on a law and jurisdiction of their choosing.
Overall, the revision of MINREPCON is more comprehensive and far-reaching than the revision of REPAIRCON. However, MINREPCON is still a short form contract not suitable as an alternative for REPAIRCON, just as intended by BIMCO.
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Stian S. Tennfjord
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Claus Severin Mørch
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