Shipping arrangements

specific wordings which may be inserted into specific voyage charters.

Voyage charters normally require the vessel to have all of the required approvals
and certifications to carry out the intended voyage. It is therefore very common for
owners to warrant in the charter that the vessel is in possession of approval from
specified oil majors or from other organisations such as Rightship, which is a ship-
vetting organisation. It is also fairly common for disputes to arise because vessels can
lose such approvals on the basis of an inspection when they go into load or
discharge, or because their status changes as a result of some earlier problem which
is picked up by a charterer or vetting organisation.
Generally, owners are responsible for all insurance arrangements for the vessel.
However, this will not be the case if they intend to send the vessel into a war zone,
or into another area where additional premiums may be payable because of the
threat of terrorist activity or piracy. In such cases where the danger is evident at the
time the charter is entered into, there will normally be specific provision for
charterers to pick up the cost of such additional insurance premiums. The position
can be different when the danger only arises after the charter has been entered into
because of a sudden flare-up. This latter situation gives rise to complex issues which
are beyond the scope of this chapter.

2.3 Contracts of affreightment and bespoke charters

There are a number of situations in which a traditional time or voyage charter is not
appropriate. An example of a situation which is commonly encountered is with
floating production storage and offtake (FPSO) and similar multi-purpose production
and storage units. The challenge with these production units is that they only have
a finite storage capacity and therefore depend on shuttle vessels to offload crude oil
on a regular basis.
There are a number of challenges posed by this kind of arrangement. The first is
that the offtaking vessels needs to be compatible with the loading facilities at the
floating production storage and offtake. The second is that the operator has to be
sure that vessels will turn up on a regular basis to avoid the floating production
storage and offtake storage filling up, which could lead to the production unit having
to be shut down.
A further challenge is posed by the degree of flexibility which the operator of the
floating production storage and offtake wants. It is possible to have a very inflexible
contract of affreightment under which the lifting vessel can only be ordered to
discharge at a limited range of nearby ports, and the operator of the floating
production storage and offtake is not entitled to send the vessel to a discharge port
which is further away. The normal solution is to enter into a contract of
affreightment under which the parties agree on a minimum and maximum volume
of crude oil to be lifted over a period, and agree to a regular schedule of liftings. This
is on the basis that the owner guarantees that whichever vessel is used for a particular
lifting will be technically capable of loading safely from the production unit.
Very often this kind of arrangement is a bespoke contract drafted on the basis
that, in respect of each vessel which loads from the offshore unit, a separate voyage
charter will be deemed to arise based on a standard Asbatankvoy or BPvoy charter

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