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Shipping Offshore Update – June 2024

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Carbon capture – building a new ­value chain from a ­contractual perspective

With its history and extensive experience with CO2 management as an oil and gas nation, Norway is a leading country in building a new CCS value chain in the fight against climate change.


Transportation of CO2 – an emerging market

Following the Paris Agreement, Carbon Capture and Storage (CCS) has emerged as a promising tool to substantially reduce carbon emissions. Whilst CCS’s potential is considerable, it is still a developing industry that needs efficient means of transportation.


Calls on IMO to solve ­legal inconsistencies on ship recycling

BIMCO has, together with the International Chamber of Shipping, Norway, Bangladesh, India and Pakistan, urged the International Maritime Organisation (IMO) to solve possible conflicting requirements between the Hong Kong Convention and the Basel Convention ahead of the entry into force of the Hong Kong Convention on 26 June 2025. The potential conflicts may expose shipowners and others to severe consequences, particularly when recycling ships in the major ship recycling countries in South Asia such as Bangladesh, India and Pakistan – even if the ships and facilities comply with the Hong Kong Convention.


SHIPMAN 2024 – a welcome, gentle revision

Since its original introduction in 1988, the BIMCO standard ship management agreement SHIPMAN (revised in 1998 and 2009) has established itself as the global standard ship management agreement. Adopted on 22 March 2024, the new SHIPMAN 2024 represents a light touch revision of the standard form, incorporating established standalone clauses and new provisions reflecting these developments.


Integrating emissions trading schemes in ship management agreements – BIMCO’s new ETS clause and mandate letter

In advance of the recent inclusion, as from January 2024, of the shipping industry in the European Union Emissions Trading System (EU ETS), BIMCO introduced a new ETS clause tailored specifically for ship management agreements.


BIMCO publishes first standard-form quiet enjoyment letters for ship financing

Charterers are increasingly requesting to receive quiet enjoyment letters (“QELs”) from the mortgagees of chartered vessels. As there has not been any standard format for QELs, owners have often found themselves caught in the middle of protracted negotiations between the charterers and the mortgagees when QELs are requested. To meet the longstanding need for a standard format acceptable to charterers, mortgagees and owners, BIMCO published two standard form QELs on 21 February 2024.


Equipment leasing in the shipbuilding industry – inherent risks and how to mitigate them

In aviation and other sectors, equipment leasing has long been a recognised tool for companies looking to finance expensive items of equipment. Whilst to date equipment leasing has been less visible in the shipping industry, we are now seeing an increased interest in this type of financing from both shipowners and equipment lessors. However, leasing arrangements do include some inherent risks which the parties should seek to mitigate.


“Ever Given” – Court of Appeal upholds that no salvage contract was concluded

The English Court of Appeal has recently rendered judgment in the dispute between salvors and the shipowners as to whether a salvage contract on commercial terms had been made in connection with the re-floating of the “Ever Given” in the Suez Canal in March 2021 (SMIT Salvage & Ors v. Luster Maritime SA & Anr (The Ever Given) [2024] EWCA Civ 260). The judgment illustrates the importance of the parties making clear during negotiations whether they intend to be bound.


The Electronic Trade Documents Act 2023 – the framework we’ve been missing?

The Electronic Trade Documents Act, which came into force in September 2023, enables a “trade document” in electronic form to be used in the same way as its paper equivalent provided that certain criteria are met.


Norway has signed agreement which ensures international cooperation on the operation of autonomous ships

Norway has signed an agreement with the United Kingdom, Belgium, Denmark and the Netherlands to facilitate cooperation on the international operation of autonomous ships. The agreement is particularly aimed at the operation of autonomous ships in the North Sea basin, including ships for inspection and maintenance of existing and future offshore wind installations.


Working conditions at Turkish yards and the Norwegian Transparency Act

Norwegian media has recently published a number of stories on the alleged poor working conditions at Turkish shipyards. Norwegian shipowners contracting with foreign yards must be prepared to provide information on their efforts to ensure decent working conditions pursuant to the Norwegian Transparency Act.


Defence procurements at Norwegian yards – new rules on ownership control

Norway’s new long term defence plan will most likely lead to several new defence contracts. Contractors entering into such contracts may have to comply with additional contractual and regulatory requirements. This includes the Norwegian Security Act, and its recently revised rules on ownership control.


Direct lending coming to Norway

Direct lending has so far been largely absent in the Norwegian market due to regulatory constraints. However, the regulatory landscape is about to change which will present new possibilities for non-bank lending.