Shipbuilding Law Blog

Excerpt from “A Shipyard Lawyer Handbook”, ISBN 978-981-11-6760-7. This chapter summarizes the process of a shipbuilding contract from the inception of a shipbuilding project to vessel delivery. In the course of the discussion, readers will follow the development of a shipbuilding project, beginning with buyer’s visit to a selected shipyard to assess its capability for a potential shipbuilding project, followed by bid proposal, contract signing, construction and delivery of the vessel.  Pre-Contract The inception of a shipbuilding project is usually preceded by a buyer’s visit to a selected shipyard for discussion and to assess its capability. The itinerary during such a visit will normally include an opening meeting, followed by yard tour, commercial and technical discussions. Before the visit, it is common for shipbuilder to prepare a shipyard information memo. The buyer will usually provide shipbuilder with a meeting agenda and draft confidentiality agreement, also known as a no...

In an ideal scenario, shipbuilders will be entitled to relief because of the impact of COVID-19 provided they fulfil the following conditions; (a) Quarantines, epidemics, pandemics, infectious disease, requirements of governmental authorities, shortage of supply and manpower, for example, are covered in the force majeure clause of their shipbuilding contracts, (b) Shipbuilders have done everything right and comply with notice requirements in the force majeure clause to gain protection, and (c) Shipbuilders has done everything possible to mitigate such delays. However, such relief will only be temporary if the delays are protracted as the buyer may still have the right to terminate the shipbuilding contract for excessive delays. Bimco NEWBUILDCON. Clause 39(a) Buyer’s Termination , The Buyer shall have the right to terminate this Contract forthwith upon giving notice in the event that (iii) (1) the delivery of the Vessel is delayed by more than 180 days by virtue of events that...