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Circulars: SHIP MANAGERS - 9804Y2K Year 2000 clauses for ship management contracts

Our Ref: 98/04

February 1999

To: Ship Manager Members and their Brokers:

Year 2000 clauses for ship management contracts

Ship Managers are being asked to take over the management of ships without sufficient time available to confirm that the ship-board computerised systems and equipment are Year 2000 compliant.

ITIC recommends the attached clauses be added as an addendum to a BIMCO "Shipman 98" or similar agreement.

If you are using the old BIMCO "Shipman" agreement, the appropriate clause to refer to in relation to the technical management of the ship is 4. You would also have to refer to your existing "Shipman" agreement, rather than "Shipman 98".

The clauses clearly establish whether it is the owner's or the manager's responsibility to arrange for Year 2000 compliance onboard the ship. If there is insufficient time for any remedial action the manager should make it clear, as in clause B, that he is not required to take any steps to ensure Year 2000 compliance and that sole responsibility will remain with the owner.

We also felt it necessary to define the meaning of Year 2000 compliance by reference to British Standards Institution DISC PD-2000-1, rules 1 to 4. This means that neither performance nor functionality is affected by dates prior to, during, and after the Year 2000. In particular:

If you have any questions about the definition of Year 2000 compliance, or these recommended clauses, please contact the Managers.

ITIM Co. Limited, Managers
International Transport Intermediaries Club Ltd.

RECOMMENDED SHIP MANAGEMENT CLAUSES

Addendum number .......to "Shipman 98" Agreement dated ......

Year 2000 Clause

*A:
(i) The Managers having assumed the Technical Management of the Vessel in accordance with Clause 3.2 of the above Agreement as from (date), it is agreed that their responsibilities shall include ensuring, by the use of best endeavours, that all the Vessel's shipboard computerised systems and equipment as may affect the safe and efficient management or operation of the Vessel, are Year 2000 compliant (as defined by BSI DISC PD-2000-1, rules 1 to 4), provided that the Managers shall be under no responsibility or liability for any measures already taken in this respect by or on behalf of the Owners prior to the said date, details of which are contained in Schedule 1 hereto; and provided also that the Managers' responsibilities in this regard shall be limited to those set out in Schedule 2 hereto.
(ii) The Owners agree that the Managers shall be entitled to engage, at the Owners' expense, such expert assistance as the Managers may deem necessary in order to enable them to perform their obligations hereunder. Further, the Owners undertake to keep the Managers in funds sufficient to enable them to fulfil their said obligations. Should the Owners fail to do so, then the Managers shall be under no responsibility or liability for the non-completion or non-performance of their duties to the extent that this arises out of Owners' failure to put the Managers in funds.
*B:
The Managers having assumed the Technical Management of the Vessel in accordance with Clause 3.2 of the above Agreement, it is nevertheless hereby agreed that they shall not be required to take any steps to ensure that the Vessel's shipboard computerised systems and equipment as may affect the safe and efficient management or operation of the vessel are Year 2000 compliant (as defined by BSI DISC PD-2000-1, rules 1 to 4), and the Owners shall retain full responsibility therefor.
C:
All other terms and conditions of the Agreement are to remain in full force and effect.

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SIGNED

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SIGNED

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DATE

Note: * delete as applicable

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