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Bareboat charterers & class certificates

Are Bareboat charterers under an absolute obligation to maintain vessel’s class or merely have to take steps to reinstate expired class certificates within a reasonable time? and is maintaining Class a condition precedent or an intermediate term of C/P?

These questions came up in The Arctic [2019], where a vessel was chartered on BARECON'89 form and one of the clauses stated that “Charterers shall maintain the vessel….and shall keep the vessel with unexpired classification of the class…and with other required certificates in force at all times." Charterers allowed the Class to expire and owners terminated the C/P. Arbitration tribunal decided in favour of charterers. Breach was deemed to be not serious enough to deprive owners of the substantial benefit of the charter.

On Appeal, the court first dissected the clause which placed both maintenance and classification obligations on charterers, and found latter to be distinct from maintenance obligations, and to be absolute one. They may have been related but did not form part of a single obligation. As for the second ques., it was held that Class must be maintained at all times. Breach of such is not trivial, since it also relates to regulatory issues and affects insurance, financiers & cargo interests.

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