Research On Legal Risk Of BIMCO Standard Newbuilding Contract Under The Principle Of Fairness

The 21^st century is a period of historic development for China's shipbuilding industry which the three shipbuilding indexes of China surpassed Korea and Japan in an all-round in 2010,ranking first in the world for the first time and keeping for many years.Along with the development of the shipbuilding industry,there are increasing shipbuilding disputes between Chinese shipyards and foreign shipowners.Shipbuilding contracts play a key role.It is necessary to choose a fair and reasonable standard shipbuilding contract.BIMCO Standard New Shipbuilding Contract?NEWBUILDCON?launched by the Baltic International Shipping Council?BIMCO?is the best choice for many foreign shipowners.However,as NEWBUILDCON protects shipowners'interests whose provisions against the principle of fairness in many articles,Chinese shipyards need to carefully study the contract terms and do a good job in risk prevention to avoid unnecessary legal risks when applicable.The paper is divided into four chapters,which are the introduction of BIMCO Standard Newbuilding Contract,Analysis of Legal Risks under BIMCO Standard New Shipbuilding Contract,A Comparative Study of Risk Allocation Mechanism between Japan Shipbuilding Industry Association Standard Shipbuilding Contract?SAJ FORM?and China Maritime Arbitration Commission Standard Newbuilding Contract?Shanghai Form??the CMAC FORM?,and Rebalancing Proposals of Legal Risk under NEWBUILDCON.Chapter ONE,BIMCO Standard Newbuilding Contract.The first section introduces the definition,nature and significance of standard shipbuilding contract in practice.The second section describes the characteristics of NEWBUILDCON in form and content.The third section discusses the violation of the principle of fairness by NEWBUILDCON,including the guiding significance of the principle of fairness to NEWBUILDCON,the specific provisions of the violation of the principle of fairness by NEWBUILDCON,and the unfair distribution of legal risks.Chapter TWO,Analysis of Legal Risks under BIMCO Standard New Shipbuilding Contract,including unbalanced distribution of legal risks in ship production stage,unbalanced risk allocation in case of force majeure and unfair exercise of options.First,the shipyard is responsible for the ship design and design defects,whether the design is from the shipyard or the shipowner.Second,the shipowner has the right to unilaterally require the shipyard to modify or change the technical specifications.The shipyard must implement the shipowner's amendments to the technical specifications.If it does not modify or change,it will constitute a breach of contract.Third,the shipyard are responsible for additional quality assurance.In addition to repairing the ship's warranty defects as stipulated in general shipbuilding contracts,the shipyard also need to bear the ship's losses directly and immediately caused by the warranty defects.Fourth,the discussion of force majeure terms caused by Novel Coronavirus Pneumonia?NCP?.It is only stipulated that delivery can be delayed in case of force majeure,and there is no provision to terminate the contract if the purpose of the contract cannot be achieved in NEWBUILDCON.And the precondition of the shipyard's delay in delivery is to fulfill the notice obligation.Fifth,the Options term is specified in NEWBUILDCON.The Options term is a necessary obligation for the shipyard but a right for the shipowner,which the rights and obligations of both parties are not equal.Chapter THREE,Comparison of Risk Allocation Mechanism between SAJ FORM and CMAC FORM.First,the two standard shipbuilding contracts do not attribute the responsibility of ship design to the shipyard,and the shipyard does not have to bear the responsibility of ship design defects absolutely.In CMAC FORM,more detailed provisions are made on the responsibility for design defects,and it is clear that both shipyard and shipowner can bear the design responsibility,and each party shall bear legal risk for design defect liability.Second,the premise of SAJ FORM is to obtain the shipowner's adjustments to the contract price,delivery date and other terms.On this basis,CMAC FORM also requires the modification or change to be agreed by both parties in writing.Third,neither SAJ FORM nor CMAC FORM has this additional quality assurance responsibility,and the shipyard does not assume indirect losses due to ship defects.Forth,the time period and scope of delay in delivery are more extensive than those stipulated by NEWBUILDCON.And the shipyard's obligation of notice is not a precondition for the exercise of the delayed delivery.Fifth,the Options term is not a commercial practice,and SAJ FORM has no provisions on the Options.CMAC FORM gives the shipyard the right to negotiate that the shipyard has the right to negotiate with the shipowner to adjust the contract price of the option ships.Chapter FOURTH,in order to deal with the legal risks in NEWBUILDCON,this paper puts forward the following suggestions for improvement.First,design responsibilities shall be treated separately that the shipyard shall not be held liable for defects raised by the shipowner.Second,for the modification or change of technical specifications proposed by the shipowner,both parties shall reach an agreement,otherwise the shipowner shall pay the modification fee in advance,or stipulate the scope or period of modification,or other measures.Third,make it clear that the shipyard does not bear indirect loss liability,and limit the shipyard to bear additional quality guarantee liability.Fourth,when the purpose of the contract cannot be achieved due to force majeure,the shipyard shall be given the right to terminate the contract,and it shall be clear that the notice is not a precondition for the exercise of the right of delayed delivery.Fifth,delete or strictly restrict the Options term in the contract,including the exercise procedure,time limit,quantity and delivery date of the Options.From the perspective of the principle of fairness,this paper studies the legal risk-taking in the application of NEWBUILDCON,and compares the provisions of SAJ FORM and CMAC FORM for the same articles.To better balance legal risks and get corresponding improvement opinions.