Sanctions Clause for Time Charter Parties
27 January 2023
1. Nothing in this charter party shall be read so as to require either party to act in any manner which in its reasonable judgment is inconsistent with or prohibited under any applicable laws, regulations or sanctions of the UN, EU, USA, UK, Switzerland, Singapore or other jurisdiction applicable to such party (‘Competent Authorities’) relating to asset freeze, foreign trade controls, trade restrictions, export controls, embargoes, and/or international boycotts or sanctions of any type (“Sanctions”).
2. Each party warrants for themselves, in connection with this charter party, that they presently do and will, at all times throughout this charter party, adhere to any and all Sanctions and are not presently subject to Sanctions. Each party (the indemnifying party) undertakes to indemnify, defend and hold harmless the other party against any and all losses, damages, expenses, liabilities and all associated expenses incurred or sustained by the other party as a result of the indemnifying party’s violation of whatsoever nature of Sanctions in connection with this charter party. Upon breach of this clause and subject to paragraph 6 D below, by either party the other party may terminate this charter party without prejudice to any of its other rights.
3. Charterers warrant that any orders given to the vessel will not breach Sanctions. Charterers further warrant that any services or bunkers they supply to the vessel and any cargo to be loaded, carried and discharged under this charter party is not subject to Sanctions and/or does not originate from, nor is supplied by and will not be delivered by or to any person/entity which would result in a breach of Sanctions by reason of that person/entity, or any person/entity owned or controlled by such persons/entities, or known or suspected by Charterers to be acting on behalf of any person/entity, being listed by any of the Competent Authorities (each a “Listed Party”) or any person or entity subject to Sanctions in any way whatsoever . Likewise, Owners represent and warrant that the Vessel or any substitute, her equipment, crew and any necessaries supplied to the Vessel are not owned financed by or chartered, purchased, supplied or hired (whether through intermediaries or otherwise) from any Listed Party or any person or entity subject to Sanctions.
4. Charterers and Owners each warrant that, in connection with this charter party, none of their respective sub-contractors and/or contractual parties (including without limitation sub-charterers, shippers, receivers, cargo interests, bunkers and lubes suppliers, port agents, port operators, local representatives, managers, disponent owners, head owners, insurers and banks) is a Listed Party or any person or entity subject to Sanctions.
5. Owners further represent and warrant that the Vessel or any substitute, is not a designated vessel under UN resolutions or trade or economic sanctions, laws or regulations of any of the Competent Authorities
6. If at any time in the reasonable judgment of a party, the performance of any voyage under this charter party is in breach of Sanctions (including but not limited to by reason of previously suspended or withdrawn Sanctions being reintroduced or new Sanctions being imposed), either party may notify the other that it invokes the provisions of this sub-clause 6.
If such a notice is given:
A) prior to loading, then Charterers shall give alternative orders and the Vessel shall remain on hire throughout; or
B) at any point in time whilst cargo is on board the Vessel, then the parties shall cooperate in finding a mutually acceptable solution to arrange the discharge of any cargo remaining on board the Vessel. If discharge at the intended port is prohibited due to Sanctions, the Owners shall have the right to refuse to proceed to the discharge port, and the Charterers shall be obliged to issue alternative voyage orders as soon as is reasonably practicable and the Vessel shall remain on hire throughout (save where the reason that the intended voyage could not be performed was the result of Owners' breach of this clause).
C) Charterers shall indemnify Owners against any and all claims brought including but not limited to those made by the owners of the cargo and/or the holders of bills of lading and/or sub-charterers against the Owners by reason of the Owners' compliance with such alternative voyage orders or delivery of the cargo in accordance with this sub-clause 6, save where the reason that the intended voyage could not be performed was the result of Owners' breach of this clause.
D) Notwithstanding Clause 2 above and 6A above, where Charterers can no longer use the Vessel for the intended cargo since in the reasonable judgment of the Charterers the Owners and/or the Vessel have become in breach of Sanctions or a Listed Party they shall have the right to terminate this Charter once cargo free but such termination shall be Charterer’s sole remedy for the breach save for damages for any proven losses directly incurred in relation to the voyage concerned where the Owners are in breach of clause 2.
7. Either party shall also be entitled to invoke the above sub-clause 6 if, as a result of any performance under this charter party, it, any company in its group of companies, its insurers, managers or crew or its employees would in that party’s reasonable judgment be placed in breach of Sanctions and/or become the subject of adverse action by any Competent Authorities.
8. Upon request, each party shall provide to the other party such documented information as the other party or its insurers may reasonably require to assess if any employment under the Charter Party might be subject to Sanctions. The party requesting the information is entitled to refuse to proceed with or suspend the employment until such information is provided and they have had a reasonable period of time to consider it before deciding whether to proceed with the employment.
9. Charterers warrant that any cargo to be loaded under this Charter does not originate from Russia (or where such cargo is to be loaded, that it is compliance with the Price Cap measures from the Competent Authorities and Charterer will provide Owners with the required attestation and / or documentation prior to such cargo being loaded). In the event Charterers become aware of circumstances that provide reasonable cause to suspect the Vessel has or may be involved in trading under the Charterparty in violation of the Price Cap measures, Charterers shall immediately notify Owners in writing.
10. Notwithstanding anything to the contrary in this charter, if the voyage (laden or ballast) includes transit through an area where any local or state authorities require the provision of a letter from Owner’s P&I Club confirming that cover will be maintained the Vessel shall remain on hire notwithstanding any delay caused by this requirement or the provision of the said letter.
11. Charterers shall ensure that a clause similar to this shall be incorporated into all sub-charters and any bills of lading and relevant contracts of sale and purchase relating to the cargo.