Sanctions Clause for Voyage Charter Parties
14 February 2024
1. Nothing in this Charterparty 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 United States of America, United Nations, European Union, United Kingdom,, Switzerland, Singapore and/or other jurisdiction applicable to such party, or their financiers, insurers, or reinsurers (“Competent Authorities”) relating to asset freeze, foreign trade controls, trade restrictions, export controls, embargoes, or international boycotts or sanctions of any type (“Sanctions”).
2. Each party warrants for themselves in connection with this Charterparty, that they presently do and will, at all times throughout this Charterparty, 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 Charterparty. Upon breach of this Clause, and subject to Clause 6D below, by either party the other party may terminate this Charterparty 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 Charterparty 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, bunkers 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 Charterparty, none of their respective sub-contractors and/or contractual parties (including without limitation sub-charterers, shippers, receivers, cargo interests, bunkers and lubricant 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 Sanctions.
6. If at any time in the reasonable judgment of a party, the performance of any voyage under this Charterparty 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 Clause 6.
If such a notice is given:
A) at any time prior to loading, notwithstanding any other provisions, the party not in breach of any Sanctions may cancel the Charterparty and claim damages; or
B) at any time after any part of the cargo has been loaded:
i. if the Vessel remains within the administrative port limits of the loadport, the party not in breach shall have the right to discharge the cargo at the loadport at the risk and expense of the party in breach and/or follow the orders of any relevant Competent Authority;
ii. if the Vessel has left the administrative port limits of the loadport, the parties shall cooperate in finding a mutually acceptable solution to arrange the discharge of any cargo remaining on board the Vessel and follow the orders of any relevant Competent Authority. In the event that no mutually acceptable solution can be agreed within [X] days, the party not in breach shall have the right to sail the Vessel to, and discharge the cargo at, any safe place or port within the originally agreed discharge range or, if not agreed, any safe place or port and/or follow the orders of any relevant Competent Authority. Save where the reason the original voyage could not be performed was the result of Owners’ breach of this Clause, if no freight rate for the voyage actually performed is specified in the Charterparty or has been agreed between the parties, Charterers shall be liable to pay the market rate failing which a reasonable rate of freight for the voyage performed, additional time at the demurrage rate, shifting and/or port expenses incurred over and above those that would have been incurred had the Vessel proceeded directly to the final discharge port and all additional costs and expenses in connection with such lawful orders and/or discharge of any such cargo.
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 cargo being discharged at a port different to that agreed under the relevant contract of carriage, in accordance with this Clause 6.
D) Notwithstanding Clauses 2 and 6A above, where Charterers can no longer use the Vessel for the intended voyage since the Owners and/or the Vessel have become in breach of Sanctions or a Listed Party, they shall have the right to terminate this Charterparty only once the Vessel is cargo free but such termination shall be Charterers’ sole remedy for the breach save for damages for proven losses directly incurred in relation to the intended voyage where the Owners are in so in breach.
7. Either party shall also be entitled to invoke the above Clause 6 if, as a result of any performance under this Charterparty, 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 as soon as reasonably practicable to the other party such documentation and/or information as the other party, or their financiers, insurers or reinsurers may reasonably require to assess if any voyage under this Charterparty might be, is, or was subject to Sanctions and/or to assess whether there has been compliance with Sanctions. The party requesting the documentation and/or information is entitled to refuse to proceed with or suspend performance of this Charterparty until such information is provided and they have had a reasonable period of time to consider it before deciding whether to proceed with the voyage. The party responsible for providing the documented information shall be liable for any time lost as a result of delay or failure to provide such documented information in accordance with this Clause. In the event that any voyage is performed pursuant to a specific exemption to Sanctions, the parties shall retain copies of the relevant documentation for a period of minimum 5 years from the date of the final discharge.
9. Charterers warrant that any cargo to be loaded under this Charterparty does not originate from nor has been exported from Russia or where such cargo is to be loaded under this Charterparty, Charterers warrant that it is in compliance with the price cap measures in relation to oil and petroleum products as implemented by the Competent Authorities, as amended from time to time (“Price Cap Measures”), and that Charterers will provide Owners with the required attestations and such documentation as Owners, or their financiers, insurers or reinsurers may reasonably require 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 this Charterparty in violation of the Price Cap Measures due to cargo loaded on the Vessel by the Charterers, Charterers shall immediately notify Owners in writing and the provisions of Clause 6B shall apply if such notification is made whilst the cargo is on board the Vessel. Charterers shall indemnify Owners and hold Owners harmless against any and all claims, liabilities, delays and losses, damages, costs, penalties and fines whatsoever suffered by the Owners resulting from the violation of the Price Cap Measures.
10. 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.
