1. Shipbuilding & Repair Contracts Attorney-at-Law/Partner Axel Øwre Advoco Advokatfirma DA UiO/NIFS October 20, 2010

2. 2 Scope Chapter 4 in Scandinavian Maritime Law, 2nd ed. 2004, page 83 - 106 or “Innføring i Sjørett 7. utgave 2010, side 67 – 90”

3. 3 Starting point Customer 1 Customer 2 Customer 3 Charterer Insurance Financing Ship Management Ship owning Company ?

4. 4 Shipbuilding contracts Buyer/Purchaser (“Ship owning Company”) Builder/Seller (“Shipyard”) Shipbuilding Contract (a sales contract) Question 1: Just Builder & Buyer ?

5. 5 Shipbuilding contracts-cont’d 5 Purchaser/Buyer Contractor/Seller Sales Contract Builder (“Shipyard”) Shipbuilding Contract

6. 6 Shipbuilding contracts-cont’d Bareboat Charterer Purchaser/Buyer (Owner/Leasing Company) Charter Party Builder (“Shipyard”) Shipbuilding Contract

7. 7 Shipbuilding – standard contracts Yard friendly contracts SAJ Form – Japanese Shipbuilders. Often adjusted, but need to be adjusted to secure balance AWES Form – Association of West European Shipbuilders Norwegian standard Shipbuilding Contract [Duis p 17 – 67] Buyer friendly contracts Few owners do have their own standard, but those who has need to be a major in order to gain accept for such a document Agreed contracts Standard form Shipbuilding Contract 2000 – considered to be balanced Bimco’s Newbuildcon 2007. Different organized but risk wise meant to be in line with Standard form Shipbuilding Contract 2000 Does market competition means anything for the content of a shipbuilding contract?

8. 8 Shipbuilding contracts-cont’d A few topics worth focusing on, apart from main dimensions and characteristics, speed, warranty of quality etc. : Design responsibility Buyer’s supplies Contingency fund Buyers representative Security for instalments paid to the Builder by the Purchaser Who is the Owner during the building period

9. 9 Shipbuilding – the future Even more competition Labour costs Subsidies Japan >> Korea >> China >> India (?) >> ? Where – not necessarily in just one country (In this respect and with effect as from 01.07.2009 an alteration in the Norwegian Maritime Code Section 31 went into force.) Who sets the standard ? Environmental requirements – need for long term strategy Other risk factors

10. 10 Interested parties in additon to the Builder and the Buyer Among such parties you may find: Contractors Authorities Insurance companies Financial institutions Charterers

11. 11 Repair Contracts In general Some basic differences regarding facts and power to negotiate when comparing with shipbuilding Formalities – efficiencies and thoroughness; advice and decisions – who decides?

12. 12 Repair Contracts cont. Standard contracts ? [Repaircon Duis p 2 – 11] General conditions Individual repair contracts Scope of work sometimes more difficult to define compared with shipbuilding contracts. Why? What about quality of work?

13. 13 Repair Contracts cont. Delivery time Price and manner of payment Sanctions available for breach of contract Other damages www.advoco.no