2. Duration and termination SHIPMAN 2009 provides for a minimum term of the contract during which the contract is not terminated by one of the parties, with the exception of delay events and exceptional events (such as loss or retention events).10 After the expiry of the minimum term, the contract continues on an always green basis until it is terminated by one of the parties for some reason or reason after the announcement.11 Since a contract is terminated by any reason or reason after the announcement.11 Since a contract is terminated Ship Management is a personal service contract, SHIPMAN 2009 has nothing to allow the owner to terminate the contract for the initial period if the vessel is consistently below average relative to the market or according to an identifiable financial formula. Such “Early Out” provisions – often observed in container management agreements – should be taken into account in cases where commercial management services are provided, particularly with respect to longer-term commitments. 5. Director`s Responsibility and Compensation The degree of risk and liability that the director must assume with respect to the benefits to be provided is a frequent point of disagreement. The philosophy displayed by the authors of the SHIPMAN standardized forms was to “spread the responsibility among owners and managers on the basis that owners should not be in a better position than they would have been if they had managed the vessel for themselves.” 18 In keeping with this philosophy, SHIPMAN 2009 is resolutely pro-manager in its approach to risk and liability allocation. Such an approach is not necessarily in the interest of investor owners who entrust their vessels to third-party managers and rely heavily on their judgment, skills and experience. Another important consideration is the direction of skills. The legislative and regulatory provisions contained in the Vessel Management Agreement should, where possible, be aligned with similar provisions in related contracts, such as charter parties and related joint venture agreements or joint enterprise agreements, with management characteristics. For example, if the corresponding investment agreements, joint venture or charter agreements for the managed fleet are subject to U.S.
law and New York arbitration, it makes no sense to choose English law and London arbitration for SHIPMAN 2009, as consolidation of arbitration procedures becomes almost impossible in such circumstances and increases the potential for inconsistent outcomes. Third-party vessel management has grown strongly since the 1980s. Today, with about one-third of the world`s fleet under the leadership of third parties of any kind,1 ship managers appear in many maritime transactions for many reasons. For example: 4. Conflicts of interest under SHIPMAN 2009, the manager is committed to using his “best efforts” to provide services in accordance with “good ship management practice.” 15 Such a duty of care is one that is “generally understood in the maritime industry”16 and that New York`s maritime arbitrators are well equipped for interpretation and application. However, since large ship managers often manage the fleets of more than one owner, SHIPMAN 2009 explicitly allows the manager to “distribute the supplies, manpower and services available in this manner and in the current circumstances,” as the Director considers “fair and reasonable”. 17 The potential conflict between a manager`s obligations to an owner and his or her obligations and loyalty to others is often not obvious.