IMO issues guidance for delays in newbuild vessel deliveries due to COVID-19

The International Maritime Organization (IMO) has released guidance for cases when COVID-19 results in unforeseen delays in the delivery of newbuild bulk carriers and oil tankers originally scheduled to be delivered before 1 July 2020. The guidance is particularly relevant to shipbuilders, equipment suppliers, shipowners, surveyors and service engineers.

The epidemic of the coronavirus infection has to a large extend been unexpected, and its impact is far beyond the control of shipowners and shipbuilders. As a consequence, shipbuilders and their associated supply chains may have difficulties in resuming normal production of ships under construction and may as a result miss timely delivery according to contract.

Ships originally scheduled to be delivered before 1 July 2020 may be delayed, and the consequence might be that some of these ships were not designed and constructed in accordance with the requirements of SOLAS regulation II-1/3-10 (Goal-based ship construction standards for bulk carriers and oil tankers). These requirements enter into force by 1 July 2020.

The IMO guidance focus on oil tankers and bulk carriers of 150 m in length and above, which were scheduled to be delivered before 1 July 2020 but, due to COVID-19, are being delayed and delivered on or after 1 July 2020.

The guidance urges the flag administration to thoroughly consider applications on a case-by-case basis, bearing in mind the particular circumstances. In doing so, a formal report from the authorities of the country in which the ship was built, should state that the delay was due to unforeseen circumstances beyond the control of the builder and the owner.

Furthermore, the certificates should be footnoted to indicate that the ship is accepted by the flag administration according to the interpretation set out in the IMO guidance.