A bareboat charter https://danil-hristich.com is essentially a lease/hire agreement in which the ownership and operational control of the vessel are fully transferred from the shipowner to the charterer. The charterer assumes the role of the vessel’s operator and is responsible for its use during the contract period. The shipowner provides the vessel without a crew or master and receives a hire fee in return.
In contrast, a time charter or voyage charter is more like a service contract for transportation. The shipowner remains the operator, providing the crew and master, while the charterer contracts for the service of cargo transport.
Bareboat charters are often used as part of financial arrangements rather than for cargo transport. For example, a bank might finance a vessel's purchase and lease it to a customer under a bareboat charter until the loan is repaid.
In Ukrainian law, there is no unified approach to defining a bareboat charter (whether it is a lease or carriage contract). Indications in acts like the Merchant Shipping Code and the Ship Arrest Convention 1952 suggest that a bareboat charter is considered a lease contract.
Duties and Responsibilities of the Parties
The shipowner's obligations under a bareboat charter are minimal: mainly, to deliver the vessel in the agreed condition. The charterer has a broader range of responsibilities, including navigation, maintenance, operation, and insurance.
Since the charterer hires the crew and master, they are responsible for their actions (or inactions).
The shipowner may still be liable for torts (non-contractual wrongdoings). For instance, if a seaman is injured due to a known defect that the shipowner did not fix, the shipowner could be held liable. Generally, though, the charterer is liable to third parties, and typically provides the shipowner with a guarantee against third-party claims.
Complications arise with in rem claims against the ship itself (e.g., in case of a collision). While the charterer is formally liable, the shipowner might be involved in the dispute since the claim is made directly against the vessel.
Additional Features of a Bareboat Charter
- Since the shipowner loses possession of the vessel, they cannot exercise a lien over cargo if the hire is not paid.
- The charterer acts as the carrier under bills of lading, not the shipowner, because the master hired by the charterer serves as the charterer's agent.
- If a charterer has a second ship against which a maritime claim is made, the first ship (hired under a bareboat charter) may also be arrested to support that claim. This is not possible under a voyage or time charter.
By addressing these aspects, we can better understand the unique nature of a bareboat charter and how it differs from other types of charters in the shipping industry.
