THE LEGAL NATURE OF THE BAREBOAT CHARTER CONTRACT AND THE PROBLEMS OF REGULATING THE LIABILITY OF THE PARTIES UNDER THIS CONTRACT IN UKRAINE

Abstract

Introduction. The bareboat charter contract is regulated in Ukraine only fragmentarily: despite the existence of certain provisions of the Merchant Shipping Code of Ukraine, the law does not contain a coherent model of the legal status of the parties, allocation of risks, and liability in relations involving the use of a vessel without a crew. In practice, this leads to the significant role of contractual regulation and international standard forms, primarily BARECON 2001 and BARECON 2017, which effectively compensate for the gaps in national legislation.

Purpose. To determine the legal nature of the bareboat charter contract, to clarify the specific features of the national regulation of the liability of the parties under this contract, and to substantiate the directions for improving the provisions of the Merchant Shipping Code of Ukraine with due regard to international contractual practice.

Materials and methods. The regulatory framework of the study consists of the provisions of the Merchant Shipping Code of Ukraine governing time chartering of a vessel and certain aspects of bareboat charter, as well as the provisions of the BARECON 2017 standard form concerning the allocation of risks and liability of the parties. The theoretical basis comprises the works of Ukrainian and foreign scholars devoted to the legal nature of bareboat and demise charter, as well as relevant case law. The formal legal, systemic, and comparative legal methods were applied.

Results. It is substantiated that, by its legal nature, the bareboat charter contract is the type of charter contract that is the closest to the lease of a sea-going vessel, since it provides for the transfer to the charterer of full factual possession and control over the vessel without a crew. It is shown that the current regulation of the Merchant Shipping Code of Ukraine does not ensure sufficient certainty in matters of the liability of the parties, while the application of general approaches formulated for other types of chartering fails to take into account the specific nature of bareboat charter. It is proved that the model of liability under which the charterer is liable mainly where fault is proven does not fully ensure a balance of interests between the parties, given the charterer’s full control over the vessel and the crew. The expediency of introducing into the Merchant Shipping Code of Ukraine special provisions on the liability of the parties under a bareboat charter is argued, in particular with regard to the charterer’s liability for damage caused to the vessel and for the acts of the crew during the period of use of the vessel.

Prospects. Further research should be aimed at developing a comprehensive model of legislative regulation of bareboat charter in Ukraine, harmonized with international standard forms, case law, and the need to ensure proper protection of the interests of the shipowner and the charterer.