NORWAY Trends and Developments Contributed by: Lilly Kathrin Relling, Kristian Lindhartsen, Miriam Myhre and Tobias Kilde, Kvale Advokatfirma DA
Conclusion SHIP25 is a long‑awaited update of the widely used but somewhat outdated SHIP 2000. The market has changed significantly over the last two decades, and those developments were not reflected in the SHIP 2000 template. SHIP25 will hopefully reduce the need for multifaceted tweaks and one‑offs to the standard contract for shipbuilding. Finally, the new solutions in SHIP25 are still relatively untested and contain a number of options, so it will take time for market practice to settle how SHIP25’s features are used in negotiations and interpreted in disputes. It will be interesting to follow how the market receives SHIP25 and how its use develops over time.
entitled to continue construction, even if this leads to additional costs that must be addressed under the contract mechanisms. On pricing, SHIP25 acknowledges that the previous standard took little account of general price inflation and turbulent markets. While it retains SHIP 2000 as the starting point, it adds optional price adjustment mechanisms linked either to agreed indices or to budgeted costs for systems and components. These allow the contract price to be adjusted when index movements exceed a threshold, and oblige the buyer to provide additional funding (against refund security) if key subcontractors demand advance payments above an agreed percentage, instead of leaving the yard to absorb these shocks within the former fixed- price regime of SHIP 2000. Refund guarantees and compliance clauses are like - wise clarified. SHIP25 supplies default wording for refund guarantees where the parties do not attach bespoke terms, addressing earlier uncertainty around renewal and form. In addition, SHIP25 introduces a more comprehensive compliance framework, with clauses addressing human rights, safety, anti‑cor - ruption, anti‑money laundering, sanctions and export control. SHIP25 also standardises the alternative of a progres - sive transfer of ownership via Appendix II. This mech - anism is intended to align the transfer of title to the hull and materials with payment milestones, reducing the risk of these assets falling into the builder’s insolvency estate or general security and thereby decreasing the need for complex guarantee schemes. It is recognised under Norwegian law but may require particular atten - tion where other legal systems are involved.
447 CHAMBERS.COM
Powered by FlippingBook