Page 250 - ΝΑΥΤΙΚΑ ΧΡΟΝΙΚΑ - ΜΑΙΟΣ 2024

SHIP FINANCE

What are the latest developments in commercial
contracts?
Regarding shipbuilding contracts, companies are
becoming increasingly involved in the shipbuilding
process, at times directing the builder as to what
specific machinery should be used to improve the
vessel’s GHG emissions, which raises the question
of how liability will be apportioned between owner
and builder in the event that the machinery does not
operate as intended or the vessel’s performance is
affected. Companies will usually have appointed sep-
arate technical experts to guide them on technical
aspects. However, said experts do not typically have
any contractual arrangement with the builder and
may lack the financial standing to justify the com-
Interestingly, with major pany pursuing a claim against them.
players currently less In certain cases, we expect that shipbuilding con-
dependent on debt, there has tracts will be structured in a manner that is closer
been a revitalised interest by to what we see in offshore contracts, with tripartite
financiers in further exploring agreements that bring third-party experts into the
the depth of the Greek shipping picture.
market, including Additionally, the evolving use of new technology in
companies with smaller fleets shipbuilding is prompting companies to reconsider
that resemble the traditional various contractual aspects. For instance, is the
profile of Greek shipping firms. usual framework for sea trials sufficient for defects
of new technologies to transpire, and if not, how is
this reflected in the builder’s indemnities?
The EU ETS also has significant implications for the
drafting of commercial contracts. Parties need to
address several related issues in their charters, mem-
oranda of agreement, and management agreements
(particularly with third-party managers), including
how relevant data will be collected and exchanged,
who will bear the responsibility of complying with
the EU ETS, and the development of a framework for
dealing with emissions when a vessel is sold.

What do you expect to see in the market in the next
two years?
On the financing side, a lot will depend on whether
capture some or all carbon emitted from fuels on interest rates will drop. However, I anticipate an
board. The captured carbon will need to be stored active market regardless, as there is a plethora of
and then removed periodically from the vessel in a financiers willing to have a presence in the Greek
particular manner. Given the significant expense shipping market. Additionally, the Greek shipping
involved in the installation of such equipment, com- market is strong enough to engage them, particularly
panies are likely to seek capital from their financiers. those who can be more agile in their offering.
Financiers will need to consider the implications of On the commercial front, there is no stopping pro-
this process concerning the asset’s value, particu- gress. I expect we will witness the outcomes of
larly whether the equipment will be factored into ongoing research into new technologies, and I am
the vessel’s overall value and if the vessel’s security certain that Greek shipping companies will be at the
can also cover the equipment. In the case that the forefront of such developments. Over the next two
vessel has already been financed, and the equip- years, we should have a much clearer idea of the
ment is subsequently financed by another lender, preferred fuel and its effect on the current fleet and
the situation becomes more complex. newbuilding orders.
Finally, we are also observing some interest from Lastly, I believe we will see increased regulatory
companies in participating in tech start-ups in this interventions from the IMO and the EU on envi-
sector. ronmental and other matters.

244