Thursday, June 26, 2025
Home News BIMCO publishes ship financing forms for uninterrupted use of vessels

BIMCO publishes ship financing forms for uninterrupted use of vessels

BIMCO has published two standard Quiet Enjoyment Letters (QELs), the first standard form QELs available to the industry, to offer a tool that can ensure the charterers’ uninterrupted use of a ship if the owner defaults under the financing facility.

The QELs will be provided by the lender to the charterer to ensure that the charterer, who does not have a contractual relationship with the lender but only with the owner, can continue to “quietly enjoy” the ship in case of the owner’s default.

In return, the charterer gives a certain number of undertakings, including not canceling the charter party and continuing to pay amounts due under the charter party. The QELs also offer lenders an opportunity to secure their rights, such as appointing a replacement owner in case of a default.

“The two new forms fill a gap in the market where no such standard form is currently available. They are distinct because they are beneficial to charterers, lenders and owners,” stated Nicholas Fell, chairperson of BIMCO’s Documentary Committee.

The QELs have been developed in a collaborative process involving representatives of owners (Wah Kwong and Oldendorff Carriers), charterers (BHP and Noble Resources International), lenders (Danish Ship Finance), leasing institutions (CMB Financial Leasing Co. Ltd.) and legal experts (Linklaters LLP and Holland & Knight LLP).

“The objective of the subcommittee in charge of the project was to create a balanced standard that reflects the market practice and fairly represents the rights and obligations of all parties,” stated Catherine Smith, chairperson of the BIMCO QEL subcommittee.

Two versions of the QEL have been developed: a standard quiet enjoyment letter signed by the lender and agreed by the owner and charterer, and a “short form” version which is signed only by the lender.

The QELs have been drafted for use with bareboat and time charter parties, as well as ship leasing structures, and complement BIMCO’s existing portfolio of term sheets for ship financing and ship sale and leaseback transactions which includes the SHIPTERM, SHIPTERM S and SHIPLEASE term sheets.





Latest Posts

Maersk unveils “Trade & Tariff Studio” to simplify customs management

Maersk has launched Maersk Trade & Tariff Studio, an AI-driven customs-management platform. Lars Karlsson, Global Head of Trade & Customs Consulting at Maersk stated that...

Solstad renews partnership with Marlink

Solstad has renewed its long-standing partnership with Marlink to advance its digitalization strategy through to 2028. Under the new agreement, Marlink will deliver SealinkNextGen, a...

KEZAD and Witthal Gulf Industries sign deal to launch recycling plant

Khalifa Economic Zones Abu Dhabi Group has signed a 50-year land lease agreement with Witthal Gulf Industries for the establishment of the country’s first...

Emirates Shipping Line announces new service to Seattle

Emirates Shipping Line has announced its entry into the United States market with the launch of the Sun Chief Express service, a direct, fortnightly...

Port of Long Beach approves $833 million budget

The Long Beach Board of Harbor Commissioners has approved an $833 million budget for fiscal year 2026, nearly half of which will go toward...
error: Content is protected !!