The BIMCO CII Clause:
A Trap for the Unwary Time Charterer?

The BIMCO CII Clause was meant to be the industry’s roadmap for carbon‑efficiency compliance. Instead, it has become a flashpoint — giving owners sweeping operational powers while leaving charterers exposed to CII failures they did not cause. This article unpacks the structural imbalance in the clause and offers practical drafting fixes solicitors should be advising on.

The Industry Standard Clause

The BIMCO CII Operations Clause for Time Charter Parties 2022 is intended to serve as the industry standard for managing compliance with the Carbon Intensity Indicator (CII) regime.

In practice, however, it has created tension between owners and time charterers and has become the subject of frequent complaint by charterers that it too heavily favours owners, placing the burden of CII compliance almost entirely on charterers.

The Problem with the Clause

The Clause requires charterers to ensure an Agreed CII rating, which by default is C. If the trajectory of the C/P Attained CII is deviating from the Agreed CII, subclause (g) permits owners, subject to certain notice requirements and pre‑conditions, to slow steam or even refuse to comply with the charterers’ orders while keeping the vessel on hire — a drastic remedy for owners and a nightmare for charterers, who must continue to pay full hire for a vessel that refuses to perform the commercial voyage required.

The Clause is premised on the conventional basis that charterers are responsible for emissions because they control the vessel’s employment (e.g. speed, route, and bunkers), and therefore determine the vessel’s emissions profile. However, this fails to take into account that emissions can also be attributable to owners’ fault, such as hull or propeller fouling, poor engine maintenance, and auxiliary engine inefficiencies.

Although subclause (f) imposes an obligation on owners to maintain the vessel, its engines, hull, and equipment, that obligation does not sufficiently protect the interests of charterers. This is because it is an obligation to exercise due diligence only, a relatively low‑threshold duty, and a breach by the owner of this obligation does not preclude the owner from exercising its remedies under subclause (g).

The result is that owners’ fault may be the reason for an adverse CII trajectory, but the charterer will suffer the impact. This plainly creates a serious imbalance between the parties. The imbalance is worsened by the uncapped indemnity that charterers provide to owners under subclause (j) in respect of charterers’ breach of their obligations under the Clause.

The Solution

1. Move from “Absolute” to “Best Efforts”

The standard clause requires charterers to “ensure” that the vessel achieves the Agreed CII. This obligation is not confined to matters within the charterers’ control or attributable to them.

Switching this to an obligation on the charterer to “use reasonable commercial endeavours”, “cooperate in good faith”, or similar language would confine the obligation to what is reasonably within the charterers’ control. This would not only protect charterers from adverse CII resulting from owners’ fault, but also from factors outside the parties’ control, such as bad weather or port congestion. Owners may argue that this favours charterers too much, on the basis that charterers issuing employment orders should bear the risk of bad weather, port congestion, waiting time, and the like.

2. Adopt a More Balanced Approach

A more balanced solution would be to exclude any adverse CII attributable to owners’ fault from the calculation of the C/P Attained CII. A reference to “fault” is wider than a reference to subclause (f), which imposes only a low‑threshold duty of due diligence in relation to hull efficiency and maintenance. Similarly, a reference to “fault” would be more capable of shifting the impact onto owners where hull or propeller fouling has occurred.

3. Define the Buffer Zone

The standard clause can technically trigger protective measures if the vessel is only marginally off track. A tolerance margin could be introduced to soften this, such that owners may not invoke their remedies under subclause (g) unless the Projected Attained CII rating falls into Band E or the bottom 20% of Band D. This would allow charterers an opportunity to correct minor rating fluctuations (for example, a drop from a high B to a low B) without suffering drastic consequences.

These are not exhaustive solutions, but rather some initial observations.