LEASE AGREEMENT FOR A SHIP

THIS Bareboat Lease Agreement made at……………….this....................	day of……………….20 ……………….between A B Co. Ltd., a company registered under the Companies Act, 1956 and having its registered office at……………….(hereinafter referred to as "the Lessor") of the ONE PART and X Y Co. Ltd., a company registered under the Companies Act, 1956 and having its registered office at ............. (hereinafter referred to as "the Lessee") of the OTHER PART.
 
WHEREAS the lessor has purchased the vessel hereinafter referred to as "the Vessel" hereinafter described in the Schedule and agreed to lease the same to the lessee upon the terms and conditions hereinafter appearing.
 
NOW THIS DEED WITNESSETH AS FOLLOWS
(1) In pursuance of the said agreement and in consideration of the rent hereby reserved and on the terms and conditions, covenants and agreements herein contained and on the part of the lessee to be observed and performed, the lessor hereby agrees to lease to the lessee and the lessee hereby agrees to take on lease, the vessel for a period of……………….commencing from……………….
(2) Lease rental.-The lease rent shall be paid in advance and the first of such rent as hereinbefore provided shall be paid on the 10th ..........and the subsequent rent shall be paid on the 10th day of every succeeding month regularly.
(3) Delivery of vessel
 
(i)The vessel shall be delivered by the manufacturer, described in the Schedule hereinunder written, hereinafter referred to as the manufacturer, on or before……………….at the port.....................If the vessel cannot be delivered to the lessee by the above date and if the lessee agrees, the said date of delivery of the vessel can be extended, but if the lessee does not agree to the extension of date of delivery, this agreement shall terminate and neither the lessor nor the lessee shall be liable to the other for any loss arising from such termination.
 
(ii)The vessel will be inspected by the lessee and if found suitable, the lessee will issue a Certificate of Acceptance of delivery within……………….days of the delivery of the vessel by the manufacturer. The issue of Certificate of Acceptance of delivery by the lessee shall constitute full performance by the lessor of all its obligations as to the delivery of the vessel in a satisfactory condition and the lessee shall not be entitled to make any claim against the lessor on account of any defect found by it later on or any representation or warranties expressed or implied, with respect to the vessel.
 
(iii)The matters relating to cost of lubricating oil, water, remaining bunkers, unbroached provisions, paints, oils, ropes, and other consumable items on board the vessel shall be settled directly between the manufacturer and the lessee at the time of delivery of the vessel and the lessor shall not be responsible or liable for providing the same.
 
(4) Lessee's confirmations
(i)The lessee acknowledges, declares, agrees and confirms that it has negotiated with the manufacturer and selected the vessel for its own operation and the lessor shall not be responsible for any delay in delivery of the vessel by the manufacturer or for any defects or fitness of the vessel for any particular purpose.
(ii)jThe lessor hereby agrees to assign to the lessee the right to seek compensation for any damage found by the lessee after signing the Certificate of Acceptance of Delivery.
 
(5) Custody and use of vessel
(i)The lessee shall be entitled to use the vessel from the date it issues the Certificate of Acceptance of Delivery to the lessor and it shall be entitled to operate the vessel throughout the world in any lawful trade for which she is suitable, subject to the observance of restrictions imposed by the law of the country of the vessel's registration, insurance policies, cover notes, indemnity and any other society or association. The vessel shall not be sent to the territorial waters of the countries mentioned in the Schedule. No acids, explosives or cargoes injurious to the vessel shall be supplied nor shall any voyage be undertaken, nor goods or cargoes be loaded, that would involve risk of seizure, capture or penalty imposed by British or foreign rulers or governments.
(ii)The lessee or master of the vessel shall not have any right, power or authority to create, incur or impose any lien on the vessel, except for crew's wages and salvage. The lessee shall intimate the fact that the lessee or the master of the ship is not entitled to create, incur or impose any lien on the vessel, to all persons having business with the vessel or to any person furnishing repairs, supplies or other consumables or necessaries to the vessel. The lessee shall exhibit aboard the vessel in a conspicuous place a notice stating that the vessel Is the property of 	and neither the nor the master of the vessel has any right, power or authority to create, incur or impose any lien whatsoever on the vessel.
(iii)If due to any reason, but not due to the lessor's fault, a lien is created or imposed upon the vessel during the term of the lease, the lessee shall got the lien removed at his expenses within months from the date of its creation or  imposition, failing which the lessor shall be entitled to terminate this agreement by service of a notice of .................... days to the lessee and thereupon the lessee shall be liable for the cost and expenses incurred in removal of the said lien, lessor's loss of profit consequent upon the earlier determination of the lease agreement and other consequential  damages.
(iv)If the vessel is sold by order of judicial or other authority, whilst under arrest, the lessee will be liable to pay to the lessor the stipulated loss value mentioned in the Schedule hereto
(v)If the vessel is seized or captured by any country due to the fault of the lessee, the lessor shall be  entitled to terminate thisreto. lease by a……………….days notice to the lessee.
(vi)The lessee shall not be entitled to sub-lease or bareboat charter the vessel without the prior consent of the lessor in writing.
(vii)The lessee shall indemnify and keep indemnified the lessor for any damage caused to the vessel or to a third party or against all losses, damages, costs, claims and demands, which May be made or filed against the lessor arising out of or in consequence of the operation or use of the vessel during the lease period.
 
(6) Maintenance of vessel by the losses
 
(1) The lessee shall keep the vessel In his possession and control during the term of the lease. The lessee shall at his own expense:
 
(i)	clean the boilers and/or opening up of pistons and/or overhauling of the engines and to 	maintain the vessel in good and serviceable repair and condition (fair wear and tear 	excepted);
(ii)	keep the vessel in the description described in the Schedule hereunder written and to use its best endeavours so, as to maintain the vessel in the said classification and to maintain the vessel in accordance with all laws and regulations to which the vessel may be subject;
(iii)	keep machinery survey certificate current at all times;
(iv)	observe and perform all the terms and conditions of the mortgage granted over the vessel, of all insurance effected on the vessel and of the laws and regulations of the country of the registration of the vessel.
(2)(i)	The lessee shall at its own expense victual, navigate, operate, supply full and repair the vessel in accordance with the laws and regulations. of the vessel's registration or any other country which the vessel may visit and the lessee will be liable for all charges and expenses of every kind and nature whatsoever incidental to use and operation of the vessel under t
(ii)	The lessee will ensure that the master, officers and the crew of the vessel are properly certified according to the rules and regulations of the vessel's registration. The lessee shall 	notify to the lessor the description of the master and nationality of other crew members and any alteration thereof.
(iii)	The lessee shall dry-dock the vessel and clean and paint under water parts of the vessel 	whenever necessary.
(iv)	The lessee at its own expense shall also pass the vessel's annual docking, annual survey,yearly and special survey (hull) every four years or such intervals as the classification 	society permits. his lease.
(v)	The lessee shall pay taxes, duties, levies, registration charges, oil, fuel, pilotage, agency 	fees, port charges, commissions of loading and unloading cargoes, canal dues, all 	provisions, wages, shipping and discharging fees, other expenses of the master, officers 	and crew and all charges, which may be payable upon the ownership custody or use of 	the vessel and any taxes, which may be imposed in respect of this agreement. However, 	the lessee shall not be liable to pay income-tax payable by the lessor on its income from 	this agreement.
(7) Alteration of vessel
 
(i)	The lessee shall not make any alterations, additions or improvements in the structure or machinery  or boilers of the vessel without the written consent of the lessor.
(ii)	If the lessee makes any alterations, additions or improvements with the consent of the lessor, the same shall be deemed to form part of the vessel. If the lessee makes any alterations, additions or improvements without the consent of the lessor, the lessor may give notice to the lessee to restore the vessel to her original condition and the lessee shall 	forthwith comply with the lessor's requirement at its own cost.
(8) Inspection of vessel
 
(i)	The lessor shall have the right to inspect the vessel at any time on reasonable notice to the lessee to ascertain that the lessee has'observed and complied with its covenants and obligations under this lease agreement. However, if the lessor requires the lessee to dry-dock the vessel for the purpose of inspection or survey, then no lease rent shall be payable hereunder for the period during which the vessel is not available to the lessee for use and operation by reason of drydocking and inspection or survey.
(ii)	The lessee shall, whenever requested on reasonable notice permit the lessor to inspect the vessel and log books, voyage reports (dock, engine log), harbour reports, off-hire reports, stevedore damage reports or any other information regarding any accidents or damage to the vessel as soon as the same occurs.
(9) Loss and damage to vessel
(i)	The lessee shall bear the entire risk of loss and damage which may be caused to the 	vessel, during the term of the lease.
(ii)	In the event of loss or damage to vessel, the lessee at the option of the lessor shall:
 
(a)	place the vessel in good repair condition and working order at its own cost and 	expenses (ordinary wear and tear excepted);
	(b)	replace the same with like vessel.
 
In case of such-loss or damage to the vessel and its repair, etc. or the replacement of the vessel, this agreement shall continue and lease rent shall be payable.
(iii)	If the vessel is totally lost (including constructive total loss or infringement of ownership), the lessee shall be liable to pay to the lessor the stipulated loss value described in the Schedule hereunder written. In case of total loss of the vessel, this agreement shall terminate upon completion of payment of the stipulated loss value, but until such payment is made, lease rent shall continue to be payable.
(iv)	On payment of stipulated loss value of the vessel by the lessee, the lessor shall assign its 	right against third parties; provided that the lessor shall not be held responsible for the 	condition, functioning, quality or working order of the vessel or the financial ability or 	otherwise of any such third party to sustain any claim against him or the validity of such 	transfer of ownership of the vessel.
(10) Insurance of vessel
 
(i)	The lessee at its own expense shall insure and keep insured in the amounts as described 	in the Schedule hereunder written during the term of lease with an insurer approved by 	the lessor against marine, war and protection and indemnity risks including freight, 	demurrage and defence in the name of the lessor and furnish the original insurance 	policies and receipts for paying premiums to the lessor
(ii)	The lessee may at its own expense insure the vessel against other risks or for loss of 	carriage.
(iii)	If the underwriters of the vessel accept the loss as an actual, constructive or 	compromised total loss, the insurance money shall be paid between the lessor and the 	lessee according to their interests.
(iv)	At the option of the lessor, the proceeds of insurance shall be applied towards:
(a)	payment for repairing of the vessel and for replacement of the vessel;
(b)	payment to the lessor for total loss towards the stipulated loss value of the vessel;
	(c)	payment of damages to a third person or the lessee due to the occurrence of the 		accident covered by insurance;
(v)	In case of receipt of insurance monies by the lessor, this lease agreement shall be 	terminated and the lessee shall not be liable to pay the lease rentals after the loss 	of the 	vessel. But if the insurers do not pay the Insurance monies on the ground that the 	loss is caused to the vessel on account of the negligence of the lessee or 	of those for 	whom it is responsible, then the lessee will be liable to pay to the 	extent to which the 	lessor falls to recover from the Insurers; provided however that the lessee's liability, under 	this clause shall be limited to the difference between the amount, 	recovered by the lessor 	from the insurers and. the stipulated loss value described in  the Schedule hereunder, 	applicable at the time such claim is met.
(vi)	In case of loss of the vessel, the lessor shall upon the request of the lessee. complete, the 	form, execute documents and do things as may be required by the insurer for making the 	claim for the loss or damage to the vessel.
(vii)	The lessor or the lessee shall not do any act or permit or suffer any act to be done 	whereby any insurance shall or may be suspended, impaired or defeated.
(11) Deposit of advance lease, rentals
(i)	The lessee shall deposit lease rentals of six months in advance at the time of 	execution of this agreement as security for performance of this agreement. The 	said deposit shall not carry any interest.
(ii)	If the lessee is in default in payment of lease rentals or any amount payable under 	these presents, the deposit on the option of the lessor may be applied against all 	and any monies, damages, arrears. of lease rents and or stipulated loss value, and 	unless the lessor terminate the lease in terms of any provision of this agreernent., 	the lessee shall pay the amount of aforesaid advance rent to the lessor or such 	amount as may be required to -make up the six months advance rent, which may 	be kept as security
(12) Liability of lessee to pay lease rent In certain cases.
 
The lease rentals under this agreement shall be payable by the lessee, notwithstanding the vessel:
 
(i)	may be damaged or not navigable or any of her certificates have expired, due to which 	the vessel cannot be used; or
(ii)	is subject of capture and/or seizure or may be under arrest or detention by any court or 	the judicial authority; or
(iii)	be lost or missing; or
(iv)	be the subject of or prospective subject of a Notice of Abandonment; or
(v)	be requisitioned for hire,
 
unless the lessor shall in such a case give the lessee's notice of discontinuance of this lease,
 
Provided that If 1he vessel's underwriters shall compensate the lessor for such capture, seizure or loss, the lease rentals shall cease to be payable by the lessee.
 
(13) Default by the lessee,
 
(i)Should any one of the following events take place, the lessor may exercise any or all of the remedies mentioned in the clause hereinafter mentioned without having to give prior notice or demand to the lessee:
 
(a)	If the lessee fails to pay the lease rentals or any other amount due and payable or 	any other sum and monies due and payable under this agreement for a period of 	15 days from the date of the lease rentals or amount become payable;
(b)	If the lessee fails to observe or perform all and every covenant stip6lation, terms 	and conditions of this agreement;
(c)	If the vessel being the subject of any writ of execution or distress, attachment or 	disposition or on a petition for the dissolution or winding-up of the lessee being 	presented;
(d)	If the lessee entering into any compromise, arrangement or composition with its 	creditors or any assignment for the benefit of such creditors; or
(e)	If the lessee suspends or discontinues its business.
(ii) (a)	To declare a part of or the entire amount of lease rentals payable under the, agreement and all other amounts, costs and expenses due and payable.
(b)	To re-take possession of the vessel.
(c)	To terminate the lease created under these presents and to sue the lessee for 	compensation, or damages including loss or profits.
All the above remedies are cumulative and are not exclusive of any remedies available under any law for the time being in force.
(iii)	The lessee shall not be relieved from its liability under these presents on the lessor exercising all or any of the remedies including liability for damages and compensation.
(iv)	If the lessee falls to pay any lease rentals or sums payable under these presents, 	it shall be liable to pay interest at the rate of ………..% per annum from the date 	of the said lease rentals or sums payable to the date of payment.
(14) Report of business, etc.-The lessee shall immediately on demand provide the lessor with such particulars, statements and other material relating to financial status and the state and condition of the vessel.
(15) Redelivery of vessel to the lessor
(i)	Upon the expiration or earlier determination of this lease agreement for any 	reason whatsoever, the lessee shall at its own expense return the vessel to the 	lessor at a port indicated by the lessor.
(ii)	The vessel may be surveyed and inspected at the option of the lessor before the 	redelivery of the vessel to the lessor and the surveyors or other agents will be 	appointed by the lessor and lessee jointly who shall determine the condition and 	fitness of the vessel, her machinery and equipment and if they report that the 	vessel, her machinery and equipment requires any repair or work necessary to 	place the vessel in working condition and in that case the lessee at its own 	expense make all such repairs and do all such works before redelivery. The holds 	of vessel shall also  be cleaned by the lessee before redelivery of the vessel.
(16) Salvage.-All salvage and, all proceeds from derelicts by the lessee shall be for the lessor's benefit and the salvage and other expenses incurred by the vessel shall be borne by the lessee.
(17) General average
(i)	The general average, if any, shall be payable according to York-Antwerp Rules, 	1974 or any subsequent modifications thereof at London.
(ii)	The lessee shall ensure that all bills of ladings issued as aforesaid contain the 	USA clause Paramount and New Both to Blame Collision Clause.
(18) Indemnity.-The lessee shall indemnity and keep indemnified the lessor against all actions, demands, claims, proceedings and costs which may be brought against the lessor due to any default or any failure on the part of the lessee under this agreement.
 (19) Assignment of rights by lessor
(i)	The lessor may transfer, pledge or mortgage the vessel with its bankers,' 	financers or any ~ other financial institution providing finance to the ships, subject 	to the terms of this agreement, without the consent of the lessor.
(ii)	The lessor cannot assign or transfer its rights under this agreement without the 	prior consent of the lessee in writing.
(20) Notice by either party to the other.-Any notice or letter to be sent in relation to this agreement shall be sent by either party to the other party at the address mentioned above and shall be deemed to be duly served if delivered by hand, on the date of delivery, if sent by registered post, three days after posting.
(21) Waiver or Indulgence on the part of the lessor
(i)	Any failure or delay on the part of the lessor to exercise any power or right under 	this lease shall not operate as a waiver thereof and any partial exercise by the 	lessor of any power or right hereunder shall not preclude any other or further 	exercise thereof or the exercise of any other power or right.
(ii)	Any indulgence or time allowed by the lessor in respect of any breach shall not 	constitute a waiver in respect of the exercise of rights or remedies with regard to 	any other breaches whether or not known to the lessor at the time of granting the 	indulgence.
(22) Settlement of disputes.-Any dispute arising under this agreement shall be decided by the English Courts to whose jurisdiction the parties agree whatever their domicile may be:
Provided that either party may elect to have the dispute referred to the arbitration of a single arbitrator in London in accordance with the provisions of the Arbitration Act, 1950 or any statutory modification or re-enactment thereof for the time being in force. Such election shall be made by written notice by one party to the other not later than 21 days after receipt of a notice given by one party to the other of a dispute having arisen under this agreement.
(23) Execution of lease deed.-The lease deed shall be executed in duplicate. The original shall be retained by the lessor and the duplicate by the lessee.
(24) Stamp duty and other expenses relating to execution of lease deed.-The stamp duty and all other expenses in respect of this lease deed and duplicate thereof shall be borne and paid by the lessee.
(25)Headings to clauses.-The headings to clauses of this agreement are meant only for convenience of reference and shall not in any way be taken Into account in the interpretation of these presents.
 
IN WITNESS WHEREOF, the parties hereto have caused this agreement and duplicate thereof to be executed by the duly authorised representatives on the date and year first hereinabove written.
 
			The Schedule above referred to 
 
WITNESSES		
1	Signed and delivered by A B Co. Ltd., the lessor through the 			hands of Shri……………….Managing Director thereof

2.	Signed and delivered by X Y Co,. Ltd., the lessee through the 			hands of Shri………………Managing Director thereof
Supplementary documents taken apart from the lease agreements