Learning objectives
- Describe the main phases of a newbuilding project, from contracting to delivery.
- Understand the structure and roles of a supervision site team.
- Manage the process of deviation from the contractual technical specification.
- Recognise the types of quality control points at the shipyard.
- Understand the typical milestone payment scheme.
- Manage the delivery phase and the post-delivery guarantee period.
The phases of a newbuilding project
Module objectiveRecognise the phases of a newbuilding project and the three dates that decide which requirements apply to the ship.
There is no three-date test that applies identically to every requirement. Each rule must be checked under its own wording for contract, keel-laying or similar-stage, delivery, major-conversion and transitional triggers. A contract/keel/delivery summary is a project tool, not a universal regulatory definition.
Where a rule uses ‘keel laid or at a similar stage of construction’, actual keel laying is already the first case. Mass thresholds identify the alternative similar stage; they do not invalidate a keel actually laid.
A newbuilding project goes through distinct phases, from the definition of specifications to final delivery, each with its own challenges and its own degree of involvement by the future shipowner.
| Phase | Essential content |
|---|---|
| Specification and contracting | Definition of technical and commercial requirements; negotiation of the construction contract |
| Design | Development of the basic and then detailed design, with class approval |
| Construction | Steel cutting, block assembly, launching, outfitting |
| Trials and delivery | Sea trials, final verification, delivery of the ship to the owner |
Table 1.1 — The main phases of a newbuilding project.
Involvement of the future shipowner, through their own site team, should begin well before steel cutting: decisions made during the detailed design phase are the hardest and most costly to change once physical construction has begun.
Key takeaways
- The project runs from specification and contracting through design and construction to trials and delivery to the owner.
- The future shipowner's involvement through their own site team should begin well before steel cutting.
- Contract, keel laying and delivery are three alternatives: meeting any one of them brings the new requirement into play.
The site team: structure and roles
Module objectiveRecognise how the site team sent by the shipowner to the shipyard is composed and which area of responsibility each role covers.
The site team represents the buyer within the contractual mandate and powers. Comments, acceptances or failure to object do not automatically transfer the builder's responsibility for design, materials and construction. The team performs neither class functions nor flag-State statutory powers.
Supervision combines attendance at critical points, document review, traceable records and, where accepted and appropriate to risk, remote tools. Remote methods extend coverage but do not replace access, testing or on-site judgement where required.
SUPERMAN 2025 is BIMCO's current form for a separate supervision engagement and must be read as actually agreed.
The site team is the group of supervisors sent by the shipowner to the shipyard to verify, throughout the construction period, that the ship is being built in compliance with the contractual specification and the expected quality standards.
| Role | Area of responsibility |
|---|---|
| Site Team Leader | Overall team coordination and main interface with the shipyard and head office |
| Hull/Structural Supervisor | Structure, welding, hull integrity |
| Machinery Supervisor | Main engine, auxiliary systems, propulsion systems |
| Electrical/Automation Supervisor | Electrical systems, automation, control systems |
| QA/QC Inspector | Systematic verification of workmanship quality against agreed standards |
Table 2.1 — Typical site team roles.
Key takeaways
- The site team verifies throughout the construction period that the ship complies with the contractual specification.
- The Site Team Leader coordinates the team and is the main interface with the shipyard and head office.
- No written shipyard report replaces the site team's daily physical presence.
The contractual technical specification
Module objectiveRecognise the essential elements of a good technical specification and why ambiguities generate disputes and additional costs.
Each requirement should define performance, conditions, test method, tolerance and effect of deviation. Contract, specification, maker list, drawings, class notation and applicable rules require an explicit document hierarchy.
The technical specification is the document that, together with the general arrangement plan and drawings, contractually defines what the shipyard must build. Ambiguities or gaps in this document are the leading cause of disputes and additional costs during construction.
Essential elements of a good specification
- Detailed, unambiguous description of every system and major component.
- Explicit reference standards for materials, welding, painting and finishes.
- Clear list of options and extras relative to the base configuration.
- Measurable acceptance criteria, not just qualitative descriptions.
A vague specification tends to be interpreted by the shipyard in the least costly way for itself, not necessarily the most favourable way for the shipowner. Investing time and expertise in drafting a detailed specification drastically reduces later disputes.
Key takeaways
- The technical specification, with the general arrangement plan and drawings, contractually defines what the shipyard must build.
- A good specification sets explicit reference standards and measurable acceptance criteria, not just qualitative descriptions.
- The shipyard tends to interpret a vague specification in the least costly way for itself, not necessarily for the shipowner.
Managing deviations from the specification
Module objectiveManage deviations from the original specification through written Variation Orders, with cost and schedule impact agreed before execution.
Each departure must be classified: buyer request, builder proposal or substitution, non-conformity, rule change, technical necessity or urgent measure. Classification determines authority, approvals and treatment of price, time, warranties and as-built records.
Written instruction and agreement or reservation of effects precede implementation where contract and circumstances permit. Urgency may precede the final VO but does not remove notice, records, mitigation and later determination. A site-team request is not by itself an authorised Variation Order.
Situations that require deviating from the original specification almost always arise during construction, for technical reasons, material availability or additional owner requests. Managing this process rigorously is essential for cost and schedule control.
Key takeaways
- Deviations from the specification arise from technical reasons, material availability or additional owner requests.
- No change should be accepted verbally: every deviation, however small, requires a written Variation Order.
- In the Variation Order the step that counts is the signature before execution, not after, with cost and schedule impact agreed.
Quality control at the shipyard
Hold, Witness and Review are project quality-plan points. Witness, Review and Patrol describe class survey methods. They may concern the same work but cannot be translated item by item.
The builder's Quality Plan, buyer ITP and class survey plan should be coordinated while purpose, authority, acceptance criteria and consequences of non-attendance remain distinct.
The site team verifies construction quality through formalised control points, of varying intensity depending on the criticality of the work.
| Type | Characteristics |
|---|---|
| Hold Point | Work stops until the inspector explicitly approves; used for critical, irreversible operations |
| Witness Point | The inspector is informed and may attend, but work does not stop in their absence |
| Review Point | Subsequent documentary verification, not real-time, for lower-criticality work |
Table 5.1 — Types of quality control point.
The construction contract and milestone payments
NEWBUILDCON 2007, the SAJ Form and SHIP25 (version 2026) are alternative, normally amended starting points. Law, arbitration, instalments, milestones, delay, remedies and security come from the signed wording. Percentages and sequences shown in the course are illustrative examples.
The refund guarantee is normally the main protection for advance instalments, but not necessarily the only one. Issuer, effectiveness, amount, reduction, expiry, demand conditions and consistency with the contract must be checked.
The shipbuilding contract governs, alongside the technical specification, the commercial side of the project, including the payment scheme tied to verifiable milestones. One clarification before looking at any percentages: the SAJ form fixes the five events that trigger the instalments, not their percentages, which are blanks to be negotiated. The «20-20-20-20-20» split that circulates as «the SAJ default» is not the default of any form.
The typical milestones
| Milestone | What it actually is |
|---|---|
| Contract signature | First instalment — in practice due not on signature but on receipt of the refund guarantee (Module 07) |
| Steel cutting | Cutting of the first plate: the physical start of construction |
| Keel laying | Not «laying of the keel for class purposes»: it is a regulatory date with an official definition — see the box below |
| Launching | In modern docks the ship does not «leave» anything: the dock is flooded and she floats. In recent contracts the milestone is often tied to float-out or to a progress certificate issued by class, not to a physical event |
| Delivery | Final payment, typically the largest share |
Table 6.1 — The five typical milestones of the SAJ form.
The definition is neither metaphorical nor vague — it is numerical. SOLAS chapter II-1, regulation 1.2, and MARPOL Annex VI, regulation 2.2, define a similar stage of construction as the stage at which «construction identifiable with a specific ship begins» and «assembly of that ship has commenced comprising at least 50 tonnes or one per cent of the estimated mass of all structural material, whichever is less». A ship may therefore have a keel laid in the physical sense without meeting the definition, and the other way round. Mind the citation: the same formula sits at different paragraph numbers in different SOLAS chapters — in chapter II-2 it is regulation 1.3 — so cite it by chapter, not generically.
A scheme with a large final instalment at delivery incentivises the shipyard to complete work to standard, since the largest payment depends on final acceptance by the shipowner; schemes with larger upfront payments reduce this incentive and require even more rigorous quality control throughout the process.
The contract beyond the milestones: guarantees, delay, supplies
Module objectiveRecognise the clauses that decide who pays when something goes wrong, and the standard form the shipbuilding contract starts from.
Delivery date, permissible and non-permissible delay, extension events, notice, liquidated damages, cap, longstop, cancellation and procedure form one contractual system. Numerical thresholds from a form or example do not transfer to other contracts.
The prevention principle and effect of notices or time bars depend on wording and governing law. Speed, consumption, deadweight and capacity produce only the remedies agreed for their conditions.
The previous module looked at the contract from the payments side. This one looks at the clauses that decide who pays when something goes wrong — and they are the clauses a technical site team is typically left in the dark about, only to be asked to apply them once the delay has happened.
The standard forms: nobody starts from a blank page
No one drafts a shipbuilding contract from scratch. You start from a standard form and amend it, often heavily. Knowing which one you started from already says a great deal about how balanced the final text will be.
| Form | Publisher | What you need to know |
|---|---|---|
| SAJ | Shipbuilders' Association of Japan, January 1974 | The dominant one. Always amended, and the basis of the forms used in Korea, China, Taiwan and Singapore. Tends to favour the yard |
| NEWBUILDCON | BIMCO, 2007 — still the current edition | Far more balanced towards the buyer, and for that reason rarely accepted by yards. It remains the clearest text on which to study the mechanisms |
| AWES | Association of European Shipbuilders and Shiprepairers | The European form |
| CMAC «Shanghai Form» | China Maritime Arbitration Commission, March 2011 | In practice largely superseded by modified SAJ versions |
| SHIP25 | Norwegian, 2025 | Replaces SHIP 2000; among other things it introduces a more balanced split where it is the buyer who nominates a specific supplier |
Table 7.1 — The standard shipbuilding contract forms.
This is the market default, with Singapore the only widely used alternative. NEWBUILDCON says so at clause 41: the contract is subject to English law unless another is stated. The same form's clause 42 provides a ladder before arbitration: technical and class disputes go first to the classification society, then to expert determination.
The refund guarantee and other protection for advance instalments
A buyer who has paid four instalments out of five has handed over a large part of the price of a ship it does not own: title stays with the builder until the protocol of delivery is exchanged. If the yard fails, without a guarantee the buyer is an unsecured creditor at the back of the queue. The refund guarantee is a bank's undertaking to repay the pre-delivery instalments if the builder does not do so on the buyer's rescission. It is the single most important piece of the whole commercial structure, and it is why the first instalment is in practice due not on signature but on receipt of the guarantee.
The first concerns dates: the guarantee must be extended every time the delivery date moves, and a material variation of the contract without the guarantor's consent may discharge it. The second concerns Chinese bank guarantees, which commonly suspend payment if arbitration is commenced within 28 days of the demand, and which expire shortly after the cancelling date — sometimes a few days after. Anyone without the guarantee's expiry in their diary finds themselves without one exactly when it is needed.
Delay: the distinction that decides who pays
Not all delays are equal. The SAJ form, at article VIII, lists the causes of permissible delay: events beyond the control of the builder and its sub-contractors, which move the delivery date with no economic consequence. Everything else is non-permissible and exposes the builder to liquidated damages. Who bears the cost of the lost months turns on this distinction.
SAJ article VIII.2 requires the builder to notify the delay within a few days of its start and to state its extent within a few days of its end — the exact period is negotiated, generally seven or ten days. The English courts apply the requirement to the letter: no notice, no extension. There is also a less intuitive consequence: because the SAJ form contains a complete extension-of-time code, the English prevention principle — that a party who prevents performance cannot then complain of it — does not apply, and even delays caused by the buyer can fall within permissible delay if they were beyond the builder's control.
Makers list and buyer's supplies
Two annexes that look technical and are commercial, and also the only point at which the buyer has any real say over what gets installed on board.
| What it is | The risk to know about | |
|---|---|---|
| Makers list | The list of approved suppliers of machinery, equipment and services, annexed to the specification and signed by both parties. Negotiated before signature, together with the specification | It is the only lever over quality, fleet standardisation, spares availability and worldwide service. Watch for a frequent clause: the buyer is often barred from dealing directly with the listed suppliers. Within the list, the choice between names normally stays with the yard |
| Buyer's supplies | Items the buyer procures and delivers to the yard for installation: typically navigation and communication equipment, spares, mooring ropes, lubricants | The risk stays with the buyer. But the costliest point is a different one: late delivery of the supplies automatically extends the ship's delivery date — it is an express permissible delay in NEWBUILDCON cl. 34(a) — and so cancels the delay damages the buyer itself would want to claim. On rescission, under SAJ art. XI.3(b), the supplies become the builder's property |
Table 7.3 — Makers list and buyer's supplies.
Plan approval: silence is approval
It is the costliest procedural trap in the project, and it is not hidden — it is written down. NEWBUILDCON, clause 20, has the builder send the plans not less than thirty days before construction starts, with the buyer returning them within fourteen days with approval or comments. Clause 20(e) is explicit: if the buyer does not respond in time, the plans are deemed approved. In SAJ-derived contracts the windows are shorter and negotiated — twelve business days in a Chinese contract of February 2026, twenty-one days in one from 2007, twenty-eight days for the office with ten for the site supervisor in an Imabari contract.
Module 01 says involvement should start early. Clause 20 explains why that is not advice but a constraint: if the supervision organisation is not already standing when the first plans arrive, the clock runs anyway and deemed approvals accumulate on decisions that cannot then be changed without a Variation Order. It is worth adding that the buyer's approval does not transfer design responsibility to the buyer — NEWBUILDCON says so at clause 20(f) — but it is a point worth putting in writing, because not every form contains it.
Key takeaways
- The refund guarantee is a bank's undertaking to repay the pre-delivery instalments if the builder does not do so on rescission.
- Permissible delay moves the delivery date with no economic consequence; everything else exposes the builder to liquidated damages.
- Under NEWBUILDCON clause 20(e), if the buyer does not respond in time the plans are deemed approved.
The role of class in the newbuilding process
Module objectiveRecognise the key moments at which class is involved in a newbuilding and distinguish its checks from the site team's checks.
A classification society verifies its own rules. When authorised as a Recognized Organization it performs specified delegated statutory work. Both may occur at the same attendance but remain legally distinct.
A certificate of class is not a statutory certificate, and class attendance at sea trials does not approve every commercial guarantee. The buyer verifies guarantees under specification, protocol and contract.
Key takeaways
- Class approval of plans and calculations comes before construction begins.
- The checks continue with inspections on materials and welding, sea trials and the class certificate at delivery.
- A ship compliant with class may be non-compliant with the contractual specification: the checks are distinct.
The rules the construction has to satisfy
Module objectiveRecognise the three bodies of rules that apply physically in the yard and the documents they produce, which stay with the ship for her whole life.
Goal-based Standards and the Ship Construction File concern new oil tankers and bulk carriers of at least 150 m within SOLAS II-1/3-10; the system includes subsequent verification and maintenance audits and does not end with the 2016 outcome.
PSPC applies according to ship type, spaces and construction date. From 1 January 2026 MSC.557(108) and MSC.558(108) also update AMPP qualification references.
UR Z23 and IACS Recommendation 47 are distinct. Class Patrol, Review and Witness do not equal buyer-ITP Hold, Review and Witness points.
The previous module said who checks. This one says what has to be satisfied: three bodies of rules that apply physically in the yard, produce documents that stay with the ship for her whole life, and that a site team meets every day even when it does not know it.
Goal-Based Standards and the Ship Construction File
With SOLAS regulation II-1/3-10 the IMO stopped telling classification societies how to write their structural rules and started telling them what goal those rules must achieve. It applies to oil tankers and bulk carriers of 150 metres in length and above — bulk carriers with a single deck, top-side tanks and hopper side tanks, excluding ore carriers and combination carriers — with a contract from 1 July 2016, a keel from 1 July 2017 or delivery from 1 July 2020.
The ship must be «designed and constructed for a specified design life to be safe and environmentally friendly», and that is achieved by satisfying the structural rules of a recognized organization which conform to the Goal-Based Standards. The rules in question are the IACS Common Structural Rules: they were submitted to the IMO for verification by independent audit teams, and MSC 96 in May 2016 concluded that the rules of all twelve IACS societies conform.
The same regulation II-1/3-10 requires that a Ship Construction File be provided upon delivery, with information on how the functional requirements of the Goal-Based Standards were applied in the design and construction, and that it be kept updated throughout the ship's life. The content is set out in guideline MSC.1/Circ.1343 of 2 June 2010: design data (design life, environmental conditions, structural strength, fatigue life, corrosion protection), construction documentation (as-built drawings, material certificates, welding and non-destructive testing records, tank testing, coating) and data for service and recycling. The file stays with the ship and is available to the classification society and the flag State. For a ship in scope it belongs on the delivery documents list, not treated as an optional technical annex.
PSPC: coating is not a finish, it is a performance standard
Saying «reference standards for painting» is imprecise: there is a mandatory performance standard, and it governs how the work is supervised in the yard.
| Resolution | What it applies to | Status |
|---|---|---|
| MSC.215(82) 8 December 2006 | Dedicated seawater ballast tanks of all ships of 500 gt and above, and double-side skin spaces of bulk carriers of 150 m and above | Mandatory via SOLAS II-1/3-2 |
| MSC.288(87) 14 May 2010 | Cargo oil tanks of crude oil tankers of 5,000 tonnes deadweight and above | Mandatory via SOLAS II-1/3-11 |
| MSC.244(83) 5 October 2007 | Void spaces of bulk carriers and oil tankers in the cargo area | Recommendatory only |
Table 9.1 — The performance standards for protective coatings.
What PSPC requires in practice: a target useful life of fifteen years in «GOOD» condition; blasting to Sa 2½ with a 30–75 μm surface profile; salt contamination no greater than 50 mg/m² of sodium chloride equivalent; an epoxy system with a nominal dry film thickness of 320 μm and the 90/10 rule — 90% of readings at or above nominal, no reading below 90% of nominal; at least two stripe coats by brush or roller on edges and welds plus two spray coats, in contrasting colours with a light-coloured top coat to make in-service inspection easier. And, at the end, the Coating Technical File: the product's statement of compliance, technical data sheets, yard records, ambient conditions, thicknesses, the inspector's daily reports. It is reviewed by the classification society at construction, stays on board, and follows the ship for her whole life.
This is a recent change most material in circulation has not yet caught up with. The original PSPC text required inspectors certified to «NACE Coating Inspector Level 2, FROSIO Inspector Level III or equivalent». Resolutions MSC.557(108) and MSC.558(108), adopted on 23 May 2024 and in force from 1 January 2026, replaced the NACE reference with AMPP Certified Coatings Inspector — NACE having merged with SSPC to form AMPP. A specification still calling for «NACE Level 2» today cites a qualification the standard no longer names.
How class actually supervises construction: UR Z23
Class involvement is neither discretionary nor variable from society to society: it is the subject of IACS Unified Requirement Z23, «Hull survey for new construction», applicable to ships contracted for construction from 1 January 2008. It provides, among other things, for a kick-off meeting between society and shipbuilder before construction starts, to agree the survey plan, the sub-contractors and the construction methods; fabrication to IACS Recommendation No. 47, the Shipbuilding and Repair Quality Standard; control of welding consumables, qualification of welders and approval of procedures; non-destructive testing with systematic surveyor review of radiographs; tank testing; and verification of the Coating Technical File.
Key takeaways
- With SOLAS II-1/3-10 the IMO tells classification societies not how to write their structural rules, but what goal they must achieve.
- PSPC sets a target useful life of fifteen years in «GOOD» condition and a Coating Technical File that stays on board.
- UR Z23's three survey methods — patrol, review and witness — are Hold Point, Review Point and Witness Point seen from the class side.
Sea trials and performance verification
MEPC.411(84) is the current EEDI survey and certification guideline and refers to ITTC 2024 or ISO 15016:2025 for speed-trial analysis.
One trial may produce data useful to class/statutory trials and contractual guarantees, but purpose, authority, acceptance criteria and remedies remain distinct.
Sea trials verify that the ship meets contractually guaranteed performance: speed, fuel consumption, manoeuvrability, operation of main systems.
What is typically verified
- Maximum and service speed, under load and sea conditions defined by contract.
- Specific fuel consumption at different engine load conditions.
- Manoeuvring performance: stopping time, turning diameter, rudder response.
- Operation of all main and auxiliary systems under real operating conditions.
Many contracts provide for liquidated damages if the performance verified at sea trials falls short of what was guaranteed. The site team must document the results precisely, because they are the basis of any compensation claim — and because beyond a certain threshold it is no longer about compensation.
The structure of a performance clause: three steps, not one
For each guaranteed parameter the mechanism is always the same, and the third step is the one popular material forgets: a free tolerance within which nothing happens; then a penalty per unit of shortfall, with a cap; and finally a threshold beyond which the buyer may reject the ship or rescind, instead of accepting a price reduction.
| Parameter | Free tolerance | Penalty | Rejection threshold |
|---|---|---|---|
| Speed | up to 0.3 knots | in steps between 0.3 and 0.7 knots | beyond 0.7 knots |
| Fuel consumption | up to 6% | per full 1% between 6% and 8% | beyond 8% |
| Deadweight | up to 1 tonne | per full tonne | beyond 10 tonnes |
Table 10.1 — A real example: the thresholds of a Chinese SAJ-form contract dated 3 February 2026. The figures are negotiated contract by contract; it is the three-step architecture that is constant.
EEDI verification: the most delicate part of the speed trial
On a ship subject to the EEDI the speed trial does not only verify a contractual guarantee: it certifies a regulatory index. Verification happens in two stages. A preliminary verification at design stage, on the EEDI Technical File and its supporting documentation — engine data, estimated reference speed, power curves from model tests. Then final verification at the sea trial: the verifier attends the trial and confirms the propulsion system as built, draught and trim, sea conditions, ship speed and shaft power. The curves are then corrected for wind, current, waves, shallow water, displacement, water temperature and density.
The commercial point is that the reference speed enters the EEDI denominator directly: an unfavourable correction can push the attained index above the one required for the applicable phase. That is why the trial procedure and the weather and sea conditions are negotiated in advance, not on the day.
Manoeuvrability has numerical criteria, not qualitative ones
«Stopping time, turning diameter, rudder response» describes the trials correctly, but the criteria are set by IMO resolution MSC.137(76) of 4 December 2002, applicable to ships of 100 metres in length and over and to all chemical tankers and gas carriers regardless of length, constructed from 1 January 2004.
| Trial | Criterion |
|---|---|
| Turning circle at maximum rudder | Advance ≤ 4.5 L and tactical diameter ≤ 5 L |
| Initial turning ability | With 10° of rudder, no more than 2.5 L travelled by the time the heading has changed by 10° |
| 10°/10° zig-zag | First overshoot ≤ 10° if L/V < 10 s, ≤ 20° if L/V ≥ 30 s, interpolated in between; second overshoot ≤ 25° and ≤ 40° at the same extremes |
| 20°/20° zig-zag | First overshoot ≤ 25° |
| Full astern stopping test | Track reach ≤ 15 L; the Administration may allow up to 20 L for ships of large displacement |
Table 10.2 — The manoeuvrability criteria of resolution MSC.137(76). Explanatory notes: MSC/Circ.1053 of 16 December 2002.
NEWBUILDCON gives each parameter its own clause — speed (cl. 8), consumption (cl. 9), deadweight (cl. 10), cubic capacity (cl. 11) — each with a free tolerance, a rate per unit and a cap. Once the cap is exceeded, clause 39(a)(iv) turns the remedy into a right of termination; on consumption, clause 9(c)(ii) offers the alternative of rejecting the engine and requiring its replacement. In practice: the tolerance is a technical margin, the cap is the point at which the matter stops being about price.
Delivery of the ship
Protocol, title, risk and possession follow the contract and transaction structure; they do not necessarily pass at one instant. The dossier depends on ship, flag, class, registry, lenders and specification.
For ships within the Hong Kong Convention, in force since 26 June 2025, IHM Part I must be ship-specific, verified, certified and maintained. The separate EU regime must also be checked.
Delivery is a coordinated sequence of acceptance, records, payments, registration and transfers defined by the contract and transaction structure.
Typical activities of the delivery phase
- Final verification of all punch lists accumulated during construction.
- Final tests of all systems under operating conditions.
- Delivery of the complete technical documentation (manuals, certificates, as-built drawings).
- Signing of the delivery protocol and formal transfer of ownership.
What is actually exchanged at delivery
«Complete technical documentation» is true but does not get you ready for a delivery. The documents are a precise list — NEWBUILDCON clause 29 and SAJ article VII say substantially the same things — and they do not all carry the same legal weight.
| Document | What it does |
|---|---|
| Protocol of Delivery and Acceptance | It is the act: title and risk pass on exchange of the protocol, not before and not with the invoice |
| Bill of Sale | The formal instrument of transfer, filed with the flag registry |
| Builder's Certificate | The document of title for first registration: registries accept the builder's certificate or a bill of sale as evidence of title, and in practice both are tendered |
| Declaration of Warranty | A declaration that the vessel is free of liens, claims and mortgages: essential for the registry and for the financing bank |
| Certificate of Non-Registration | Confirms the ship is not registered elsewhere |
| Protocol of Trials; Protocol of Inventory and Equipment; Protocol of Stores | Trials carried out, equipment and spares handed over, consumable stores on board |
| Finished drawings, manuals and all certificates | Certificates without qualification; interim certificates are acceptable provided they permit unrestricted registration and trading |
| Commercial invoice; IHM statement | The inventory of hazardous materials follows the ship from here on |
Table 11.1 — The delivery documents and what each one does.
For oil tankers and bulk carriers of 150 metres and above subject to the Goal-Based Standards, the Ship Construction File must be provided upon delivery (Module 09). It is not a technical annex to be chased afterwards: it is a SOLAS requirement with a date, and forgetting it means taking delivery of a documentally incomplete ship at the very moment the final instalment has just been paid.
It is common practice to accept delivery with some minor deficiencies not yet resolved (an open punch list), provided they are tracked precisely and completed within an agreed deadline. A vague or unformalised punch list risks never being completed by the shipyard once the final payment has been received.
The guarantee period
Duration, definition of Defect, design, materials, workmanship, notice, remedies, cost and exclusions depend on the amended contract. Design cannot be excluded in the abstract: the actual clause must be read.
Notify a defect when it becomes identifiable, with evidence and preservation of rights, rather than waiting for the final deadline. Maker warranties and builder warranty should be coordinated.
Managing the guarantee period effectively
- Promptly document every defect that emerges, with photographic evidence and a precise description.
- Distinguish defects attributable to construction from those resulting from improper use or maintenance of the ship.
- Comply with the contractually required notification procedures to avoid losing the right to the guarantee.
NEWBUILDCON, clause 36: the buyer may require the builder to appoint a guarantee engineer, an engineer who stays on board during the guarantee period to attend to defects and assist the crew. He remains, for all purposes, the builder's employee. The cost split is asymmetric and worth reading: the buyer pays accommodation and provisions to a standard comparable to the Chief Engineer's, a monthly lump sum, and travel between the ship and his home country; the builder bears the rest of the employment cost.
Many companies reduce their attention after delivery, disbanding the site team too quickly. Effective management of the guarantee period requires the same documentation discipline seen during construction, so as not to lose the right to corrections the shipyard is contractually obliged to provide.
Emerging trends
Module objectiveDistinguish what is already decided from what is not in emissions rules, and recognise the approval regime for alternative fuels.
The IMO Net-Zero Framework has not been adopted. EEDI, EEXI, CII and applicable regional regimes remain current requirements distinct from proposals under negotiation.
MEPC.407(84) enters into force on 1 September 2027, while the new North-East Atlantic ECA SOx/PM and NOx requirements take operational effect on 1 March 2028 and 1 January 2028, with their own Tier III triggers.
Alternative fuels and cyber resilience should be translated into specification requirements with flag, class and vendor evidence, not presented as one consolidated regime already in force.
Shipbuilding is going through a period of significant transformation, driven above all by decarbonisation and the growing technological complexity of new ships.
The IMO Net-Zero Framework has not been adopted
This is the point on which anyone ordering a ship today most needs accurate information, because the material in circulation treats it as settled. Here is the position. MEPC 83, April 2025, approved — by majority, not consensus — the amendments to MARPOL Annex VI that would establish the Net-Zero Framework: a global fuel greenhouse gas intensity standard plus a global emissions pricing mechanism. An extraordinary session was convened for adoption.
The extraordinary session of 14–17 October 2025 adopted nothing: on a motion to adjourn, 57 states voted to adjourn for a year and 49 to continue. The session was adjourned, not concluded. MEPC 84, 27 April – 1 May 2026, did not adopt the framework: positions were restated without decisions, and two intersessional meetings were convened, in September and November 2026. The extraordinary session resumes provisionally on 4 December 2026, in the same week as MEPC 85.
Today there is no IMO carbon price and no global fuel intensity standard. A ship contracted now is subject to no Net-Zero Framework requirement, and any economic model assuming compliance costs from 2028 must be flagged as contingent on the outcome of 4 December 2026. Even if it were adopted on that date, MARPOL's tacit acceptance procedure puts the earliest realistic entry into force no sooner than 2028.
What is already decided, and does concern anyone ordering now
Alternative fuels: what actually exists as a rule
Saying «dual-fuel ships» is not enough, because the approval regime changes radically with the fuel. The IGF Code — resolution MSC.391(95), 11 June 2015, in force from 1 January 2017 — is mandatory via SOLAS chapter II-1 part G, but it contains detailed prescriptive provisions only for natural gas. Everything else goes through the alternative design route, that is a demonstration of an equivalent level of safety, resting on interim guidelines.
| Fuel | Regulatory basis |
|---|---|
| Natural gas (LNG, CNG) | IGF Code: a complete prescriptive chapter |
| Methanol and ethanol | MSC.1/Circ.1621, 7 December 2020 — interim guidelines. The IGF chapter is expected in 2027 |
| Ammonia | MSC.1/Circ.1687, 26 February 2025 — interim guidelines |
| Hydrogen | Interim guidelines approved at MSC 111, May 2026 |
Table 13.1 — The regulatory basis for alternative fuels.
On a methanol, ammonia or hydrogen ship, approval does not run through a prescriptive chapter setting out distances and materials: it runs through a HAZID and a HAZOP agreed with the flag State, the classification society's own rules, and a demonstration of equivalence. For the site team that means two things. First, design decisions stay open longer, and so do the Variation Orders. Second, the competence to build is not only in the new plant but in the approval process: someone who has supervised a conventional ship knows where to look, but does not necessarily know how an equivalence is documented.
And the two trends that remain
- Greater digitalisation of design and quality control processes at the shipyard.
- Pressure on delivery times in a market with capacity saturated for the most in-demand technologies — with a direct contractual consequence: in a seller's market yards resist buyer-friendly clauses, and protection shifts from negotiating damages to the strength of the refund guarantee and to tying instalments to progress stages certified by class rather than to calendar dates.
A site team supervising a dual-fuel ship for the first time must invest in specific training on the new fuel systems, which introduce different safety standards and verification procedures compared with traditional conventional-fuel construction.
Key takeaways
- The extraordinary session of October 2025 did not adopt the Net-Zero Framework: today there is no IMO carbon price.
- NOx Tier III applies to ships constructed on or after 1 January 2027 operating in the North-East Atlantic Emission Control Area.
- The IGF Code has detailed prescriptive provisions only for natural gas: everything else goes through the alternative design route.
Building a successful project
Module objectiveRecognise the critical success factors of a newbuilding project, from the technical specification to the relationship with the shipyard.
Project governance should link requirement, authority, owner, evidence, deadline and impact. Technical acceptance, class/statutory approval and commercial acceptance are not synonyms; close-out also transfers open risks, lessons learned and responsibilities into operation and warranty.
A successful newbuilding project integrates technical competence, contractual rigour and management of the relationship with the shipyard in a balance that must be built from the very start of the project.
Critical success factors
An excessively confrontational site team risks damaging the collaboration needed to effectively resolve the problems that inevitably arise in a complex project. The right balance is between firmness on standards and constructive collaboration in problem-solving.
Key takeaways
- The technical specification must be unambiguous and drafted with the site team's input from the contracting phase.
- Variation Orders and Hold Points are managed with rigorous discipline, with no verbal exceptions.
- With the shipyard, firmness on standards goes together with constructive collaboration in problem-solving.
Recurring mistakes
From the Mistake Library of SuperbaKnowledge, filtered to the subjects this course covers. This view selects and organises content published in SuperbaKnowledge; it does not modify or replace it. The linked Knowledge page remains the reference version, while official texts remain authoritative.
| Topic | Mistake | Typical consequence | Topic sheet |
|---|---|---|---|
| Coating and PSPC (Performance Standard for Protective Coatings) | Coating applied under out-of-specification environmental conditions (excessive humidity, unsuitable temperature) | Compromised coating adhesion, premature failure | See the topic sheet |
Glossary of terms
| Term | Definition |
|---|---|
| Delivery | Handover of the ship to the shipowner |
| Hold Point | A control point that suspends work until approval |
| Keel laying | A construction event that may be a regulatory trigger where the applicable provision uses it; it must be distinguished from the similar stage defined by the rule. |
| Launching | The launching of the ship |
| Punch list | List of minor deficiencies not yet resolved |
| Sea trials | Sea trials to verify performance |
| Site team | The shipowner's supervision team at the shipyard |
| Steel cutting | Cutting of the first steel plate, the physical start of construction |
| Variation Order (VO) | Document formalising a change to the contractual specification |
References and sources
Consolidated list of the sources cited, verified in August 2026. For official texts, always consult the publications of the owning bodies.
| Source | Scope |
|---|---|
| SOLAS, chapter II-1 | Regulation 1.2: definition of a similar stage of construction (50 tonnes or 1%) |
| MARPOL, Annex VI | Regulation 2.2: the same definition; chapter 4 for the EEDI |
| SAJ form — Shipbuilders' Association of Japan, January 1974 | The dominant form, always amended; the basis of the Korean, Chinese, Taiwanese and Singaporean forms |
| NEWBUILDCON — BIMCO, 2007 | Still the current edition: clauses on plans, performance damages, delay, guarantee and delivery documents |
| AWES; CMAC Shanghai Form (March 2011); SHIP25 (2025) | The other standard forms — European, Chinese and Norwegian respectively |
| IACS | UR Z23 Hull survey for new construction; Rec. 47 Shipbuilding and Repair Quality Standard; Common Structural Rules |
This course is educational material for training purposes and does not constitute a professional certification or qualifying credential. Read the full disclaimer.