New Panama Canal Transit

Recently we have been dealing with a number of legal issues surrounding the modification requirements for vessels intending to transit the Panama canal through the newly extended locks.   In particular, these cases concern changes to the mooring requirements and retrofitting of vessels to comply with such requirements.   There is an excellent background article on the DNV website that explains the technical side in greater detail (https://www.dnvgl.com/news/new-requirements-for-panama-canal-transit-58190).

Whilst each case turns on its own facts, the general position is that Charterers cannot order a vessel to transit the new extended locks unless suitable retrofitting takes place.   Indeed, transit via the canal will not be permitted absent compliance with the Panama Canal requirements, in particular the OP Notice to Shipping N-1-2017.    It is a matter of negotiation as to who should pay for the retrofitting but absent special provisions in the charter there is no obligation on Owners to retrofit their vessels.   In many cases, Owners have agreed to retrofit in return for an increased hire rate and/or a contribution towards the costs.

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