GUARDCON
Standard Contract for the Employment of Security Guards on Vessels

BIMCO has developed GUARDCON to assist the industry, and in particular shipowners and their P&I
Clubs, by providing a clearly worded and comprehensive standard contract on which they canconclude agreements for security services. The employment of security guards on ships is somethingthat shipowners, unfortunately, have recently become all too familiar with due to the continuing
threat of piracy to shipping in the Indian Ocean and other areas around the world.
In response to ship owners’ increasing demand for security services, an ever growing number ofprivate maritime security companies have entered the market to meet that demand. A recent countof such companies stood at more than 200 – each with their own set of terms and conditions of
employment. There is presently very little regulation governing the activities of these companies andno formal recognised accreditation system to ensure minimum standards. While there are a number
of well-established, professional and highly reputable maritime security firms in operation, there arealso many that are less well-founded and who may be operating with inadequate insurance cover
and without the necessary permits and licences.
The use of GUARDCON is not in any way intended to be a substitute for the proper exercise of due
diligence by ship owners as part of the pre-contractual process when selecting a security company toprovide unarmed or armed guards for a ship. While there is no substitute for due diligence,
GUARDCON aims to raise the bar in terms of the standards to which security companies must reachin terms of insurance cover for their risks, and permits and licences to allow them to lawfullytransport and carry weapons. The insurance requirements alone are set at such a level as will
potentially exclude smaller companies from being able to offer their services using GUARDCON ifthey lack the necessary financial resources. This is deliberate and is intended, along with the permits
and licences provisions, to weed out operators who may potentially place shipowners and theircrews at risk.
Of equal importance is that ship owners employ security guards as a supplement to existing antipiracy and BMP measures and not as an alternative. In this respect, GUARDCON emphasises thatship owners should not seek to reduce costs by employing less than the number of guards
recommended. Risk analysis has shown that in the majority of cases the recommended minimum
number will be four guards. This number has been proven to give the best protection against attack
because all quarters of the ship can be covered and a proper round the clock watch system can be
maintained.
At the November 2011 meeting of the Documentary Committee in Copenhagen, it was agreed thatthe development of a standard contract for the employment of security guards on vessels should begiven the highest priority. A Sub-committee was chosen immediately after the November DC
meeting to undertake the drafting work. The selected group brought expertise drawn from ship1

owners, underwriters, P&I Clubs and lawyers. The first meeting of the Sub-committee took place inDecember 2011 with the concluding meeting to finalise the draft taking place on 16 March.
The speed at which GUARDCON has been drafted, in just a little over 3 months, is a considerable
credit to the Sub-committee members who devoted many long hours free of charge to the project.
BIMCO is indebted to the Sub-committee for all their hard work. The members of the GUARDCON
Sub-committee are as follows:







Mr Tor Langrud, Wilhelmsen, Norway (Owner) (Chairman)
Mr Daniel Carr, Stolt-Nielsen, USA (Owner)
Mr. Chris South, West of England P&I Club, UK
Mr Andrew Moulton, Ascot Underwriters, UK
Mr Stephen Askins, Ince & Co, UK
Ms Elinor Dautlich, Holman Fenwick Willan, UK

We must also thank those who took part in the consultation process during the drafting. A numberof reputable international private maritime security companies, including Drum-Cussac, PVI Ltd,MAST and Salama Fakira were invited to submit comments on the draft. The feedback we received
from the security firms was positive and constructive. We also benefited from the useful advice of anumber of leading marine underwriters including Ascot Underwriters (who were represented on the
Sub-committee), Hiscox, Canopius and Aegis as well as valuable input provided by the Piracy Subcommittee of the International Group of P&I Clubs. Lastly, but not least, we thank the members of
BIMCO’s Documentary Committee for their constructive feedback and useful suggestions on thedraft during development and for their agreement to fast-track the approval of GUARDCON for
publication.
In parallel with the development of GUARDCON, BIMCO has also prepared Guidance on the Rules for
the Use of Force. It is outside of BIMCO’s remit to draft a set of standard Rules for the Use of Forceas such because, ultimately, the content of such Rules is a matter of national law. While the BIMCO
Guidance on RUF will undoubtedly be of great assistance to owners and private maritime security
companies when drawing up and agreeing RUF for their own purposes, the Guidance itself does notform part of the GUARDCON contract.

*****************

Explanatory Notes
The following notes are intended to provide some of the thinking behind the provisions of
GUARDCON.
Nature of the Contract
GUARDCON is intended to be a multi-functional agreement which can be used for single transits or
as a framework agreement for multiple transits. Although it is geared towards the employment ofprivate armed guards on board ships, it may equally also be used for the employment of unarmed
guards. It does not cover the use of security escort vessels as different principles apply which, if
incorporated, would create an unduly complex contract.

2

The liabilities and indemnities provisions of GUARDCON are based on knock for knock principles. In
drafting GUARDCON the Sub-committee has drawn upon examples of clauses commonly found in
existing contracts agreed between shipowners and reputable international private maritime security
firms.
The contract follows the usual BIMCO pattern of a Part I box layout where the parties will enter thevariable information of the agreement; a Part II terms and conditions; plus several annexes covering
matters such as instruction notices, security equipment, rules for the use of force and individual
waiver.
The provisions of GUARDCON are not cast in stone; they are designed to provide a well thought
through and solid contractual platform on which the parties can base their agreements. It is
expected that ship owners and security companies may wish to negotiate and subsequently amendsome of the more commercial terms, such as those relating to payments and fees. However, we
strongly recommend against any amendments to the key clauses – namely those dealing withinsurance, liabilities, Master’s authority, and permits and licences. Any changes to these provisions
may result in a ship owners’ P&I Club cover being prejudiced and so should be avoided.

SECTION 1 – Basis of the Contract
1. Definitions
In common with other BIMCO contracts, a list of definitions is provided of terms used throughout
the Contract.
It should be noted that GUARDCON is designed to be a contract between the owners of the vessel
and the security contractors and that the liability, insurance and other important provisions areconstructed on this basis. While we acknowledge that in some cases it may be the charterers whoarrange and pay for the security guards, it is essential that the owners are identified as thecontracting party. If the contract is entered into by charterers or ship managers then the names anddetails of these parties should be added to the “owners” box in Part I along with the vessel’s owners
details or the contract should be signed “for and on behalf of owners”.
2. Commencement, Appointment and Duration
GUARDCON is an “evergreen” contract when used as a framework agreement and will continue
beyond the initial 12 month contract period until terminated by one of the parties giving 30 days’
notice. For single transit purposes, the contract ends when the security guards disembark the vesselat the end of the transit.
Sub-clause (c) emphasises that when GUARDCON is used as a framework agreement it does not
oblige the owners to use the contractors’ services exclusively during the contract period or requirethem to guarantee a minimum number of transits. Owners require a degree of flexibility in providing
security guards for their vessels to ensure that services are available when needed. As smaller
security companies may not always have the personnel resources available to provide guards as andwhen needed by the owners, the contract allows the owners to obtain services elsewhere to meettheir vessel scheduling requirements.

3

SECTION 2 – Security Services
3. Security Services
The contractors are to provide a security team of at least four members, one of whom must be an
appropriately experienced leader. Four is considered to be the minimum number of guards
necessary to operate an efficient round-the-clock watch on board a vessel during a transit andproviding the required level of protection. Certain circumstances, such as a lack of accommodation
on board, may preclude a four man team being deployed; however, accepting any less than four
guards should be agreed carefully on a case by case basis between owners and contractors andshould follow from a proper risk analysis.
The opening sentence of sub-clause (b) is lifted from BIMCO’s Piracy Clause which means that thecontract will also encompass seaborne armed robbery that takes place in inshore or territorial
waters, such as in the Gulf of Guinea (which would not usually come under the definition of“piracy”).
4. Engagement of Security Services
If GUARDCON is used for multiple transits, the owners must notify the contractors on each occasion
and at least 72 hours in advance by issuing an Instruction Notice (as per Annex C) setting out theirrequirements and intended transit dates. The use of the contract is not limited to the current High
Risk Area, but can be used within any defined geographical area agreed between the owners andcontractors.
5. Change of Specification of Security Services
New legal and regulatory requirements may dictate a change to the specification of the security
services supplied by the contractors. While such requirements are to be implemented, this clauseensures that any changes to the specification do not include a reduction in the number of guards oran increase in fees.

SECTION 3 – Obligations and Responsibilities
6. Contractors’ Obligations and Responsibilities
There is no established “best industry practice” in the maritime security sector as yet. Consequently,
the contract requires the contractors to use “all reasonable skill and care” as the benchmark forproviding the agreed security services.
Sub-clause (a)(ii) requires the contractors to advise on and/or help the owners implementing
security measures on board the vessel (hardening) but makes it clear that such hardening is basedon the owners’ instructions. This has been done to avoid situations where the contractors might
attempt to claim that the level of hardening does not meet their requirements and use that as an
excuse to not board their team. However, it should be noted that the employment of private
security guards on ships is not a substitute for other security measures – it is simply another layer on
top of existing security. Reference is made to BMP in this respect, but BMP will only apply where thetransit is through the High Risk Area and not to other areas such as the Gulf of Guinea (this also
applies to the provisions of sub-clause 6(a)(v)).
Sub-clause (a)(iv) relates to advice provided by the security team to the Master in respect ofrouteing. The clause makes it clear that such advice is strictly limited to security related mattersconcerning the routeing of the vessel and does not undermine the Master’s overall authority inrespect of the navigation of the vessel.

4Sub-clause (a)(ix) requires the contractors to have sufficient shore based resources to provide
operational and administrative backup to the security team during the transit. It is essential that
security firms are adequately resourced to be able to manage and advise their guards during
deployment and for the owners to have a round-the-clock point of contact for the contractors.
Sub-clause (a)(x) deals with the contractors’ responsibility for their sick or injured personnel.
Deviating to a place where the sick or injured personnel can be taken ashore for medical attention
and repatriation is the owners’ responsibility under Clause 7 (Owners Obligations andResponsibilities) - sub-clause 7(i) - and will be covered by their P&I Club; however, arranging for thetransportation of the injured personnel to shore and then home is a cost to be met by thecontractors and they will need to be appropriately insured to cover this cost (see Clause 12(Insurances)).
Sub-clause (b) sets out the qualifications, training and experience required of the security guards.
Sub-clause (b)(i)(2) refers to STCW training – this is intended to cover basic shipboard fire-fighting
skills, personal safety and survival craft proficiency. It is not intended that the security guards should
be STCW qualified or certified. The sub-clause also refers to BMP training – but it should be notedthat this will only apply where the owners require security guards for transits through the High Risk
Area.
Sub-clause (b)(i)(6) relates to the background experience of the guards – it does not limit the guards
to only ex-military personnel but recognises that ex-law enforcement personnel and also those fromother relevant backgrounds may be equally suited to the task. It is not intended that the reference
to “or other service acceptable to the Owners” is a back-door to allowing security contractors toprovide personnel ill-suited to the task; GUARDCON is not a substitute for the exercise of due
diligence by ship owners to ensure that the security contractors are able to provide personnel thatare appropriately qualified and experienced.
Sub-clause (b)(i)(8) covers working languages. It is important that the guards are able tocommunicate effectively with the Master of the vessel and, of course, among each other.
Sub-clause (b)(ii) requires that the team leader has some prior experience of providing shipboard
security services and that at least one of the guards has had advanced first aid training (which inmilitary terms would be the ability to provide first aid to victims of gunshot and other similar lifethreatening wounds).
Sub-clause (c) emphasises one of the key principles of the contract – that the contractors must haveand maintain adequate insurance.
The contractors’ do not have an automatic right to sub-contract. Owners will have carried out due
diligence on the company that they have contracted with to provide security services. Sub-clause (d)reflects that it would be unreasonable to allow contractors under these circumstances to farm out
the contract to another company that the owners have not checked.
Sub-clause (d)(ii), however, addresses the fact that it is common practice in the security industry for
individual guards to be sub-contracted by security companies rather than being directly employed.
In some cases, for tax reasons, individual guards will set themselves up as a “company” (where they
are the sole shareholder/employee). This provision allows sub-contracting in these specificcircumstances and does not require the owners’ approval.

5

7. Owners’ Obligations and Responsibilities
The nature of the GUARDCON contract dictates that the owners’ obligations will be a shorter list
than those of the contractor – however, the Sub-committee has done its best to “balance” theobligations of the parties.
The key obligation is the payment of all sums due to the contractors. Other notable obligations
include the notification of all relevant parties that the vessel will be carrying armed/unarmed
security guards; the provision of a secure location for the storage of firearms, if carried (It is common
practice for the bridge of the ship to be used for this purpose where the locked firearms containers
used by the guards to transport their weapons can be stored); and the entering of the guards on thecrew manifest as supernumeraries and giving them shipboard familiarisation training. Listing theguards as supernumeraries on board the vessel is done to avoid issues in certain ports as to thestatus of non-crew on the ship – if not listed as supernumeraries they could be considered as
passengers that might create difficulties in terms of their employment on board and the carriage of
their security equipment.

SECTION 4 – Master’s Authority, Division of Responsibilities and Hijacking
8. Master’s Authority and Division of Responsibilities
Clause 8 is undoubtedly one of the most important provisions in GUARDCON and the one which has
perhaps been most discussed during the drafting process.
The concept of providing for the use of force, including lethal force, in a commercial contract is
unique in the maritime field. It is worth remembering that the police in most countries are subject torobust and onerous regulations and procedures before weapons are used with each step assessed
and recorded in a Decision Log. Transparency and accountability is fundamental. At the moment themaritime security industry does not have anything like the same level of scrutiny.
As a “test” for the GUARDCON regime the Sub-committee discussed the issue with the UK Crown
Prosecution Service (CPS) who looked at the draft GUARDCON and the Guidance for the Rules for the
Use of Force. Although the CPS will not at this stage be providing a formal response or issuing theirown guidelines, they have confirmed that the approach in GUARDCON is right at least as a matter ofEnglish Law where force used to prevent a potential hijacking must be proportionate and necessary.
The CPS cautioned against allowing the Master to be involved in the decision to open fire in case heshould fall foul of the rules on "joint enterprise" and be tainted by the actions of the security
personnel.
The CPS have also advised that there should be a point in time when it is clear that a decision has
been made to the effect that the use of force MAY be used to deal with an escalating or existing
threat and that the Rules for the Use of Force are invoked.
The most fundamental aspect of carrying armed civilian guards on board a merchant vessel is that
under no circumstances should there be a derogation of the Master’s authority – he retains at all
times full command of and responsibility for the vessel. This is a SOLAS requirement and is expressly
stated in the contract.
However, GUARDCON also acknowledges that the Master of a merchant vessel does not have thenecessary expertise to command a team of armed guards in the use of firearms or necessarily to
decide upon situations where a graduated response by the guards is appropriate. Clause 8 does not
require the Master to invoke the Rules for the Use of Force (RUF), which is consistent with theadvice given by the CPS above to avoid the risk of “joint enterprise”. If the Master was to invoke the6

RUF and the guards, acting on his orders, unlawfully fatally injure a third party, the Master could be
exposed to criminal liability.
It is important to note that the RUF are invoked only in response to a specific threat – they are
therefore not necessarily in effect for the whole duration of a transit. Could the RUF be madeeffective at the time the guards embark the vessel until the end of the transit, thus avoiding any
decision making process about who invokes them and when? In BIMCO’s view the concept ofeffectively giving weapons control to the security guards while the vessel is within the territorial
waters of a Coastal State would create many more legal and practical issues than it resolved.
Sub-clause 8(b) deals with the assessment by the security team leader of threats to the vessel. If, in
the team leader’s professional opinion, the threat warrants a graduated response from the security
guards, he has to advise the Master or, in the Master’s absence, the officer of the watch, that heintends to invoke the RUF. During the development of GUARDCON, the Sub-committee discussed
various scenarios that might impact on the obligation of the team leader to advise the Master – inparticular in the case of a surprise attack where there might not be time to advise the bridge team.
However, experience of Somali piracy attacks indicate that with vigilant bridge and security teams
there is always forewarning of an attack and therefore there should always be time for the guards tomake the bridge team aware of their intentions.
It is very important to note that invoking the RUF does not necessarily mean the use of lethal force
or indeed force of any kind by the security guards. A properly drafted and agreed RUF provides ameans of graduated response to a threat which must be proportionate to that threat. It may well bethat the highly visible presence of security guards on deck is sufficient to deter a threat without
further action being taken.
In terms of the actual use of force, Sub-clause 8(c) clearly allocates the decision to each of the
security guards alone. This means that the Master cannot order a guard to shoot – each guard must
act in accordance with the RUF and national law in deciding upon the appropriate use of force andwill be held liable for the consequences. In this way the Master is unlikely to be exposed to any
criminal action at a later date.
Sub-clause 8(d) echoes the sentiment of Sub-clause (a) in terms of emphasising the Master’s
absolute authority at all times as conferred by the SOLAS Convention. Although the Master does notinvoke the RUF or order the use of force by the security guards, he retains the right under all
circumstances to order the guards to stop firing.
However, it should be noted that the Master’s right to order the guards to stop firing is set against
the individual right of each guard to exercise self-defence. Simply put, an individual has the right totake whatever appropriate action he feels is necessary and proportionate to defend himself (inaccordance with national law). If a guard thinks that to stop shooting would lead directly to him
being killed or injured, then he can take the sole decision to continue firing regardless of orders to
the contrary.
9. Hijacking
The preamble to Clause 9 makes the clear statement that the contractors cannot and do notguarantee that the security services they provide will prevent the vessel from being attacked. The
wording is intended to convey that if the vessel is hijacked despite the best efforts of the guards,
then it does not mean that all liabilities and losses pass to the contractors.

7

The Clause goes on to deal with what happens if the vessel is hijacked by pirates. Although theowners will normally appoint a team of specialists to manage the hijack, the contractors and thefamilies of the captured security guards will understandably also want to be kept advised of what’s
happening. Sub-clause (a) provides for the owners to arrange for the contractors to receive weekly
situation reports.
Sub-clause (b) is intended to avoid situations where the contractors and the captured security
guards may place the crew of the vessel at risk by attempting to communicate with each other inorder to escape from their captors.
For the purposes of negotiating with and paying ransom to the pirates, Sub-clause (c) sets out thatthe security guards on the seized vessel are to be considered as crew members. As such, thecontractors are not obliged to contribute to any ransom payment by the owners to secure therelease of the vessel and crew. Cargo does not contribute to ransoms as they rely on general average(GA) and similarly crew are not expected to contribute to their proportion in GA.

SECTION 5 – Permits and Licences, Investigations and Claims
10. Permits and Licences
There is concern in the industry that an apparent sizable number private maritime security firms areoperating without the necessary permits and licences to transport and carry weapons. The
consequences of contractors failing to have the required permits and licences effectively makes thecarriage of weapons illegal, the consequences of which could result in significant delays to thevessel. In response to this concern, GUARDCON contains a comprehensive clause dealing withpermits and licences which place a strict obligation on the contractors to ensure that they meet all
such requirements. This is an important clause and parties should take careful note of its provisions.
Clause 10, however, is not one-sided as it recognises that the owners also have obligations in
respects of various permissions that need to be obtained in order to carry armed guards on board. It
places a mutual obligation on the owners and the contractors to obtain all necessary permits and tomaintain them during the transit and provide copies to the other party on request. Each party is also
obliged to indemnify the other against the consequences of failing to obtain the required permits.
Permit has been defined for the purposes of the Clause to mean, in addition to permits, certificates,
licences, authorisations, consents, permissions, approvals and visas.
11. Investigations and Claims
If there is an incident on board the vessel involving firearms, this will generally result in an enquiry
by the vessel’s Flag State or, at the very least, by the vessel’s owners. In such cases the contractors
are obliged to assist in the enquiry – which may entail the submission of written reports from the
Master, team leader and other members of the security team/crew.
If there is a third party claim against the contractors or the owners as a consequence of the security
services (for example, a claim by a fisherman for damage to his boat resulting from security
measures), Sub-clause (c) provides for the parties to assist each other in defending claims.

8

SECTION 6 – Insurance, Fees and Taxes
12. Insurance Policies
One of the key features of GUARDCON is the all-important Insurance Policies Clause. It is highly
recommended that parties carefully read the provisions of Clause 12 to make sure that they fully
understand their obligations.
Sub-clause 12(a) sets out the minimum insurance cover that the contractors must maintain to cover
their liabilities during the contract period. The policy limits for the contractors’ insurances set out in
the Clause reflect a level which should be considered the industry accepted norm. BIMCO
acknowledges that the insurance requirements in GUARDCON will “raise the bar” on insurance coverfor many security contractors. The result may be that the widespread adoption of GUARDCON will
weed out some of the less well-resourced companies who are unable or unwilling to meet theinsurance requirements. However, given the fundamental importance of ensuring that security
contractors are adequately insured to cover their risks, BIMCO feels that GUARDCON has an
essential role to play in regulating this aspect of the commercial arrangement between owners andcontractors.
The Insurance Policies Clause has been drafted in consultation with the underwriter representativeon the GUARDCON Sub-committee, Mr Andrew Moulton of Ascot Underwriters, with additional
input provided by a number of other leading marine insurance underwriters including Hiscox,
Canopius and Aegis. It has been a fundamental part of the development of GUARDCON to ensurethat underwriters are comfortable with the contract and prepared to write appropriate cover for it.
We are aware of at least one prominent insurance broker that has been working with a leading
underwriter to produce a tailored “GUARDCON insurance package” for security contractors and weare confident that similar packages will be developed to coincide with GUARDCON’s publication.
Sub-clause (b) deals with policy limits which are set at $5 million (or other higher figure as may be
agreed by the parties). While the application of deductibles to help reduce premiums is a perfectly
acceptable practice, the contract provides that to avoid contractors agreeing deductibles that in theevent of a claim they may not have the financial resources to meet, such deductibles have to reflectmarket practice. The contractors are obliged to provide the owners with evidence of insurance withcopies of cover notes if the owners so require.
Owners should also be adequately insured and have appropriate P&I cover – this is dealt with in Subclause (c).
Sub-clause (d) deals with kidnap and ransom insurance. As is common with this type of insurance, if
you have it you cannot say you have it because it may be invalidated as a result. However, K&R
policies normally extend to every person on board a vessel including supernumeraries and so if theowners have K&R cover the security guards will be embraced by that policy while they are on board
the vessel. Should the vessel be hijacked and the security guards removed from the vessel then theClause addresses the fact that once off the ship, the guards are no longer covered by the owners’
kidnap and ransom policy and therefore the contractors will need to make alternative arrangements
or at least be aware that the owners’ insurance may not respond.
13. Fees and Expenses
The fees and expenses provisions of the contract encompass two main methods of employing
security guards – namely a daily rate or a lump sum agreement. BIMCO acknowledges that the
security industry operates with a number of permutations in respect of fees and expenses – in somecases combining the two. However, to avoid GUARDCON becoming overly complex, only daily rateand lump sum are contemplated. If the commercial parties wish to negotiate and agree upon9

alternative fee structures and payment methods they are free to amend the contract accordingly tosuit their needs.
The parties should not only agree the amount of the fees but also clearly state the currency to apply.
This is done by filling in Box 13.
Sub-clause (b) deals with mobilisation fees, if any have been agreed. Again, the amount and currency
should be stated in the appropriate box in Part I.
Invoicing is on the basis of latest 30 days after the security guards have disembarked the vessel isprovided in Sub-clause (c). The owners have 21 days in which to settle invoices issued by thecontractors. If the owners fail to pay within 21 days then Sub-clause (d) provides the contractors
with various sanctions against the owners.
If the owners decide that they require additional services to those originally agreed, then Sub-clause(g) provides for agreement to be reached in writing setting out what the additional services are andwhat extra fees the owners have to pay for the additional services.
Sub-clause (i) deals with rescheduling of the transit by the owners where the date of embarkation of
the guards is delayed. If the owners are unable or fail to give more than 48 hours’ notice of the delay
then the contractors will be entitled to be paid as of the original agreed date of embarkation.
If the vessel is hijacked then according to Sub-clause (k) no further daily rate payments will be madeby the owners to the contractors until the vessel is released and if/when security services are
resumed – so even though the contractors assume no liability for the seizure of the vessel theconsequence is that all payments are suspended for the duration of the hijack.
14. Taxes
This is a comprehensive mutual clause dealing with taxes payable by the owners and the contractors
and also covering sales tax for security related items purchased by the contractors on the owners’
behalf. Additionally, in Sub-clause (d) provision is made for withholding taxes which the owners are
obliged to pay on behalf of the contractors to relevant tax authorities.

SECTION 7 – Legal and Liabilities
15. Liabilities and Indemnities
Along with the Clauses covering insurances and permits & licences, the liabilities and indemnities
provisions are at the very heart of GUARDCON. The contract applies “knock for knock” mutual
allocation of risk principles whereby each party is responsible for loss of/damage to and/or deathof/injury to any of its own property and/or personnel or that of the entities within its defined“group”; responsibility is without recourse to the other party; and each party, in respect of thelosses, damages or other liabilities it has assumed responsibility for, indemnifies the other party.
It should be noted that Sub-clause 15(b) is not an exclusion of liability. It is a contractual
arrangement whereby two parties agree to hold each other harmless and indemnify each other forthis liability (up to the contractual cap). It does not exclude liability to an injured/dead person (suchas a fisherman killed by a security guard), who would still claim in the normal way against whicheverof the contracting party is the party at fault (who may then be able to take the benefit of thisindemnity to recover from the other contracting party).

10

Sub-clause (c) concerns third party liability. To be consistent with Sub-clause (b), the provision isreciprocal with each party indemnifying the other against claims by third parties with the exceptionof claims from third parties arising out of the owners’ or contractors’ own negligence. The reference
to “unlawful” act is intended to cover scenarios such as a fisherman being killed by a security guard
using unlawful force.
Sub-clause (c)(iii) addresses the issue of third party claims (including claims from the crew) in theevent of a liability caused as a result of a firearm being accidently or negligently fired by a security
guard. This sort of accident could be the result, for example, of a guard tripping while carrying aloaded firearm. It is an exception to the knock for knock principle; the owners agree not to pursue
individual security personnel but can still claim against the contractors under this indemnity.
The handling of claims is dealt with under Sub-clause (c)(iv) – the clause provides that the parties
have the option to take over the handling of specific claims from the other party for which theywould otherwise have to provide an indemnity.
Sub-clause (d) places a contractual cap on the liabilities under the contract as between the owners
and the contractors of a minimum of US$5 million while recognising that although the owners may
have rights of limitation under international conventions and national law, the contractors will nothave any such rights.
Sub-clause (e) is the consequential damages provision that has been lifted from TOWCON 2008.
16. Security Personnel Liability
Clause 16 is basically a “Himalaya” provision tailored to the requirements of the security personnel
provided by the contractors which extend the contractual protections afforded the contractors totheir employees.
17. Security Personnel – Waiver
The security guards are required to sign a waiver before embarking the vessel – a standard form of
waiver has been drafted specifically addressing the terms of GUARDCON and attached as per Annex
D. A number of security companies have reviewed the text of the waiver and seem satisfied that it
fits the bill as currently worded.
18. Delay
Given the legal, logistical and regulatory difficulties that the contractors may face transporting
weapons and personnel through and to various countries, Sub-clause (a) provides a grace period tothe contractors to absorb the first twenty-four hours of any delay in embarking the security teamand their equipment. It does not, however, absolve the contractors of their responsibility to do theirutmost get their personnel and equipment on board as and when required.
Sub-clause (b) deals with delays due to weather which prevent the security team from disembarking
the vessel as scheduled. In such cases the full daily rate continues to be payable until the guards
finally disembark.
19. Cancellation and Termination
Sub-clause (a) deals with cancellation of an individual transit in advance of embarkation. If thecontractors are unable to get their security team and equipment on board the vessel within thetwenty-four hour grace period provided for in Clause 18, the owners have the right to cancel theagreed transit and no compensation is payable to the contractors.

11

Under other circumstances the owner may also wish to cancel a scheduled transit, perhaps due to achange of employment orders for the vessel. Sub-clauses (a)(i) to (iii) provide a compensation
mechanism for the benefit of the contractors on a sliding scale depending on how close to theembarkation date notice of cancellation is given.
Termination for cause is dealt with under Sub-clause (b) and with the exception of (b)(i), dealing withflag state authorisation for the carriage of armed guards, is based on standard wording found inother BIMCO contracts.
When GUARDCON is used as a framework agreement it is an “evergreen” contract, so if the parties
wish to bring it to an end for reasons other than fault, they are required to give the other party 30
days’ notice in accordance with Clause 2 (Commencement, Appointment and Duration). The
minimum contract period is 12 months.
20. Compliance with Laws and Regulations
This is a standard BIMCO wording taken from the SHIPMAN Standard Ship Management Agreement.
21. Health, Safety and Environmental Regulations
Although it may perhaps seem a little strange to link the employment of armed guards with healthand safety in the workplace requirements, this is a provision commonly found in current security
guard contracts and is protective of owners (for example, the guards must follow smoking
prohibitions on board).
22. Drug and Alcohol Policy
This is a self-evident but nevertheless very important provision. The ban on drugs extends toprescription drugs if used or abused for purposes other than those for which they were medicallyprescribed.
23. No Salvage
Bearing in mind that it might be as a result of the actions of the security team in defending the vesselthat results in the vessel requiring salving, this Clause excludes claims for salvage awards and life
salvage by the contractors and their security team.
24. Dispute Resolution
This is the current version of the BIMCO Dispute Resolution Clause offering the parties three options
on arbitration: London (which applies by default if no other venue is agreed as it currently handles
by far and away the largest proportion of international maritime arbitrations); New York; and, finally,a free choice of venue as may be agreed between the parties. The mediation provision applies in all
circumstances. It is very important that the parties agree which jurisdiction and arbitration venue isto apply to their contract and that they clearly indicate their choice in Box 19.

SECTION 8 – General
25. Assignment
A standard wording other than the fact that the words “or delayed” have been incorporated as a
useful addition.
26. Notices
This is a general notice provision dealing with how contractual notices should be given and when
they should be treated as received.

1227. Confidentiality
Confidentiality is a matter of particular concern to both parties in this type of contract wheresecurity is of chief importance and so a comprehensive mutual provision has been drafted.
28. Third Party Rights
The purpose of this Clause is to clarify that only third parties expressly identified in the Contract canbenefit from it.
29. Partial Validity
The Partial Validity Clause is designed to avoid a potential situation where the entire contract is held
to be invalid simply because a particular provision is deemed by an arbitrator or other competentauthority to be illegal, unenforceable or invalid. If the offending clause cannot be interpreted oramended in such a way as to make it valid, then this Clause provides for it to be considered deleted
but for the rest of the contract to be unaffected.
30. Entire Contract
This is a standard wording found in a number of other BIMCO contracts. The purpose of the Clause is
to limit the rights of the parties to the written terms of the contract. As such it is intended to exclude
representations, written and oral, not intended to be part of the final concluded contract.
ANNEXES
Annex A (Security Equipment)This Annex is designed for the parties to attach a list of firearms, ammunition and other equipment(including non-lethal weapons) that will be provided by the contractors. It is intended to be a genericdescriptive list and therefore not include actual serial numbers (these will be required, however, for
the issue of permits and licences to the contractors).
Annex B (Rules for the Use of Force)
This is a blank Annex to which the parties need to attach their agreed RUF to form part of thecontract. BIMCO has developed Guidance on the Rules for the Use of Force to which the parties may
refer as a useful source of inspiration when drafting and agreeing their own RUF.
Annex C (Instruction Notice)
When the contract is used as a framework agreement for multiple transits, the owners are required
to issue an instruction notice detailing their requirements for each transit. This Annex provides a pro
forma Instruction Notice which can be used for this purpose.
Annex D (Individual Waiver)
As mentioned in the notes above on Clause 17 (Security Personnel – Waiver), the members of the
security team are required to sign individual waivers before boarding the vessel. This Annex provides
a standard wording for the waiver that specifically refers to the terms of the contract.
Annex E (Schedule of Charges)
This Annex covers mobilisation fees at various named ports and allows for charges for other ports tobe added as agreed by the parties.
Annex F (Standard Operating Procedures)
Many maritime security companies have their own standard operating procedures covering theprovision of security services on board ships. If such procedures exist, they should be attached tothis Annex.

13

Copyright and availability
Copyright in GUARDCON is held by BIMCO who are also the publishers.
Sample copies of GUARDCON and the Guidance on the Rules for the Use of Force may be
downloaded free of charge from the BIMCO website at www.bimco.org.
To use GUARDCON we recommend BIMCO’s web-based charter party editing system, idea, which
provides access to a secure Microsoft Word version of the contract that can be filled in and edited
online and then exchanged by e-mail. For details of how to sign up to use idea please click on the
Products tab on the BIMCO homepage at www.bimco.org or contact idea@bimco.org.

14