Main Changes: SHIP 2000 vs. SHIP25

Project Management and Reporting

• Digitalized document flow: The Builder must now grant the Buyer electronic access to Drawings and documentation; short and fixed deadlines apply for comments, and silence is considered approval. This reduces the risk of delays and gives the Builder increased predictability. For the Buyer, this means that the project organization must be able to respond quickly.
• Standardized, detailed monthly reports: SHIP25 requires ongoing status and progress reports including comparisons with the building schedule, change logs, photo documentation, and the status on Subcontractors—much more detailed than SHIP 2000. This provides the Buyer with a better decision basis.
• Representatives and Handling of Deviations

SHIP25 clarifies that if the Buyer’s Representatives do not identify and notify the Builder of defects in a timely manner, the Buyer may be held liable for additional costs and delays as a result. This is a stricter approach than SHIP 2000, where the consequences of passivity were less explicit. The Builder thus has more predictability and reduced risk of unforeseen liability; the Buyer, in turn, faces the need for more active involvement, but also gains more influence if it is proactive.

• New role for the Representative: At least one of the Buyer’s Representatives must now explicitly be authorized to sign Change Orders and be present at the necessary times to avoid interrupting progress at the Builder.

Supplier liability and Subcontractors

An important development in SHIP25 is a much more balanced liability framework for delays and defects related to supplies where the Buyer requires the use of a specific supplier. Here, the Builder may disclaim parts of the risk, which is a strengthening of the Builder’s position compared to SHIP 2000. For the Buyer, it is often beneficial to provide two alternatives to avoid increased risk and cost.

Refund Guarantees

Unlike SHIP 2000, which provided little regulation of Refund Guarantees, SHIP25 requires the parties to attach guarantee terms as a dedicated appendix (“Appendix VI”), and for the guarantees to be maintained throughout the building period—even in case of delay. If the Builder fails to renew the guarantee in time, the Buyer has the right to terminate and claim repayment of all instalments. This gives the Buyer a much higher level of security, and the Builder clear routines and obligations.

New Compliance Clauses

Following increased requirements on sustainability and corporate social responsibility, SHIP25 introduces the following new clauses:

• Health, Safety & Environment (HSE) and Human Rights: The Builder must comply with relevant HSE Laws, and the Buyer may conduct audits on site. If the Buyer is subject to the Transparency Act, the Builder must cooperate fully.
• Anti-bribery and corruption: Both parties must comply with Anti-Bribery and Corruption (ABC) Laws.
• Sanctions and Export Controls: Both parties must warrant that no element of the contract breaches applicable Sanctions or Export Control laws. Termination may result; SHIP25 allows for loss-sharing in some sanction-termination cases, so that neither party bears the full burden if neither is to blame.
• Cyber Security: New requirements for measures, notification, audits, etc. ensure responsibility for an area that is far more topical now than in 2000.

These changes provide the Builder with a clear framework, and the Buyer with greater assurance that the project is managed in accordance with current laws and expectations.

Opt-in models – increased strategic flexibility

SHIP25 introduces several key opt-in mechanisms, including:

• Design Responsibility: The default is full Builder responsibility, but the parties can agree to limit the Builder’s liability to that of the underlying design contract when a third-party designer is used (Appendix I). This allows more—also smaller—yards to compete.
• Progressive Title: The Buyer may obtain title to the hull as the vessel is built, with corresponding changes for security arrangements. This is especially relevant for projects in Norway (Appendix II).
• Price Adjustment Mechanisms: SHIP25 provides for index adjustment of the Contract Price in the event of high inflation, and allows for certain components to be priced at actual cost plus agreed margin (“Budget Price”). The Builder is thus protected from pricing unexpected fluctuations, and the Buyer gets flexibility on specs that are not ready at signing.

These elements give both parties greater assurance and flexibility to handle project-specific needs and market risk.

Change Management and Warranty Work

Change Management: new and more balanced regime

A key novelty in SHIP25 is that the Builder—subject to prior written notice—may charge its standard hourly rates for reasonable engineering time spent in assessing modifications or changes requested by the Buyer, regardless of whether such changes are ultimately implemented. This gives both parties improved predictability in cost and process, incentivising the Buyer to request only serious changes and ensuring more efficient project completion.

Warranty and Claims Handling: clearer structure and better balance

SHIP25 gives the Buyer expanded and formalised access to have warranty work or remedial work performed at another yard if the Builder fails to rectify within reasonable time—but always following written notice and with a requirement to involve the Builder’s representatives and document the work. At the same time, the Builder’s financial responsibility is limited to the price of such work as it would have cost at the Builder’s Yard, including necessary docking and access work.

Summary

• Flexibility and risk management: SHIP25 provides tools to balance project risk, price and flexibility. With opt-in schemes and clear deadlines, both parties can optimise their negotiation outcomes to their needs.

• Proactive handling of changes: The Builder can now charge for assessment of Change Orders, even where these are not implemented—a change which may reduce speculative requests but also requires conscious decisions and clear communication.

• Simplified, faster dispute resolution: The dispute mechanism in SHIP25—using the Nordic Offshore and Maritime Arbitration Association (NOMA) Rules instead of ad hoc arbitration as in SHIP 2000, and with the NOMA Fast Track Arbitration for claims under NOK 5 million—is designed to provide faster handling of disputes, lower costs and greater predictability.

• Compliance as a commercial advantage: In addition to being key for the competitiveness of Norwegian yards, the new requirements for sustainability, transparency and cyber security make it easier for both Buyer and Builder to document responsible business practices vis-à-vis authorities and financing sources.

• Extra observations & key advice:
  • SHIP25 requires that the Buyer’s Representative must actually be authorized to sign Change Orders on a continuous basis—personnel planning and power of attorney routines should be carefully set up.
  • Warranty and claims procedures are clearer, including that the Buyer may increasingly undertake rectification personally at the Builder’s expense, but within set procedures and cost limits. This requires careful management and documentation.
  • The parties must expressly determine whether Progressive Title should apply—this can be crucial for financing and the Buyer’s position in an insolvency scenario at the Builder. This also affects the refund guarantee regime.

With SHIP25, the industry continues the strong Norwegian tradition of balanced and modern standard contracts within shipbuilding—to the benefit of both yards, owners, and financial institutions. Haavind continuously assists yards, owners, and banks in shipbuilding projects, and is ready to support your implementation and optimal use of the new standard.