A Bareboat Charter, also known as a Demise Charter, is one of the most significant contractual arrangements in maritime law, wherein the vessel owner leases the ship without crew, provisions, or insurance to the charterer, who assumes full control and possession of the vessel for a specific period. This makes the charterer the de facto owner for the duration of the charter.
Unlike a time, charter or voyage charter, where the owner manages operations, navigation, and crewing, a bareboat charter transfers complete operational control to the charterer. The charterer is responsible for manning the ship, maintaining its seaworthiness, bearing all operational costs, and ensuring compliance with safety and environmental standards.
LEGAL POSITION UNDER THE MERCHANT SHIPPING ACT, 2025
The Merchant Shipping Act, 2025, which consolidates and modernizes India’s maritime legislation, expressly recognizes the concept of bareboat charter registration. Under the new framework, Part VI, Chapter 8 of the Act provides for bareboat charter-in and charter-out registration, allowing foreign-owned vessels to be temporarily registered in India and Indian vessels to be chartered abroad under dual registration systems.
Section 254 of the Act empowers the Directorate General of Shipping (DGS) to grant bareboat charter registration to foreign vessels chartered by Indian entities, subject to compliance with safety, manning, and security regulations. The Act ensures that such vessels, during the charter period, enjoy the same privileges and are subject to the same obligations as Indian-registered vessels.
Additionally, Section 255(3) stipulates that upon the expiry or termination of the charter, the registration of the vessel under the Indian flag automatically ceases. The Merchant Shipping (Bareboat Charter) Rules, 2025 are expected to further detail the procedural requirements, documentation, and duration of registration.
COMMERCIAL AND PRACTICAL RELEVANCE
In commercial terms, bareboat charters are instrumental in fleet expansion, financing, and asset optimization. They allow Indian shipping operators to use vessels without full ownership, providing flexibility and capital efficiency. The model is also popular in the offshore, coastal, and tourism sectors.
For legal practitioners and maritime consultants, understanding the bareboat charter regime under the Merchant Shipping Act, 2025 is essential for advising clients on charter party drafting, registration compliance, insurance, and dispute resolution.
In conclusion, the bareboat charter system—as streamlined under the Merchant Shipping Act, 2025—represents a forward-looking legal framework supporting India’s vision of a modern, globally competitive maritime industry.