Common use of Flag State Clause in Contracts

Flag State. 35.1 The Vessel shall on the Delivery Date be registered in the name of the Owners under the laws and flag of the Flag State and the Head-Charterers and the Sub-Charterers shall provide the Owners with all such assistance as the Owners may reasonably require in obtaining and maintaining such registration and shall not during the Charter Period do or suffer anything to be done which might imperil such registration. Initial registration costs shall be for Owners’ account but thereafter all registration, tonnage and other taxes, imposts, dues and payments from time to time payable in connection with maintaining such registration shall be for the Sub-Charterers’ account and be payable on demand. No change shall be made to the Vessel’s Flag State without Sub-Charterers’ consent in writing (such consent not to be unreasonably withheld, delayed or conditioned) and the costs of any change (unless requested by Sub-Charterers) shall be for Owners’ account. 35.2 The Sub-Charterers shall have the right, subject to the prior approval of the Owners and the Approved Mortgagee (which the Head-Charterers shall procure is not unreasonably withheld, conditioned or delayed), and subject to the Sub-Charterers paying all costs associated therewith to require that the Owners register their title in another Flag State of the Sub-Charterers’ choice. 35.3 The Sub-Charterers acknowledge that it shall be reasonable for the Owners, the Head-Charterers and the Approved Mortgagee to withhold their approval if the Owners’ title to the Vessel or the Approved Mortgagee’s security would be adversely affected, or if either of them would become subject to additional taxes or other costs, unless indemnified by the Sub-Charterers, by reason of such change. 35.4 The name of the Vessel shall be chosen by the Sub-Charterers subject to the Owners’ and Head-Charterers’ consent which shall not be unreasonably withheld. Neither the Owners nor the Head-Charterers shall have any right to change the name of the Vessel, without the Sub-Charterers’ consent which shall not be unreasonably withheld or delayed. 35.5 The Sub-Charterers shall have the right to paint the Vessel in their own colours, install and display their funnel insignia and fly their own house flag provided that painting, re-painting, installation and re-installation shall be for the Sub-Charterers’ account.