SD-9/CHART(82)/97-III DATED 10th December, 2001

MEMORANDUM

GUIDELINES FOR CHARTERING OF FOREIGN FLAG VESSELS - FIRST RIGHT OF REFUSAL FOR INDIAN FLAG VESSELS IN GLOBAL OR OPEN TENDER

1. The following sentence may be added to para 5.1 of DG Shipping guidelines dated 27th March, 2000 on chartering of foreign flag vessels, in the seventh line after the words 'foreign flag vessel':-

"The first right of refusal will not apply wherever the foreign flag vessel, which participated in the global or open tender is converted to Indian flag before the vessel commences its operation in the coasting trade of India, in implementation of the global or open tender".

2. It is further clarified that the first right of refusal to and Indian owner in a global or open tender, as specified in the DG Shipping guidelines dated 27th March, 2000 was only intended to protect Indian flag vessels over foreign flag vessels. However, if a foreign flag vessel participates in the global or open tender, with the intention of converting to Indian flag prior to its engagement in the coasting trade of India, in implementation of the global or open tender, there would be no requirement for a licence or a permission from the Directorate General of Shipping, in accordance with Section 407 of the Merchant Shipping Act, 1958.

3. This issues with the approval of the Director General of Shipping and Ex-Officio Additional Secretary to the Government of India.

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