Navigating SALEFORM 2025: All you need to know about the new form

SALEFORM 2025 is a substantial and welcome overhaul that reflects over a decade of change in regulatory requirements, market practice, financial compliance, and environmental regulation. It closes the most significant gaps in the 2012 form, including the complete absence of sanctions provisions, anti-bribery and corruption protections, and any environmental compliance framework, while strengthening the sellers' default regime and codifying modern market practice across payment mechanics and closing procedure.

The most impactful procedural change is the replacement of the deposit holder model with a formal escrow agent structure, governed by a separate escrow agreement that must be negotiated, executed, and exchanged simultaneously with the MOA itself.

The buyers must lodge the deposit within three banking days after both the MOA and the escrow agreement have been signed by the parties and exchanged, and after the escrow agent has confirmed in writing that it is ready in all respects to receive the deposit. This adds a meaningful procedural step at signing that practitioners must plan for carefully in advance.

Both parties are obliged to provide the escrow agent with all required KYC and anti-money laundering documentation without undue delay. Separately, any additional KYC documentation reasonably requested by the parties and/or their financiers and/or banks in order to effect the sale and purchase shall equally be provided without undue delay^[1]. A party that has completed its own KYC process may elect to terminate without liability if the escrow agent has not confirmed readiness within the agreed number of days.

Consequently, KYC readiness must be built into transaction timelines from the outset. It is no longer an administrative afterthought but a contractual obligation with a termination right attached.

SALEFORM 2012 offered a single payment mechanism, whereby on delivery, but no later than three banking days after notice of readiness had been tendered, the deposit was released to the sellers and the balance paid free of bank charges to the sellers' nominated account.

SALEFORM 2025 introduces three alternatives under clauses 3(a)-3(c), where clause 3(a) applies in the absence of deletion:

• Under alternative 3(a), the deposit is released to the sellers in accordance with the escrow agreement and the balance is paid free of bank charges to the sellers' nominated account on delivery.
   
• Under alternative 3(b), the buyers remit both the deposit and the balance in advance ^[2] to the escrow agent's designated account; the escrow agent holds it to the buyers' order and releases both the deposit and the balance to the sellers on delivery. Interest accrued on the balance is credited to the buyers in accordance with the escrow agreement.
   
• Under alternative 3(c), the buyers remit the balance via SWIFT using conditional payment instructions by way of authenticated MT 199 and MT 103 messages to the sellers' bank, which holds the balance to the buyers' order without allocation to the sellers' account. On delivery, the deposit is released in accordance with the escrow agreement, and the balance is released upon written instructions from the buyers' authorised representative.
   

The SWIFT conditional payment mechanism under alternative 3(c) reflects how sophisticated international shipping transactions are already being structured in practice^[3]. It provides meaningful security to buyers, broadly comparable to a letter of credit, whilst avoiding the costs and complexity of a full escrow arrangement for the purchase price. Having all three alternatives expressly built into the standard form removes the need for additional negotiation, which is a genuine and practical improvement on SALEFORM 2012.

This is, in our view, the most commercially significant change from a risk allocation and litigation perspective.

Under SALEFORM 2012, where the sellers' failure to deliver was due to proven negligence, the sellers were liable to compensate the buyers for their loss and expenses together with interest whether or not the buyers elected to cancel. However, the 2012 form contained no express provision entitling buyers to loss of bargain damages, leaving buyers to rely on general principles of contractual damages to recover such a head of loss. 

Under SALEFORM 2025, on the other hand, where the sellers' failure to tender notice of readiness or be ready to validly complete a legal transfer by the cancelling date is due to proven negligence, the sellers shall make due compensation to the buyers for their losses and all expenses together with interest, whether or not the buyers terminate. Where the buyers elect to terminate under clause 14(e), such compensation shall expressly include loss of bargain. 

Additionally, following issuance of a new notice of readiness and where delivery occurs more than three banking days after the date of the original notice of readiness, the sellers shall compensate the buyers for the additional costs reasonably incurred resulting from such delay.

In a rising market, loss of bargain can represent a very substantial sum, i.e. broadly the difference between the contract price and the market value of the vessel at the time of breach. Sellers must understand that SALEFORM 2025 significantly raises their exposure upon default. Buyers, conversely, now have a considerably stronger contractual basis for recovering full compensation, including the benefit of their bargain.

SALEFORM 2012 contained no anti-bribery and corruption ("ABC") provisions. SALEFORM 2025 introduces an entirely new clause 16, under which both parties warrant that they will comply at all times with all applicable ABC laws in their fulfilment of all rights and obligations under the MOA, including the prevention of bribery and corrupt practices in all forms.

A party failing to comply with applicable ABC laws agrees to defend and indemnify the other party against any fines, penalties, liabilities, losses, or damages arising from such non-compliance. Where one party's non-compliance causes the other party to breach applicable ABC laws, the compliant party has the right to terminate the MOA and, depending on which party is in default, to recover or retain the deposit and seek damages from the non-compliant party.

The indemnity and termination right attached to ABC non-compliance create genuine and potentially significant liability exposure for both parties. In transactions involving brokers, agents, or other intermediaries, or in jurisdictions carrying a higher corruption risk, parties should carefully review their internal compliance frameworks before signing.

SALEFORM 2012 contained no sanctions clause. SALEFORM 2025 dedicates an entirely new clause 17 to sanctions compliance, with its own defined terms: 

• "Sanctioned Activity" covers any activity subject to restrictions imposed by a Sanctions Authority. 
   
• "Sanctions Authority" includes the UN, EU, UK, USA, and any other competent authority or government with jurisdiction over the Parties or the Vessel. 
   
• "Sanctioned Person(s)" covers any person, entity, organisation, or vessel subject to asset freezes, transaction bans, designation measures, or other counterparty-specific restrictions.
   

The sellers warrant, at all times from the date of the MOA until delivery, that they and the vessel are not Sanctioned Persons, that the vessel has not been employed in any Sanctioned Activity, and that the vessel will not be so employed prior to delivery. The buyers warrant that they are not a Sanctioned Person prior to delivery, and – critically – that following delivery they will not employ the vessel in any Sanctioned Activity, permit such use by others, or sell or transfer the vessel to any Sanctioned Person. This post-delivery warranty expressly survives closing.

Either party is at liberty to notify a relevant Sanctions Authority if it has reasonable cause to believe that the other party is in breach of clause 17, notwithstanding any confidentiality obligations under the MOA.

The absence of a sanctions clause in SALEFORM 2012 had become a widely recognised gap, routinely filled by bespoke addenda negotiated on a transaction-by-transaction basis. Clause 17 provides a balanced, BIMCO-endorsed starting point for all parties. The post-delivery warranty binding buyers deserves particular attention, as it creates ongoing compliance obligations that survive completion of the sale.

Two entirely new BIMCO standard clauses address the EU Emissions Trading System ("EU ETS") and Regulation (EU) 2023/1805, which entered into force on 1 January 2025 ("FuelEU Maritime").

On EU ETS, the sellers warrant that, at delivery, they will have complied with all reporting requirements for the current reporting period. Following delivery, the sellers undertake to submit a verified partial emission report covering the period up to and including delivery, and to provide evidence of such submission to the buyers upon request. The sellers remain solely responsible for surrendering emission allowances attributable to the vessel's emissions up to and including the date of delivery, and shall indemnify and hold the buyers harmless against any claims, losses, or liabilities arising under any emission scheme in respect of the vessel's emissions during the reporting period up to and including delivery.

The commercial implications of FuelEU Maritime are more complex. Where the vessel's estimated compliance balance at delivery is negative, the sellers must provide validated penalty data, and the buyers have the right to deduct from the purchase price an agreed sum per tonne of CO2 equivalent. Where the vessel has carried a negative compliance balance for the last two or more consecutive complete reporting periods, the buyers have an additional right to deduct an agreed sum reflecting anticipated future exposure to the FuelEU multiplier penalty. Conversely, where the estimated compliance balance at delivery is positive, the buyers shall pay the sellers an agreed sum per tonne of CO2 equivalent, up to an agreed maximum, at the same time and place as payment of the purchase price.

These provisions introduce direct purchase price adjustment mechanisms tied to the vessel's environmental compliance record^[4]. 

Parties should note two important drafting points:

First, where the blanks for the agreed deduction rate in the negative compliance balance provision are left unfilled, a default rate applies automatically equal to the FuelEU Penalty per tonne of CO2 equivalent as calculated under the FuelEU Maritime regulation. 

Second, the provisions addressing the positive compliance balance payment and the additional deduction for consecutive negative reporting periods are opt-in only: they do not apply unless the relevant blanks are completed by the parties. The blank fields cannot sensibly be negotiated without access to the vessel's verified emissions data, and technical and environmental advisers must be engaged at an early stage in any transaction involving vessels trading within the EU.

Understanding where the SALEFORM 2025 and SHIPSALE 22 converge and diverge is important for practitioners who may be asked to choose between them.

Several features that are new in SALEFORM 2025 were already present in SHIPSALE 22, including a separate deposit holding agreement structure, KYC obligations, a sanctions clause, an anti-bribery and corruption clause, a confidentiality clause, and the no-physical-inspection alternative.

SHIPSALE 22 also contains features that SALEFORM 2025 still lacks: 

• a dedicated subjects clause addressing conditions precedent such as financing and board approval;
   
• a disruptive banking event provision, which entitles the buyers to an additional two banking days to lodge the deposit where the cause of delay is a failure in the banking system, an error on the part of the buyers' bank or the deposit holder's bank, or a compliance review by those banks,  rather than any fault on the part of the buyers themselves; 
   
• and a more detailed framework governing the use of electronic signatures.
   

However, SALEFORM 2025 goes beyond SHIPSALE 22 in three important respects.

First, SALEFORM 2025 expressly entitles buyers to loss of bargain damages upon termination following the sellers' proven negligence. SHIPSALE 22 contains no equivalent provision. Under SHIPSALE 22, the sellers' liability upon default is confined to the buyers' direct losses and expenses together with interest, leaving buyers without an express contractual right to the benefit of their bargain.

Second, the three payment alternatives, and in particular the SWIFT conditional payment mechanism, offer a degree of structural flexibility that SHIPSALE 22 does not provide. 

Third, and most significantly for vessels currently trading in the EU, SHIPSALE 22 contains no EU ETS clause and no FuelEU Maritime clause. Every relevant transaction concluded on SHIPSALE 22 therefore currently requires bespoke addenda to address both live regulatory regimes; an additional drafting burden that SALEFORM 2025 has now removed by incorporating BIMCO standard provisions directly into the form.

SALEFORM remains the global market standard for ship sale and purchase transactions, and SALEFORM 2025 represents a material improvement on its 2012 predecessor. It is more robust, more commercially balanced, and better suited to today's regulatory environment than either SALEFORM 2012 or SHIPSALE 22.

SALEFORM 2025 closes the most significant gaps in the prior form, namely sanctions compliance, anti-bribery and corruption obligations, environmental regulation, and sellers' default liability, and codifies modern market practice across payment mechanics and closing procedure.

Practitioners should note the following when using SALEFORM 2025:

1. No subjects clause. As with SALEFORM 2012, SALEFORM 2025 contains no dedicated subjects clause. A bespoke addendum therefore remains required for any transaction subject to financing, board approval, or other conditions precedent, and this should be prepared and agreed before exchange.
    
2. Escrow agreement must be agreed before signing. The terms of the deposit holding agreement must be negotiated and finalised before the main contract is signed. This cannot be deferred until after exchange without creating significant closing risk.
    
3. FuelEU blanks require technical input. The blank fields for agreed rates per tonne of CO2 equivalent under the FuelEU Maritime clause require verified emissions data and input from technical and environmental advisers before they can responsibly be completed. 
    
4. Sellers face materially higher default exposure. The express loss of bargain provision significantly increases sellers' financial exposure upon default compared with SALEFORM 2012. Sellers and their advisers should assess this exposure at the outset of any transaction. 
    
5. The post-delivery sanctions warranty survives closing. The buyers' sanctions warranty continues in force after delivery and imposes an ongoing compliance obligation. Buyers should ensure that this requirement is incorporated into their internal compliance frameworks from the date of delivery. 
    

In sum, SALEFORM 2025 is the most comprehensive and market-ready ship sale form currently available. We recommend its adoption as the starting point for all ship sale transactions, with the caveats above addressed from the outset of transaction planning.

^{[1] In the recent December 2025 judgment - King Crude Carriers SA and others (Appellants) v Ridgebury November LLC and others (Respondents) – the English Supreme Court (overturning the Court of Appeal) held that the sellers were not entitled to claim the deposits payable under sale contracts as a debt, despite the buyers’ breach which had resulted in the non-fulfilment of a condition precedent to payment of the deposits. The sellers’ remedy, instead, lay in damages for breach of contract and not in a debt claim by way of “deemed fulfilment”.}  

^{[2] This may not be a viable option if the balance is being financed and drawdown is not possible until the vessel is free from encumbrances and other CPs are satisfied upon the time of delivery.} 

^{[3]. The use of MT199 conditional SWIFT payments was more commonplace in previous years – now, we are frequently seeing such payments methods not being accepted in S&P transactions where the escrow account option as supported by requests for solicitors undertakings in relation to the advance payment, holding and release of the balance payment is becoming more common practice.}

^{[4] In recent transactions the relevant deductions were taken from the price for bunkers and lube oils, rather than the purchase price with a post closing obligation to pay a reconciled payment depending on the final figures.}