Efficiency

Another requirement before the charterer can “activate” the off-hire clause is that time must be actually lost as a direct result of the inefficiency of the ship. Thus delay caused by fumigation was not time lost to the charterer because the vessel would have been in port anyway, or delay in sailing because of a boiler breakdown when the delay would have occurred anyway because of waiting for tides. So the thing to remember is that in addition to the delay there must be an actual loss to the charterer. The NYPE off-hire clause uses the words “the payment of hire shall cease for the time thereby lost”. This makes no reference to the time at which the vessel is restored to an efficient state. Another form of wording is “the payment of hire shall cease until she be again in an efficient state”, which defines a specific period of time. This can work against an owner’s interest in instances where the ship is only partly disabled and thus the charterers at least have partial use of her (e.g. reduced speed due to a listed cause). Another point which was aired in Marika M (1981) in which the vessel went aground and after refloating (and again efficient), she was further delayed because she lost her place in the berthing queue because of the grounding. The judge said that the “net loss of time” only included the time up to full working being restored. “Efficiency” relates to efficiency to perform the service which the charterer wants the ship for at that time. i.e. that if a crane breaks down whilst the ship is performing a voyage is irrelevant because the charterer does not want to work the cargo at sea. Similarly, an engine breakdown whilst the ship is berthed discharging cargo is irrelevant because the ship does not at that time want to put to sea.