From When Time Counts Under a Time Charterparty

From When Time Counts Under a Time Charterparty

The point from which hire begins to count is a central commercial issue in a time charterparty because it marks the moment when the time charterer starts paying for the use of the ship. Under the New York Produce Exchange (NYPE) Charterparty Form, the clause links the commencement of hire to written notice of readiness. Where notice is given to the time charterer or the time charterer’s agents before the stated afternoon deadline, time begins to count from 7 a.m. on the following working day. The clause therefore creates a practical gap between the tender of readiness and the formal start of hire, unless the time charterer chooses to use the ship earlier.

This arrangement reflects a balance between operational readiness and commercial payment. The shipowner must make the ship available in accordance with the charter, while the time charterer receives a short period after notice to arrange cargo, berth, loading, discharging, or other employment matters. However, the privilege is not a free right to use the ship. If the time charterer requires the ship immediately after notice has been given, the time actually used counts as hire.

Notice of Readiness (NOR) and the Start of Hire in Time Charter

The printed wording makes written notice of readiness the trigger for the hire mechanism. If the notice is validly given before 4 p.m., hire begins at 7 a.m. on the next working day. The time charterer is therefore not normally required to pay from the exact moment when notice is delivered. Instead, the charter fixes a clear commercial starting point, reducing argument about hours and minutes unless the ship is put to use before the ordinary commencement time.

In practical terms, the time charterer should treat the notice deadline seriously. A notice given before the contractual cut-off activates the next-working-day rule. A notice given too late may postpone the start of hire under the clause. The mechanism also shows why the form distinguishes between readiness to serve and actual use. Readiness alone may not start hire immediately, but early use does.

The clause is especially important where a ship is ready but loading or discharging facilities are not yet available. The contractual start of hire depends on the notice provision rather than on immediate berth availability, unless the charter contains different wording. This gives both parties a predictable framework: the shipowner knows when the hire obligation will begin, and the time charterer knows when the use of the ship will start producing hire liability.

Immediate Use Before the Ordinary Start Time in Time Charterparty

The time charterer may choose to use the ship before hire would otherwise begin under the 7 a.m. next-working-day formula. If that happens, the time used becomes payable as hire. The commercial reason is straightforward: the time charterer cannot take the benefit of the ship’s employment while postponing the corresponding hire obligation.

This early-use rule may apply where loading begins, discharging starts, cargo operations are arranged, or the ship is otherwise placed into the time charterer’s service before the contractual commencement hour. The key point is not merely whether the ship is ready, but whether the time charterer has required or accepted operational use of the ship. Once the time charterer uses the ship, the time used counts.

Under English treatment, once the ship is put into use by the time charterer, the hire consequence may be continuous in the ordinary way, unless the charter provides otherwise. The U.S. arbitration approach described in the authorities is more limited: where the time charterer uses the ship earlier than the ordinary starting time, hire is payable for the hours of actual use.

Advances for Ordinary Ship Disbursements in Time Charterparty

The clause also deals with cash advances for the ship’s ordinary disbursements. At any port, the captain may require funds for ordinary ship expenses. Those funds may be advanced by the time charterer or the time charterer’s agents. Where such advances are made, they are subject to the stated commission and may be deducted from hire.

This provision is not the same as making the time charterer responsible for the shipowner’s internal handling of the money after the advance has been made. The clause expressly protects the time charterer by providing that the time charterer is not responsible for the application of the advances. The time charterer supplies the cash when properly required and then obtains credit against hire, but the shipowner remains concerned with how the captain applies the funds for the ship’s ordinary disbursements.

The deduction mechanism is commercially important because it prevents the time charterer from paying twice. If the time charterer advances money for ordinary disbursements that are for the shipowner’s account, the amount is normally brought back into the hire account through deduction. The commission recognises the service or financing element involved in making the advance available through the time charterer or local agent.

Docks, Wharves, and Places of Cargo Operation in Time Charterparty

The time charterer is usually given the right to direct where cargo is loaded or discharged, including the dock, wharf, or other place of operation. That right is not unlimited. The ship must be able to safely lie always afloat at any state of tide, unless the place is one where similar size ships customarily and safely lie aground.

The wording links the time charterer’s employment freedom to the safety of the place selected. The time charterer may direct the ship to the cargo operation point, but the direction must remain within the contractual safety restriction. A place that exposes the ship to an unsafe grounding risk will not satisfy the clause merely because it is convenient for cargo interests. Conversely, where safe grounding is customary for similar size ships, the clause recognises that local practice may permit the ship to lie aground without breach.

This clause should be read together with the broader law governing safe ports and safe berths. The immediate subject here is the physical place of loading or discharging, but the same commercial logic applies: the time charterer’s employment orders must not require the ship to operate in a way that falls outside the agreed safety limits.

Cargo Space Placed at the Time Charterer’s Disposal in Time Charterparty

The time charterer is entitled to the whole reach of the ship’s holds, decks, and usual places of loading, but only to the extent that the ship can reasonably stow and carry the cargo. The time charterer’s entitlement is therefore broad, but not absolute. It covers cargo space in the accepted commercial sense and does not include areas properly needed for the ship’s own safe operation.

In Weir v. Union S.S., the House of Lords treated the relevant space as cargo space, not space properly required for ballast. This distinction is important because the time charterer cannot demand use of space that the ship reasonably needs for stability, safety, or operation. The charter grants commercial use of the ship’s cargo capacity, not control over every part of the ship’s structure.

The words also refer to the ship’s structural capacity as it exists when the charter is made. In Japy Frères v. Sutherland, the relevant question was not what the ship may once have been capable of carrying when originally built, but what capacity the parties contracted on at the time of the charter. That approach reflects commercial reality. A time charter is made against the ship actually offered and accepted, not against an abstract historical design.

The shipowner is also entitled to reserve proper and sufficient space for the officers, crew, tackle, apparel, furniture, provisions, stores, and fuel. In Noemijulia Steamship v. Minister of Food, the issue concerned the reservation of space for fuel, then coal. The case illustrates that the time charterer’s right to cargo space must be reconciled with the shipowner’s continuing duty to keep the ship properly supplied and capable of performing the service.

Reasonable Stowage and Carrying Limits in Time Charterparty

The phrase “not more than she can reasonably stow and carry” imposes a further limitation on the time charterer’s use of cargo spaces. It is not confined to bare physical capacity. The phrase also allows the shipowner to comply with rational classification society requirements concerning the stowage and distribution of cargo where those requirements relate to the ship’s physical safety during operation.

In The Roman Karmen, Mance, J. held that this wording was not limited to simple physical seaworthiness. It extended at least to the shipowner’s compliance with classification society rules governing cargo stowage and disposition in the interests of the ship’s safe operation. The decision shows that cargo capacity must be measured by what the ship can reasonably and safely carry under the governing technical framework, not by a purely mathematical view of available space.

The practical consequence is that the time charterer cannot insist on using the ship in a way that overloads, misdistributes, or otherwise conflicts with rational safety standards. The time charterer obtains the commercial benefit of the holds and usual loading spaces, but the shipowner remains responsible for the ship’s safety and classification compliance.

Deck Cargo and Usual Loading Places in Time Charterparty

The reference to decks and usual places of loading may raise questions about deck cargo. Whether deck cargo may be carried depends on the charter wording, the nature of the ship, the trade, the cargo, and any applicable safety or contractual restrictions. The time charterer’s right to use deck space does not mean that every deck area is automatically available for cargo in all circumstances.

The shipowner may resist a proposed use of deck space where the cargo cannot reasonably be stowed and carried, where the use would conflict with safety requirements, or where the deck is not a usual loading place for the particular ship and trade. As with hold capacity, the central question is not merely whether space exists, but whether the proposed use is contractually and operationally reasonable.

Supercargo Accommodation and Passengers in Time Charterparty

The clause also contemplates accommodation for a supercargo, where carried, and may allow the time charterer to carry passengers as far as accommodation permits. This is a limited privilege, not an open-ended passenger-carrying right. It depends on available accommodation and on the terms agreed for payment to the shipowner for accommodation and meals.

Where passengers are carried under the time charterer’s privilege, the time charterer assumes the risk and expense of fines or extra costs caused by their carriage. This allocation is commercially sensible. The passengers are carried because the time charterer has exercised the privilege, and any regulatory or operational consequences arising from that choice fall on the time charterer rather than the shipowner.

Passenger carriage under a commercial time charter can create issues beyond the daily accommodation charge. Immigration requirements, port formalities, fines, delays, and additional expenses may arise. The clause deals with these consequences by placing the risk on the time charterer when the carriage of passengers causes the expense.

U.S. Law on When Hire Begins in Time Charter

Under U.S. law applying the New York Produce Exchange (NYPE) Charterparty Form, the starting point is broadly the same: hire commences at 7 a.m. on the working day after notice of readiness has been given, provided that the notice was given before 4 p.m. The Hopeville is an example of this approach. The rule is contractual and does not depend simply on whether cargo facilities are available immediately.

In The Alexandros Koryzis, the position was that even if the dock or wharf was immediately available when notice of readiness was given, hire did not start until the next working day under the clause. The case reinforces the importance of the contractual trigger. Immediate berth availability does not, by itself, displace the agreed commencement formula.

The time charterer may nevertheless decide to use the ship before the next working day. In that situation, the time charterer must pay for the time used. U.S. authorities, including The Antonis, treat this obligation as applying to the actual hours of use, rather than necessarily making hire run continuously from the first moment of use. That approach differs from the English view and should be kept in mind where the law or arbitration forum may affect the result.

Commercial Importance of the Clause

The clause dealing with when time counts may appear narrow, but it connects several important parts of time charterparty operation. It fixes the start of hire after notice of readiness, allows early use to count as hire, permits advances for ordinary disbursements to be deducted, defines the time charterer’s ability to direct cargo operations, and identifies the cargo spaces and accommodation available under the charter.

For shipowners, the clause protects the hire stream and preserves necessary control over safety, fuel space, crew space, classification requirements, and the ship’s operational integrity. For time charterers, it provides access to the ship’s earning capacity, cargo spaces, loading places, and operational use, while also giving a mechanism for disbursement advances and deductions from hire.

The best practical approach is to treat this group of provisions as an operational framework rather than isolated wording. Notice of readiness, early use, advances, berth directions, cargo-space rights, and passenger privileges all affect the commercial balance between the parties. Clear records, timely notices, careful port and berth orders, and accurate accounting for advances reduce disputes and support the smooth performance of the time charterparty.