Time Charter Off-Hire

Standard forms of time charter invariably include a clause providing that hire is not payable by the charterer during any period when full use of the vessel is not available to him because of an accident or deficiency falling within what might broadly be termed the shipowner’s sphere of responsibility. The precise events which take the vessel off-hire and the period for which hire is not payable vary with each form of charter and are dependent on the wording of the relevant off-hire clause. Normally the range of events which will take a vessel off-hire are listed in an off-hire clause of this type.

Occasionally, however, a series of mini off-hire clauses covering particular events such as speed deficiency or drydocking, are scattered throughout the charterparty and these may cause inconsistencies and apparent contradictions unless clearly crossreferenced to the main off-hire clause. The operation of the standard clause is triggered merely by the occur- rence of one of the specified events irrespective of any fault on the part of the shipowner. Being a ‘no fault’ clause, its provisions are strictly construed by the courts, and the burden of proof rests firmly with the charterer when seeking a suspension of the hire. In the words of Bucknill LJ, ‘I think he must bring himself clearly within the exceptions. If there is a doubt as to what the words mean, then I think those words must be read in favour of the owners because the charterer is attempting to cut down the owners’ right to hire.’

On the other hand, the operation of the clause is unaffected by exceptions or force majeure clauses in the charterparty, although other provisions may specifically exclude the operation of the clause in certain circumstances, such as where the relevant event is caused by the charterer’s negligence. There is some authority for suggesting that the clause will not operate where the specified event results from a breach of contract by the charterer though, even if the vessel did go off-hire in such an event, presumably the owner could include the loss of hire in his claim for damages for breach. The standard off-hire clause frequently concludes with the phrase, ‘or by any other cause preventing the full working of the vessel’. Authority restricts such ‘other causes’ to those which directly affect the efficient running of the vessel, and excludes external events which, while delaying performance of the contract, do not relate to the physical condition of the vessel or its crew. Thus delays caused respectively by an obstruction on the Yangtse river, or by a vessel too heavily loaded for entry to the Panama canal, were not caught by the clause; while delay in obtaining free pratique, caused by the suspicion that a member of the crew was suffering from typhus, was sufficiently closely related to the vessel’s performance to take it off-hire.

The general view is that the phrase ‘any other cause’ is not caught by the eiusdem generis rule, since in the majority of cases it would not be possible to isolate a distinct genus from the various items listed in the clause. In any event, the rule would clearly be inoperative in the frequent case where the clause is amended to read ‘any other cause whatsoever’. It also appears to be restricted to fortuitous events, so as not to include those naturally resulting from the use of the vessel.