Time Charter Ship Off-Hire

The off-hire clause operates as an exception to the basic rule that the charterer must pay hire continuously during the charter period. There are certain incidents that, when they occur, cause the ship to come off- hire. The basic premise is that the charterer is deprived of the efficient use of the ship through no fault of his or her own, therefore he or she is not obliged to pay hire during that period. The incidents are limited to only those that hinder or prevent the efficient working of the ship (The Appollonius, 1978). The incidents that are expressly stipulated in off-hire clauses include breakdown of machinery, damage to hull, deficiency or default¬†of men or equipment, and dry docking or other measures necessary to maintain the efficiency of the ship. The BALTIME extends the cover by stating “other accident” and the NYPE by indicating “any other similar cause preventing the full working of the vessel.” The off-hire clause comes into effect after the lapse of a certain period of time. For example, the BALTIME states that the ship will go off-hire if the delay caused by any of the listed incidents continues for more than twenty-four hours, and the time of off-hire begins to count from the moment the efficient working of the ship ceases. In the Captain Stefanos (2012), the commercial court considered whether the amended clause 56 of NYPE46 indicating “capture/seizure … by an authority” was to be construed as an off-hire period when the vessel was captured by pirates and held for forty-five days. The court found in favor of the charterers, indicating that piracy was an off-hire event given that it constituted a “capture/seizure” which was not required to emanate “by an authority.” Hence parties should pay a great deal of attention to the grammatical structure and syntax of a clause, and the person to whom the risk of piracy is allocated should be clearly stated. Contrary to this decision, in The Saldanha (2011) the court relied on another clause (40) of the NYPE46, which was different in some respects to clause 56 and which held that the vessel was on-hire during the detention by pirates.