Off-hire and performance claims in time charters

Off-hire suspends hire for the time lost under the charter; a performance claim converts a speed or consumption shortfall into hire plus excess bunker cost.

Off-hire is the contractual suspension of a time charterer’s obligation to pay hire for time lost to a cause the charter party lists, such as a machinery breakdown, a crew deficiency or a drydocking. A performance claim is the separate money claim in damages for a shortfall against the warranted speed or fuel consumption, during which the ship stays on hire throughout. The two mechanisms account for most of the disputed money on a time charter, and they are measured in entirely different ways.

What off-hire is, and what it is not

Off-hire is a creature of the charter party and of nothing else. English law, which governs the great majority of international time charters by express choice, gives a time charterer no general right to stop paying hire because the ship cannot earn. The remedy exists only to the extent the clause creates it, so its wording decides which events trigger it, how the lost time is measured, how long it runs, and who pays for the bunkers burned meanwhile.

Because the clause is an exception to an absolute obligation to pay hire from delivery to redelivery, the charterer carries the burden on every limb and ambiguity is read in the owner’s favour. The charterer must prove a listed cause, prevention of the full or efficient working of the vessel, and time actually lost. Fault is irrelevant in both directions: the charterer need not show the owner did anything wrong, and the owner cannot answer an off-hire claim by proving it exercised due diligence.

Three routes to the same money, and why the measures differ

A charterer whose ship has underperformed has up to three distinct routes, and they are routinely conflated. They produce different numbers.

  1. Off-hire. Hire never accrues for the time lost. No breach, no fault and no causation by the owner is needed, and no question of mitigation arises. The deduction is self-executing on the hire statement .
  2. Damages for breach of the speed and consumption warranty. Hire accrues in full and the charterer has a money claim, measured as time lost at the hire rate plus the cost of bunkers over-consumed. Taking that claim out of hire is an exercise of equitable set-off .
  3. The printed reduced-speed limb. NYPE 1946 clause 15 and clause 17 of NYPE 93 and NYPE 2015 each give a contractual right of deduction, not a damages claim, where the speed was reduced by a defect in or breakdown of the hull, machinery or equipment. This route needs a defect. It needs no warranty and no good weather sampling.

The distinction matters most at the margin. A vessel running at 85 percent of rated power because of a fouled fuel injection system has not had her full working prevented, so route 1 fails and route 3 succeeds. A vessel that simply cannot make her warranted speed on a clean hull in good weather has no defect to point to, so route 3 fails and route 2 succeeds.

Net loss of time, period, and the threshold that is neither

Two clause architectures dominate, and a third feature, the qualifying threshold, is regularly mistaken for a third architecture.

Net loss of time: hire ceases for the time thereby lost

A net clause suspends hire only for the time actually lost to the service the vessel was required to perform. NYPE 2015 clause 17 is the standard example: on loss of time from the listed causes, “the payment of hire and overtime, if any, shall cease for the time thereby lost”. Partial service during the event reduces the deduction, which is why the arithmetic and not the trigger is where most net-clause disputes are fought.

The measure is against the service immediately required of the vessel, not the chartered adventure as a whole. In Minerva Navigation Inc v Oceana Shipping AG (The Athena) [2013] EWCA Civ 1723 the vessel drifted for 10.9416 days off Libya in breach of orders to proceed to the Benghazi roads. The Court of Appeal restored the arbitrators’ award and held at [24] and [27] that whether the same time would have been lost anyway at some later stage is not a relevant consideration. Any calculation that reduces a deduction because the delay overlapped a port wait that would have happened regardless has been wrong since October 2013.

Period clauses: hire ceases until she is efficient again

A period clause runs from the event until the vessel is again in an efficient state to resume her service, as a continuous block. The classic wording comes from Hogarth v Miller (The Westfalia) [1891] AC 48, where engine damage meant the vessel had to be towed to Harburg but her cargo winches worked, so she was off hire during the tow and back on hire for the discharge. Lord Halsbury’s test, quoted by Tomlinson LJ in The Athena at [22], is whether she was efficient “to do what she was required to do when she was called upon to do it”.

That is the point the period label obscures. Even under period wording the vessel comes back on hire when she can do the thing then required of her, so an owner is not barred from showing that she was performing part of the service. What the period form removes is the netting of time within the event, not the efficiency test at its boundaries.

A qualifying threshold is a condition, not a deductible

Several forms require the event to last a stated time before the clause operates at all. That is a condition on the clause biting, and once it is passed the whole of the time lost comes off, not the excess over the threshold. A thirty-hour qualifying event under a twenty-four hour gate gives thirty hours of off hire, not six. Treating the gate as a deductible is a recurring arithmetical error in hire statements and it always favours the owner.

Correcting the record on BALTIME clause 11(A)

BALTIME clause 11(A) is widely described, including in secondary commentary, as the period form. It is not. BALTIME 1939 as revised 2001 clause 11(A), at lines 143 to 152 of the printed form, reads:

In the event of drydocking or other necessary measures to maintain the efficiency of the Vessel, deficiency of men or Owners’ stores, breakdown of machinery, damage to hull or other accident, either hindering or preventing the working of the Vessel and continuing for more than twenty-four consecutive hours, no hire shall be paid in respect of any time lost thereby during the period in which the Vessel is unable to perform the service immediately required. Any hire paid in advance shall be adjusted accordingly.

“Any time lost thereby” is the same net measure as NYPE, and “the service immediately required” is the same test the Court of Appeal applied in The Athena. Two features do make BALTIME wider than NYPE, and neither is about periods. “Hindering or preventing” reaches partial inefficiency that NYPE’s “preventing the full working” does not, and “other necessary measures to maintain the efficiency of the Vessel” is broader than NYPE’s drydocking limb, so routine maintenance qualifies. Set against that, clause 11(B) puts stress-of-weather detention, shallow-harbour trading and accident to cargo on the charterers’ account even where the detention was caused or contributed to by the negligence of the owners’ servants.

NYPE clause 17 and clause 15, sentence by sentence

Clause 17 of NYPE 2015 runs to five sentences across lines 372 to 392, and practitioners routinely quote only the first. The other four decide real money.

The net loss of time limb and its listed causes

The listed causes on the 2015 form are deficiency and default and strike of officers or ratings and deficiency of stores; fire; breakdown of or damage to hull, machinery or equipment; grounding; detention by the arrest of the vessel, unless caused by events for which the charterers, their sub-charterers, servants, agents or sub-contractors are responsible; detention by Port State control or other competent authority for vessel deficiencies; detention by average accidents to the vessel or cargo, unless resulting from inherent vice, quality or defect of the cargo; drydocking for the purpose of examination, cleaning and painting of underwater parts and repair; or any other similar cause preventing the full working of the vessel.

The list is closed save for that final sweep-up, and the word “similar” confines it. It is not, as is sometimes said, a non-exhaustive list.

The deviation limb and the equidistant position

Where the vessel deviates or puts back during a voyage “contrary to the orders or directions of the Charterers, for any reason other than accident to the cargo or where permitted in Clause 22 (Liberties) hereunder”, hire is suspended from the deviation until she is again in the same or equidistant position from the destination and the voyage is resumed. The gate is that the deviation be contrary to the charterers’ orders and outside the liberties, which is why a deviation to save life or property under clause 22 leaves her on hire.

Bunkers used while off hire

Line 384: “All bunkers used by the Vessel while off-hire shall be for the Owners’ account.” Lines 391 to 392 add a second, overlapping sentence: “Bunkers used by the Vessel while off-hire and the cost of replacing same shall be for the Owners’ account and therefore deducted from the hire.” NYPE 93 carries the first sentence at line 230.

All bunkers means all bunkers. There is no hotel-load-only limitation anywhere in the form, so a vessel steaming to a repair port while off hire burns very low sulphur fuel oil or marine gas oil on the owner’s account for the whole passage. The lines 391 to 392 sentence is the only place in the printed clause where an off-hire consequence is expressly routed into the hire statement.

Stress of weather and shallow harbors, which run the other way

Detention and expenses arising from the vessel being driven into port or to anchorage through stress of weather, or from trading to shallow harbors or to rivers or ports with bars, are for the charterers’ account. The clause therefore contains one limb that moves money towards the owner, which is worth noting because it is the limb charterers overlook when a heavy weather diversion costs several days.

The reduced-speed limb

Lines 388 to 390: “If upon the voyage the speed be reduced by defect in, or breakdown of, any part of her hull, machinery or equipment, the time so lost, and the cost of any extra bunkers consumed in consequence thereof, and all extra proven expenses may be deducted from the hire.” NYPE 1946 clause 15 carries the same limb in almost identical terms, recovering extra fuel rather than extra bunkers.

This is the printed bridge between off-hire and the performance claim, and it is the most under-used provision in the form. It requires a defect or a breakdown, and in exchange it dispenses with the warranty, the about margin and the whole good weather sampling exercise.

Which edition the authorities construed

NYPE 1946 clause 15 reads “or by any other cause preventing the full working of the vessel”. It is the only printed NYPE edition without “similar”, which is why The Laconian Confidence and The Saldanha attach to 1946 wording rather than to NYPE 93 or 2015. “Whatsoever” appears in no printed NYPE edition at all; wherever it appears it is a rider insertion, alongside the common additions of “and/or default of men” and an express strikes limb. The printed-form authorities are therefore being applied to a form that is almost never fixed unamended, and the first question on any real fixture is what the recap did to line 379.

NYPE 2015 added four things to the NYPE 93 clause 17: “sub-charterers” in the arrest proviso, the express Port State Control limb, drydocking widened from “examination or painting bottom”, and the replacement-cost sentence at lines 391 to 392.

SHELLTIME 4 clause 21, and the bridge to the speed warranty

SHELLTIME 4 clause 21 is the tanker regime and it behaves like a period clause on its face and like a net clause in its arithmetic. Five trigger groups, with hour gates on three of them:

  • 21(a)(i), deficiency of personnel or stores, repairs, gas-freeing for repairs, time in and waiting to enter drydock for repairs, breakdown whether partial or total of machinery, boilers or other parts or equipment including tank coatings, overhaul, maintenance or survey, collision, stranding, accident or damage, or any other similar cause preventing the efficient working of the vessel, where the loss continues for more than three consecutive hours or cumulates to more than three hours on partial loss of service;
  • 21(a)(ii), industrial action, refusal to sail, breach of orders or neglect of duty on the part of the master, officers or crew, with no hour gate;
  • 21(a)(iii), obtaining medical advice or treatment for, or landing, any sick or injured person, or landing a body, with a three-consecutive-hour gate;
  • 21(a)(iv), delay in quarantine arising from the master, officers or crew having had communication with the shore at an infected area without the charterers’ written consent, or detention by customs or other authorities caused by smuggling or other infraction of local law;
  • 21(a)(v), detention by authorities at home or abroad attributable to legal action against, or breach of regulations by, the vessel, her owners or the owners, unless brought about by the act or neglect of charterers.

The consequence limb runs off hire “from the commencement of such loss of time until she is again ready and in an efficient state to resume her service from a position not less favourable to Charterers than that at which such loss of time commenced”, with a proviso that any service given or distance made good while off hire is taken into account in assessing the deduction. So the trigger is a loss of time, the end point is a restoration and position test, and the proviso nets it back.

Clause 21(b) is the only provision in any standard form that converts a speed shortfall into off hire. Where the vessel fails to proceed at a guaranteed speed under clause 24 and the failure arises wholly or partly from a clause 21(a) cause, the off-hire period is the difference between the time she would have required at the guaranteed speed and the time actually taken, and the clause adds that all the time actually taken shall be excluded from any computation under clause 24. SHELLTIME 4 therefore bars double recovery expressly, which no NYPE edition does.

Clause 21(f) sets the timebase against the NYPE family: all references to time are references to local time except where otherwise stated. Clause 22(b) runs periodical drydocking off hire from arrival at the charterers’ offered port until she is ready and back in position, with gas-freeing to drydock-cleaning standard not counting as off hire where the owners exercise due diligence and gas-freeing to hot-work or tank-entry standard counting.

BALTIME, GENTIME, BOXTIME and SUPPLYTIME

The BIMCO forms diverge from NYPE in a way that changes which arguments are even available.

GENTIME clause 9(a) and BOXTIME 2004 clause 9(a) carry closed lists with no sweep-up limb at all. Every ejusdem generis and “whatsoever” argument that dominates NYPE litigation is therefore unavailable on those forms, and the drafting answer is a wider individual limb instead.

GENTIME 9(a)(ii) is the widest crew limb in any printed form: “any deficiency of the Master, Officers and/or Crew, including the failure or refusal or inability … to perform services when required”. Inability is enough, which disposes of the deficiency-against-illness argument that runs under NYPE. BOXTIME 9(a)(ii) adds “whether or not within the control of the Owners”.

BOXTIME 2004 clause 9(a)(iv) goes further than any other printed form by making “any delay occasioned by any breach by the Owners of any obligation or warranty in this Charter Party” an off-hire event outright. A breach of the speed and consumption warranty is therefore itself off hire on a BOXTIME fixture, which is why a container charter on that form needs no separate performance-claim machinery.

SUPPLYTIME 2017 clause 12 is a terminology trap. “Suspension of hire” there is the cap on the owners’ liability rather than an off-hire mechanism, and the 2017 edition extended that limitation to apply whether or not the vessel is off hire. Clause 12(f) runs the other way: where charterers fail to pay, the owners may suspend performance, but throughout any period of suspended performance the vessel remains on hire.

Bareboat: the form with no off-hire clause

BARECON 2017 has no off-hire clause and no performance warranty. Hire runs continuously under clause 15, subject to an anti-technicality grace period that replaced the BARECON 2001 “time shall be of the essence” wording. The only off-hire references in the form are survey cost allocation, the owners bearing the on-hire survey time and the charterers the off-hire survey time.

That is the structural point about a bareboat charter : the risk of the ship not working is the charterer’s own commercial risk, to be managed against the yard, the seller, its hull and machinery cover or its own loss of hire policy, and there is no hire-suspension remedy to run against the owner at all.

Off-hire measures across the standard forms

Clause numbers and wording verified against the printed forms. Editions as stated.

Form and editionClauseMeasureQualifying thresholdSweep-up limbBunkers while off hire
NYPE 194615net loss of timenone“any other cause preventing the full working”not addressed generally; extra fuel on the reduced-speed limb only
NYPE 9317net loss of timenone“any other similar cause”all for owners’ account (line 230)
NYPE 2015 (3 June 2015)17net loss of timenone“any other similar cause”all for owners’ account, plus cost of replacement (lines 384, 391 to 392)
BALTIME 1939 as revised 200111(A)net loss of timemore than 24 consecutive hoursnone; closed list ending “damage to hull or other accident”not addressed in clause 11
SHELLTIME 4 (Dec 1984, amended Dec 2003)21loss-of-time trigger, restoration end point, credit for service givenmore than 3 consecutive hours, or cumulating to 3 hours on partial loss“any other similar cause preventing the efficient working” (21(a)(i) only)bunkers clause excludes items arising while off hire unless related to service given
BIMCO GENTIME (September 1999)9(a)net loss of timenonenone; closed list of four limbsnot addressed in clause 9
BIMCO BOXTIME 20049(a)net loss of timenonenone; closed list of five limbsallowance for distance made good and bunkers saved on the deviation limb
BIMCO SUPPLYTIME 201712suspension of hire as a liability cap, whether or not off hirenegotiated in the boxnot applicablenot verified
BIMCO BARECON 2017nonehire runs continuouslynot applicablenot applicablecharterer’s own fuel throughout

Two cells are worth stating in words because they are the ones most often got wrong. No printed NYPE edition carries any hour threshold or deductible. And BALTIME is a net clause, not a period clause.

The off-hire measure matrix

This matrix is a Shipping-Wiki.com construction, derived by reading each form’s trigger, measure and allocation limbs against one another rather than taken from any single source. It answers the question a post-fixture manager actually asks, which is not “what type of clause is this” but “on these facts, on this form, what comes off”.

FactsNYPE 2015BALTIME 11(A)SHELLTIME 4 cl.21BOXTIME 2004 cl.9
Total breakdown, 18 hoursall 18 hours off hireon hire: under the 24-hour gate18 hours off hire, past the 3-hour gateall 18 hours off hire
Total breakdown, 30 hoursall 30 hours off hireall 30 hours off hire, gate passed30 hours off hire, subject to the position testall 30 hours off hire
One crane of four down, shore is the constraintnil: no net time lostarguably some, on “hindering”nil, subject to partial-loss cumulationnil
Speed down 1 knot from a machinery defectreduced-speed limb: time lost plus extra bunkersnet time lost, on “hindering”clause 21(b): the time difference, and clause 24 excludedoff hire under 9(a)(iv) as a breach of warranty
Speed down 1 knot, no defect, clean hullperformance claim only, ship on hireperformance claim onlyperformance claim only, under clause 24off hire under 9(a)(iv)
PSC detention for the ship’s own deficiencyexpress limb, off hireno limb, no sweep-up: on hireclause 21(a)(v), off hireclosed list: turns on limb (i) or (iv)
Crew all present, several illarguable at best“deficiency of men”, arguable“deficiency of personnel”9(a)(ii), off hire: “inability”
Deviation to land a sick crew memberon hire, clause 22 libertyon hireclause 21(a)(iii), off hire past 3 hourson hire unless limb (iv) engaged
Ice delay, no damageon hire, clause 35 has no hire consequenceon hireon hireon hire

The events, and the words that decide them

Drydocking and maintenance

NYPE 2015 lists drydocking “for the purpose of examination, cleaning and/or painting of underwater parts and/or repair”. NYPE 93 lists only examination or painting bottom, so a hull clean or a repair drydock on that edition has to come in through breakdown or the sweep-up. Clause 17 carries no notice machinery of its own: clause 19 prohibits drydocking during the charter except in an emergency, and clause 52(b), which applies only where the minimum period exceeds five months, gives the owner an option to drydock at a mutually agreed time and place. BALTIME clause 11(A) reaches furthest of all with “other necessary measures to maintain the efficiency of the Vessel”, so routine maintenance qualifies. Unscheduled drydocking for damage repair is off hire on every net form, and its duration plus mobilization and waiting time falls to the owner. Where class will accept an in-water survey in lieu of drydocking , the off-hire exposure of a special survey drops sharply, which is a commercial reason for the notation and not only a technical one.

Crew deficiency, default and illness

On the printed 1946 words “deficiency of men” means numerical insufficiency: Royal Greek Government v Minister of Transport held that a full complement refusing to sail was a strike rather than a deficiency, and that the strike provisions prevailed. NYPE 93 and 2015 add “default” and “strike” for that reason, and The Saldanha reads “deficiency” as going to numbers and “default” as meaning refusal. A full complement in which several are ill is therefore arguably neither, and the fallback is the sweep-up.

The recent authority on the consequence is Bunge SA v Pan Ocean Co Ltd (The Sagar Ratan) [2025] EWHC 193 (Admlty), where four crew tested positive for COVID-19 on arrival at Bayuquan, the owners repositioned to Ulsan to replace the crew and returned. The court held crew illness leading to quarantine restrictions is not something occurring in the ordinary way such that the vessel stays on hire; she was not providing the service immediately required and she was off hire. Owners fixing on GENTIME or BOXTIME have no argument to run here at all, because “inability” covers it.

Quarantine and health detention

NYPE has no quarantine limb in any edition. SHELLTIME 4 clause 21(a)(iv) has one and it is narrow, biting only on delay arising from shore communication at an infected area without the charterers’ written consent, so a quarantine imposed on the ship by a port authority for reasons unconnected with shore leave falls outside it. Where the BIMCO Infectious or Contagious Diseases Clause for Time Charter Parties 2022 is incorporated, sub-clause (c) reverses the default: the vessel remains on hire and the charterers answer for the owners’ direct losses, damages and expenses, unless the quarantine, refusal of admission or delay results from the owners’ acts or omissions or from the ship’s activity before the charter, when she goes off hire.

Port State Control detention

The 2015 limb is “detention by Port State control or other competent authority for Vessel deficiencies”, and the last three words do the work. A detention arising from the charterer’s cargo, its documentation or its orders is outside them and keeps the ship on hire. Under NYPE 93 and 1946 there is no PSC limb and the detention has to be brought within “any other cause” or “any other similar cause”, which The Laconian Confidence reads ejusdem generis with the listed physical causes.

A related line matters here. In Hyundai Merchant Marine Co Ltd v Furness Withy (Australia) Pty (The Doric Pride) [2006] EWCA Civ 599 a 2001-built vessel on her maiden United States call was designated a High Interest Vessel and held off the lower Mississippi pending a Coast Guard boarding. She was held off hire from 0920 on 20 February to 1245 on 26 February 2004, worth USD 257,732.77. Rix LJ held that pointing to legislation aimed at ports pitches the enquiry too high, because the real question is why the legislation detained this vessel, and the designation went to the status of the ship. Counsel for the owners conceded that a detention triggered by pre-charter activity, by stowaways or by maintenance failures would fall on the owners’ side, and the concession was treated as inevitable.

Arrest, sub-charterers and the nexus test

The 2015 proviso excludes an arrest caused by events for which the charterers, their sub-charterers, servants, agents or sub-contractors are responsible. In NYK Bulkship (Atlantic) NV v Cargill International SA (The Global Santosh) [2016] UKSC 20 a sub-buyer arrested the vessel by mistake to secure a demurrage claim against a third party. The Supreme Court held the vessel off hire, because the proviso requires a nexus between the occasion for the arrest and the function the sub-contractor was performing as the charterer’s agent in performing a relevant charter party obligation, and it expressly rejected the broad owners’ sphere against charterers’ sphere test that the Court of Appeal had applied. Where the arrest is for the owner’s own debts the analysis is simpler, and the maritime lien and arrest regime decides how long the ship stays under detention.

Stowaways and the route of access

NYPE 2015 splits it cleanly. Clause 42(a): where stowaways gain access by secreting away in the goods or containers or by any other means related to the cargo operation, that is a charterers’ breach and “the Vessel shall remain on hire for any time lost as a result of such breach”. Clause 42(b): any other route of access is an owners’ breach and “the Vessel shall be off-hire for any time lost”. The whole dispute is therefore evidential, and it is decided on the gangway watch log, the pre-departure search record and the ISPS Code declaration.

Strikes: the crew, the flag, the shore

Clause 17 lists a strike of officers or ratings. Clause 41 widens it to strikes, labour stoppages or boycotts “or any other difficulties arising from the Vessel’s ownership, crew or terms of employment of the crew” of the chartered vessel or of any other vessel under the same ownership, operation and control, and carries an owners’ guarantee that the crew’s minimum terms comply with the MLC 2006 on delivery and throughout. A shoreside stevedores’ strike, a port-wide stoppage or a cargo-related boycott is none of those, and the time is the charterer’s trading risk.

Ice, stress of weather and shallow harbors

NYPE 2015 clause 35 is a refusal-of-orders clause with no hire consequence at all: the vessel need not force ice, may follow ice-breakers only with the owners’ prior approval having regard to her size, construction and class, and need not enter or remain in an icebound port. An owner wanting the ice delay itself off hire has to write it in; a charterer wanting the ship to go has to look at her ice class and warrant accordingly. Stress of weather and shallow-harbour detention run the other way under clause 17 and under BALTIME clause 11(B).

Gear and crane breakdown on geared tonnage

The trigger is easily satisfied: a crane is equipment, and its breakdown is listed. The measure is the whole argument, and it is worked through below. What decides a real case is usually the rider, because a term stating that off hire is calculated proportionally according to the number of cargo cranes working is what converts a net claim into a pro rata one.

Piracy seizure and the ninety-first day

Cosco Bulk Carrier Co Ltd v Team-Up Owning Co Ltd (The Saldanha) [2010] EWHC 1340 (Comm) settles the printed position on NYPE 1946 clause 15 without “whatsoever”: piracy is not within any enumerated cause and remains a totally extraneous cause falling outside the sweep-up, so the ship stayed on hire through a seizure from 22 February to 2 May 2009 at USD 52,500 per day. Express wording is needed, as succeeded on an additional clause in The Captain Stefanos [2012] EWHC 571 (Comm). The BIMCO Piracy Clause for Time Charter Parties 2013 takes the middle course at sub-clause (f), keeping the vessel on hire throughout and ceasing hire from the ninety-first day after seizure until release, and NYPE 2015 clause 39 does the same on the printed form. The economics of that ninety-day window are what drive war risks and kidnap cover on a high-risk area transit.

Slow steaming on charterers’ orders

Not off hire, and not a breach either where the charter deals with it. NYPE 2015 clause 38 offers Slow Steaming at 38(a)(i), limited to operation above the auxiliary blower cut-out point and within the manufacturer’s published recommendations, and Ultra-Slow Steaming at 38(a)(ii) below that point. Clause 12(a) then excludes from performance calculations any period during which the speed is deliberately reduced to comply with the charterers’ orders, unless slow steaming or eco speed warranties appear in Appendix A. The BIMCO slow steaming clauses do the same job as a bolt-on, the time charter clause dating from 2011. Prolonged operation at very low load has its own engineering consequences, which is why engine derating and the economics in optimum speed belong in the same conversation as the clause.

Scrubber and ballast water failures

Separate the physical from the regulatory. A failed exhaust gas cleaning system or ballast water treatment unit is a breakdown of machinery or equipment and is caught by the standard clause on both NYPE and SHELLTIME 4, and BIMCO and INTERTANKO joint guidance of May 2019 confirms it. Regulatory non-compliance with no physical failure is much weaker, and tribunals have resisted stretching the sweep-up to reach it. The recommended drafting answer for both scrubbers and ballast water management is an express indemnity for fines, detentions, delays and removal, not reliance on off hire.

Calculating the off-hire deduction

Off-Hire Deduction

$$\text{Deduction} = \frac{t_\text{off}}{24} \cdot R_\text{hire} + C_\text{fuel}$$
SymbolMeaningUnit
\(t_\text{off}\)Off-hire durationh
\(R_\text{hire}\)Hire rateUSD/day
\(C_\text{fuel}\)Fuel cost during off-hireUSD

Source: BIMCO - NYPE 2015

Calculate Off-Hire Deduction on ShipCalculators.com →

The hire rate, pro rata, and the timebase

NYPE 2015 clause 10(a) fixes hire “per day or pro rata for any part of a day”, so pro-rating is continuous rather than by half-day or by watch. The same clause provides that for the purpose of hire calculations the times of delivery, redelivery or termination are adjusted to Coordinated Universal Time. SHELLTIME 4 clause 21(f) does the opposite and works in local time. On a short off-hire event spanning a date line or a clock change, the timebase alone is worth hours.

Fixing the start and the end of the period

Off-hire begins when the vessel ceases to be capable of the service immediately required, not when the defect was first reported. Where a fault develops gradually, the start is the moment it crosses the threshold of preventing the full working of the vessel, which is a question of fact resolved on the engine room logs , the movement book and the noon reports .

It ends when she is again capable of that service. A vessel that finishes repairs and then waits at anchor for a berth is back on hire from completion, because the berth wait is the charterer’s risk under her own safe port and employment obligations. SHELLTIME 4 adds a positional test, requiring restoration from a position not less favourable to charterers, with service given or distance made good credited back.

Worked example: full off-hire on a NYPE 2015 Supramax

Figures illustrative, priced at 11 September 2026. Hire USD 14,500 per day, address commission 3.75 percent, brokerage 1.25 percent. A turbocharger failure stops the vessel on passage. Net time lost, agreed off the engine room logs, is 79 hours 20 minutes. Bunkers used while off hire, from the remaining-on-board soundings, are 5.6 tonnes of VLSFO at USD 545 per tonne and 2.4 tonnes of MGO at USD 720 per tonne.

  • Off-hire in days: 79 h 20 min is 79.3333 h, divided by 24 gives 3.305556 days.
  • Gross hire suspended: 14,500 multiplied by 3.305556 is USD 47,930.56.
  • Address commission the charterer does not retain: 47,930.56 at 3.75 percent is USD 1,797.40, so the net hire it would have paid is USD 46,133.16.
  • Bunkers for the owner’s account under clause 17: 5.6 at 545 is USD 3,052.00, and 2.4 at 720 is USD 1,728.00, totalling USD 4,780.00. Not commissionable.
  • Deduction on the hire statement: USD 50,913.16.
  • Brokerage the owner no longer owes: 47,930.56 at 1.25 percent is USD 599.13.
  • The owner’s net loss: 47,930.56 plus 4,780.00 less 599.13, which is USD 52,111.42.

The two figures differ by USD 1,198.26, which is the commission wedge. An owner reconciling its own loss against the charterer’s deduction and expecting them to match will chase a difference that is not an error.

Bunkers, and what price to put on them

The clause says whose account. It does not say at what price. NYPE 2015 prices only the redelivery bunkers, under clause 11(e), so the basis for the off-hire parcel has to be written into the rider: the invoice price of the parcel actually burned, a published assessment for the port and the date from the bunker price indices , or a stated first-in-first-out basis. SHELLTIME 4 answers it for bunkers consumed for the owner’s purposes by charging them first in, first out at prices actually paid by charterers, so an off-hire following a cheap lifting is valued cheaply. Quantity is proved from the bunker delivery note required by MARPOL Annex VI Reg.18 and the opening and closing soundings, which is also why the bunkers on delivery and redelivery figures matter beyond the hire statement.

Port charges, agency and the allowance

The mechanism is not in clause 17 at all. Clause 7(a) makes the charterer’s expense obligation conditional in two ways: it applies “while the Vessel is on-hire”, and separately, “when the Vessel puts into a port for causes for which the Vessel is responsible (other than by stress of weather), then all such charges incurred shall be paid by the Owners”. The second switch bites even while she is on hire. Clause 10(a) makes the Communications, Victualing and Expenses allowance payable “while on-hire … per thirty (30) days or pro rata”, so it pro-rates out over the off-hire period in step with hire.

Address commission and brokerage

Clause 53 makes brokerage payable on hire “earned and paid” and address commission payable “on the hire earned”, so both shrink with off hire automatically and neither needs separate adjustment. Three working consequences follow. The charterer’s real cash recovery is the gross hire less the address commission it would otherwise have retained. Brokerage on hire that is wrongly withheld does not fall due until the hire is paid, which is why a broker chases a disputed statement. And brokerage keeps running on any continuation or extension, which matters where the charterer elects to add off-hire time to the period rather than deduct it. Clause 11(f) cash advances carry two and a half percent commission and are a separate debit, not part of the off-hire arithmetic.

Worked example: one crane of four, and the pro-rata fallacy

Figures illustrative. Geared Supramax on NYPE 2015, hire USD 18,000 per day, discharging 30,000 tonnes. Four cranes in grab mode at 150 tonnes per hour each. Crane 3 fails before discharge begins and is not repaired.

  • Four cranes: 30,000 divided by 600 tonnes per hour is 50.000 hours.
  • Three cranes: 30,000 divided by 450 is 66.667 hours.
  • Net time lost: 16.667 hours, or 0.694444 days, at USD 18,000 gives USD 12,500.00.

Now change one fact and nothing else. The receiver’s conveyor accepts a maximum of 450 tonnes per hour, so three cranes were never the binding constraint. Discharge took 66.667 hours either way, the net loss of time is nil, and the deduction is USD 0.00. The pro rata claim a charterer’s operator would raise, a quarter of 66.667 hours at USD 18,000, is USD 12,500.00 of nothing. Under a true period clause the whole 66.667 hours would come off, USD 50,000.00, which is why owners resist period drafting on geared tonnage.

The performance claim as a money claim

A performance claim is damages, and the ship is on hire throughout. Its construction, the about margin, the good weather definition and the sampling method belong to speed and consumption warranties , the about margin , the good weather definition and good weather sampling and extrapolation . What belongs here is what the claim is worth and how it lands on the hire statement.

The measure under NYPE 2015 clause 12(d)

The form states the measure: a documented claim “limited to the estimated time lost and/or the additional fuel consumed”, supported by a performance analysis from the weather routing service, and “the cost of any time lost shall be off-set against the cost of any fuel saved and vice versa”. That offset is the provision charterers most often ignore, because a vessel that under-performs on speed frequently under-consumes at the same time, and the two net against each other.

$$ \text{Claim} = \left[ D \left( \frac{1}{v_\text{obs}} - \frac{1}{v_\text{eff}} \right) \times \frac{H}{24} \right] + \left[ \left( c_\text{obs} - c_\text{warr} \right) t_\text{warr} \times P \right] $$

where \(D\) is the distance in nautical miles, \(v_\text{obs}\) the observed good-weather speed in knots, \(v_\text{eff}\) the warranted speed less the about margin, \(H\) the daily hire rate, \(c\) the daily consumption in tonnes, \(t_\text{warr}\) the warranted time in days, and \(P\) the price per tonne of the relevant grade on the date the excess was burned.

Worked example: the same shortfall on two forms

Figures illustrative. A laden leg of 3,000 nautical miles takes 250.0 hours, an average of 12.0 knots, and the cause is agreed to be a turbocharger defect.

On SHELLTIME 4, guaranteed service speed 13.0 knots, hire USD 26,000 per day. Time at the guaranteed speed is 3,000 divided by 13.0, or 230.769 hours. The clause 21(b) off-hire period is 250.0 less 230.769, which is 19.231 hours or 0.801282 days, giving USD 20,833.33. All 250.0 hours are then excluded from the clause 24 computation, so there is no separate performance claim on this leg and no sampling exercise at all.

On NYPE 2015, hire USD 18,000 per day, warranted 13.0 knots on 32.0 tonnes per day, actual 35.5 tonnes per day, VLSFO at USD 545 per tonne. Clause 17’s first limb does not bite, because she was working. The reduced-speed limb does, because the speed was reduced by a defect in her machinery.

  • Time lost 19.231 hours, or 0.801282 days, at USD 18,000: USD 14,423.08.
  • Actual burn: 35.5 multiplied by 250.0 divided by 24 is 369.79 tonnes.
  • Warranted burn: 32.0 multiplied by 230.769 divided by 24 is 307.69 tonnes.
  • Excess 62.10 tonnes at USD 545: USD 33,844.15.
  • Total deduction under clause 17: USD 48,267.23, plus extra proven expenses.

Two things fall out. The bunker element dwarfs the time element on a low-hire, high-fuel-price fixture, which is the reverse of the order in which the two are usually presented. And the same facts produce USD 20,833.33 on one form and USD 48,267.23 on the other, which is the clearest available demonstration that the form is not a formality.

Pricing the excess bunkers, and the counterfactual trap

The counterfactual burn is computed at the warranted consumption over the warranted time, not over the actual elapsed time. Doing it the wrong way on the figures above gives 32.0 multiplied by 250.0 divided by 24, or 333.33 tonnes, and an excess of 36.46 tonnes rather than 62.10, understating the claim by USD 13,976. The error is easy to make because the actual elapsed time is the number in front of you.

On price, the charter has to say whether the basis is the invoice price of the bunkers consumed or a published assessment for the port and date, because no standard clause settles it and the price reporting agencies publish a different number from the one the charterer paid. Grade matters too: a claim computed on VLSFO where the vessel burned MGO in an emission control area is wrong on price and on quantity, and off-spec bunkers or a quality dispute under ISO 8217:2024 opens a separate argument about whether the comparison is valid at all.

Where off-hire and a performance claim overlap

The bar on recovering the same time twice is express on SHELLTIME 4 and implicit in the measure on NYPE. The Divinegate [2022] EWHC 2095 (Comm) applies the same principle at [122] to a freestanding hull fouling claim added to a good weather claim, holding it double recovery because the good weather method already captures underperformance from fouling and from any other matter affecting performance. The charterer’s own expert accepted the duplication. Where fouling is the real issue, the contractual answer is the BIMCO Hull Fouling Clause and NYPE 2015 clause 30, which suspend the warranties after an aggregated idle period of fifteen days by default, and the measurement answer is ISO 19030 , which is a methodology for quantifying speed loss against a reference baseline rather than a maintenance trigger.

Speed Loss ISO 19030

$$\Delta v / v_{ref} \leq 5\%$$
SymbolMeaningUnit
\(\Delta v\)Speed loss vs referencekn

Source: ISO 19030-2

Calculate Speed Loss ISO 19030 on ShipCalculators.com →

Evidence that proves an off-hire event

An off-hire claim is proved from a narrower set of documents than a performance claim, because the question is what happened to the ship rather than what the weather was.

DocumentWhat it provesKnown weakness
Engine room log and alarm printoutthe fault timeline, hour by hourcompleted by the watchkeeper, and silent on commercial consequence
Movement book and bell bookthe exact times of stopping, anchoring and resuminggranularity varies by ship
Noon reportsdistance run, speed, consumption, off-hire events declaredone observation a day, and self-reported
Bunker ROB soundings and delivery notesthe tonnes burned while off hiretank soundings carry a tolerance
On-hire and off-hire surveysthe condition and bunker baseline at each endonly two points in time
Class and survey recordsdefect history and condition of classsays nothing about the charter service
Detention notice or PSC reportthe cause and duration of a detentionthe stated cause may not match the clause wording
Repair yard invoice and specificationwhat was actually wrongarrives long after the deduction is made

For a performance claim the evidential centre of gravity shifts to the weather routing hindcast and the routing company’s performance report , and the orthodox position is that the ship’s contemporaneous records come first and are displaced only on evidence that they are unreliable. In The Divinegate the owners’ own expert said at [69] that the deck log was the more reliable source because it reflected the vessel’s actual position, and it was his concession at [85] that the log’s adverse-current entries were inconsistent with the distances run that made it fair to rely on the routing data. On the same voyage two routing houses produced 1.15 hours and 22.73 hours of lost time. Continuous shaft power and PMI measurement narrows that gap, because it replaces one observation a day with a continuous record.

Off-hire on the hire statement

Hire in advance, so most off-hire is restitution

NYPE 2015 clause 11(a) makes hire payable fifteen days in advance. An off-hire event inside a period already paid for is therefore a claim to recover hire already paid, not a deduction from hire not yet due. Clause 23 gives the charterers the return of monies paid in advance and not earned, together with a lien on the vessel for them, and clause 11(e) requires any difference in hire and bunkers to be settled within five Banking Days of redelivery. In practice the off-hire is carried into the next instalment, which is where the argument starts.

Deduction, set-off, or neither

A charterer may take money out of hire by express charter right, of which the off-hire clause and the reduced-speed limb are the printed examples, or by equitable set-off. The Nanfri [1978] QB 927 established that a time charterer may deduct for loss arising from loss of speed even with no express deduction clause, the claims being sufficiently closely connected, provided the unliquidated loss is quantified by a reasonable assessment made in good faith. The Kostas Melas [1981] 1 Lloyd’s Rep 18 sets the standard: good faith and reasonable grounds, with the deduction provisional only, so that exercising the right does not prevent either party from later proving its claim or cross-claim. The limits are real, and a cross-claim insufficiently connected to the charter cannot be set off at all. None of this is available against freight, where The Aries [1977] 1 WLR 185 restates a rule of more than a century that a cargo claim cannot be deducted from freight .

A rider can close the route off entirely. In Fastfreight Pte Ltd v Bulk Trident Shipping Ltd (The Anna Dorothea) [2023] EWHC 105 (Comm) the clause barred any deduction from hire without the owners’ express written agreement, and Henshaw J held that non-payment is itself a “deduction” even where the vessel is said to be off hire at the instalment date. Hire remained payable and the charterers were left to recover the overpayment afterwards.

Withholding hire and the withdrawal exposure

An unjustified deduction is a failure to pay hire, and the consequence depends on the clause and on the conduct. Spar Shipping AS v Grand China Logistics Holding (Group) Co Ltd [2016] EWCA Civ 982 held that punctual payment is an innominate term and not a condition, and that The Astra [2013] EWHC 865 (Comm) was wrongly decided, so late payment alone does not sound in loss-of-bargain damages; the owners there succeeded on renunciation. Withdrawal remains a contractual option, and NYPE 2015 clause 11(b) and (c) require three Banking Days’ written notice to rectify before it is exercised. An anti-technicality notice cannot be given before the payment is actually overdue: The Afovos [1983] 1 WLR 195.

Whether a deduction that turns out to be excessive, but was quantified reasonably and in good faith, can found withdrawal is genuinely unresolved in English law, with the judgments in The Nanfri read as pointing both ways. That is why the cautious charterer pays hire in full under reservation of rights and claims restitution, rather than withholding.

Withdraw Ship for Unpaid Hire

$$\text{Withdraw} = (d_\text{BD} > 3)$$
SymbolMeaningUnit
\(d_\text{BD}\)Banking Days elapsed since written notice to rectify a failure to payBanking Days

Source: NYPE 2015 Cl. 11(b) and 11(c)

Calculate Withdraw Ship for Unpaid Hire on ShipCalculators.com →

Adding off-hire time to the charter period instead

Every modern form except NYPE 1946 gives the charterer the choice of adding off-hire time to the charter period rather than deducting it, and in a rising market it is usually the better election, because the added time is priced at the original rate. NYPE 2015 clause 52(c) gives the option only where the minimum period exceeds five months, declared not less than one month before expected redelivery or at the latest one week after a late event. GENTIME clause 9(d) runs the same deadlines; BOXTIME 2004 clause 9(d) requires two months, or two weeks after the off-hire ended, and prices the time at the rate that would otherwise have been payable. NYPE 2015 clause 36 makes requisition off hire count as part of the period whether or not the option is exercised. The choice interacts directly with redelivery and last voyage orders , because an extension moves the redelivery window.

Burden and standard of proof

On off-hire the burden sits on the charterer and does not shift. It must prove that the vessel could not perform the service immediately required, that the cause is listed or within the sweep-up as construed, that the event was a fortuity rather than the natural consequence of its own orders, and how much time was lost. The Rijn [1981] 2 Lloyd’s Rep 267 supplies the fortuity requirement: delay that is the inevitable consequence of complying with the charterer’s orders is not an off-hire event, and on the facts bottom fouling after a prolonged stay at the charterer’s orders was not.

On a performance claim the legal burden also stays with the charterer throughout, on breach and on quantum, as the party alleging breach. What shifts is evidential only. In The Divinegate at [110] the owners could have answered with evidence from the master or crew, gave none, and the fair inference was that the decision could not be justified; the master was not called at all. At [143] the judgment endorsed the view that shifting-burden language is unhelpful, preferring to consider the matter in the round while accepting that silence where a party would be expected to answer may convert evidence into proof. Where the tribunal is left with a range rather than a figure, the benefit of the doubt goes to the owner, because the charterer carries the burden on quantum.

The standard in both cases is the balance of probabilities. The one elevated standard in this territory is on a wrongful arrest counterclaim, which requires bad faith or gross negligence implying malice, and which failed in The Divinegate at [166] because the arrest was a genuine and understandable mistake.

The Rijn and The Coral Seas are often cited as if in conflict and are not. The Rijn asks whether an off-hire event happened at all. Imperator I Maritime Co v Bunge SA (The Coral Seas) [2016] EWHC 1506 (Comm) asks whether an owner who gave a continuing performance warranty can answer a damages claim by pointing at the charterer’s orders, and holds that it cannot where the fouling was fair wear and tear in the ordinary course of lawful trading. Fouling from charterers’ orders defeats an off-hire claim and does not defeat a claim under a widely drafted continuing warranty.

Time limits

Two clocks run, and the contractual one usually expires first.

The claim-presentation bar is the one practitioners actually meet: a rider requiring claims to be presented within a stated period of final discharge or redelivery, with supporting documents. The Oltenia [1982] 1 Lloyd’s Rep 448 governs it. Bingham J held that the commercial purpose is to ensure claims are made within a short period so they can be investigated while the facts are fresh, and that owners are not debarred from later factual corrections or from putting a different legal label on a claim presented in time, but are shut out from enforcing a claim whose substance and supporting documents were not presented in time, subject to de minimis. The Divinegate adds two points at [60] to [62]: the onus of establishing the bar lies on the party asserting it, and the clause does not require the claim to be supported with such precision that every aspect of it is properly evidenced. The same judgment observed, obiter, that a claim-presentation bar is unlikely to catch an off-hire claim at all, off-hire being a defence to liability for hire rather than a claim.

The statutory clock is six years from accrual under section 5 of the Limitation Act 1980, applied to arbitral proceedings by section 13(1) of the Arbitration Act 1996, with commencement governed by section 14 of that Act. Most of these disputes are arbitrated rather than litigated, under the LMAA, SMA, SCMA or HKMAG regimes, and the LMAA Terms 2021 took effect on 1 May 2021 for arbitrations commenced on or after that date where the parties have so agreed. A tribunal’s decision on a point of law can be appealed under section 69 , which is the route by which The Ocean Virgo and The Anna Dorothea reached the Commercial Court.

The Arbitration Act 2025 received Royal Assent on 24 February 2025 and came fully into force on 1 August 2025, the outstanding provisions commenced by SI 2025/905. It amends the 1996 Act rather than replacing it. Two changes bear here. The new section 6A makes the law of the seat the default law of the arbitration agreement absent express agreement, which matters where a NYPE 2015 clause 54 election takes London or Singapore while the charter names another governing law. The new section 39A gives an express power to dispose summarily of a claim, defence or jurisdictional objection with no real prospect of success, which is a real route for an owner facing a deduction with no arguable basis, or a charterer facing a performance claim with no qualifying good weather at all. Section 69 is untouched.

The rider clauses that move the hire line

Most of the clauses a modern recap adds keep the ship on hire and allocate cost instead. Knowing which way each one runs is faster than arguing about it.

  • On hire, cost allocated. The BIMCO Sanctions Clause for Time Charter Parties 2020 keeps the vessel on hire throughout, with charterers given 48 hours from the owners’ notice of refusal to issue alternative orders. CONWARTIME 2025, adopted in April 2025 and superseding the CONWARTIME 2013 that NYPE 2015 clause 34 incorporates, keeps her on hire and extends the substitute safe port nomination time from 48 to 72 hours, while requiring additional war risk premiums to be proved actually incurred with any no-claim bonus credited to charterers. The Non-Payment of Hire Clause for Time Charter Parties 2006 provides that the vessel “is to be and shall remain on hire” during a suspension of performance.
  • On hire to a cut-off. The Piracy Clause for Time Charter Parties 2013 at sub-clause (f) keeps her on hire and ceases hire from the ninety-first day after seizure until release.
  • Warranties suspended rather than hire. The BIMCO Hull Fouling Clause and NYPE 2015 clause 30 suspend the performance warranties after an aggregated idle period, fifteen days by default. That is not off hire, and it does not stop hire for a day.
  • Off hire by exception. The Infectious or Contagious Diseases Clause for Time Charter Parties 2022 keeps her on hire unless the quarantine or delay results from the owners’ acts or omissions or from the ship’s activity before the charter.

There is no BIMCO Speed and Consumption Clause, in any year. References to one, including to a 2013 or a 2023 version, describe a document BIMCO has not published, so any account of its weather definition, its minimum observation period or its claim deadline is describing nothing. The gap is real and the market fills it with rider wording, which is why every element a standard clause would have settled has to be negotiated: the about margin as a number, the good weather limbs including current and swell, the minimum qualifying period, the treatment of favourable current, the basis on which excess fuel is priced, and whether the claim is struck voyage by voyage or across the charter period.

The regulatory overlay: CII, EEXI and the emissions clauses

The operational carbon intensity indicator became mandatory for the 2023 reporting year under MARPOL Annex VI Reg.28, introduced by MEPC.328(76), adopted on 17 June 2021 and in force from 1 November 2022. The arithmetic sits in the guidelines rather than the regulation: G1 is MEPC.352(78), G2 MEPC.353(78), G3 MEPC.338(76) as amended by MEPC.400(83) of 11 April 2025, and G4 MEPC.354(78). The G3 reduction factors are 5 percent for 2023 rising to 11 percent for 2026, then 13.625 percent for 2027, 16.250 for 2028, 18.875 for 2029 and 21.500 for 2030.

The interaction with hire runs three ways.

First, a charterer ordering slower steaming to protect a CII rating changes the speed at which performance is tested. NYPE 2015 clause 12(a) already excludes deliberately reduced speed on the charterers’ orders from performance calculations, and the BIMCO CII Operations Clause allocates the rating risk itself. Without either, the argument about whether the owner warranted performance at any speed or only at the charter description is open. Slow steaming and CII and the corrective action plan route are where that pressure actually shows up.

Second, an owner that limits shaft power to meet EEXI by EPL or ShaPoLi may find the vessel physically unable to reach a warranted speed. The BIMCO EEXI Transition Clause 2021 replaces the warranted maximum speed and consumption figures only if the limited figures are lower, from the certification date, leaving all other warranted figures unchanged. It contains no hire adjustment formula, so a charter without it leaves the owner arguing a conflict between a regulatory obligation and a contractual warranty with no machinery to resolve it.

Third, the reporting regimes have made the data better. A charter carrying the BIMCO CII and emissions clauses , the ETS allowances clause or the FuelEU Maritime clause generates a more granular performance record than a charter without them, which strengthens the charterer’s evidential position on a speed and consumption claim as a side effect of compliance. The IMO mid-term net-zero measure was adjourned in October 2025 and has not been adopted, so nothing in that instrument bears on a charter fixed today.

Off-hire outside English law

The analysis above is English law, which most international time charters choose. Three overlays differ materially, and they are overlays rather than alternatives to a global default.

New York and the Society of Maritime Arbitrators. The divergence is on self-help. SMA panels have treated it as settled that a charterer may not withhold hire against underperformance or cargo claims unless the charter expressly permits it, and owners routinely seek an immediate partial final award on the sum withheld, a practice SMA arbitrators have followed since 1963. NYPE 2015 clause 54 makes United States maritime law and New York SMA arbitration the default. United States law also treats recoupment as a defence going to the foundation of the plaintiff’s claim, which produces a different answer from The Aries on a time-barred cross-claim.

Singapore and Hong Kong. The SCMA Arbitration Rules 4th Edition apply to arbitrations commencing on or after 1 January 2022, with the Expedited Procedure threshold raised to USD 300,000 in aggregate of claim and counterclaim. The HKMAG Terms (2021) are substantially based on the LMAA Terms 2021 with changes for Hong Kong procedural law. In both seats the substantive law is usually English by election, and the courts apply English authority without being bound by it. The Arbitration Act 2025 reforms do not apply in either.

China, and a genuine civil-law divergence. The Maritime Code of the People’s Republic of China supplies statutory off-hire, which English law does not. Article 133, second paragraph, provides that where the ship has not been operated normally for twenty-four consecutive hours due to failure to maintain seaworthiness or the other conditions agreed upon, the charterer shall not pay hire for the operating time so lost, unless the failure was caused by the charterer. Three differences from the English position sit in one sentence: a twenty-four consecutive hour threshold, a trigger framed as failure to maintain seaworthiness or the agreed conditions rather than an enumerated list, and an express carve-out for charterer-caused failure that codifies the fortuity point. Article 127 confines the whole chapter to cases where the charter party is silent or stipulates differently, so a NYPE rider displaces it. Article 132 requires due diligence to make the ship seaworthy at delivery, and Article 140 gives a statutory right to cancel and claim losses on non-payment, without the innominate-term analysis of Spar Shipping. Article 142 is redelivery condition, fair wear and tear excepted, and is not an off-hire provision.

Limitations

Several limits on the account above deserve stating plainly.

The printed forms are not the fixtures. Almost every real charter amends the off-hire clause, and the amendments are where the outcome usually lies: “whatsoever” added to the sweep-up, a stated grace period, a proportional formula for cargo gear, an anti-deduction bar, or a bespoke split between a period measure for major mechanical events and a net measure for partial impairments. Everything here describes the printed text. Read the recap first.

Some clause details could not be verified and are therefore not stated. BPTIME3 clause 19 carries a monthly aggregation threshold and an extension option, and the clause’s own wording, its sweep-up limb, its bunker allocation and its treatment of the vessel’s fault are not set out here because a clean printed form was not available. The same applies to the off-hire consequence of the BIMCO Ballast Water Management Clause for Time Charter Parties 2015, to the treatment of the speed and consumption warranty in the Biofuel Clause for Time Charter Parties 2026, and to the off-hire clause of CO2TIME 2026, adopted in February 2026 as the first time charter for liquefied carbon dioxide carriage. No clause numbers are asserted for ASBATIME 1981, INTERTANKTIME 80, STB TIME or the TANKERVOY-family time forms.

Several older authorities exist only in the paid law reports. The Didymi, The Gas Enterprise, The Al Bida, The Apollonius, The Berge Sund, The Rijn, The Lutetian, The Nanfri, The Kostas Melas, The Mastro Giorgis, The Roachbank, The Aquacharm, Hogarth v Miller, Royal Greek Government v Minister of Transport and The Oltenia all predate the free full-text era or sit outside it, so they are cited here by reported name, court and year without a link. Page pinpoints for them are deliberately omitted where the report itself could not be read, and the reported citation of The Al Bida in particular varies between sources. Where a judgment is available free it is cited to the National Archives Find Case Law service, which begins at 2001.

Arbitration awards are mostly unpublished, so settlement behaviour cannot be quantified. No figures are given here for what proportion of performance claims settle, at what value arbitration becomes likely, or what a typical discount to a claimed figure looks like, because LMAA awards are not published and any such number would be invented. London Arbitration reports give a partial and self-selected view.

Off-hire and a loss of hire policy do not line up automatically. A loss of hire policy defines its own perils and its own deductible period, neither of which has to match the charter party’s trigger or duration, so an owner can be off hire under the charter and uninsured under the policy at the same time. A Port State Control detention is the standard example where the policy defines perils by reference to physical damage.

Simultaneous charterer-caused delay complicates quantum but not liability. Where the vessel is off hire for a breakdown and at the same time waiting at anchorage on the charterer’s orders, the net measure asks what time was lost to the service immediately required, and The Athena forbids reasoning from what would have happened anyway. That makes the analysis harder rather than easier, and it is a fact-specific exercise on the logs rather than a rule.

Frequently Asked Questions (FAQs)

What is off-hire in a time charter?
Off-hire is the contractual suspension of the charterer’s obligation to pay hire for time lost to a cause the charter party lists. It is not a general remedy: English law gives a time charterer no right to stop paying hire for a ship that cannot earn unless a clause says so, which is why the scope of the off-hire clause decides everything. NYPE 2015 clause 17, BALTIME 1939 as revised 2001 clause 11(A) and SHELLTIME 4 clause 21 are the three most-fixed examples.
Does off-hire require the owner to be at fault?
No. Off-hire operates irrespective of fault and irrespective of breach, which is what separates it from a damages claim. The charterer does not have to show the owner did anything wrong, only that the facts fall within the clause. The corollary is that the owner does not escape off-hire by showing it exercised due diligence.
What is the difference between a net loss of time clause and a period off-hire clause?
A net loss of time clause suspends hire only for the time actually lost to the service the vessel was required to perform, so partial service during the event reduces the deduction. A period clause suspends hire from the event until the vessel is again in an efficient state to resume her service, measured as a continuous block. NYPE, BALTIME and GENTIME are all net clauses. The period formulation survives mainly as the end point in SHELLTIME 4 clause 21 rather than as the measure.
Is BALTIME clause 11(A) a period off-hire clause?
No, and the belief that it is circulates widely. BALTIME 1939 as revised 2001 clause 11(A) says that no hire shall be paid ‘in respect of any time lost thereby during the period in which the Vessel is unable to perform the service immediately required’, which is the same net measure as NYPE. What BALTIME adds is a qualifying gate, the event must continue for more than twenty-four consecutive hours, and a wider trigger, ‘hindering or preventing’ the working of the vessel rather than preventing her full working.
Once the twenty-four-hour BALTIME gate is passed, do I deduct the whole time lost or only the excess?
The whole time lost. The gate is a condition on the clause operating at all, not a deductible against the claim. A thirty-hour qualifying event under BALTIME clause 11(A) gives thirty hours of off hire, not six.
Does NYPE have an off-hire deductible or grace period?
No, in any edition. NYPE 1946 clause 15 and clause 17 of both NYPE 93 and NYPE 2015 carry no hour threshold at all. Any grace period on a NYPE fixture came in by rider, and it should be read as a threshold or as a deductible according to its own words, because the two produce very different numbers.
What is SHELLTIME 4's off-hire threshold?
More than three consecutive hours where the loss results from an interruption in the vessel’s service, or cumulating to more than three hours where it results from partial loss of service, under clause 21(a)(i). The industrial action and crew default limb at 21(a)(ii) and the quarantine and customs limb at 21(a)(iv) carry no hour gate, and the medical limb at 21(a)(iii) carries the three-consecutive-hour gate.
Is time lost measured against the whole chartered service or against the service immediately required?
Against the service immediately required of the vessel at the time. In Minerva Navigation Inc v Oceana Shipping AG (The Athena) [2013] EWCA Civ 1723 at [24] and [27] the Court of Appeal held that whether the same time would have been lost anyway at some later stage of the adventure is not a relevant consideration, restored the arbitrators’ award and set aside the contrary first-instance judgment. Any calculation built on a counterfactual about what would have happened anyway has been wrong since October 2013.
Does an off-hire clause require the vessel to be inefficient in herself?
No. In Andre and Cie SA v Orient Shipping (Rotterdam) BV (The Laconian Confidence) [1997] 1 Lloyd’s Rep 139 Rix J held that prevention of the full working of the vessel does not require inefficiency in the vessel herself, and that working can be prevented by legal as well as physical means and by outside as well as internal causes. What defeated the charterer on the facts was the narrowness of the bare words ‘any other cause’, not a requirement of physical inefficiency.
Does adding 'whatsoever' to 'any other cause' put the vessel off hire for any interference at all?
No. It removes the ejusdem generis constraint that otherwise confines the sweep-up to the class of the listed causes, but it does not decide which side of the line a given event falls. The Mastro Giorgis [1983] 2 Lloyd’s Rep 66 and The Roachbank [1987] 2 Lloyd’s Rep 498 both carried ‘whatsoever’ and went opposite ways. The point also rests on obiter reasoning: in The Saldanha [2010] EWHC 1340 (Comm) Gross J treated it as persuasive dicta rather than binding authority. Note that ‘whatsoever’ appears in no printed NYPE edition; it is always a rider insertion.
Who pays for bunkers burned while the ship is off hire under NYPE?
The owner, and all of them. NYPE 93 clause 17 at line 230 and NYPE 2015 clause 17 at line 384 both read ‘All bunkers used by the Vessel while off hire shall be for the Owners’ account’, and NYPE 2015 adds at lines 391 to 392 that the cost of replacing them is also for the owner’s account ‘and therefore deducted from the hire’. There is no hotel-load-only limitation anywhere in the form, so a vessel steaming to a repair port while off hire burns propulsion fuel on the owner’s account. NYPE 1946 clause 15 has no general bunkers sentence and recovers extra fuel only on its reduced-speed limb.
What price do I put on the bunkers I deduct for an off-hire period?
NYPE says nothing, which is why the rider has to. The three bases used in practice are the invoice price of the parcel actually burned, a published assessment for the port and the date, and a stated first-in-first-out basis. SHELLTIME 4 answers it for bunkers consumed for the owner’s purposes by charging them first in, first out at prices actually paid by charterers, so an off-hire following a cheap lifting is valued at the cheap price.
What happens to port charges, pilotage and agency during an off-hire period?
On NYPE 2015 they shift to the owner by two separate routes in clause 7(a). The charterer’s expense obligation is expressed as applying ‘while the Vessel is on-hire’, and separately the clause provides that when the vessel puts into a port for causes for which the vessel is responsible, other than by stress of weather, all such charges are paid by the owners. The second switch bites even while she is on hire. SHELLTIME 4 clause 21(c) puts port charges, pilotage and other expenses at a substitute port on the owner.
Does the communications and victualling allowance stop during off hire?
On NYPE 2015, yes, pro rata. Clause 10(a) makes the Communications, Victualing and Expenses allowance payable ‘while on-hire … per thirty (30) days or pro rata’, so it comes out on the same basis as hire rather than running through the off-hire period.
Do I deduct address commission from the off-hire hire I am claiming?
Yes. NYPE 2015 clause 53 makes address commission payable on the hire earned and deducted by the charterers on payment, so hire that is never earned carries no address commission. The charterer’s actual cash recovery on an off-hire event is the gross hire less the commission it would otherwise have retained, and presenting the deduction gross overstates the claim by the commission rate. This is the commonest error in a hire statement.
Does the broker lose commission on off-hire time?
Yes. Clause 53 makes brokerage payable on hire ’earned and paid’, so it falls with hire earned and does not fall due at all on hire that is wrongly withheld until that hire is paid. It keeps running on any continuation or extension of the charter, which matters where the charterer elects to add off-hire time to the period instead of deducting it.
Can I add off-hire time to the charter period instead of deducting it?
Where the form says so, and it is often the better election in a rising market because the added time is priced at the original charter rate. NYPE 2015 clause 52(c) gives the option but only where the minimum period exceeds five months, declared not less than one month before expected redelivery or at the latest one week after a late event. GENTIME clause 9(d) is one month and one week; BOXTIME 2004 clause 9(d) is two months and two weeks and prices the added time at the rate that would otherwise have been payable.
How does off-hire interact with hire paid fifteen days in advance?
An off-hire event inside a period already paid for is a claim to recover hire already paid, not a deduction from hire not yet due. NYPE 2015 clause 11(a) sets the fifteen-day advance basis, clause 23 gives the charterers the return of monies paid in advance and not earned together with a lien on the vessel for them, and clause 11(e) requires any difference in hire and bunkers to be settled within five Banking Days of redelivery.
Is a breach of the speed and consumption warranty an off-hire event?
Not on NYPE or SHELLTIME 4 by itself. The vessel is off hire only if the speed reduction was caused by an event the off-hire clause names, and a bare warranty breach is a claim in damages while the ship stays on hire. Two exceptions matter: BOXTIME 2004 clause 9(a)(iv) makes any delay occasioned by any breach by the owners of any obligation or warranty in the charter an off-hire event outright, and SHELLTIME 4 clause 21(b) converts a clause 24 speed shortfall into off hire where it arises wholly or partly from a clause 21(a) cause.
Can I claim the same lost time twice, as off hire and as underperformance?
No. SHELLTIME 4 bars it in terms: clause 21(b) provides that all the time actually taken which is counted into the off-hire calculation shall be excluded from any computation under clause 24. On NYPE the same result follows from the measure, since both routes recover the time lost once. The Divinegate [2022] EWHC 2095 (Comm) at [122] applies the same principle to a freestanding fouling claim added to a good weather claim, which is double recovery because the good weather method already captures underperformance from fouling and from any other matter affecting performance.
My vessel's speed dropped because of a machinery defect but she kept steaming. Is there any deduction on a NYPE fixture?
Yes, but not under the off-hire limb, because the full working of the vessel was not prevented. Clause 17’s reduced-speed limb applies: if upon the voyage the speed be reduced by defect in, or breakdown of, any part of her hull, machinery or equipment, the time so lost, the cost of any extra bunkers consumed in consequence and all extra proven expenses may be deducted from the hire. NYPE 1946 clause 15 carries the same limb, recovering extra fuel and all extra expenses. This route needs a defect or a breakdown, but it needs no warranty and no good weather sampling.
One of four cranes is down. Can I deduct a quarter of the discharge time?
Not under a net loss of time clause. You deduct the time actually lost to the service, which is nil if the remaining cranes finished at the same hour because the shore conveyor, the barge fleet or the receiver’s silo was the binding constraint. A rider stating that off hire is calculated proportionally according to the number of cranes working is what converts it into a pro rata claim, and whether such a rider displaces the printed net requirement has been fought in London arbitration.
Does a Port State Control detention put the ship off hire?
On NYPE 2015 yes, where it is a detention ‘by Port State control or other competent authority for Vessel deficiencies’, which is an express limb added in that edition. The three closing words confine it, so a detention caused by the charterer’s cargo, documentation or orders keeps the ship on hire. NYPE 93 and NYPE 1946 have no PSC limb at all and such a detention has to be brought within the sweep-up. SHELLTIME 4 clause 21(a)(v) is drawn differently again, by whose breach rather than whose deficiency.
Is a vessel arrested by a third party off hire?
Under NYPE 2015 yes, unless the arrest is caused by events for which the charterers, their sub-charterers, servants, agents or sub-contractors are responsible. ‘Sub-charterers’ was added in 2015 and does not displace the nexus test in The Global Santosh [2016] UKSC 20, where the Supreme Court held the proviso requires a nexus between the occasion for the arrest and the function the sub-contractor was performing as the charterer’s agent in performing a relevant charter party obligation, and expressly rejected a broad owners’ sphere against charterers’ sphere test.
Is a vessel seized by pirates off hire?
Not under an unamended NYPE 1946 clause 15. In The Saldanha [2010] EWHC 1340 (Comm) Gross J held piracy is not within any enumerated cause and remains a totally extraneous cause falling outside the sweep-up, dismissing the charterers’ appeal on a seizure running from 22 February to 2 May 2009 at a hire of USD 52,500 per day. Express capture, seizure or detention wording is needed, as succeeded in The Captain Stefanos [2012] EWHC 571 (Comm). Where the BIMCO Piracy Clause for Time Charter Parties 2013 is incorporated, the vessel remains on hire and hire payments cease only from the ninety-first day after seizure until release.
Does 'deficiency of men' cover a crew that refuses to work?
Not on the printed 1946 words. In Royal Greek Government v Minister of Transport the phrase was held to mean numerical insufficiency of officers and crew, so that a full complement refusing to sail was a strike and not a deficiency, and the strike provisions prevailed. NYPE 93 and NYPE 2015 add ‘default’ and ‘strike’ for exactly that reason. GENTIME clause 9(a)(ii) goes furthest of any printed form by adding ‘inability’ to perform services, which removes the argument altogether.
Is crew sickness an off-hire event?
It depends on the wording, and on NYPE the argument is not straightforward, because ‘deficiency’ goes to numbers and ‘default’ to refusal, so a full complement in which several are ill is arguably neither. The recent authority on the consequence is Bunge SA v Pan Ocean Co Ltd (The Sagar Ratan) [2025] EWHC 193 (Admlty), where crew COVID-19 infections leading to quarantine restrictions put the vessel off hire because she was not providing the service immediately required. BOXTIME 2004 clause 9(a)(ii) closes the gap expressly with ‘inability’ and ‘whether or not within the control of the Owners’.
Is a quarantine or health detention off hire?
It depends entirely on the clause, because NYPE has no quarantine limb in any edition. SHELLTIME 4 clause 21(a)(iv) has one and it is narrow, confined to delay arising from the master, officers or crew having had communication with the shore at an infected area without the charterers’ written consent. Where the BIMCO Infectious or Contagious Diseases Clause for Time Charter Parties 2022 is incorporated, sub-clause (c) reverses the default: the vessel remains on hire and the charterers answer for the owners’ direct losses, unless the quarantine or delay results from the owners’ acts or omissions or from the ship’s activity before the charter, when she goes off hire.
Stowaways have delayed the ship. Who carries it?
On NYPE 2015 it turns entirely on how they boarded. Clause 42(a) makes access via the goods, the containers or anything else related to the cargo operation a charterers’ breach, and the vessel remains on hire for any time lost. Clause 42(b) makes any other route of access an owners’ breach, and the vessel is off hire for any time lost. The gangway watch log, the pre-departure search record and the ISPS declaration are the evidence that decides it.
Does a crew strike put the vessel off hire, and what about a shoreside strike?
A strike of the ship’s own officers or ratings is an express NYPE off-hire cause, and NYPE 2015 clause 41 widens it to strikes, labour stoppages or boycotts or any other difficulties arising from the vessel’s ownership, crew or the terms of employment of the crew, including of any other vessel under the same ownership, operation and control. A shoreside stevedores’ strike, a port-wide stoppage or a cargo-related boycott is none of those things and is the charterer’s trading risk.
Does an ice delay put the ship off hire?
No. NYPE 2015 clause 35 is a refusal-of-orders clause and carries no hire consequence: the vessel is not obliged to force ice, may follow ice-breakers only with the owners’ prior approval having due regard to her size, construction and class, and is not required to enter or remain in an icebound port or area. Time lost to ice is therefore on hire unless the ice has physically damaged or disabled her, when the breakdown limb takes over.
Does a scrubber or ballast water treatment system failure put the ship off hire?
A physical failure is a breakdown of machinery or equipment and is caught by the standard clause on both NYPE and SHELLTIME 4, subject to proving time lost. Regulatory non-compliance with no physical failure is much weaker, and tribunals have resisted stretching the sweep-up to reach it. BIMCO and INTERTANKO joint guidance of May 2019 confirms a defective scrubber falls within the standard clauses and recommends an express indemnity for fines, detentions, delays and fuel removal rather than reliance on the off-hire clause.
Is a deviation to land a sick crew member off hire?
On NYPE 2015 she stays on hire. Clause 17’s deviation limb suspends hire only where the deviation is contrary to the orders or directions of the charterers and is not permitted by clause 22, and clause 22 gives liberty to deviate for the purpose of saving life and property. On SHELLTIME 4 the answer is the opposite: clause 21(a)(iii) names obtaining medical advice or treatment for, or landing, any sick or injured person, or landing a body, with a three-consecutive-hour gate.
Does slow steaming at the charterer's request put the ship off hire or breach the warranty?
Neither, where the form or a clause deals with it. NYPE 2015 clause 38 offers Slow Steaming at 38(a)(i), limited to operation above the auxiliary blower cut-out point and within the manufacturer’s published recommendations, and Ultra-Slow Steaming at 38(a)(ii) below that point. Clause 12(a) then excludes from performance calculations any period during which the vessel’s speed is deliberately reduced to comply with the charterers’ orders, unless slow steaming or eco speed warranties have been given in Appendix A. The BIMCO Slow Steaming Clause for Time Charter Parties 2011 does the same job as a bolt-on.
When does an off-hire period start?
When the vessel ceases to be capable of the service immediately required of her, which is a question of fact rather than the moment the defect was reported or logged. Where a defect develops gradually the period begins when it crosses the threshold of preventing the full working of the vessel. Engine room logs, the movement book, noon reports and the chief engineer’s statements are the primary documents, and in a contested case an engineering expert reconstructs the fault timeline from them.
When does an off-hire period end?
When the vessel is again capable of the service required of her. A vessel that completes repairs and then waits at anchor for a berth is back on hire once the repairs are done, because the berth wait is the charterer’s operational risk. SHELLTIME 4 clause 21(a) and clause 21(c) add a positional test, requiring her to be ready and in an efficient state to resume service from a position not less favourable to charterers than the one at which the loss of time began, with any service given or distance made good credited.
Can a charterer deduct an underperformance claim from hire without an express deduction clause?
Yes, by equitable set-off. In The Nanfri [1978] QB 927 the majority of the Court of Appeal held charterers entitled to deduct from hire sums for loss arising from loss of speed, the claims being sufficiently closely connected, provided the unliquidated loss is quantified by a reasonable assessment made in good faith, and that right exists independently of any contractual entitlement.
What is the test for a lawful deduction, and is it final?
Good faith and reasonable grounds, and the deduction is provisional only. The Kostas Melas [1981] 1 Lloyd’s Rep 18 holds that an estimated deduction is justified only if shown to have been made in good faith and on reasonable grounds, and that exercising the right does not prevent either party from subsequently proving its claim or cross-claim and so does not affect the final resolution of the underlying dispute.
Can an anti-deduction clause defeat an off-hire deduction?
Yes. In Fastfreight Pte Ltd v Bulk Trident Shipping Ltd (The Anna Dorothea) [2023] EWHC 105 (Comm) Henshaw J dismissed the charterers’ appeal and held that the clause barred withholding an entire hire instalment, not merely setting off sums against it, even where off-hire was alleged. Hire therefore remained payable absent the owners’ written agreement, and the charterers were left to recover any overpayment afterwards. An anti-deduction rider converts every off-hire claim into a claim for restitution after the event.
Can a charterer deduct for off-hire it expects to occur?
No. The Lutetian [1982] 2 Lloyd’s Rep 140 is the authority for the mechanics: where the vessel is off hire at the instalment date the obligation to pay is suspended, but no deduction may be made for an anticipated period of off-hire. An off-hire event that has not yet happened is not a deduction, it is a forecast.
Why can hire be set off against when freight cannot?
Because of a specific common-law rule about freight. In The Aries [1977] 1 WLR 185 the House of Lords restated at 189G to H that a cargo claim cannot be asserted by way of deduction from freight, following Dakin v Oxley and describing the rule as having stood for more than a century, and held that the Hague Rules one-year bar had extinguished the claim entirely. Hire carries no equivalent rule and is open both to equitable set-off and to express deduction rights, of which the off-hire clause is the standard example.
Does late payment of hire entitle the owner to loss-of-bargain damages?
Not by itself. In Spar Shipping AS v Grand China Logistics Holding (Group) Co Ltd [2016] EWCA Civ 982 the Court of Appeal held punctual payment of hire is an innominate term and not a condition, and that The Astra [2013] EWHC 865 (Comm) was wrongly decided. The withdrawal clause is a contractual termination option and does not make time of the essence. The owners in that case recovered on renunciation instead, on the strength of persistent late payment, broken promises and financial difficulty.
Who bears the burden of proof in a performance claim?
The charterer, throughout, on both breach and quantum, as the party alleging breach. The owner carries only an evidential burden, in the sense that unexplained silence invites an adverse inference: in The Divinegate [2022] EWHC 2095 (Comm) at [110] the owners could have answered with evidence from the master or crew, gave none, and the fair inference was that the decision could not be justified. At [143] the same judgment endorsed the view that shifting-burden language is unhelpful. Where the tribunal is left with a range, the benefit of the doubt goes to the owner.
Who bears the burden of proof on an off-hire claim?
The charterer, on every limb, and it does not shift. The charterer must prove that the vessel could not perform the service immediately required, that the cause is a listed event or falls within the sweep-up as construed, that the event was a fortuity rather than the natural consequence of the charterer’s own orders, and how much time was lost. Because an off-hire clause is an exception to an absolute obligation to pay hire, ambiguity is resolved in the owner’s favour.
Can hull fouling caused by the charterer's own orders put the vessel off hire?
No. The Rijn [1981] 2 Lloyd’s Rep 267 requires an off-hire event to be a fortuity, and fouling that is the inevitable consequence of complying with the charterer’s orders is not one, so the delay risk stays with the charterer. That is a different question from whether fouling answers a performance claim, where The Coral Seas [2016] EWHC 1506 (Comm) reached the opposite result under a continuing warranty.
Can an owner answer a performance claim by saying the fouling came from the charterer's orders?
Not under a widely drafted continuing warranty. In Imperator I Maritime Co v Bunge SA (The Coral Seas) [2016] EWHC 1506 (Comm) Phillips J upheld findings that fouling acquired during weeks in tropical waters at the charterers’ orders was fair wear and tear in the ordinary course of trading, that the continuing warranty applied to all sea voyages including those following a prolonged tropical wait, and that the owners had assumed that risk, so compliance with lawful orders was no defence and no implied indemnity arose.
Is the benefit of a favourable current deducted from a performance analysis?
Not without express words. In The Divinegate [2022] EWHC 2095 (Comm) at [100] and [102] the court held that where the warranty says only ’no adverse currents’, adverse-current periods are excluded from the good weather sample but the benefit of a positive current is not stripped out, because the warranty tests capability against defined weather conditions measured by actual performance at sea rather than by a paper calculation. On the facts the point took the claim from 37.64 hours down to 16.
Do weather routing hindcasts beat the ship's deck logs?
Not as a rule. The vessel’s contemporaneous records are the starting point and are displaced only on evidence that they are unreliable. In The Divinegate the owners’ own expert had said at [69] that the deck log was the more reliable source because it reflected the vessel’s actual position, and it was only his concession at [85] that the log’s adverse-current entries were unreliable and inconsistent with the distances run that made it fair to rely on the routing data at [103]. Two routing houses on the same voyage produced 1.15 hours and 22.73 hours of lost time, which is the answer to any claim that a hindcast is objective.
How long must a good weather period be?
There is no minimum. In The Ocean Virgo [2015] EWHC 3405 (Comm) at [18] Teare J held it an error of law to require a good weather period to run a full twenty-four hours noon to noon where the charter did not say so, and at [20] that periods of fourteen and sixteen hours could not be excluded for length alone. In The Divinegate a thirty-two hour period was accepted as representative. The test is whether the sample fairly represents the vessel’s capability.
Once breach is proved in good weather, is the claim limited to the good weather periods?
No. Good weather is an evidential filter for establishing breach, not a cap on recoverable loss, so the shortfall is applied across the voyages in all weather conditions, excluding periods of slow steaming at the charterer’s request. That is the holding in The Gas Enterprise [1993] 2 Lloyd’s Rep 352 at p.366 per Lloyd LJ, applied in The Ocean Virgo at [6], where the arbitrator’s contrary assumption that a claim would be restricted to the leg on which the good weather fell was identified as a second error of law.
How is a speed and consumption performance claim quantified?
As damages in two parts. The time element is the voyage distance divided by the observed good-weather speed less the distance divided by the warranted speed adjusted for the about margin, valued at the daily hire rate. The bunker element is the excess tonnes burned, valued at the price of the relevant grade on the date the excess was burned. NYPE 2015 clause 12(d) puts the measure in the form and requires the cost of any time lost to be offset against the cost of any fuel saved, and vice versa.
How do I compute the counterfactual bunker consumption?
At the warranted consumption rate over the warranted time, never over the actual elapsed time. On a leg of 3,000 nautical miles where a vessel warranted at 13.0 knots on 32.0 tonnes per day took 250.0 hours and burned 35.5 tonnes per day, the warranted burn is 32.0 multiplied by 230.769 hours divided by 24, which is 307.69 tonnes, so the excess is 62.10 tonnes. Doing it over the actual 250.0 hours gives 333.33 tonnes and an excess of 36.46 tonnes, understating the claim by nearly 26 tonnes.
What is the English time limit for a performance or off-hire claim?
Six years from the date the cause of action accrued, under section 5 of the Limitation Act 1980, applied to arbitral proceedings by section 13(1) of the Arbitration Act 1996. Commencement of arbitration, which is the act that stops the clock, is governed by section 14 of the 1996 Act. A contractual claim-presentation bar in the rider will usually be far shorter, often ninety days from final discharge or from redelivery.
Does a claim-presentation time bar catch an off-hire deduction?
Probably not, though the point is obiter. In The Divinegate the court thought the charter’s claim-presentation clause unlikely to apply to an off-hire claim, off-hire being a defence to liability for hire rather than a claim. The same judgment held at [60] to [62] that the onus of establishing the bar lies on the party asserting it, and that the clause did not require the claim to be supported with such precision and completeness that every aspect of it was properly evidenced.
What does a claim-presentation clause actually require?
Presentation of the substance of the claim together with its available supporting documents within the stated period. In The Oltenia [1982] 1 Lloyd’s Rep 448 Bingham J held that owners are not debarred from making later factual corrections, nor from putting a different legal label on a claim presented in time, but are shut out from enforcing a claim whose substance and supporting documents were not presented in time, subject to de minimis exceptions.
Is the Arbitration Act 2025 in force, and does it change these disputes?
Yes. It received Royal Assent on 24 February 2025 and came fully into force on 1 August 2025, the outstanding provisions being commenced by SI 2025/905. Two changes bear on these disputes: the new section 6A of the Arbitration Act 1996 makes the law of the seat the default law of the arbitration agreement absent express agreement, which matters where a NYPE 2015 clause 54 election takes London while the charter names another governing law; and the new section 39A gives an express power to dispose summarily of a claim, defence or jurisdictional objection with no real prospect of success. Section 69 is untouched.
Can a charterer under a New York law charter withhold hire for underperformance?
Not without express charter party authority. Society of Maritime Arbitrators panels have treated it as settled that a charterer may not withhold hire against underperformance or cargo claims unless the charter permits it, and owners routinely apply for an immediate partial final award on the sum withheld, a practice SMA arbitrators have followed since 1963. NYPE 2015 clause 54 makes United States maritime law and New York SMA arbitration the default, with London or Singapore by election.
Does Chinese law supply off-hire where the charter is silent?
Yes, as a default. Article 133 of the Maritime Code of the People’s Republic of China provides that where the ship has not been operated normally for twenty-four consecutive hours through failure to maintain seaworthiness or the other conditions agreed upon, the charterer shall not pay hire for the operating time so lost, unless the failure was caused by the charterer. Article 127 confines the whole chapter to cases where the charter party is silent or stipulates differently, so any NYPE rider displaces it.
Is a bareboat charterer ever entitled to off hire?
No. BARECON 2017 has no off-hire clause and no performance warranty, and hire runs continuously subject only to the anti-technicality grace period. A bareboat charterer that loses the use of the ship looks to the yard, the seller, its own hull and machinery cover or its own loss of hire cover, not to a hire-suspension remedy against the owner.
Does suspending performance for unpaid hire put the ship off hire?
No, the opposite. NYPE 2015 clause 11(d) provides that while hire is outstanding the owners may withhold performance of any and all obligations, hire continues to accrue, and any extra expenses resulting from the withholding are for the charterers’ account. The BIMCO Non-Payment of Hire Clause for Time Charter Parties 2006 and SUPPLYTIME 2017 clause 12(f) reach the same result.
What is the timebase for a hire and off-hire calculation?
Read the form, because the two families differ. NYPE 2015 clause 10(a) provides that for the purpose of hire calculations the times of delivery, redelivery or termination shall be adjusted to Coordinated Universal Time, and BOXTIME 2004 clause 8(a) does the same. SHELLTIME 4 clause 21(f) is the opposite: all references to time are references to local time except where otherwise stated. Both forms pro-rate hire per day or pro rata for any part of a day, so the timebase is worth real hours across a date line or a clock change.
Does a loss of hire policy pay out whenever the charter says the ship is off hire?
Not necessarily. A loss of hire policy defines its own covered perils and its own deductible period, and neither has to match the charter party’s off-hire trigger or duration. A Port State Control detention that is off hire under NYPE 2015 clause 17 may not be a covered peril under a policy that defines perils by reference to physical damage to the vessel, so the owner can be off hire and uninsured at the same time.
Does an EEXI power limitation reduce the warranted speed?
Only where the BIMCO EEXI Transition Clause 2021 is incorporated, and then only in one direction. The clause replaces the warranted maximum speed and consumption figures if, and only if, the limited figures are lower, with effect from the certification date, and it leaves all other warranted figures unchanged. It contains no hire adjustment formula. A charter without the clause leaves the owner arguing a conflict between a regulatory obligation and a contractual warranty with no contractual machinery to resolve it.

Sources

  1. Minerva Navigation Inc v Oceana Shipping AG (The Athena) [2013] EWCA Civ 1723, Court of Appeal, 23 October 2013: time lost is measured against the service immediately required
  2. Eastern Pacific Chartering Inc v Pola Maritime Ltd (The Divinegate) [2022] EWHC 2095 (Comm), 10 August 2022: the good weather method, adverse and favourable current, and fouling double recovery
  3. Polaris Shipping Co Ltd v Sinoriches Enterprises Co Ltd (The Ocean Virgo) [2015] EWHC 3405 (Comm): no minimum good weather period, and application of breach to the whole charter party
  4. Hyundai Merchant Marine Co Ltd v Furness Withy (Australia) Pty (The Doric Pride) [2006] EWCA Civ 599, 25 January 2006: detention going to the status of the vessel
  5. Cosco Bulk Carrier Co Ltd v Team-Up Owning Co Ltd (The Saldanha) [2010] EWHC 1340 (Comm): piracy seizure is not within the NYPE 1946 clause 15 causes
  6. Fastfreight Pte Ltd v Bulk Trident Shipping Ltd (The Anna Dorothea) [2023] EWHC 105 (Comm), 24 January 2023: an anti-deduction clause bars withholding an entire hire instalment
  7. Imperator I Maritime Co v Bunge SA (The Coral Seas) [2016] EWHC 1506 (Comm), 24 June 2016: fouling as fair wear and tear under a continuing performance warranty
  8. Spar Shipping AS v Grand China Logistics Holding (Group) Co Ltd [2016] EWCA Civ 982, 7 October 2016: punctual payment of hire is an innominate term, not a condition
  9. BIMCO, ASBA and the Singapore Maritime Foundation: New York Produce Exchange Time Charter 2015, clause 17 (Off-Hire) at lines 372 to 392 and clause 12 (Speed and Consumption)
  10. BIMCO: BALTIME 1939 Uniform Time-Charter as revised 2001, clause 11 (Suspension of Hire etc.) at lines 143 to 152
  11. Maritime Code of the People's Republic of China, Articles 127, 132, 133 and 140: statutory off-hire on a twenty-four consecutive hour threshold
  12. IMO Resolution MEPC.328(76): 2021 Revised MARPOL Annex VI, adopted 17 June 2021, in force 1 November 2022, introducing EEXI and the operational carbon intensity indicator