Time charter party: hire, off-hire and redelivery

A time charter party is a contract by which a shipowner places a manned vessel at a charterer’s disposal for an agreed period, in return for hire. The owner keeps possession, supplies the crew, maintains the ship and insures her. The charterer directs where she goes and what she carries, pays for the bunkers and the port costs, and pays hire for every day of the period whether the ship is working or waiting. What the charterer buys is the ship’s earning capacity, not the ship.

The contract’s whole architecture follows from that split. Because the charterer pays for time, the charterer carries the delay risk, and the exceptions to that rule are the off-hire clause. Because the charterer directs the ship but the owner’s master executes the orders, the employment and indemnity clause moves the consequences back to the charterer. Almost every reported time charter dispute is about one of those two clauses, or about what happens at the two ends: delivery and redelivery.

The three charter types, and what separates them

The line that matters most is possession. Under a voyage charter and a time charter the owner keeps possession and the master and crew remain the owner’s servants, so the owner remains the operator for ISM and manning purposes. Under a bareboat charter the charterer takes the ship and becomes the disponent owner. A time charterer never becomes the ISM company, which is why the EU emissions regime cannot make it the responsible party however much of the fuel it pays for. The wider comparison is in charter parties overview , and the pre-fixture stage in charter party subjects .

A trip time charter is a time charter for a single voyage or defined trip, with hire still running per day. It is a time charter and not a voyage charter, and the Court of Appeal said so directly in The Doric Pride [2006] EWCA Civ 599, correcting the judge below who had called it essentially a voyage charter transaction. All the machinery applies to it.

The standard forms

Most fixtures are made on a printed form with a rider of negotiated clauses, and the form decides the default answers.

Dry cargo runs on the New York Produce Exchange family, the time charter counterpart of the GENCON voyage form. NYPE 1946 is still in wide use despite its age; NYPE 93 followed; and NYPE 2015 , dated 3 June 2015 and released 14 October 2015 by the Association of Ship Brokers and Agents with BIMCO and the Singapore Maritime Foundation, is the current edition at 57 clauses. BALTIME 1939 as revised 2001 , BIMCO ’s Uniform Time-Charter first issued in 1909, is the short sea and tramp form; the 2001 revision was a minor technical exercise swapping in standard BIMCO clauses.

Tankers run on SHELLTIME 4 , issued December 1984, amended December 2003 and now at version 1.2 dated March 2017, and on BPTIME 3 and INTERTANKTIME 80. SHELLTIME 5 does not exist. The confusion comes from Shell’s voyage forms, which do run to SHELLVOY 5 and SHELLVOY 6.

Containers use BOXTIME 2004 and LINERTIME 2015. Offshore support vessels use SUPPLYTIME 2017 , which runs on a knock for knock indemnity rather than on ordinary fault allocation. Specialised forms exist for chemical tankers (BIMCHEMTIME) and, since 2026, for liquefied carbon dioxide carriers (CO2TIME).

What each side pays for

The dividing line is the standing cost of the ship against the marginal cost of the voyage.

The owner supplies the vessel and keeps her in class; supplies, pays and victuals the crew; maintains and repairs her; provides stores and lubricating oil; carries hull and machinery and P and I insurance; and holds the statutory certification. The charterer supplies and pays for the bunkers, and pays port charges, canal dues, pilotage, towage, agency fees, cargo handling and any extra insurance the trade requires.

Two consequences follow that are easy to miss. The charterer’s fuel bill is usually the largest single cost of the fixture and is entirely within the charterer’s control through speed, which is why speed is the most heavily negotiated technical term. And because the owner carries the crew cost whether the ship is trading or idle, an owner’s downside in a falling market is not a smaller margin but a fixed cost against no revenue, which is what loss of hire insurance is written against.

Hire: how it is calculated and when it is paid

Hire is normally a rate per day, sometimes expressed per tonne deadweight per month, running from delivery to redelivery and payable in advance, semi-monthly or monthly depending on the form. A part period is pro-rated to the hour. Address commission to the charterer and brokerage to the broking houses come off each payment, commonly totalling somewhere in a 1.25 to 3.75 percent band, which is market convention rather than a rule; the mechanics are in address and brokerage commission .

A hire statement is built by taking the gross hire for the period, deducting commissions, then deducting the agreed items: off-hire already established, the value of bunkers consumed during off-hire, owner’s disbursements the charterer has advanced, and any agreed performance claim. The last of those is where disputes start, because a charterer that deducts a contested performance claim from hire is at risk of being in default on hire itself.

Withdrawal for non-payment, and why Spar Shipping matters

Late payment of hire is a breach, and the owner’s contractual remedy is withdrawal. NYPE 2015 clause 11(b) makes any failure to pay punctually a breach, without the qualification for oversights, errors or omissions that NYPE 93 carried, and clause 11(c) permits withdrawal where hire is not paid within a grace period of three banking days.

What withdrawal does not automatically bring with it is damages for the rest of the charter period. That was the question in Grand China Logistics Holding (Group) Co Ltd v Spar Shipping AS [2016] EWCA Civ 982, decided 7 October 2016. Three supramax bulk carriers had been let on amended NYPE 1993 forms in 2010, and from April 2011 the charterers paid hire late persistently. The Court of Appeal held unanimously that the obligation to pay hire punctually and in advance is an innominate term, not a condition, and that The Astra [2013] EWHC 865 (Comm) was wrongly decided on that point. Without more, late payment entitles the owner only to withdraw. The withdrawal clause is a contractual option to terminate and is not itself an indicator that punctual payment is a condition.

The owners in Spar Shipping still recovered their loss of bargain, by a different route: the charterers’ sustained pattern of late payment amounted to renunciation, evincing an intention not to perform in a way that deprived the owners of substantially the whole benefit of the contract. The practical lesson for an owner is that a documented pattern is worth more than any single default.

Two procedural points govern how withdrawal is exercised. An anti-technicality notice , where the charter requires one, must be served before withdrawing, giving the charterer a stated number of banking days to cure; withdrawing without it is itself wrongful. And withdrawal takes effect on communication: in The Brimnes [1975] QB 929 owners telexed a withdrawal at 17:45 on 2 April 1970 and the funds were credited later that evening, and the Court of Appeal held the withdrawal took effect when the telex was received in the charterers’ office during business hours, whether or not anyone read it. A telex payment instruction is not payment; payment is complete only when the creditor has the cash at his disposal. See withdrawal of the vessel for non-payment of hire .

Off-hire

Off-hire suspends the charterer’s obligation to pay for time the vessel is not giving the service required of her. It operates irrespective of fault, which is what distinguishes it from a damages claim, and the charterer bears the burden of bringing itself within the clause.

The clause type decides how much time comes off. A net loss of time clause suspends hire only for the time actually lost; a period clause suspends it for a defined period from the onset of the event until the vessel is again fully efficient, whether or not all of that time was lost. NYPE is a net loss of time clause: its wording is that hire ceases for the time thereby lost. BALTIME clause 11(A) is widely described as the period form and is not one: it provides 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 it adds is a qualifying gate of more than twenty-four consecutive hours and a wider trigger, “hindering or preventing” the working of the vessel. A qualifying gate is a condition on the clause operating, not a deductible, so a thirty-hour event gives thirty hours of off hire rather than six. Getting either point the wrong way round changes the arithmetic materially. The clause is number 15 in NYPE 1946 and number 17 in NYPE 93 and NYPE 2015, the 2015 version having absorbed many events previously added by rider and widened the exceptions to cover sub-charterers.

The test is what service was required of the vessel at the time. In The Berge Sund [1993] 2 Lloyd’s Rep 453 an LPG carrier failed a pre-loading inspection at Ras Tanura and spent three weeks cleaning. Staughton LJ asked what service was required, found that the charterers’ order at that point was to clean rather than to load, and held the vessel remained on hire because she was performing the service required. In The Athena [2013] EWCA Civ 1723 the Court of Appeal reinstated the arbitrators and held the inquiry is into the service immediately required at the time of the event, rejecting the judge’s broader net-loss-to-the-chartered-service test. The reason matters: off-hire operates irrespective of fault and the owner needs to know where it stands on the hire due date.

One word decides how wide the clause reaches. In The Laconian Confidence [1997] 1 Lloyd’s Rep 139 Rix J held that the causes named in a typical NYPE clause all relate to the physical condition or efficiency of the vessel, her crew or in one instance the cargo, so a residual “any other cause” is read ejusdem generis and confined to that class. Adding “whatsoever” displaces that limitation. On the facts, with “whatsoever” present, an 18-day disposal procedure imposed by the Chittagong authorities on rejected sweepings was wholly extraneous and put the vessel off hire. The case is not authority for a net loss of time principle and it is not authority that the list is exhaustive: exhaustiveness turns on whether “whatsoever” appears.

Delay by an authority is allocated by which side the cause falls on. In The Doric Pride [2006] EWCA Civ 599 a vessel on her first ever call at a US port was designated a High Interest Vessel by the US Coast Guard and held at anchorage for six days awaiting a security boarding, with USD 257,732.77 of hire at stake. Rix LJ drew the basic distinction between matters on the owners’ side, the vessel and her crew, and matters on the charterers’ side, trading and employment. The vessel’s status as a first-time US caller was something owners know or should know and charterers need not, so it fell on the owners’ side and she was off hire.

An act somewhere down the sub-charter chain does not automatically defeat the claim. In The Global Santosh [2016] UKSC 20 a cargo receiver’s agent applied to arrest cargo over a demurrage claim and the arrest order named the vessel by mistake. The off-hire clause excepted detention occasioned by the act or default of the charterers or their agents. The majority held there must be a nexus between the occasion for the arrest and the function the charterer had delegated; the arrest arose from a sale contract dispute rather than from any vicarious exercise of a right under the time charter, so the vessel was off hire. Lord Clarke dissented. See off-hire and performance claims .

The employment and indemnity clause

The employment clause obliges the master to follow the charterer’s orders as to employment; the indemnity gives the owner protection against the consequences of complying. It is the pivot of the whole contract: the charterer directs the ship, so the charterer carries the consequences of the direction.

The Kos [2012] UKSC 17 is the leading modern authority on its scope. Owners lawfully withdrew a VLCC for non-payment of hire while she was loading at Angra dos Reis with cargo already aboard, and claimed for the 2.64 days of service and the bunkers consumed while that cargo was discharged afterwards. The Supreme Court held unanimously that the cost was recoverable as a bailee’s expenses under the principle in The Winson, with no need to show necessity, and by a majority, Lord Mance dissenting, that it was also recoverable under the Shelltime 3 clause 13 indemnity. The indemnity is very wide, subject to two provisos: the owner cannot be indemnified for what hire already remunerates, and the loss must be caused by compliance with the charterer’s orders. Lord Sumption held the relevant order was the order to load, and that the timing of the withdrawal was adventitious and did not break the chain of causation. Owners were entitled to the market rate from notice of withdrawal until the cargo was removed.

The employment and navigation boundary decides who pays for a longer passage. In The Hill Harmony [2001] 1 AC 638 charterers, acting on weather routing advice, ordered the great circle route from Vancouver to Japan; the master took the longer rhumb line route citing heavy weather on an earlier passage. The House of Lords held that routeing is a matter of employment, not navigation, so the master must follow the charterer’s routeing orders unless safety genuinely requires otherwise, and a departure from the ordered route raises deviation . The extra steaming time and bunkers were for owners’ account. See the employment and indemnity clause and weather routing .

Speed and consumption

The vessel is described with a speed she will maintain and a fuel consumption she will burn doing it. NYPE 2015 lifts the warranty out of the description into a standalone clause 12, drafted as a continuing warranty.

How a claim is built. Performance is measured over defined good weather periods and the shortfall found there is extrapolated across the sea passages. That is the method The Didymi [1988] 2 Lloyd’s Rep 108 and The Gas Enterprise [1993] 2 Lloyd’s Rep 352 established. The Court of Appeal in The Gas Enterprise put the reasoning plainly: the good weather description is a contractual yardstick by which performance is measured, not a limit on the period damages run for, because a vessel that underperforms in good weather is unlikely to do better in bad. The Ocean Virgo [2015] EWHC 3405 (Comm) is the modern authority on whether a good weather sample is sufficient, and confirms that once breach is established, damages run over the whole charter period excluding slow steaming ordered by the charterer.

What “about” is worth. Not a fixed number. The Court of Appeal held in The Al Bida [1987] 1 Lloyd’s Rep 124 that “about” is not a fixed margin: it depends on the ship’s size, draught, trim and configuration. The half-knot and five percent figures that circulate in the market are London arbitration practice, not law, and a fixture wanting a defined margin should state one. The same case held a charterer may claim for underperformance on some voyages without netting off overperformance on others.

What counts as good weather is contractual, and where the charter is silent it is a question for the tribunal. The common market convention is Beaufort force 4 and Douglas sea state 3 or below, with no adverse current and no significant swell, sustained over a minimum period. That is convention rather than law, and it is one of the most heavily negotiated lines in a modern fixture because it decides which passages enter the sample at all. See good weather definition in charter warranties , charter party speed and consumption warranties and noon report .

Whether the warranty is continuing is genuinely argued. The authorities usually cited for testing at delivery include The Al Bida and The Apollonius; the counter-argument runs off the maintenance and utmost despatch obligations. What can be said without hedging is that most modern fixtures make it continuing in express terms, and NYPE 2015 clause 12 is drafted that way, so the question rarely has to be answered from first principles.

Safe ports and safe berths

The charterer undertakes to order the vessel only to ports she can reach, use and return from without exposure to danger which cannot be avoided by good navigation and seamanship. That is Sellers LJ’s formulation in The Eastern City [1958] 2 Lloyd’s Rep 127 at 131, and it remains the test.

The modern gloss is The Ocean Victory [2017] UKSC 35, on a Capesize that allided with the south breakwater and grounded leaving Kashima, Japan on 24 October 2006 in a storm combining long wave swell at the Raw Materials Quay with a severe northerly gale in the Kashima Fairway. The Supreme Court held unanimously on the safe port issue that “abnormal occurrence” is not a term of art and bears its ordinary meaning: an event well removed from the normal, out of the ordinary course and unexpected. Mere theoretical foreseeability does not turn a rare event into a normal attribute of the port. The judge below had erred by fragmenting the inquiry into the two weather components separately instead of asking the single question whether their simultaneous coincidence was abnormal. It was, so Kashima was not unsafe and the charterers were not in breach.

The case decided two further points on other issues: that the joint insurance provisions of BARECON 89 clause 12 barred recovery of the ship’s value from the demise charterer, by a majority with Lord Clarke and Lord Sumption dissenting; and that charterers could not limit under the 1976 Convention by reference to the tonnage of the very ship lost. See safe port and safe berth warranties .

Redelivery and the last voyage

The charter states a period and a margin, commonly expressed as “about” so many months, and a redelivery range. NYPE 2015 moved redelivery into its own clause 4, with the ranges and the notices.

The recurring dispute is the last voyage. The charterer orders a final employment; the question is whether it can reasonably be expected to allow redelivery within the period and its margin. The House of Lords settled the timing point in The Gregos [1994] 1 WLR 1465: legitimacy is judged at the time the voyage is due to begin, not when the order is given. The owner is not obliged to perform an illegitimate last voyage; it must accept a legitimate one; and late redelivery not caused by the owner’s own fault is a breach sounding in damages. Where performance becomes impossible altogether rather than merely late, the question becomes one of frustration .

The measure of those damages is the overrun, not the follow-on fixture. In The Achilleas [2008] UKHL 48 the vessel was redelivered nine days late, and the owners’ follow-on fixture with Cargill was renegotiated from USD 39,500 to USD 31,500 per day, on which they claimed about USD 1.3 million. The House of Lords allowed the charterers’ appeal unanimously and limited damages to the difference between market rate and charter rate for the nine days of overrun. Lord Hoffmann introduced the assumption of responsibility analysis alongside the Hadley v Baxendale contemplation test. The practical effect is that the conventional overrun measure is the default, and a party wanting to shift consequential loss onto the other must say so expressly. See redelivery and last voyage orders .

Bunkers at each end

Bunkers on board at delivery are bought by the charterer, and a like quantity at redelivery is bought back by the owner. The usual arrangement is the same agreed price at both ends, so the two legs net off and neither party takes a market position on fuel it never burned. Market price enters as the measure of damages where redelivery quantities fall outside the agreed margin, not as the standard mechanism, and stating market price as the default is a common error.

Ownership matters on a withdrawal. In The Span Terza (No.2) [1984] 1 WLR 27 the House of Lords held that property in charterer-supplied bunkers stays with the charterer and revests in the owner only on contractual redelivery. Where the charter ends by withdrawal rather than by redelivery, the owner holds the remaining bunkers as bailee and cannot simply treat them as its own. See bunkers on delivery and redelivery .

Quality is the charterer’s risk in the ordinary case, because the charterer supplies the fuel and the charter normally warrants a stated specification. The line drawn in practice is between a fuel that was off specification when supplied , which is the charterer’s problem, and damage caused by the ship’s own treatment of an on-specification fuel, which is the owner’s. See bunker fuel quality disputes and bunker quality and ISO 8217 .

Emissions: who pays, and who is the responsible party

Three regimes now cut across the hire bargain, and each splits control from liability in a different way.

EU ETS. Under Directive 2003/87/EC as amended by Directive (EU) 2023/959, the phase-in by emissions year is 40 percent of verified 2024 emissions, 70 percent of 2025 and 100 percent from 2026, with surrender due by 30 September of the following year. It reaches cargo and passenger ships of 5,000 gross tonnage and above, at 100 percent of emissions on intra-EEA voyages and at berth and 50 percent on voyages into and out of the EEA. Carbon dioxide alone was covered for 2024 and 2025; methane and nitrous oxide are added from 2026.

The allocation problem is structural. The shipping company under Article 3(w) is the ISM company, which on a time charter is the owner, so a time charterer can never be the shipping company and cannot itself surrender allowances, however much of the fuel it pays for. Article 3gc is the statutory pass-through entitling the shipping company to reimbursement. Contractually, the BIMCO ETS - Emission Trading Scheme Allowances Clause for Time Charter Parties 2022, published at the end of May 2022, resolves it in kind: the charterer transfers allowances rather than cash into the owner’s nominated registry account, on a monthly cycle with the owner notifying in the first seven days of each month and the charterer transferring within seven days. A redelivery estimate is given no later than fourteen days before expected redelivery and trued up within seven days, and allowances for off-hire periods are offset or returned. On non-payment the owner may suspend performance on five days’ notice, and the vessel stays on hire during the suspension. There is no 2023 revision of this clause. See EU ETS for shipping and EU ETS surrender mechanics .

FuelEU Maritime. Regulation (EU) 2023/1805 applies from 1 January 2025 and requires a reducing greenhouse gas intensity of the energy used on board, measured against a 2020 reference of 91.16 gCO2eq per megajoule: 2 percent from 2025, 6 percent from 2030, 14.5 percent from 2035, 31 percent from 2040, 62 percent from 2045 and 80 percent from 2050. Since the charterer chooses the fuel, the BIMCO FuelEU Maritime Clause for Time Charter Parties 2024 , adopted 25 November 2024, works by surcharge: the charterer pays an amount equal to the expected penalty where the aggregated compliance balance is negative. It gives the charterer no automatic right to supply biofuels, and its liquidated damages provisions bite only if a currency and amounts are inserted. See FuelEU Maritime explained and FuelEU compliance balance and pooling .

CII. The Carbon Intensity Indicator rating attaches to the ship and the owner holds it, while the charterer controls the speed, the trade and the waiting time that produce it. The BIMCO CII Operations Clause for Time Charter Parties 2022, adopted in November 2022, addresses the split by obliging the charterer to operate consistently with the MARPOL carbon intensity regulations and not to permit the contractual attained CII to exceed an agreed figure, while the owner exercises due diligence to minimise fuel consumption. Where no figure is agreed it defaults to the required CII. Note two things it does not do: there is no NYPE 2015 CII clause, because that form predates the regime by seven years, and no published standard clause gives the owner a right to take over speed and routeing if a poor rating looks likely. An owner wanting that has to negotiate it expressly, and it cuts directly across the employment clause and The Hill Harmony. See BIMCO CII clauses and MARPOL Annex VI .

Riders often cite the MARPOL numbering wrongly. After the revised Annex VI adopted by IMO resolution MEPC.328(76), applying from 1 November 2022, regulation 26 is the SEEMP, regulation 27 is the IMO fuel oil consumption data collection system and regulation 28 carries the CII, with rating from 1 January 2023. The older numbering, with data collection at regulation 22A and the SEEMP at regulation 22, is superseded.

Cargo claims, bills of lading and the Inter-Club Agreement

Bills of lading are signed by the master, or by the charterer or its agents on the master’s authority, under the employment clause. The bill is normally an owner’s bill and the owner is the contractual carrier, which is why the charter gives the owner an indemnity where the charterer requires signature for cargo details differing from the mate’s receipts, or for a bill claused differently from the facts. Signing clean for cargo the mate’s receipts have claused is the classic case, and the letter of indemnity is the instrument through which it is done. See bill of lading and charterparty bills and incorporation .

Cargo claims between owner and charterer are apportioned mechanically rather than litigated on fault, under the Inter-Club New York Produce Exchange Agreement 2011, as amended 14 July 2025. That amendment is only the fourth revision since the agreement was first adopted in 1970, and it touched clauses 3(c) and 4(c) alone, confirming that “settled” covers a court judgment or an arbitration award and that the reasonable legal costs of defending a cargo claim are apportionable even where the claim is withdrawn or successfully defended. The clause 8 apportionment percentages were not changed. It applies to charter parties entered into on or after 14 July 2025 where the 2011 agreement as amended is incorporated by reference, or by an “or any amendments thereto” formula. Clause 1 names the NYPE 1946 and NYPE 1993 forms and the Asbatime Form 1981; since Asbatime is used in tanker as well as dry trades, describing the agreement as a purely dry cargo instrument is a market generalisation rather than a term of it. NYPE 93 and NYPE 2015 incorporate it at clause 27.

The rider clauses that carry the modern risks

A modern fixture attaches a rider of standard clauses, and the ones that recur are worth naming with their exact titles and years, because approximations of both are common.

• Sanctions Clause for Time Charter Parties 2020, published 19 December 2019: an objective test, with continuing warranties by both parties for themselves and listed third parties, and termination and damages for the innocent party on breach. See BIMCO sanctions clauses .
• Cyber Security Clause 2019: symmetrical obligations on both parties to implement measures, hold response plans and keep records, with liability between them capped at a negotiated figure defaulting to USD 100,000. There is no 2021 revision. The underlying requirement is IMO resolution MSC.428(98) of 16 June 2017, which put cyber risk into the safety management system by the first annual Document of Compliance verification after 1 January 2021; MSC-FAL.1/Circ.3, now at revision 3 of 4 April 2025, is guidance and not the requirement.
• Slow Steaming Clause for Time Charter Parties 2011, published in BIMCO Special Circular No.7 of 23 December 2011: two-tier, covering slow steaming and ultra slow steaming, subject to the engine maker’s recommendations, with the charterer indemnifying against greater bill of lading liabilities. The 2012 clause is the voyage version. See BIMCO slow steaming clauses .
• Piracy Clause for Time Charter Parties 2013 , superseding the 2009 version: the vessel stays on hire through a seizure except that hire ceases from the 91st day after seizure until release.
• Infectious or Contagious Diseases Clause for Time Charter Parties 2022, replacing the 2015 version: the owner may refuse to trade to an affected area, and where that right is waived the charterer bears the resulting liabilities and preventative costs.
• ISPS/MTSA Clause for Time Charter Parties 2005, superseding the 2003 ISPS clause with express US Maritime Transportation Security Act compliance.

Trading limits are set by the hull policy and incorporated into the employment clause. The Institute Warranty Limits were revised and renamed the International Navigating Limits with effect from 1 November 2003. The change that matters legally is that they are provisions, not warranties, so a breach avoids only losses occurring outside the permitted area rather than discharging the underwriter from the date of breach under section 33 of the Marine Insurance Act 1906. See ice clauses in charter parties .

Law, forum and arbitration

The forum is one of the first things a claims handler checks, because the forms differ. NYPE 2015 clause 54 defaults to United States law with arbitration in New York under Society of Maritime Arbitrators rules, and offers English law with LMAA arbitration in London, and Singapore with SCMA, as elections. BIMCO forms generally default to English law and London arbitration.

In London the LMAA Terms 2021 apply to proceedings commenced on or after 1 May 2021, alongside two lighter procedures whose thresholds decide the cost of a dispute. The Small Claims Procedure has a default limit of USD 100,000 exclusive of interest and costs, applied separately to claims and counterclaims rather than as an aggregate, before a sole arbitrator. The Intermediate Claims Procedure applies where the total of claims or counterclaims exceeds that figure but neither exceeds USD 400,000, before three arbitrators. Above that the full Terms apply.

The statutory backdrop changed recently. The Arbitration Act 2025 received Royal Assent on 24 February 2025 and came into force on 1 August 2025, amending rather than replacing the Arbitration Act 1996. Four changes reach charter party disputes: a new presumption that the arbitration agreement is governed by the law of the seat absent express agreement; a summary award power on a “no real prospect of succeeding” test; a reframing of jurisdictional challenges; and strengthened arbitrator disclosure duties and immunity. It applies to arbitrations and related court proceedings commenced on or after that date.

In New York the SMA Maritime Arbitration Rules 2024 apply to contracts entered into on or after 1 October 2024, superseding the 2016 edition, and are read with the Federal Arbitration Act. See maritime arbitration .

The commercial layer

Period hire is quoted per day and reported by the Baltic Exchange through its timecharter routes and basket assessments , alongside broker-reported fixtures. A ballast bonus is a lump sum the charterer pays on delivery to compensate for positioning the vessel to the delivery port, separate from hire, usually payable with the first instalment and negotiated as part of the overall economics rather than governed by any standard clause.

The choice between a period and a trip fixture is a trade between rate certainty and redelivery certainty. A period charter fixes the earning rate for months or years and removes the owner’s exposure to a falling market at the cost of foregoing a rising one. A trip charter usually pays a higher daily rate and returns the ship to the market sooner within a defined redelivery range, so the owner keeps the option value of the market and carries the risk of the next fixture. Converting a time charter rate to the voyage-equivalent basis a shipowner compares alternatives on is what time charter equivalent does. Where the ship is fixed onward, the chain raises its own problems of back-to-back terms, set out in charter chains and sub-chartering ; a container operator taking part of a ship instead takes a slot charter .

Limitations

This article states English law as the default frame, because the standard forms and the reported authorities on which the subject rests are overwhelmingly English, and because BIMCO forms elect English law and London arbitration. That default is not universal. NYPE 2015 itself defaults to United States law and New York arbitration, and a New York tribunal applying the Federal Arbitration Act and SMA rules may reach a different result on the same clause. Nothing here should be read as advice on a fixture governed by another law.

Three further limits. No market rate figures are given, because time charter rates move continuously and every citable series is broker research behind a paywall; a rate stated without its date and its source is worse than no rate. The clause numbers cited are those of the named form, and a rider will very often displace them, so the printed clause number in a fixture is the one that governs. And where a proposition is market convention rather than law, this article says so: the half-knot and five percent “about” margins, the Beaufort force 4 and Douglas sea state 3 good weather definition, the 1.25 to 3.75 percent commission band and the same-quantity-same-price bunker arrangement are all convention, and a tribunal will apply the contract rather than the convention where the two differ.

One point is genuinely unsettled rather than merely complex: whether a speed and consumption warranty is continuing or is given only at delivery. This article does not state an answer, because the authorities do not, and the practical response is that modern fixtures make it continuing expressly.

Related Articles

• Voyage charter party
• Bareboat charter party
• Charter parties overview
• NYPE 2015 time charter form
• NYPE 93 and NYPE 1946
• BALTIME 1939 as revised 2001
• SHELLTIME 4
• SUPPLYTIME 2017
• Off-hire and performance claims
• Withdrawal of the vessel for non-payment of hire
• Safe port and safe berth warranties
• Redelivery and last voyage orders
• The employment and indemnity clause
• Charter party speed and consumption warranties
• Trip time charter
• Time charter equivalent
• Maritime arbitration