Does a vessel arrested for a claim under a sale contract remain on hire?

Time charterer Cargill withheld hire from disponent owners NYK pursuant to a period off-hire clause in a time trip charter on amended NYPE terms. The vessel was delayed for a prolonged period at Port Harcourt in Nigeria, where she was to discharge cement: first, because the unloader at the discharge port owned by the buyer of the cargo was broken and the vessel was held at anchor and, subsequently, because the sellers of the cargo arrested the cargo and inadvertently the vessel in order to secure their substantial claim for demurrage under the sale contract arising from the period of delay at the discharge port. Transclear was the seller and IBG the buyer. Under the sale contract, IBG was responsible for discharging the cargo. Transclear was also a sub-charterer of the vessel pursuant to a voyage charter.

NYK brought a claim for payment of the hire which was withheld by Cargill for the period when the vessel was subject to the Arrest Order. Their claim was rejected by the majority of a panel of three arbitrators. NYK successfully appealed to the Commercial Court…

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