Test for net loss of time under NYPE off-hire clause

An analysis of the Minerva Navigation Inc v Oceana Shipping AG (M/V Athena) case, concerning the duties of ship-owners as regards charterers in shipping law.

The dispute in this case arose out of the vessel’s failure to proceed immediately to her new discharge port when ordered to do so by the charterers. The charterers claimed that the vessel was off-hire for the period she spent drifting rather than proceeding to the discharge port. An issue with the bills of lading meant that, even if the vessel had proceeded to port immediately upon charterers’ orders, she would not have been able to commence discharging any sooner. The owners argued that there had therefore been no net loss of time in the performance of the charter service overall and that the vessel remained on-hire for the disputed period. The charterers contended that the test should be whether there had been a loss of time in performance of the services immediately required of the vessel; in this case, to proceed to the discharge port. The Commercial Court, allowing the owners’ appeal from the arbitration award, held that the correct test under clause 15 NYPE 1946 was whether there had been a net loss of time in the charter service overall. On the facts, this provided the owners with a defence to the claim…

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