Off-hire – discharge prevented by port/health authorities


Published: 6 February 2008

Reviewing two recent London arbitrations

Off-hire continues to be a “popular subject” and disputes over alleged off-hire periods are still regularly published. Recently, two London arbitrations have dealt with off-hire periods where discharge was prevented or prohibited by local port or health authorities in the discharge port. It is for the charterers to bring themselves within the scope of the off-hire clause in the C/P.

London Arbitration 27/07

In London Arbitration 27/07 the vessel carried what was described as “milling wheat” from the west coast of India to Yemen (a voyage of only six days). Discharge was prohibited by the local Yemeni health authority due to alleged cargo damage, and the charterers therefore advanced a claim against owners for the alleged cargo damage and also put the vessel off-hire. With regard to the cargo claim as such, the charterers argued that unless the wheat was damaged during the voyage, the damage (insect infestation and “black” grain) must have existed on loading and the master should have seen it and stopped loading and claused Bs/L. The arbitrators, however, thought that it was highly improbable that the cargo damage complained of could have occurred during the voyage (which was short) and also referred to the fact that the charterers themselves apparently considered it a possibility that the damage existed on loading. With the cargo being described only as “milling wheat” the master had nothing to alert him that there should have been any defect in the cargo and the master could not be expected to have any expertise in relation to the quality or condition of the cargo. The arbitrators therefore, with regard to the cargo claim, concluded that the condition of the cargo on discharge was not materially different from its condition on loading, and consequently there was no fault on the master’s or owners’ part. This is in line with previous case law (the DAVID AGMASHENEBELI [2002] EW HC 104 (Admiralty)).

This conclusion formed part of the basis on which the arbitrators held with regard to the alleged off-hire periods: the C/P included the usual clause 15 in the NYPE form, a clause concerning off-hire if the vessel should “be arrested”, a clause dealing with off-hire in case of “restriction, detention” etc.

It was stated that it would be strange if charterers could put the vessel off-hire because of events which resulted from compliance with their orders without any responsibility on the vessel’s part. In the present case, this was exactly what had happened insofar as the vessel had merely carried out the charterers’ orders to load the cargo and where the damage complained of was not the fault of the vessel.

The vessel was perfectly capable of discharging and even though the local health authorities refused to allow the cargo to be discharged, the charterers were not allowed to put the vessel off-hire under the usual NYPE clause 15.

The same conclusion was reached with regard to the clause dealing with arrest: on the evidence, the vessel was never arrested and a clause dealing with off-hire because of “restrictions” etc. was also not helpful to charterers – any restrictions such as the prevention of discharge by the health authorities was not caused by the ship itself: the true cause for the prevention of discharge was merely caused by the vessel’s compliance with the charterers’ orders to load the cargo in the first place.

London Arbitration 1/08

In a second arbitration, London Arbitration 1/08, the vessel was also chartered on an NYPE form carrying soya beans from South America to two separate discharge ports in Egypt and Israel. At the first discharge port, discoloured, caked and malodorous soya beans were found in one of the holds being discharged and the discharge was stopped by orders of the local harbour master following intervention by a government laboratory. The vessel was shifted to another berth more than once and also subsequently taken to an outer anchorage where she remained until charterers instructed the vessel to sail for the second discharge port.

The arbitrators held that the vessel was in fact doing what the charterers required of it; firstly awaiting the results of the laboratory analysis and the outcome of the charterers’ efforts to sell the damaged cargo (a sale of the damaged cargo eventually took place in the second load port in Israel) and awaiting charterers’ orders for sailing to the second discharge port.

All through that period, the vessel was, in fact, fully capable of discharging (although subject to the fact that discharging of one hold with damaged cargo was prohibited) but the vessel was not detained or prevented from sailing by the harbour master. It was therefore perfectly open to charterers to give orders to sail for the second discharge port and there was no evidence to show that the vessel would not have been able to comply with any such (sooner) orders. There was only one effect of the harbour master’s intervention and that was that the remaining cargo in one hold could not be discharged at the first discharge port.

The C/P on the NYPE form contained the usual clause 15 and an additional clause also related to off-hire in the case of the vessel being seized, detained or arrested.

Clause 15 in the NYPE form did not assist charterers as the vessel was fully working at all material times and fully capable of performing the service immediately required of it. It was for the charterers to decide what to do i.e. whether to stay at the first discharge port or simply leave for the second discharge port and charterers were consequently not entitled to put the vessel off-hire under clause 15.

Any demand from the local harbour master to provide security or imposing an official order of some kind may have made the conclusion different, but that did not happen.

The charterers were likewise unable to bring themselves within the clause dealing with detention, arrest or delay: there was in this particular case no question of seizure or arrest and the vessel was in fact not detained or delayed by any public authority. The harbour master had not refused to clear the ship for sailing but merely prohibited discharge.

Any delay which occurred in this case was therefore caused by the charterers’ own decisions on what to do in the particular situation and the fact that they preferred to wait for several days in the first discharge port did not entitle them to put the vessel off-hire under the available clauses in the C/P.

London Arbitration 27/07 (2007) 733 LMLN 3
London Arbitration 1/08 (2008) 734 LMLN 1 (2)