This question was considered in a recent London arbitration. Clause 45 of the time charterparty in question provided that “vessel’s holds … to be clean swept/washed down and dried up so as to receive Charterers’ intended cargoes in all respects … to the satisfaction of the independent surveyor … if the vessel fails to pass hold inspection/test as above, the vessel should be placed off-hire from the time of rejection until the vessel passed the same inspection/test again and any time/proven directly related expense incurred thereby to be for Owners’ account…”.

When the vessel arrived to load cargo, a surveyor rejected the holds at 1620 on the day of arrival (19 September). By 1900 the same day, the master advised the agents that the holds had been cleaned and were ready to receive cargo. However, the surveyor had left the ship. He did not return until 1100 the following day, and only accepted the holds at 1620 that day.

Charterers relied on clause 45 and withheld hire for the 24hour period from 1620 on 19 September to 1620 on 20 September. Owners argued that Charterers were not entitled to do so because (a) the clause was a “net loss of time clause” rather than a “period off-hire clause”, and as the intended berth was occupied until 26 September no time was lost, and (b) there was an implied duty on Charterers to ensure that any re-inspection of the holds happened as soon as possible. The defects were quickly remedied, but the surveyor did not attend until the next day and even then it was around five hours before he passed the holds. If Charterers were to be allowed time off-hire, it was only between 1620 and 1900 on 19 September.

It was held that clause 45 was a “period” off-hire clause and that the ship was off-hire “from the time of rejection … until passed again”. The words “any time/proven directly related expenses incurred thereby” allowed Charterers to claim the right to deduct in respect of any “additional” time that might result directly from the original failure. On the face of it, therefore, Charterers’ deduction was justified.

As to the implied term, it seemed to the tribunal both reasonable and necessary that, in circumstances such as the present case, Charterers should be under some duty to act reasonably in ensuring that their surveyor did not delay any re-inspection. Further, there was no doubt that, if asked at the time of entering into the charterparty, the parties would have agreed that some such term should be implied. However, the tribunal could not accept that, in this case, the surveyor should have remained on the ship until she was ready and then passed her. It may have been that little cleaning was required, but the tribunal was not satisfied that the surveyor should have appreciated that and remained on board. On the facts, it was reasonable for the surveyor not to return until 1100 the next day. However, no explanation was given for why he did not pass the holds until 1620 of that day. The tribunal concluded that he should have passed the holds by no later than 1130 on 20 September. To that extent, therefore, Charterers were in breach of the implied term.

Owners were awarded damages for this breach, such damages being measured by reference to the extent of off-hire to which Charterers became entitled as a result of their breach. Owners were therefore entitled to recover hire from 1130 to 1620 on 20 September, and Charterers were entitled to withhold hire between 1620 on 19 September and 1130 on 20 September.