In TS Lines Ltd v Delphis NV; Delphis NV v Ulrike F Kai Freese GmbH & Co. KG – Butterworths Law Direct 2.4.09 the Commercial Court heard an appeal against the decision of an arbitrator regarding the effect of an off-hire clause in a charterparty.
The vessel was chartered by the Defendant charterers from the Claimants. By cl 81 of that charterparty, if the vessel was off-hire for a period of 20 consecutive days the charterers had an option to re-deliver the vessel when next cargo free. Clause 57 provided, inter alia, that if the vessel became damaged in port or at sea, the hire period would be suspended until the vessel was again efficient in the same or equivalent position and the voyage resumed.
The question was whether when, under Class’s orders, the vessel proceeded direct to Hong Kong (rather than Shanghai) to discharge the entire cargo, including the cargo destined for Shanghai, after which she was to sail to Guangzhou for repairs, the vessel came on-hire again from leaving Yokohama on 22 September because the routes to Hong Kong and Shanghai were identical, and it was only when the vessel diverted from that route on 23 September that the vessel went off-hire again, with the effect that the vessel was not off-hire (ie was temporarily efficient) for the 20 consecutive days as required under the charterparty in order to entitle Charterers to redeliver the vessel.
The Commercial Court allowed the appeal from the Tribunals’ finding that the vessel had not been off hire throughout. The question which had been put before the arbitrators was whether the vessel, on its way to a repair yard, and not going to Shanghai in accordance with the charterer's instructions, had been tendering services in accordance with the charterparty. The commercial purpose of the charterparty had been to comply with the charterers’ instructions, with which the vessel had not been complying when it set off from Yokohama. It was therefore, on the proper construction of cl 57, off-hire during that period, albeit travelling in the general direction of Shanghai, but not intending to go there.