Off-hire under time charters: deductions and disputes

Atlas Claims InsightsPublished 9 October 2026 · Reviewed 14 October 2026 · 5 min read

Under a time charter, hire is payable continuously unless the charter says otherwise. The off-hire clause is the main exception, and it is one of the most frequently disputed provisions in shipping.

The basic principle

Hire remains payable unless the charterer can show that an event listed in the off-hire clause has occurred, such as a breakdown of machinery, deficiency of crew or dry-docking, and that it caused a loss of time in the service required. The burden is on the charterer.

Net loss of time vs period clauses

• Net loss of time clauses, such as the NYPE forms, generally only allow a deduction for the time actually lost to the charterer.
• Period clauses treat the vessel as off-hire from the event until it is again efficient, regardless of how much time the charterer actually lost.

The wording of the specific clause is decisive, and many charters amend the standard forms.

Deductions from hire

Under English law, a charterer may in some circumstances deduct from hire by way of equitable set-off, for example for off-hire or for a reasonably assessed claim that the owner has wrongly deprived it of the use of the vessel. But deductions must be made in good faith and on reasonable grounds. Excessive or unjustified deductions may expose the charterer to a claim and, in some cases, to withdrawal of the vessel.

Performance claims

Speed and consumption claims are often raised alongside off-hire. They depend on the warranty wording, the definition of good weather and the quality of weather and performance data.

How to avoid disputes

• Record off-hire events, times and causes in contemporaneous logs.
• Notify the other side promptly with the basis for any deduction.
• Keep weather routing and performance data for the whole period.
• Agree a reconciliation at the end of each period rather than letting deductions accumulate.

This guide is general information about the law of England and Wales as at October 2026. It is not legal advice and may not cover your situation. Atlas Claims is not a law firm; for advice on your legal rights or on litigation, consult a qualified solicitor.