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Lawful deductions made for under performance but claim put forward under off-hire - what happens?

What if time charterers make lawful deductions for under- performance but then wrongly put them forward to owners as having being made under the off-hire provision, and by the time they clarify matters to owners, the six year time limit expires? This issue came up in London Arbitration 09/18.

It was held that charterers had used unequivocal language in their hire statements, to their own detriment. It was suggested that if the charterers were unsure then they could have said “off-hire/damages due to underperformance”. Also, the time bar had expired and there could be no set off against owners’ claim for hire. The point made by the tribunal was that when making deductions from hire, charterers must identify them with some degree of precision so that owners could assess their response to it. A win for owners.


One could however argue that ‘professionals’ (and they are to be deemed as such) sitting on owners’ side should have been able to point out/identify such an error and then tried seeking clarification from charterers as to whether the deductions were for damages (under a very specific deductions clause) or off-hire; and reasons for the same. In shipping, no one expects owners to simply sit back and let charterers deduct hire without questioning them.



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