Minerva Navigation v Oceana Shipping - The Athena
Minerva Navigation Inc v Oceana Shipping AG; Oceana Shipping AG v Transatlantica Commodities S.A. The MV “Athena”
English High Court; Walker J;  EWHC 3608 (Comm); 13 December 2012
Richard Lord QC for Minerva Navigation Inc, Owners
Stewart Buckingham for Transatlantica Commodities S.A., Charterers
TIMECHARTER ON NYPE FORM 1946: OFF-HIRE CLAUSE 15: WHETHER “LOSS OF TIME” MEANS NET LOSS OF TIME IN THE SERVICE IMMEDIATELY REQUIRED OR IN THE OVERALL CHARTER SERVICE
In this case the Court decided that a vessel was not off-hire whilst she drifted, contrary to Charterers’ orders, off the port of discharge because, had she proceeded immediately to the port in accordance with those orders, she would have remained idle at the anchorage, awaiting a discharging berth. Thus, although there was an off-hire event under the terms of the off-hire clause, there was no net loss of time in the overall charter service. Charterers had, therefore, to pay hire for the period the ship was drifting
This case note has been contributed by Justin Gan Boon Eng, LLB (Hons) (NUS), an advocate and solicitor of the Singapore Bar
The Vessel was chartered on a modified NYPE 46 form by Minerva Navigation Ltd (“Owners”) to Oceana Shipping AG (“disponent Owners”), and by Oceana Shipping AG to Transatlantica Commodities S.A. (“Charterers”) on materially identical terms. Clause 15 was amended (additions underlined):
“…in the event of loss of time from... default of master... or by any other cause preventing the full working of the vessel, the payment of hire shall cease for the time thereby lost ...
The Vessel was to carry a wheat cargo from Russia to Syria. Due to a dispute with the Syrian receivers, Charterers ordered the Vessel to discharge at the Libyan port of Benghazi instead. The bills of lading had to be switched and Owners refused to discharge the cargo in Libya until the original bills of lading were returned.
In the meantime, the Vessel stopped in international waters off Benghazi on 19 January 2010 and did not proceed to Benghazi until 30 January 2010. For unrelated reasons, the Vessel only berthed on 3 February 2010, after the bill of lading problems had been resolved, and completed discharge on 18 February 2010.
Charterers claimed hire paid and expenses incurred for the period 19 - 30 January 2010 from Oceana Shipping AG, the disponent Owners, who made a similar claim against the head Owners. Separate references to arbitration were made, in which the claims were successful. The decision to stay within international waters from 19 - 30 January 2010 constituted “default of master”, which caused the Vessel’s delayed arrival at Benghazi and loss of time. Significantly, the arbitrators found as a fact that the Vessel would in any case have only been able to berth on 3 February 2010, but held in favour of the Charterers:
“Whether the same time would have been lost for other reasons had she proceeded directly to Benghazi is irrelevant to a claim under the off hire clause. The time was lost in relation to the service immediately required of her and that is sufficient.”
Owners obtained leave to appeal on a question of law in relation to this finding. (Oceana Shipping AG dropped out of the proceedings after leave to appeal was obtained.)
(1) Whether Clause 15 was engaged
There was no dispute before Walker J in relation to this enquiry. A period of off-hire under Clause 15 commences when the Vessel is unable to perform the service immediately required of her. The decision to stay within international waters from 19 - 30 January 2010 brought the Vessel off-hire.
(2) The consequences of Clause 15 being engaged
There was also no dispute that a period of off-hire under Clause 15 correspondingly ends when the Vessel is “fully efficient for the service immediately required under the charterparty”, and that Charterers cannot recover off-hire for any delay once the Vessel becomes so efficient. (The “Pythia”  2 Lloyds Rep 160)
It was, however, disputed whether Charterers, having proved the off-hire event and period, had also to show that the off-hire event caused a net loss of time in performing the overall charter service and not merely a loss of time in relation to the service immediately required.
Walker J decided that Charterers had to show that the off-hire incident caused a net loss of time in the performance of the overall charter service. Consequently, as the Vessel would have in any case only been able to berth at Benghazi on 3 February 2010, the decision to stay within international waters from 19 - 30 January 2010 caused no net loss of time to the overall charter service. Accordingly, Charterers were not entitled to recover the hire paid for the period 19 - 30 January 2010, notwithstanding that the Vessel was off-hire. The arbitrators’ finding set out above was incorrect.
In so finding, Walker J considered that:
(a) Deducting hire to the extent that there was an overall loss of time prevented the Charterer from obtaining a windfall (at ). Although there may be injustice in Charterers having to pay for a period of time when the Vessel was not in their service, the primary enquiry is on the correct construction of Clause 15 (at  and ).
(b) The “Pythia” made it clear that delays arising after the Vessel resumed being fully efficient for the service immediately required could not be taken into account when determining the period of off-hire. However, it did not consider whether “time thereby lost” in Clause 15 referred to time thereby lost in relation to the (i) overall charter service or (ii) service immediately required.
(c) The “Ira”  1 Lloyds Rep 103 emphasised that in relation to Clause 15 of NYPE 46, the “causative effect [of the off-hire event] upon the charterers in the particular circumstances of the case” must be considered.
First, The “Athena” is of general application to Clause 15 of NYPE 46 charters, but is currently [September 2013] under appeal.
Secondly, The “Athena” confirms the textbook statement [fn.1] that charterers relying on Clause 15 have to show a loss of time in relation to both the (i) overall charter service and (ii) the service immediately required .
Thirdly, although Walker J’s reasoning (with respect) does not appear clearly from the judgment, the reference to causation appears persuasive. If, after all, the off-hire event caused no “loss of time” in the voyage, it is difficult to see why Charterers should be absolved from paying hire for a period of time for which Charterers would have paid anyway if the off-hire event had not occurred.
Finally, it remains to be seen whether the fresh argument below (noted by Walker J at  but rejected on technical grounds) will be effective:
“…to the extent that the vessel was not made available for charterers’ service, but charterers were deprived of its use, then the hire paid in advance was not earned, and charterers were entitled to recover hire for the period of deprivation by way of damages.”
Fn.1 Time Charters 6th ed. at 25.54. See however the criticisms of The “Athena” by the authors of Time Charters, published by the London Maritime Arbitrators Association in an article titled Off Hire under the New York Produce form: “Loss of time” & “Time Thereby Lost” at http://www.lmaa.org.uk/uploads/documents/The%20Athena%20%20EWHC%203608%20(Comm).pdf