Off-Hire Clauses and Piracy

In Osmium Shipping Corporation v Cargill International SA (The Captain Stefanos) the Commercial Court recently held that a bespoke off-hire clause in a NYPE 1946 time charterparty meant that the ship was off-hire when captured by pirates.

The material part of the clause read:

“…in the event of loss of time…caused by…capture/seizure…the hire shall be suspended from the time of the inefficiency until the vessel is again efficient in the same…”

The court preferred the “plain and obvious meaning of the words used in the clause” over an argument about allocation of risk based particularly on the inclusion of the CONWARTIME 2004 clause in the charterparty.

Parties may allocate piracy risks by means of express contractual clauses but the wording must be clear.