Off-Hire Claims: Build the Evidence and the Calculation Right
Prepare and answer off-hire claims with a clear event log, the right clause and a transparent calculation that both sides can check.
This is for time charter operators, owners' commercial teams and claims handlers on either side. When a vessel breaks down, waits for repairs or is detained, the question of whether hire stops, and for how long, can tie up money for months. Most of that delay comes from missing timestamps, unclear causes and calculations nobody else can follow. This post sets out how to capture the event properly, test it against the off-hire clause, and present a calculation that is easy to accept or challenge on facts.
The vessel suffers a main engine problem mid-voyage and drifts for some hours while the crew repairs it. The master sends a short email, the charterer's operator notes it, and the voyage continues. Nobody records when full working resumed or how much fuel was used while drifting.
A month later, charterers deduct a round number of days and bunkers from hire. Owners reject it, pointing to the clause wording and partial working. Each side reconstructs the event from scattered emails and noon reports, arguing about times rather than principles, and the hire statement stays open well beyond redelivery.
A handysize operator in Visakhapatnam often argued for months over off-hire deductions after breakdowns. The operations manager introduced a standard event report sent to the master within hours of any incident, plus a template calculation that linked each line to a noon report or engine log. On the next breakdown, the master's report recorded exact times, drifting position and fuel figures. The commercial team sent owners a short notice and later a calculation with every source attached. Owners questioned one interval of partial working, which was resolved by checking the engine log. The deduction was agreed and entered in the hire statement well before redelivery, and both sides moved on.
What does off-hire mean in a time charter?
Off-hire is a period when the charterer does not pay hire because the vessel is not fully available for service due to a cause listed in the off-hire clause, such as breakdown, deficiency of crew or certain detentions.
Are bunkers deducted during off-hire?
Often yes, if the charter party says bunkers consumed during off-hire are for owners' account. The specific wording matters, so check your clause and calculate using actual consumption records and the agreed bunker prices.
What is the net loss of time test?
Under some clauses, charterers can only deduct the time actually lost to them, not the whole duration of the incident. Whether this applies depends on the wording, so take advice from counsel for disputed cases.
What evidence supports an off-hire claim?
Master's reports, deck and engine logs, noon reports, surveyor or class reports, port agent statements and contemporaneous correspondence. The closer to the event the evidence was created, the more weight it usually carries.
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