June, 2020 - COVID-19 impacts hire obligations

  • Date: 09/06/2020
June, 2020 - COVID-19 impacts hire obligations

Following the advent of COVID-19, many ports have imposed quarantine restrictions on ships arriving from affected areas or with possible infection on-board. There have also been associated delays due to the closure or restriction of operations in certain ports or unavailability of cargo. Against this backdrop, we have seen various disputes as to whether hire should be payable for the duration of such delays. Can a charterer legitimately refuse to pay hire during periods of delay due to the virus?

As a basic principle, hire will remain payable unless a charterer can bring itself within the meaning of an off-hire clause. In particular, although charterparties will almost invariably contain general exceptions clauses as well, such as Clause 16 of the NYPE form or Clause 27 of the Shelltime 4 form, these cannot serve to excuse a charterer from its obligation to pay hire.

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