Voyage charters

Unlike time charters, voyage charters do not contain off-hire provisions. Under a voyage charter, the freight is payable as a lump sum per voyage.  A claim for freight usually depends on the performance of the voyage. The main rule set out in § 344 of the Maritime Act is that freight is collectible only if the cargo arrives at the destination.   However, it is not unusual to have contractual stipulations requiring the freight to be prepaid, whether or not the ship and/or cargo is lost. In such a case, the assured will not have suffered any loss of income if the vessel is ready for resuming service within the estimated time for the voyage. Clause 3 No. 3, second sentence of the 1972 and 1993 conditions contained an express provision to the effect that even if such prepaid freight would give him compensation for the non-performed part of the voyage, this should not reduce his right to compensation under the loss of hire insurance. The 1996 Commentary to Cl. 16-4 stated that this provision was no longer necessary and hence it was not included in the Plan. The intention under the 1996 Plan was clearly that no such deduction should be made.

If the vessel resumes the voyage under the charter (in ballast or loaded) after repair of damage to the vessel, the assured is entitled to compensation for the loss of time corresponding to the time with which the voyage has been prolonged due to the deviation to the repair facility, surveys, collecting of and considering tenders, slow steaming, if any, until the vessel is in a position at least as favourable to the assured, as the position at the time of the casualty.

If a casualty causes cancellation of the charter, then the calculation of the loss of time becomes more complicated. Although the freight is paid for the transportation of the goods from the loading port to the discharging port, it also covers the owner's ballast voyage to the loading port, as well as the waiting and loading time spent there. A casualty during the loaded voyage may thus leave the assured with a claim for distance freight only, sometimes less. To the extent the vessel is unable to complete the voyage, one may argue that the vessel has been unserviceable throughout the whole period, including time spent during the ballast voyage. However, as described above under 5.1.2 in respect of Cl. 16-3, second sentence, any loss of time arising before the casualty (any event described in Cl. 16-1) shall not be taken into account. In other words, the freight at risk is not covered on a per voyage basis under a loss of hire insurance. Any time lost after the repairs will be covered as per Cl. 16-13,  see below under 7.4.2