Off-hire and delay under the MYBA Form

Chartering, Legal, P and I Clubs — By on March 22, 2016 at 6:05 PM
Nathaniel Harding

Nathaniel Harding

The MYBA Form is a common form of yacht charter and in most cases, its use is approved by the Club. For parties accustomed to traditional off-hire provisions in commercial time charters, the provisions under the MYBA Form may come as a surprise. These provisions are found in Clause 12 Breakdown or Disablement.

Clause 12 Breakdown or Disablement 
                                                                  Clause 12 Breakdown or Disablement

Disablement

If the disablement occurs after the date of delivery and is as a result of machinery breakdown, grounding, collision or other cause that prevents reasonable use of the vessel by the charterer, then the vessel may be considered off-hire. The key difference here is that it is not simply the occurrence of the off-hire event that renders the vessel off-hire,  but that the event must deprive the charterer of thereasonable use of the vessel.

What does ‘reasonable use’ mean in this clause?

Our search did not reveal any English yacht charter cases on this point, but the test is one of fact and any decision will turn on a case by case basis. The intended purpose of the charter, or use of the vessel during the charter, is likely to be crucial here.

For example, if they chartered the vessel with the specific intention to travel from one port to another, or for an island hopping trip, then a breakdown or disablement that keeps the yacht alongside would possibly mean the charterer is deprived of reasonable (intended) use. If, however, they simply chartered the vessel to entertain guests on board, or to enjoy the vessels luxurious facilities, there is an argument to say that they still had reasonable use of the vessel whilst it was disabled.

There is no definitive list but when considering how much use of the vessel a charterer had, the following may be relevant:

  • To what extent did the disablement affect the accommodation or facilities on board;
  • What did the charter guests do whilst the vessel was repaired (cooked meals by the chef, relaxed on board, used the vessels facilities, watersports, sightseeing nearby using vessel tenders etc);

Paragraphs 2 and 3 deal with off-hire of more than 48 hours. In this instance, the charterer may terminate the charter by notice in writing to the owner (or in writing to the captain if unable to reach the owner). The owner would then be under a duty to refund the charterer for any remaining charter fee.

Alternatively, the charterer may waive its right to terminate and may remain on board for the duration of the charter period (N.B. the owner must agree). In doing so, the charterer loses any right to claim against the owner for the time lost due to the disablement/off-hire period.

The need for the charterers to give prompt notice, and that their failure to do so results in a loss of entitlement to off-hire remedies, makes this an owner-friendly clause. Whilst there are similar provisions in other well known yacht charters, it is still considered good practice to make the charterer aware of their rights under this clause.

Costs of returning to the redelivery report?

Where the charterer exercises their right to terminate the charter following a breakdown or disablement, the owner is obliged to cover the reasonable costs of returning the charterer and their guests to the place of redelivery specified in the charter.

We hope that this article is useful in clarifying some of the provisions in the MYBA Form.

If you have any further questions in respect of this article, please do not hesitate to contact your normal LADC contact at the Club or visit our LADC webpage.

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