Can Underperformance Claims Override An Express Anti-Deduction Clause?

A London arbitration confirms that charterers cannot withhold hire for alleged underperformance where the charterparty prohibits deductions.

A recent London arbitration serves as a useful reminder that, where parties have agreed an express anti-deduction clause, Charterers may be prevented from withholding hire for alleged vessel underperformance, even where they believe they have a legitimate claim.

The London Arbitration 10/26 concerned a vessel chartered on an amended NYPE form for a single time charter trip carrying a cargo of logs. The dispute arose after Charterers withheld part of the hire on the basis of an alleged underperformance claim, despite an express clause in the charterparty prohibiting deductions for vessel underperformance.