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Thursday, 10 December 15
LIENING CARGO - WHICH LIEN CLAUSE APPLIES TO THE BILL OF LADING? : WIKBORG REIN | HELLENIC SHIPPING NEWS
 KNOWLEDGE TO ELEVATE
In a dry bulk market where a charterer is not paying freight or hire, its counterparty is often left to consider whether it can lien the cargo on board the chartered vessel to obtain payment voluntarily, or by court sale if necessary.
This often involves looking at a Congenbill bill of lading and establishing whether a charterparty lien clause applies via Clause (1) on the reverse, which incorporates all “terms and conditions, liberties and exceptions of the Charterparty, dated as overleaf”. Problems arise when:
- there is no date overleaf and there are a number of charterparties in a chain, any of which could apply; or
- there are a number of charterparties in the chain with the same date as overleaf.
The question then becomes which charterparty lien clause to apply and to what debt to apply it.
Charterparty liens under English law
As a matter of English law, the absence of a date overleaf on the face of the Congenbill does not prevent a charterparty from being incorporated. Where there is only one charter, direct with the head owner, there is no doubt as to its application. However, the situation becomes complicated if there is:
- a head time charter;
- a sub-time charter;
- a head voyage charter; and
- a sub-voyage charter.
Which of these four charters is to be incorporated? An owner will normally assert that the head charter should be incorporated (ie, because it has signed it). Likewise, a receiver under the bill will usually argue for the sub-voyage charter – again, because this was the contract that it knew of when arranging the shipment. However, English law points in a different direction.
The starting point is that under a time charter, the time charterer has power over the issue of the bill of lading, provided that this reflects the mate’s receipts. The time charterer also has the authority to give orders to the master and direct the vessel in its commercial business. As such, the charterparty of greatest influence on the voyage is likely to have a time charterer as one of the parties.
However, insofar as the Congenbill concerns only a single voyage, the charterparty likely to be most relevant will be a voyage charter. As such, English law hesitantly arrives at the position that the applicable charterparty is that in which a time charterer is acting as disponent owner, with the head voyage charterer as its counterparty. In other words, in the above scenario, the terms of the head voyage charter between the sub-time charterer and the head voyage charterer will be incorporated into the Congenbill.
This raises a further question: if the bill of lading is an owner’s bill made between the head owner and receiver, how can a lien in the head voyage charter be applied to that bill when it refers to freight due to the sub-time charterer, which is not a party to the bill? Does the fact that the freight subject to the lien will not be paid to the head owner bar exercise of the lien? English law suggests not. Provided that the freight is still due to be paid by the head voyage charterer to the sub-time charterer, the sub-time charterer can direct the head time charterer to direct the head owner to exercise the lien on its behalf (against its indemnity for the costs, expenses and potential liabilities involved). The head owner acts as a form of trustee in such a lien and accounts to the time charterer for any payments received as a consequence of the lien.
Persuading the head owner to take such steps can be difficult, particularly if it has been paid hire in full and has no personal interest in collecting the freight for the time charterer.
However, if the head owner does not exercise a formal lien, it might face an order from the time charterer to stop the vessel in an attempt to obtain payment. The head owner might argue that this puts it in breach of the Congenbill as against the receiver, to which the time charterer might reply that it has the right to give orders (including the right to order the head owner on how to exercise rights under the bill of lading), so if the head owner refuses, it is in breach. The respective rights and wrongs of such a showdown would be complex; but faced with this situation, a head owner may prefer to exercise the lien itself as trustee to protect itself from claims under the bill of lading from the receiver – particularly if it obtains an indemnity from the time charterer in the process.
Comment
As in all charterparty matters, generalisations are interesting, but the individual circumstances of each dispute must be carefully checked to see whether they apply. Bearing that in mind, when it comes to liening cargo under a Congenbill, it seems that English law will look first to the head voyage charterparty as the source of relevant terms to be incorporated into the Congenbill (unless another charter is expressly identified), and this is likely to lead to a less-than-obvious outcome.
Source: Wikborg Rein | Hellenic Shipping News
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Thursday, 09 November 23
GREEK AND CHINESE COMPANIES OWN 34% OF THE GLOBAL FLEET’S CARGO CAPACITY - BIMCO
“The global fleet of cargo carrying ships consists of around 61,000 ships with a deadweight capacity of about 2,200 million tonnes. The ships ...
Monday, 23 October 23
CHINA SEPT COAL OUTPUT HITS SIX-MONTH HIGH ON RISING POWER DEMAND - REUTERS
China’s September coal output rose 0.4% from August to the highest level since March, official data showed on Wednesday, on rising power dema ...
Monday, 23 October 23
INDIA COAL INVENTORIES DROP AT FASTEST PACE IN TWO YEARS, BOOSTING IMPORTS - REUTERS
Coal inventories at Indian power plants in the first half of October fell at their fastest rate in two years, an analysis of government data showed ...
Tuesday, 19 September 23
LNG SHIPPING STOCKS: THE ASIAN GROWTH UP-INDICES
Last week, the UP World LNG Shipping Index (UPI) gained 3.81 points or 2.51%, closing at 155.85 points. This index tracks the performance of LNG sh ...
Sunday, 10 September 23
GOLDMAN SACHS PREDICTS OIL PRICE TO HIT $100 ON OPEC CUTS - YAHOO FINANCE
Oil supply cuts by Saudi Arabia and Russia could lead to Brent crude jumping as high as $107 a barrel in 2024, Goldman Sachs Commodities Research h ...
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- Maheswari Brothers Coal Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Renaissance Capital - South Africa
- Global Business Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- OPG Power Generation Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- Kaltim Prima Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- Ministry of Mines - Canada
- India Bulls Power Limited - India
- Sarangani Energy Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Intertek Mineral Services - Indonesia
- Agrawal Coal Company - India
- Cigading International Bulk Terminal - Indonesia
- McConnell Dowell - Australia
- Essar Steel Hazira Ltd - India
- Electricity Generating Authority of Thailand
- IHS Mccloskey Coal Group - USA
- Anglo American - United Kingdom
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- Formosa Plastics Group - Taiwan
- Ambuja Cements Ltd - India
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- Coalindo Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- SN Aboitiz Power Inc, Philippines
- Trasteel International SA, Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement PLC, Thailand
- Medco Energi Mining Internasional
- LBH Netherlands Bv - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- ASAPP Information Group - India
- Coastal Gujarat Power Limited - India
- Indogreen Group - Indonesia
- Therma Luzon, Inc, Philippines
- Wilmar Investment Holdings
- Coal and Oil Company - UAE
- Vizag Seaport Private Limited - India
- Metalloyd Limited - United Kingdom
- Bhushan Steel Limited - India
- San Jose City I Power Corp, Philippines
- Minerals Council of Australia
- SMC Global Power, Philippines
- PowerSource Philippines DevCo
- Sree Jayajothi Cements Limited - India
- Aditya Birla Group - India
- Rashtriya Ispat Nigam Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Samtan Co., Ltd - South Korea
- Global Green Power PLC Corporation, Philippines
- Antam Resourcindo - Indonesia
- Orica Mining Services - Indonesia
- Mjunction Services Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Parliament of New Zealand
- Deloitte Consulting - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Timah Investasi Mineral - Indoneisa
- Indonesian Coal Mining Association
- PNOC Exploration Corporation - Philippines
- VISA Power Limited - India
- Thiess Contractors Indonesia
- Independent Power Producers Association of India
- Bhoruka Overseas - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Indo Tambangraya Megah - Indonesia
- London Commodity Brokers - England
- Bukit Asam (Persero) Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Malabar Cements Ltd - India
- Planning Commission, India
- Vedanta Resources Plc - India
- Power Finance Corporation Ltd., India
- Orica Australia Pty. Ltd.
- Interocean Group of Companies - India
- Commonwealth Bank - Australia
- Tata Chemicals Ltd - India
- Baramulti Group, Indonesia
- The University of Queensland
- Mercator Lines Limited - India
- Krishnapatnam Port Company Ltd. - India
- Pendopo Energi Batubara - Indonesia
- Romanian Commodities Exchange
- Neyveli Lignite Corporation Ltd, - India
- Rio Tinto Coal - Australia
- Barasentosa Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Ind-Barath Power Infra Limited - India
- GMR Energy Limited - India
- SMG Consultants - Indonesia
- Aboitiz Power Corporation - Philippines
- Merrill Lynch Commodities Europe
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PTC India Limited - India
- Central Electricity Authority - India
- Eastern Energy - Thailand
- Chettinad Cement Corporation Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Videocon Industries ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CNBM International Corporation - China
- Standard Chartered Bank - UAE
- Port Waratah Coal Services - Australia
- Global Coal Blending Company Limited - Australia
- Parry Sugars Refinery, India
- Sical Logistics Limited - India
- Indian Oil Corporation Limited
- Economic Council, Georgia
- Meralco Power Generation, Philippines
- Singapore Mercantile Exchange
- Bangladesh Power Developement Board
- The Treasury - Australian Government
- Billiton Holdings Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Attock Cement Pakistan Limited
- Lanco Infratech Ltd - India
- Sojitz Corporation - Japan
- Sinarmas Energy and Mining - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Sidhee Cement - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Price Waterhouse Coopers - Russia
- Bukit Makmur.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Simpson Spence & Young - Indonesia
- Kobexindo Tractors - Indoneisa
- Borneo Indobara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kumho Petrochemical, South Korea
- Central Java Power - Indonesia
- Makarim & Taira - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bharathi Cement Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Meenaskhi Energy Private Limited - India
- Madhucon Powers Ltd - India
- Straits Asia Resources Limited - Singapore
- Altura Mining Limited, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- Cement Manufacturers Association - India
- Siam City Cement - Thailand
- Indian Energy Exchange, India
- Petron Corporation, Philippines
- New Zealand Coal & Carbon
- Sindya Power Generating Company Private Ltd
- Wood Mackenzie - Singapore
- South Luzon Thermal Energy Corporation
- GVK Power & Infra Limited - India
- Thai Mozambique Logistica
- Salva Resources Pvt Ltd - India
- Grasim Industreis Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Mercuria Energy - Indonesia
- Indika Energy - Indonesia
- Mintek Dendrill Indonesia
- Toyota Tsusho Corporation, Japan
- Tamil Nadu electricity Board
- Ceylon Electricity Board - Sri Lanka
- Marubeni Corporation - India
- Ministry of Transport, Egypt
- Bukit Baiduri Energy - Indonesia
- Sakthi Sugars Limited - India
- The State Trading Corporation of India Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- IEA Clean Coal Centre - UK
- Goldman Sachs - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- ICICI Bank Limited - India
- Kartika Selabumi Mining - Indonesia
- Chamber of Mines of South Africa
- Carbofer General Trading SA - India
- Bulk Trading Sa - Switzerland
- Banpu Public Company Limited - Thailand
- Star Paper Mills Limited - India
- Bayan Resources Tbk. - Indonesia
- Jindal Steel & Power Ltd - India
- Uttam Galva Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Kideco Jaya Agung - Indonesia
- Energy Development Corp, Philippines
- Latin American Coal - Colombia
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- Bhatia International Limited - India
- Oldendorff Carriers - Singapore
- Gujarat Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Dalmia Cement Bharat India
- TeaM Sual Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- MS Steel International - UAE
- Heidelberg Cement - Germany
- Bahari Cakrawala Sebuku - Indonesia
- Directorate Of Revenue Intelligence - India
- Australian Commodity Traders Exchange
- Edison Trading Spa - Italy
- White Energy Company Limited
- CIMB Investment Bank - Malaysia
- International Coal Ventures Pvt Ltd - India
- Georgia Ports Authority, United States
- Australian Coal Association
- Xindia Steels Limited - India
- European Bulk Services B.V. - Netherlands
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