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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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Wednesday, 21 June 23
CHINA'S MAY COAL IMPORTS FROM AUSTRALIA RECOVER TO PRE-BAN LEVELS - REUTERS
Australian coal sales to China increased in May, as trade resumed between them even as overall coal demand weakened against an uncertain macroecono ...
Monday, 19 June 23
DROUGHT-DEPLETED HYDROPOWER DRIVES CHINA TO TURN TO COAL - REUTERS
China has leant hard on coal-fired power plants as well as wind and solar generators to make up for a shortfall in hydroelectric generation as a re ...
Monday, 19 June 23
CHINA COAL OUTPUT UP 4.2 PCT IN MAY - XINHUA
China’s raw coal output posted steady growth in May, official data showed.
The country produced 390 million tonnes of raw coal ...
Wednesday, 24 May 23
AMMONIA-FUELLED BULK CARRIERS WITHIN FIVE YEARS - BALTIC EXCHANGE
Within five years, ships powered by clean ammonia could be a feature on the iron ore trade routes between West Australia and East Asia.
A study ...
Tuesday, 23 May 23
CHINA'S APRIL COAL OUTPUT LEAPS 11% ON YEAR, BUT DEMAND DOWNTURN LOOMS - REUTERS
China’s daily coal output in April jumped 11% from the same month a year earlier, boosted by Beijing’s order to increase supply to ensu ...
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- Thiess Contractors Indonesia
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- Anglo American - United Kingdom
- Petron Corporation, Philippines
- Georgia Ports Authority, United States
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- Indian Oil Corporation Limited
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- India Bulls Power Limited - India
- White Energy Company Limited
- Planning Commission, India
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- Ministry of Transport, Egypt
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- Simpson Spence & Young - Indonesia
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- Sojitz Corporation - Japan
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- Global Coal Blending Company Limited - Australia
- Indika Energy - Indonesia
- Energy Development Corp, Philippines
- Energy Link Ltd, New Zealand
- Banpu Public Company Limited - Thailand
- Price Waterhouse Coopers - Russia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Goldman Sachs - Singapore
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- Siam City Cement - Thailand
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- Larsen & Toubro Limited - India
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- Economic Council, Georgia
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- Bulk Trading Sa - Switzerland
- Tamil Nadu electricity Board
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- Bhushan Steel Limited - India
- Independent Power Producers Association of India
- Bayan Resources Tbk. - Indonesia
- Xindia Steels Limited - India
- Power Finance Corporation Ltd., India
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- Indo Tambangraya Megah - Indonesia
- Kaltim Prima Coal - Indonesia
- Minerals Council of Australia
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- Timah Investasi Mineral - Indoneisa
- Latin American Coal - Colombia
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- Therma Luzon, Inc, Philippines
- Parry Sugars Refinery, India
- Riau Bara Harum - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- European Bulk Services B.V. - Netherlands
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- Orica Australia Pty. Ltd.
- Toyota Tsusho Corporation, Japan
- Siam City Cement PLC, Thailand
- Aboitiz Power Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Altura Mining Limited, Indonesia
- ICICI Bank Limited - India
- Ambuja Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
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- Bangladesh Power Developement Board
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- Leighton Contractors Pty Ltd - Australia
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- Australian Commodity Traders Exchange
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- Straits Asia Resources Limited - Singapore
- Edison Trading Spa - Italy
- Meralco Power Generation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Kartika Selabumi Mining - Indonesia
- Carbofer General Trading SA - India
- Kumho Petrochemical, South Korea
- McConnell Dowell - Australia
- Bharathi Cement Corporation - India
- OPG Power Generation Pvt Ltd - India
- Posco Energy - South Korea
- Mjunction Services Limited - India
- Kepco SPC Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Barasentosa Lestari - Indonesia
- Bhatia International Limited - India
- Intertek Mineral Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Indian Energy Exchange, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The Treasury - Australian Government
- Wilmar Investment Holdings
- SMC Global Power, Philippines
- Indogreen Group - Indonesia
- Iligan Light & Power Inc, Philippines
- Heidelberg Cement - Germany
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- Maharashtra Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Chamber of Mines of South Africa
- Antam Resourcindo - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sindya Power Generating Company Private Ltd
- Africa Commodities Group - South Africa
- Globalindo Alam Lestari - Indonesia
- Coal and Oil Company - UAE
- VISA Power Limited - India
- Uttam Galva Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Renaissance Capital - South Africa
- Central Java Power - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- GVK Power & Infra Limited - India
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- The State Trading Corporation of India Ltd
- Attock Cement Pakistan Limited
- South Luzon Thermal Energy Corporation
- Alfred C Toepfer International GmbH - Germany
- Electricity Generating Authority of Thailand
- Vedanta Resources Plc - India
- Sical Logistics Limited - India
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- Videocon Industries ltd - India
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- Merrill Lynch Commodities Europe
- Indonesian Coal Mining Association
- Romanian Commodities Exchange
- PTC India Limited - India
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- Bukit Makmur.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CNBM International Corporation - China
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- New Zealand Coal & Carbon
- Kohat Cement Company Ltd. - Pakistan
- The University of Queensland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parliament of New Zealand
- Global Business Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
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- LBH Netherlands Bv - Netherlands
- Medco Energi Mining Internasional
- Samtan Co., Ltd - South Korea
- Baramulti Group, Indonesia
- Eastern Energy - Thailand
- Kobexindo Tractors - Indoneisa
- Ind-Barath Power Infra Limited - India
- Australian Coal Association
- GMR Energy Limited - India
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