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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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Sunday, 16 April 23
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- Port Waratah Coal Services - Australia
- Star Paper Mills Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Agrawal Coal Company - India
- Planning Commission, India
- Leighton Contractors Pty Ltd - Australia
- MS Steel International - UAE
- Semirara Mining and Power Corporation, Philippines
- CNBM International Corporation - China
- Global Coal Blending Company Limited - Australia
- San Jose City I Power Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Posco Energy - South Korea
- ICICI Bank Limited - India
- Indian Energy Exchange, India
- European Bulk Services B.V. - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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- Indo Tambangraya Megah - Indonesia
- Global Green Power PLC Corporation, Philippines
- Mercuria Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Meralco Power Generation, Philippines
- Altura Mining Limited, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Globalindo Alam Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- Bhushan Steel Limited - India
- PowerSource Philippines DevCo
- Simpson Spence & Young - Indonesia
- Metalloyd Limited - United Kingdom
- Kumho Petrochemical, South Korea
- Bulk Trading Sa - Switzerland
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- International Coal Ventures Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Lanco Infratech Ltd - India
- Edison Trading Spa - Italy
- New Zealand Coal & Carbon
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- Indogreen Group - Indonesia
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- Ambuja Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- CIMB Investment Bank - Malaysia
- McConnell Dowell - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Billiton Holdings Pty Ltd - Australia
- Dalmia Cement Bharat India
- Antam Resourcindo - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Maheswari Brothers Coal Limited - India
- Malabar Cements Ltd - India
- Banpu Public Company Limited - Thailand
- Energy Link Ltd, New Zealand
- Larsen & Toubro Limited - India
- Riau Bara Harum - Indonesia
- Romanian Commodities Exchange
- Vizag Seaport Private Limited - India
- Rio Tinto Coal - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Bhoruka Overseas - Indonesia
- Ministry of Transport, Egypt
- Aditya Birla Group - India
- Power Finance Corporation Ltd., India
- Kepco SPC Power Corporation, Philippines
- Central Java Power - Indonesia
- The University of Queensland
- Interocean Group of Companies - India
- Singapore Mercantile Exchange
- Kalimantan Lumbung Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Pendopo Energi Batubara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Sarangani Energy Corporation, Philippines
- Cement Manufacturers Association - India
- Timah Investasi Mineral - Indoneisa
- Renaissance Capital - South Africa
- Jindal Steel & Power Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Tamil Nadu electricity Board
- Tata Chemicals Ltd - India
- Siam City Cement - Thailand
- Sree Jayajothi Cements Limited - India
- India Bulls Power Limited - India
- Economic Council, Georgia
- Karbindo Abesyapradhi - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- VISA Power Limited - India
- SMC Global Power, Philippines
- Indonesian Coal Mining Association
- Vedanta Resources Plc - India
- Bhatia International Limited - India
- Minerals Council of Australia
- Karaikal Port Pvt Ltd - India
- Sojitz Corporation - Japan
- SN Aboitiz Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Marubeni Corporation - India
- IHS Mccloskey Coal Group - USA
- Vijayanagar Sugar Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Commonwealth Bank - Australia
- Therma Luzon, Inc, Philippines
- Eastern Coal Council - USA
- Maharashtra Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Krishnapatnam Port Company Ltd. - India
- Heidelberg Cement - Germany
- Kaltim Prima Coal - Indonesia
- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- Ceylon Electricity Board - Sri Lanka
- Samtan Co., Ltd - South Korea
- Chettinad Cement Corporation Ltd - India
- Bukit Makmur.PT - Indonesia
- TeaM Sual Corporation - Philippines
- Orica Australia Pty. Ltd.
- Borneo Indobara - Indonesia
- Global Business Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Petron Corporation, Philippines
- Thiess Contractors Indonesia
- Kobexindo Tractors - Indoneisa
- Ministry of Mines - Canada
- Price Waterhouse Coopers - Russia
- Energy Development Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Thai Mozambique Logistica
- GVK Power & Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Coalindo Energy - Indonesia
- Grasim Industreis Ltd - India
- Aboitiz Power Corporation - Philippines
- Oldendorff Carriers - Singapore
- Barasentosa Lestari - Indonesia
- Mercator Lines Limited - India
- Bangladesh Power Developement Board
- Merrill Lynch Commodities Europe
- Semirara Mining Corp, Philippines
- Sical Logistics Limited - India
- Binh Thuan Hamico - Vietnam
- Electricity Authority, New Zealand
- Australian Coal Association
- Rashtriya Ispat Nigam Limited - India
- Mjunction Services Limited - India
- Latin American Coal - Colombia
- Goldman Sachs - Singapore
- Australian Commodity Traders Exchange
- Central Electricity Authority - India
- Coal and Oil Company - UAE
- Siam City Cement PLC, Thailand
- South Luzon Thermal Energy Corporation
- ASAPP Information Group - India
- Uttam Galva Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Mining Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Kartika Selabumi Mining - Indonesia
- Wood Mackenzie - Singapore
- SMG Consultants - Indonesia
- Chamber of Mines of South Africa
- Formosa Plastics Group - Taiwan
- Madhucon Powers Ltd - India
- GMR Energy Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parry Sugars Refinery, India
- Iligan Light & Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Georgia Ports Authority, United States
- White Energy Company Limited
- Miang Besar Coal Terminal - Indonesia
- The State Trading Corporation of India Ltd
- GN Power Mariveles Coal Plant, Philippines
- Mintek Dendrill Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Essar Steel Hazira Ltd - India
- Standard Chartered Bank - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
- Sindya Power Generating Company Private Ltd
- Xindia Steels Limited - India
- London Commodity Brokers - England
- Trasteel International SA, Italy
- PTC India Limited - India
- Deloitte Consulting - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Toyota Tsusho Corporation, Japan
- Intertek Mineral Services - Indonesia
- Independent Power Producers Association of India
- Eastern Energy - Thailand
- Videocon Industries ltd - India
- IEA Clean Coal Centre - UK
- Gujarat Sidhee Cement - India
- Gujarat Mineral Development Corp Ltd - India
- The Treasury - Australian Government
- Bharathi Cement Corporation - India
- Bukit Baiduri Energy - Indonesia
- Wilmar Investment Holdings
- Baramulti Group, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Ind-Barath Power Infra Limited - India
- Ministry of Finance - Indonesia
- Anglo American - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- Africa Commodities Group - South Africa
- Medco Energi Mining Internasional
- Parliament of New Zealand
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