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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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Tuesday, 11 April 23
OIL RISES ON CHINA STIMULUS EXPECTATIONS, WEAKER DOLLAR - REUTERS
Oil prices rose on Tuesday on expectations of potential economic stimulus by China, healthy demand in the rest of Asia and a drop in U.S. crude sto ...
Sunday, 09 April 23
CHINA’S BUSINESS INCOME REBOUND POINTS TO IMPROVING ECONOMY: OFFICIAL - XINHUA
Chinese businesses have posted a strong rebound in sales revenue since the beginning of this year in the latest signal of an improving economy.
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Sunday, 09 April 23
COAL INDIA TO BOOST SUPPLIES TO INDUSTRIES AS UTILITIES’ INVENTORIES RISE - REUTERS
Coal India Ltd will increase supplies to industries, the world’s largest coal miner said on Wednesday as fuel inventories at utilities run by ...
Thursday, 06 April 23
MARKET INSIGHT - INTERMODAL
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This year, LNG supply will likely exceed demand, so prices will need to decline to levels that will encourag ...
Sunday, 26 March 23
EUROPE’S RUSH TO LNG COULD TURN INTO 'WORLD’S MOST EXPENSIVE AND UNNECESSARY INSURANCE POLICY'- CNBC
Europe’s rapid buildout of liquefied natural gas infrastructure is on track to far exceed demand by the end of the decade, according to new r ...
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- PetroVietnam Power Coal Import and Supply Company
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- Vizag Seaport Private Limited - India
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- Edison Trading Spa - Italy
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- Holcim Trading Pte Ltd - Singapore
- Ministry of Mines - Canada
- Maheswari Brothers Coal Limited - India
- Lanco Infratech Ltd - India
- Chamber of Mines of South Africa
- Directorate Of Revenue Intelligence - India
- Aditya Birla Group - India
- Samtan Co., Ltd - South Korea
- The University of Queensland
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- Energy Development Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
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- Global Coal Blending Company Limited - Australia
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- Indonesian Coal Mining Association
- Bharathi Cement Corporation - India
- The Treasury - Australian Government
- OPG Power Generation Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Bulk Trading Sa - Switzerland
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- The State Trading Corporation of India Ltd
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- Wood Mackenzie - Singapore
- LBH Netherlands Bv - Netherlands
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- Kartika Selabumi Mining - Indonesia
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- Cigading International Bulk Terminal - Indonesia
- Heidelberg Cement - Germany
- Orica Mining Services - Indonesia
- CNBM International Corporation - China
- Altura Mining Limited, Indonesia
- Indian Energy Exchange, India
- PowerSource Philippines DevCo
- Malabar Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Mercuria Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Renaissance Capital - South Africa
- Kepco SPC Power Corporation, Philippines
- Electricity Authority, New Zealand
- Medco Energi Mining Internasional
- Economic Council, Georgia
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- Borneo Indobara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- London Commodity Brokers - England
- Mintek Dendrill Indonesia
- San Jose City I Power Corp, Philippines
- Sarangani Energy Corporation, Philippines
- White Energy Company Limited
- Videocon Industries ltd - India
- Pendopo Energi Batubara - Indonesia
- VISA Power Limited - India
- Larsen & Toubro Limited - India
- Siam City Cement PLC, Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMG Consultants - Indonesia
- Interocean Group of Companies - India
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- Aboitiz Power Corporation - Philippines
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- Planning Commission, India
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- PTC India Limited - India
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- International Coal Ventures Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- GAC Shipping (India) Pvt Ltd
- IHS Mccloskey Coal Group - USA
- Antam Resourcindo - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sical Logistics Limited - India
- IEA Clean Coal Centre - UK
- GMR Energy Limited - India
- Bhushan Steel Limited - India
- Kobexindo Tractors - Indoneisa
- Thiess Contractors Indonesia
- Riau Bara Harum - Indonesia
- Ind-Barath Power Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Mjunction Services Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Commonwealth Bank - Australia
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- Madhucon Powers Ltd - India
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- Kapuas Tunggal Persada - Indonesia
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- Karbindo Abesyapradhi - Indoneisa
- Binh Thuan Hamico - Vietnam
- Trasteel International SA, Italy
- Banpu Public Company Limited - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Parliament of New Zealand
- Sree Jayajothi Cements Limited - India
- Miang Besar Coal Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Goldman Sachs - Singapore
- Bukit Baiduri Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Bayan Resources Tbk. - Indonesia
- Thai Mozambique Logistica
- South Luzon Thermal Energy Corporation
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- ICICI Bank Limited - India
- Essar Steel Hazira Ltd - India
- Mercator Lines Limited - India
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- Savvy Resources Ltd - HongKong
- Minerals Council of Australia
- Metalloyd Limited - United Kingdom
- Wilmar Investment Holdings
- Central Java Power - Indonesia
- Port Waratah Coal Services - Australia
- Baramulti Group, Indonesia
- Merrill Lynch Commodities Europe
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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- Africa Commodities Group - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
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- Bangladesh Power Developement Board
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- Pipit Mutiara Jaya. PT, Indonesia
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- Eastern Coal Council - USA
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- Coalindo Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Jorong Barutama Greston.PT - Indonesia
- Georgia Ports Authority, United States
- Australian Commodity Traders Exchange
- Makarim & Taira - Indonesia
- Ministry of Transport, Egypt
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhatia International Limited - India
- Petron Corporation, Philippines
- Indian Oil Corporation Limited
- CIMB Investment Bank - Malaysia
- Sojitz Corporation - Japan
- Rio Tinto Coal - Australia
- Dalmia Cement Bharat India
- Straits Asia Resources Limited - Singapore
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- Meralco Power Generation, Philippines
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- Singapore Mercantile Exchange
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