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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, 02 March 23
DRY BULK MARKET: THE WAY CHINA GOES, SO GOES THE MARKET - BIMCO
We expect demand growth within the 1.5-2.5% range in 2023, driven by China’s economic recovery. Improvements in consumer sentiment should hel ...
Thursday, 02 March 23
INDIA, CHINA DEMAND BOOST LOW-RANK THERMAL COAL PRICES IN ASIA - RUSSELL, REUTERS
Signs of stronger import demand from India have arrested the decline in price of the thermal coal grades most commonly sought by the world’s ...
Thursday, 02 March 23
INDIA CHEERS THE RETURN OF ‘KING COAL’ AS INDUSTRY SEES BUOYANT FUTURE - REUTERS
India’s coal industry celebrated the return of its major conference after a three-year pandemic hiatus by presenting a bullish view of demand ...
Wednesday, 01 March 23
GEO CONNECT ASIA RETURNS IN MARCH TO ACCELERATE THE REGION’S GEOSPATIAL AND LOCATION INTELLIGENCE CAPABILITIES
Press Release: The third edition of GCA will be held in conjunction with Digital Construction Asia and the inaugural Drones Asia – an event d ...
Wednesday, 01 March 23
THE DECLINE IN THE COAL PRICE SINCE THE BEGINNING OF THE YEAR HAS BEEN SIGNIFICANT - INTERMODAL
Last week, the front-month API2 future rose by 3.5%, but since the beginning of the year the future has fallen by 39% to $136.65/t, while the Newca ...
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- IEA Clean Coal Centre - UK
- Goldman Sachs - Singapore
- GAC Shipping (India) Pvt Ltd
- Ministry of Transport, Egypt
- Bhatia International Limited - India
- Africa Commodities Group - South Africa
- Attock Cement Pakistan Limited
- Banpu Public Company Limited - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- GVK Power & Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Aboitiz Power Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Siam City Cement PLC, Thailand
- Mjunction Services Limited - India
- Indian Oil Corporation Limited
- Minerals Council of Australia
- Straits Asia Resources Limited - Singapore
- Anglo American - United Kingdom
- Power Finance Corporation Ltd., India
- Kalimantan Lumbung Energi - Indonesia
- Oldendorff Carriers - Singapore
- Energy Link Ltd, New Zealand
- TeaM Sual Corporation - Philippines
- Marubeni Corporation - India
- Mercator Lines Limited - India
- Kepco SPC Power Corporation, Philippines
- Posco Energy - South Korea
- Parry Sugars Refinery, India
- Indika Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Barasentosa Lestari - Indonesia
- Romanian Commodities Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Australia Pty. Ltd.
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Lanco Infratech Ltd - India
- Ambuja Cements Ltd - India
- Riau Bara Harum - Indonesia
- Antam Resourcindo - Indonesia
- Kumho Petrochemical, South Korea
- Wood Mackenzie - Singapore
- Essar Steel Hazira Ltd - India
- Renaissance Capital - South Africa
- Meenaskhi Energy Private Limited - India
- ICICI Bank Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Toyota Tsusho Corporation, Japan
- Therma Luzon, Inc, Philippines
- Grasim Industreis Ltd - India
- Agrawal Coal Company - India
- Ministry of Finance - Indonesia
- Indian Energy Exchange, India
- CIMB Investment Bank - Malaysia
- Kapuas Tunggal Persada - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- Sindya Power Generating Company Private Ltd
- Rio Tinto Coal - Australia
- Metalloyd Limited - United Kingdom
- Dalmia Cement Bharat India
- Economic Council, Georgia
- Jaiprakash Power Ventures ltd
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- Carbofer General Trading SA - India
- IHS Mccloskey Coal Group - USA
- Kaltim Prima Coal - Indonesia
- Indogreen Group - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Trasteel International SA, Italy
- Sree Jayajothi Cements Limited - India
- Georgia Ports Authority, United States
- Chamber of Mines of South Africa
- Chettinad Cement Corporation Ltd - India
- Gujarat Sidhee Cement - India
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- Wilmar Investment Holdings
- Larsen & Toubro Limited - India
- Sojitz Corporation - Japan
- Videocon Industries ltd - India
- Global Green Power PLC Corporation, Philippines
- CNBM International Corporation - China
- Independent Power Producers Association of India
- Price Waterhouse Coopers - Russia
- The University of Queensland
- TNB Fuel Sdn Bhd - Malaysia
- Thai Mozambique Logistica
- Eastern Coal Council - USA
- Manunggal Multi Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- LBH Netherlands Bv - Netherlands
- OPG Power Generation Pvt Ltd - India
- Coal and Oil Company - UAE
- SMG Consultants - Indonesia
- Interocean Group of Companies - India
- Australian Coal Association
- South Luzon Thermal Energy Corporation
- Kartika Selabumi Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Latin American Coal - Colombia
- Siam City Cement - Thailand
- Coalindo Energy - Indonesia
- Meralco Power Generation, Philippines
- Samtan Co., Ltd - South Korea
- Star Paper Mills Limited - India
- Holcim Trading Pte Ltd - Singapore
- Commonwealth Bank - Australia
- Tata Chemicals Ltd - India
- Standard Chartered Bank - UAE
- Vedanta Resources Plc - India
- Global Business Power Corporation, Philippines
- Planning Commission, India
- Intertek Mineral Services - Indonesia
- New Zealand Coal & Carbon
- Iligan Light & Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aditya Birla Group - India
- Bhushan Steel Limited - India
- Orica Mining Services - Indonesia
- Makarim & Taira - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Sakthi Sugars Limited - India
- Mintek Dendrill Indonesia
- Global Coal Blending Company Limited - Australia
- The State Trading Corporation of India Ltd
- SMC Global Power, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cigading International Bulk Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bayan Resources Tbk. - Indonesia
- Deloitte Consulting - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Merrill Lynch Commodities Europe
- Petron Corporation, Philippines
- Cement Manufacturers Association - India
- Malabar Cements Ltd - India
- Borneo Indobara - Indonesia
- Bhoruka Overseas - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Central Electricity Authority - India
- Ministry of Mines - Canada
- Singapore Mercantile Exchange
- Electricity Authority, New Zealand
- Madhucon Powers Ltd - India
- Vizag Seaport Private Limited - India
- Savvy Resources Ltd - HongKong
- Asmin Koalindo Tuhup - Indonesia
- GMR Energy Limited - India
- Electricity Generating Authority of Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Krishnapatnam Port Company Ltd. - India
- San Jose City I Power Corp, Philippines
- Bharathi Cement Corporation - India
- Heidelberg Cement - Germany
- Parliament of New Zealand
- Port Waratah Coal Services - Australia
- Sical Logistics Limited - India
- Mercuria Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Uttam Galva Steels Limited - India
- Maheswari Brothers Coal Limited - India
- Coastal Gujarat Power Limited - India
- Xindia Steels Limited - India
- Semirara Mining Corp, Philippines
- Directorate Of Revenue Intelligence - India
- PNOC Exploration Corporation - Philippines
- White Energy Company Limited
- Globalindo Alam Lestari - Indonesia
- London Commodity Brokers - England
- McConnell Dowell - Australia
- Binh Thuan Hamico - Vietnam
- PTC India Limited - India
- Baramulti Group, Indonesia
- Eastern Energy - Thailand
- Timah Investasi Mineral - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Maharashtra Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Altura Mining Limited, Indonesia
- Salva Resources Pvt Ltd - India
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
- Kideco Jaya Agung - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Karbindo Abesyapradhi - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Edison Trading Spa - Italy
- Medco Energi Mining Internasional
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
- Kobexindo Tractors - Indoneisa
- Energy Development Corp, Philippines
- MS Steel International - UAE
- Formosa Plastics Group - Taiwan
- Ind-Barath Power Infra Limited - India
- Thiess Contractors Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Makmur.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Central Java Power - Indonesia
- PowerSource Philippines DevCo
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