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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, 26 February 23
MAWANI AND JEDDAH CHAMBER SIGN AN AGREEMENT TO BUILD INTEGRATED LOGISTICS PARK
Press Release: The Saudi Ports Authority (Mawani) and Jeddah Chamber of Commerce and Industry have today inked an agreement to set up an integrated ...
Saturday, 25 February 23
INDONESIA IS STILL BY FAR THE TOP SUPPLIER OF COAL TO CHINA - BANCHERO COSTA
After a slow start in the first quarter, global coal trade has really picked up pace last year, and is now fully back to pre-Covid levels, said ban ...
Wednesday, 22 February 23
MARKET INSIGHT - INTERMODAL
The short-term outlook of the global soybean market is currently pivoted by a combination of weather patterns that are affecting the harvest progre ...
Saturday, 18 February 23
OIL UNLIKELY TO BREAK ABOVE $100/BBL THIS YEAR, J.P.MORGAN SAYS –- REUTERS
Brent oil prices are unlikely to breach the $100 a barrel level this year, barring any significant geopolitical drivers, with OPEC+ potentially add ...
Saturday, 18 February 23
CHINA'S COAL PRICES FALL TO 1 YR-LOW, CLOUDING DEMAND AND IMPORT OUTLOOK - REUTERS
China’s thermal coal prices hit their lowest levels in a year this week on rising inventories as domestic mine production is recovering faste ...
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- Indo Tambangraya Megah - Indonesia
- White Energy Company Limited
- Pendopo Energi Batubara - Indonesia
- Indogreen Group - Indonesia
- Lanco Infratech Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Neyveli Lignite Corporation Ltd, - India
- Toyota Tsusho Corporation, Japan
- Petron Corporation, Philippines
- Uttam Galva Steels Limited - India
- Coal and Oil Company - UAE
- Energy Development Corp, Philippines
- Vizag Seaport Private Limited - India
- Siam City Cement PLC, Thailand
- Latin American Coal - Colombia
- Independent Power Producers Association of India
- Global Green Power PLC Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Metalloyd Limited - United Kingdom
- Parliament of New Zealand
- Minerals Council of Australia
- Holcim Trading Pte Ltd - Singapore
- Commonwealth Bank - Australia
- Directorate Of Revenue Intelligence - India
- Madhucon Powers Ltd - India
- ICICI Bank Limited - India
- Eastern Energy - Thailand
- Formosa Plastics Group - Taiwan
- The Treasury - Australian Government
- Maheswari Brothers Coal Limited - India
- Rio Tinto Coal - Australia
- Alfred C Toepfer International GmbH - Germany
- Star Paper Mills Limited - India
- GMR Energy Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Medco Energi Mining Internasional
- Videocon Industries ltd - India
- Sakthi Sugars Limited - India
- Port Waratah Coal Services - Australia
- Australian Coal Association
- Ceylon Electricity Board - Sri Lanka
- Chettinad Cement Corporation Ltd - India
- OPG Power Generation Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Carbofer General Trading SA - India
- Orica Australia Pty. Ltd.
- SMC Global Power, Philippines
- Mjunction Services Limited - India
- Edison Trading Spa - Italy
- Cement Manufacturers Association - India
- Electricity Authority, New Zealand
- Banpu Public Company Limited - Thailand
- Marubeni Corporation - India
- Kepco SPC Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Bharathi Cement Corporation - India
- Kumho Petrochemical, South Korea
- Billiton Holdings Pty Ltd - Australia
- Chamber of Mines of South Africa
- Malabar Cements Ltd - India
- Indonesian Coal Mining Association
- Samtan Co., Ltd - South Korea
- Gujarat Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Maharashtra Electricity Regulatory Commission - India
- Kaltim Prima Coal - Indonesia
- Singapore Mercantile Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Makarim & Taira - Indonesia
- Karaikal Port Pvt Ltd - India
- Renaissance Capital - South Africa
- Kideco Jaya Agung - Indonesia
- Ministry of Transport, Egypt
- Global Business Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- SN Aboitiz Power Inc, Philippines
- Sojitz Corporation - Japan
- AsiaOL BioFuels Corp., Philippines
- Wood Mackenzie - Singapore
- Bukit Makmur.PT - Indonesia
- Ambuja Cements Ltd - India
- Bhushan Steel Limited - India
- Price Waterhouse Coopers - Russia
- Cigading International Bulk Terminal - Indonesia
- SMG Consultants - Indonesia
- Borneo Indobara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- San Jose City I Power Corp, Philippines
- Meralco Power Generation, Philippines
- Globalindo Alam Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Africa Commodities Group - South Africa
- The State Trading Corporation of India Ltd
- ASAPP Information Group - India
- Xindia Steels Limited - India
- Planning Commission, India
- LBH Netherlands Bv - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- London Commodity Brokers - England
- Romanian Commodities Exchange
- CIMB Investment Bank - Malaysia
- GAC Shipping (India) Pvt Ltd
- PTC India Limited - India
- TeaM Sual Corporation - Philippines
- Electricity Generating Authority of Thailand
- Merrill Lynch Commodities Europe
- Gujarat Sidhee Cement - India
- Australian Commodity Traders Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Sindya Power Generating Company Private Ltd
- India Bulls Power Limited - India
- Simpson Spence & Young - Indonesia
- Indian Oil Corporation Limited
- Grasim Industreis Ltd - India
- International Coal Ventures Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Baramulti Group, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Posco Energy - South Korea
- Mercator Lines Limited - India
- Riau Bara Harum - Indonesia
- Vedanta Resources Plc - India
- South Luzon Thermal Energy Corporation
- Deloitte Consulting - India
- Kalimantan Lumbung Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Standard Chartered Bank - UAE
- Kapuas Tunggal Persada - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- Mintek Dendrill Indonesia
- Trasteel International SA, Italy
- Bayan Resources Tbk. - Indonesia
- Iligan Light & Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Mercuria Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- MS Steel International - UAE
- Barasentosa Lestari - Indonesia
- Attock Cement Pakistan Limited
- Bhoruka Overseas - Indonesia
- IHS Mccloskey Coal Group - USA
- Bhatia International Limited - India
- Thai Mozambique Logistica
- Central Java Power - Indonesia
- McConnell Dowell - Australia
- Wilmar Investment Holdings
- Interocean Group of Companies - India
- Ind-Barath Power Infra Limited - India
- Manunggal Multi Energi - Indonesia
- New Zealand Coal & Carbon
- Central Electricity Authority - India
- Agrawal Coal Company - India
- Heidelberg Cement - Germany
- Tata Chemicals Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- European Bulk Services B.V. - Netherlands
- Altura Mining Limited, Indonesia
- Coastal Gujarat Power Limited - India
- Goldman Sachs - Singapore
- Eastern Coal Council - USA
- Karbindo Abesyapradhi - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Ministry of Mines - Canada
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Finance - Indonesia
- Straits Asia Resources Limited - Singapore
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Semirara Mining and Power Corporation, Philippines
- Indika Energy - Indonesia
- GVK Power & Infra Limited - India
- Antam Resourcindo - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Tamil Nadu electricity Board
- Timah Investasi Mineral - Indoneisa
- Sical Logistics Limited - India
- Power Finance Corporation Ltd., India
- PNOC Exploration Corporation - Philippines
- Orica Mining Services - Indonesia
- Thiess Contractors Indonesia
- PowerSource Philippines DevCo
- Dalmia Cement Bharat India
- Bangladesh Power Developement Board
- Parry Sugars Refinery, India
- Aditya Birla Group - India
- Sinarmas Energy and Mining - Indonesia
- Anglo American - United Kingdom
- Coalindo Energy - Indonesia
- Siam City Cement - Thailand
- Bukit Baiduri Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Larsen & Toubro Limited - India
- VISA Power Limited - India
- Therma Luzon, Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Intertek Mineral Services - Indonesia
- Semirara Mining Corp, Philippines
- Oldendorff Carriers - Singapore
- Energy Link Ltd, New Zealand
- Georgia Ports Authority, United States
- Jaiprakash Power Ventures ltd
- Economic Council, Georgia
- Bulk Trading Sa - Switzerland
- The University of Queensland
- Indian Energy Exchange, India
- CNBM International Corporation - China
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