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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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Saturday, 18 February 23
PAKISTAN PLANS TO QUADRUPLE DOMESTIC COAL-FIRED POWER, MOVE AWAY FROM GAS - REUTERS
Pakistan plans to quadruple its domestic coal-fired capacity to reduce power generation costs and will not build new gas-fired plants in the coming ...
Saturday, 18 February 23
2023 MARINE FUEL MARKET PREDICTIONS - JOHN BERGMAN, AURAMARINE
The drive for decarbonisation we witnessed in 2022 has continued into 2023, demonstrating the shipping’s industry positive strides in the fas ...
Saturday, 28 January 23
COAL GROWTH BLIP NOT TO BE REPEATED - BALTIC EXCHANGE
As 2022 drew to a close, global coal demand looked set to end the year just 1.2% up on the previous year. But that small increase was enough to pus ...
Thursday, 26 January 23
CHINA'S COAL OUTPUT INCREASES IN DECEMBER 2022 - XINHUA
China’s raw coal output posted stable expansion in December 2022, official data showed.
The country produced 400 million tonne ...
Thursday, 26 January 23
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The premium of high-grade thermal coal over coking coal in Asia is shrinking as China’s re-opening and ending of a ban on imports from Austra ...
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- Independent Power Producers Association of India
- Energy Link Ltd, New Zealand
- Makarim & Taira - Indonesia
- Manunggal Multi Energi - Indonesia
- Australian Coal Association
- London Commodity Brokers - England
- Dalmia Cement Bharat India
- Baramulti Group, Indonesia
- Formosa Plastics Group - Taiwan
- Star Paper Mills Limited - India
- Vizag Seaport Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Transport, Egypt
- Kaltim Prima Coal - Indonesia
- MS Steel International - UAE
- Wilmar Investment Holdings
- Economic Council, Georgia
- Vijayanagar Sugar Pvt Ltd - India
- ICICI Bank Limited - India
- Uttam Galva Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Bukit Baiduri Energy - Indonesia
- GMR Energy Limited - India
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- Holcim Trading Pte Ltd - Singapore
- Cigading International Bulk Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Green Power PLC Corporation, Philippines
- Africa Commodities Group - South Africa
- Posco Energy - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Bhushan Steel Limited - India
- Indogreen Group - Indonesia
- Marubeni Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Mercator Lines Limited - India
- Ministry of Finance - Indonesia
- Therma Luzon, Inc, Philippines
- Kumho Petrochemical, South Korea
- Commonwealth Bank - Australia
- PetroVietnam Power Coal Import and Supply Company
- Sical Logistics Limited - India
- Savvy Resources Ltd - HongKong
- Gujarat Sidhee Cement - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indonesian Coal Mining Association
- GVK Power & Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Heidelberg Cement - Germany
- GAC Shipping (India) Pvt Ltd
- New Zealand Coal & Carbon
- Bhatia International Limited - India
- Sojitz Corporation - Japan
- Simpson Spence & Young - Indonesia
- San Jose City I Power Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- Sree Jayajothi Cements Limited - India
- Carbofer General Trading SA - India
- ASAPP Information Group - India
- Indian Energy Exchange, India
- Kideco Jaya Agung - Indonesia
- Madhucon Powers Ltd - India
- Straits Asia Resources Limited - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Indo Tambangraya Megah - Indonesia
- Samtan Co., Ltd - South Korea
- Banpu Public Company Limited - Thailand
- Aboitiz Power Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- White Energy Company Limited
- Electricity Generating Authority of Thailand
- Edison Trading Spa - Italy
- Riau Bara Harum - Indonesia
- Global Business Power Corporation, Philippines
- Aditya Birla Group - India
- The Treasury - Australian Government
- Attock Cement Pakistan Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Grasim Industreis Ltd - India
- Standard Chartered Bank - UAE
- Ceylon Electricity Board - Sri Lanka
- Ambuja Cements Ltd - India
- Goldman Sachs - Singapore
- Billiton Holdings Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- PowerSource Philippines DevCo
- SMC Global Power, Philippines
- PNOC Exploration Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- International Coal Ventures Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Georgia Ports Authority, United States
- Bharathi Cement Corporation - India
- Metalloyd Limited - United Kingdom
- Central Java Power - Indonesia
- Siam City Cement PLC, Thailand
- Mjunction Services Limited - India
- Rio Tinto Coal - Australia
- Binh Thuan Hamico - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Power Finance Corporation Ltd., India
- Maharashtra Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- CNBM International Corporation - China
- Altura Mining Limited, Indonesia
- Ministry of Mines - Canada
- Merrill Lynch Commodities Europe
- LBH Netherlands Bv - Netherlands
- Globalindo Alam Lestari - Indonesia
- Energy Development Corp, Philippines
- Lanco Infratech Ltd - India
- OPG Power Generation Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Timah Investasi Mineral - Indoneisa
- Anglo American - United Kingdom
- Meralco Power Generation, Philippines
- VISA Power Limited - India
- Xindia Steels Limited - India
- Deloitte Consulting - India
- Jaiprakash Power Ventures ltd
- TNB Fuel Sdn Bhd - Malaysia
- Wood Mackenzie - Singapore
- Jindal Steel & Power Ltd - India
- Siam City Cement - Thailand
- Indian Oil Corporation Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sakthi Sugars Limited - India
- Pendopo Energi Batubara - Indonesia
- Karaikal Port Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Australian Commodity Traders Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Essar Steel Hazira Ltd - India
- SMG Consultants - Indonesia
- Tata Chemicals Ltd - India
- Bangladesh Power Developement Board
- Antam Resourcindo - Indonesia
- Coalindo Energy - Indonesia
- Borneo Indobara - Indonesia
- Orica Mining Services - Indonesia
- PTC India Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Planning Commission, India
- Central Electricity Authority - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coastal Gujarat Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Parliament of New Zealand
- Petron Corporation, Philippines
- Cement Manufacturers Association - India
- CIMB Investment Bank - Malaysia
- Renaissance Capital - South Africa
- Meenaskhi Energy Private Limited - India
- Electricity Authority, New Zealand
- Kartika Selabumi Mining - Indonesia
- Latin American Coal - Colombia
- Intertek Mineral Services - Indonesia
- IHS Mccloskey Coal Group - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The University of Queensland
- Orica Australia Pty. Ltd.
- Kepco SPC Power Corporation, Philippines
- Indika Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Agrawal Coal Company - India
- Maheswari Brothers Coal Limited - India
- European Bulk Services B.V. - Netherlands
- The State Trading Corporation of India Ltd
- Larsen & Toubro Limited - India
- Mercuria Energy - Indonesia
- Videocon Industries ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Tamil Nadu electricity Board
- Ind-Barath Power Infra Limited - India
- IEA Clean Coal Centre - UK
- Chamber of Mines of South Africa
- Vedanta Resources Plc - India
- Iligan Light & Power Inc, Philippines
- Coal and Oil Company - UAE
- Sarangani Energy Corporation, Philippines
- Semirara Mining Corp, Philippines
- India Bulls Power Limited - India
- Malabar Cements Ltd - India
- Thai Mozambique Logistica
- South Luzon Thermal Energy Corporation
- Miang Besar Coal Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- McConnell Dowell - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- SN Aboitiz Power Inc, Philippines
- Oldendorff Carriers - Singapore
- Leighton Contractors Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Kobexindo Tractors - Indoneisa
- Toyota Tsusho Corporation, Japan
- Interocean Group of Companies - India
- Bulk Trading Sa - Switzerland
- Port Waratah Coal Services - Australia
- Romanian Commodities Exchange
- Minerals Council of Australia
- Krishnapatnam Port Company Ltd. - India
- Trasteel International SA, Italy
- Eastern Energy - Thailand
- TeaM Sual Corporation - Philippines
- Thiess Contractors Indonesia
- Chettinad Cement Corporation Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Bhoruka Overseas - Indonesia
- Parry Sugars Refinery, India
- Medco Energi Mining Internasional
- Barasentosa Lestari - Indonesia
- Mintek Dendrill Indonesia
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