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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, 13 December 22
AUSTRALIA TO CAP PRICES OF COAL, GAS TO DRIVE DOWN ENERGY BILLS - REUTERS
Australia will cap coal and gas prices for a year in a bid to shave utility bills for households and businesses hit by soaring costs because of the ...
Tuesday, 13 December 22
YANCOAL AUSTRALIA TO PREPAY $459 MLN DEBT AS RECORD COAL PRICES BOOST CASHFLOWS - REUTERS
Coal miner Yancoal Australia Ltd. said on Friday it intended to prepay $459 million of its debt on or around Dec. 16, as elevated coal prices were ...
Tuesday, 13 December 22
WHY COAL LEADS THE RISE IN COMMODITIES THIS YEAR - MARKETWATCH
This year marked a resurgence for coal, often known — and loathed — by environmentalists as the dirtiest energy source, with prices mor ...
Thursday, 08 December 22
BIMCO TO REVISE WAR RISK CLAUSES
Work to revise the BIMCO War Cancellation Clause 2004, the BIMCO War Risks Clause for Time Chartering 2013 (CONWARTIME 2013) and the BIMCO War Risk ...
Thursday, 08 December 22
COAL ROYALTY PAYMENTS BOOST AUSTRALIAN STATE'S BUDGET FORECAST - REUTERS
Australia’s Queensland state on Wednesday forecast a record surplus for the current financial year, largely driven by higher royalty payments ...
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- Ceylon Electricity Board - Sri Lanka
- Indogreen Group - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Commonwealth Bank - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Wood Mackenzie - Singapore
- Simpson Spence & Young - Indonesia
- Salva Resources Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Electricity Authority, New Zealand
- Africa Commodities Group - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Commodity Traders Exchange
- Videocon Industries ltd - India
- Billiton Holdings Pty Ltd - Australia
- India Bulls Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Merrill Lynch Commodities Europe
- Edison Trading Spa - Italy
- Kapuas Tunggal Persada - Indonesia
- Heidelberg Cement - Germany
- Vizag Seaport Private Limited - India
- Ind-Barath Power Infra Limited - India
- ICICI Bank Limited - India
- Semirara Mining Corp, Philippines
- London Commodity Brokers - England
- Barasentosa Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Australian Coal Association
- IHS Mccloskey Coal Group - USA
- PNOC Exploration Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Power Finance Corporation Ltd., India
- AsiaOL BioFuels Corp., Philippines
- Grasim Industreis Ltd - India
- Jindal Steel & Power Ltd - India
- Agrawal Coal Company - India
- Coastal Gujarat Power Limited - India
- Malabar Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Sindya Power Generating Company Private Ltd
- LBH Netherlands Bv - Netherlands
- CNBM International Corporation - China
- Holcim Trading Pte Ltd - Singapore
- Binh Thuan Hamico - Vietnam
- Global Business Power Corporation, Philippines
- ASAPP Information Group - India
- Planning Commission, India
- Krishnapatnam Port Company Ltd. - India
- Madhucon Powers Ltd - India
- Bangladesh Power Developement Board
- Manunggal Multi Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- Parry Sugars Refinery, India
- Bayan Resources Tbk. - Indonesia
- Larsen & Toubro Limited - India
- Baramulti Group, Indonesia
- Meenaskhi Energy Private Limited - India
- Singapore Mercantile Exchange
- OPG Power Generation Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Metalloyd Limited - United Kingdom
- Marubeni Corporation - India
- Gujarat Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Kideco Jaya Agung - Indonesia
- MS Steel International - UAE
- Price Waterhouse Coopers - Russia
- Bhushan Steel Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- Jaiprakash Power Ventures ltd
- PTC India Limited - India
- Borneo Indobara - Indonesia
- Kaltim Prima Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Posco Energy - South Korea
- Star Paper Mills Limited - India
- Therma Luzon, Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Bharathi Cement Corporation - India
- Siam City Cement - Thailand
- GAC Shipping (India) Pvt Ltd
- Karaikal Port Pvt Ltd - India
- Chamber of Mines of South Africa
- Central Java Power - Indonesia
- The Treasury - Australian Government
- Vijayanagar Sugar Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Sinarmas Energy and Mining - Indonesia
- GMR Energy Limited - India
- Latin American Coal - Colombia
- Economic Council, Georgia
- Banpu Public Company Limited - Thailand
- Central Electricity Authority - India
- SN Aboitiz Power Inc, Philippines
- McConnell Dowell - Australia
- Bulk Trading Sa - Switzerland
- TeaM Sual Corporation - Philippines
- Vedanta Resources Plc - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- GVK Power & Infra Limited - India
- Samtan Co., Ltd - South Korea
- Dalmia Cement Bharat India
- Timah Investasi Mineral - Indoneisa
- Trasteel International SA, Italy
- Deloitte Consulting - India
- Anglo American - United Kingdom
- Meralco Power Generation, Philippines
- Thai Mozambique Logistica
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Formosa Plastics Group - Taiwan
- Mercator Lines Limited - India
- Kepco SPC Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Kalimantan Lumbung Energi - Indonesia
- Georgia Ports Authority, United States
- Indian Energy Exchange, India
- Rashtriya Ispat Nigam Limited - India
- SMG Consultants - Indonesia
- Indika Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Ministry of Transport, Egypt
- Standard Chartered Bank - UAE
- Minerals Council of Australia
- Oldendorff Carriers - Singapore
- Bukit Makmur.PT - Indonesia
- The University of Queensland
- Tamil Nadu electricity Board
- PowerSource Philippines DevCo
- Energy Development Corp, Philippines
- Indian Oil Corporation Limited
- Altura Mining Limited, Indonesia
- Sree Jayajothi Cements Limited - India
- San Jose City I Power Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Sakthi Sugars Limited - India
- Kartika Selabumi Mining - Indonesia
- Pendopo Energi Batubara - Indonesia
- Coal and Oil Company - UAE
- Sarangani Energy Corporation, Philippines
- Ministry of Mines - Canada
- Semirara Mining and Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Parliament of New Zealand
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- PetroVietnam Power Coal Import and Supply Company
- Medco Energi Mining Internasional
- Aditya Birla Group - India
- Eastern Energy - Thailand
- Cement Manufacturers Association - India
- Maheswari Brothers Coal Limited - India
- Directorate Of Revenue Intelligence - India
- Chettinad Cement Corporation Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Renaissance Capital - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement PLC, Thailand
- Mercuria Energy - Indonesia
- Lanco Infratech Ltd - India
- Port Waratah Coal Services - Australia
- Orica Australia Pty. Ltd.
- Interocean Group of Companies - India
- Ambuja Cements Ltd - India
- Antam Resourcindo - Indonesia
- Wilmar Investment Holdings
- Karbindo Abesyapradhi - Indoneisa
- IEA Clean Coal Centre - UK
- Eastern Coal Council - USA
- Uttam Galva Steels Limited - India
- Kumho Petrochemical, South Korea
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Finance - Indonesia
- Mintek Dendrill Indonesia
- Savvy Resources Ltd - HongKong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- Coalindo Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Tata Chemicals Ltd - India
- Petron Corporation, Philippines
- Rio Tinto Coal - Australia
- Sical Logistics Limited - India
- Carbofer General Trading SA - India
- Bukit Baiduri Energy - Indonesia
- Makarim & Taira - Indonesia
- Energy Link Ltd, New Zealand
- VISA Power Limited - India
- Attock Cement Pakistan Limited
- Neyveli Lignite Corporation Ltd, - India
- TNB Fuel Sdn Bhd - Malaysia
- Sojitz Corporation - Japan
- CIMB Investment Bank - Malaysia
- Bhatia International Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Independent Power Producers Association of India
- Thiess Contractors Indonesia
- Goldman Sachs - Singapore
- Mjunction Services Limited - India
- New Zealand Coal & Carbon
- European Bulk Services B.V. - Netherlands
- White Energy Company Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aboitiz Power Corporation - Philippines
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