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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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Wednesday, 07 December 22
MARKET INSIGHT - INTERMODAL
China’s coal imports from January to October were 230.1m mt, a decrease of around 10.7% y-o-y (2021 totalled 323.2m mt). The question is if t ...
Wednesday, 07 December 22
INDIA'S STEEL MINISTRY SEEKS IMPORT TAX WAIVER FOR COKING COAL - SOURCES REUTERS REPORTED
India’s steel ministry has asked the finance ministry for a waiver of import tax on coking coal among a slew of raw materials, as it scramble ...
Tuesday, 06 December 22
INDIA'S COAL PRODUCTION RISES 17% IN APR-NOV PERIOD - PTI
The country’s coal production increased 17 per cent to 524.20 million tonnes in the April-November period of the ongoing fiscal.
...
Tuesday, 06 December 22
INDONESIA AIMS TO STARTS COLLECTING COAL LEVY IN Q1 2023 - MINISTER, REUTERS REPORTED
Indonesia aims to establish a coal fund agency and start collecting a coal levy in the first quarter next year, to help ensure supply security for ...
Saturday, 03 December 22
COMPLEX RUSSIAN PRICE CAP MAKES MARITIME VISIBILITY A MUST - WINDWARD
Many commentators and analysts are speculating about the potential impact the Russian seaborne oil price cap will have on organizations and entitie ...
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Showing 176 to 180 news of total 6871 |
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- Wood Mackenzie - Singapore
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- Miang Besar Coal Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bangladesh Power Developement Board
- Simpson Spence & Young - Indonesia
- Singapore Mercantile Exchange
- Bhoruka Overseas - Indonesia
- South Luzon Thermal Energy Corporation
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- International Coal Ventures Pvt Ltd - India
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- Minerals Council of Australia
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- The University of Queensland
- Price Waterhouse Coopers - Russia
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- The Treasury - Australian Government
- Ceylon Electricity Board - Sri Lanka
- Leighton Contractors Pty Ltd - Australia
- Coalindo Energy - Indonesia
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- Parliament of New Zealand
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- London Commodity Brokers - England
- Australian Coal Association
- Bhushan Steel Limited - India
- Maheswari Brothers Coal Limited - India
- Eastern Coal Council - USA
- Asmin Koalindo Tuhup - Indonesia
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- McConnell Dowell - Australia
- Electricity Generating Authority of Thailand
- White Energy Company Limited
- VISA Power Limited - India
- Economic Council, Georgia
- Thiess Contractors Indonesia
- Sinarmas Energy and Mining - Indonesia
- PTC India Limited - India
- Ministry of Mines - Canada
- Sical Logistics Limited - India
- Straits Asia Resources Limited - Singapore
- Sarangani Energy Corporation, Philippines
- Mercuria Energy - Indonesia
- Antam Resourcindo - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Transport, Egypt
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- Star Paper Mills Limited - India
- Planning Commission, India
- Electricity Authority, New Zealand
- Samtan Co., Ltd - South Korea
- Borneo Indobara - Indonesia
- Orica Mining Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Savvy Resources Ltd - HongKong
- Karbindo Abesyapradhi - Indoneisa
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- Bulk Trading Sa - Switzerland
- Ind-Barath Power Infra Limited - India
- Vedanta Resources Plc - India
- Madhucon Powers Ltd - India
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- Pendopo Energi Batubara - Indonesia
- Interocean Group of Companies - India
- Indonesian Coal Mining Association
- Gujarat Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Manunggal Multi Energi - Indonesia
- Intertek Mineral Services - Indonesia
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- Iligan Light & Power Inc, Philippines
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- GAC Shipping (India) Pvt Ltd
- Formosa Plastics Group - Taiwan
- IEA Clean Coal Centre - UK
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- Ambuja Cements Ltd - India
- Siam City Cement - Thailand
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- TNB Fuel Sdn Bhd - Malaysia
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- Jindal Steel & Power Ltd - India
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- Chamber of Mines of South Africa
- Billiton Holdings Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
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- Directorate General of MIneral and Coal - Indonesia
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