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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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Monday, 14 December 15
CFR SOUTH CHINA COAL SWAP IS STILL SLIDING
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery declined US$ 0.93(2.18%) per ton month over month.
A commodity swap ...
Sunday, 13 December 15
THE LOW VESSEL DEMANDS PUSHED DOWN BALTIC DRY INDEX FURTHER DOWN
COALspot.com: The low vessel demand across nearly all vessel sizes pushed the Baltic Exchange’s main sea freight index further down in this F ...
Sunday, 13 December 15
DRY BULK RATES KEEP ON FALLING AS LOW VESSEL DEMAND IS STILL THE NORM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market nowadays is in an endless downward spiral, which as it turns out is unable to recover, at least as long as the current balance ...
Friday, 11 December 15
US COAL PRODUCTION UP 7.7% IN WEEK ENDED DECEMBER 5, 2015
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 16.1 million shor ...
Thursday, 10 December 15
CANADIAN MINER TECK ANNOUNCES LNG HAUL TRUCK PILOT PROJECT
Teck Resources Limited is piloting the use of liquefied natural gas (LNG) as a fuel source in six haul trucks at its Fording River steelmakin ...
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- Siam City Cement - Thailand
- Baramulti Group, Indonesia
- Africa Commodities Group - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Marubeni Corporation - India
- Ministry of Finance - Indonesia
- Madhucon Powers Ltd - India
- GMR Energy Limited - India
- Indian Energy Exchange, India
- Videocon Industries ltd - India
- Siam City Cement PLC, Thailand
- Barasentosa Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Kideco Jaya Agung - Indonesia
- Star Paper Mills Limited - India
- Uttam Galva Steels Limited - India
- GN Power Mariveles Coal Plant, Philippines
- TeaM Sual Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karaikal Port Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Trasteel International SA, Italy
- San Jose City I Power Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Oldendorff Carriers - Singapore
- Bharathi Cement Corporation - India
- Economic Council, Georgia
- Agrawal Coal Company - India
- Anglo American - United Kingdom
- Eastern Coal Council - USA
- Thiess Contractors Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bangladesh Power Developement Board
- Chettinad Cement Corporation Ltd - India
- Indonesian Coal Mining Association
- India Bulls Power Limited - India
- Parliament of New Zealand
- Indogreen Group - Indonesia
- LBH Netherlands Bv - Netherlands
- Attock Cement Pakistan Limited
- Petrochimia International Co. Ltd.- Taiwan
- CNBM International Corporation - China
- Gujarat Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Timah Investasi Mineral - Indoneisa
- Directorate Of Revenue Intelligence - India
- Jaiprakash Power Ventures ltd
- Grasim Industreis Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Medco Energi Mining Internasional
- Maharashtra Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Chamber of Mines of South Africa
- Power Finance Corporation Ltd., India
- Sindya Power Generating Company Private Ltd
- Vizag Seaport Private Limited - India
- PNOC Exploration Corporation - Philippines
- Semirara Mining Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- ICICI Bank Limited - India
- Semirara Mining and Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- Renaissance Capital - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Interocean Group of Companies - India
- Rashtriya Ispat Nigam Limited - India
- Gujarat Sidhee Cement - India
- Posco Energy - South Korea
- PowerSource Philippines DevCo
- Independent Power Producers Association of India
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- Edison Trading Spa - Italy
- ASAPP Information Group - India
- Heidelberg Cement - Germany
- Manunggal Multi Energi - Indonesia
- New Zealand Coal & Carbon
- Directorate General of MIneral and Coal - Indonesia
- Electricity Generating Authority of Thailand
- Toyota Tsusho Corporation, Japan
- Wood Mackenzie - Singapore
- White Energy Company Limited
- Wilmar Investment Holdings
- Romanian Commodities Exchange
- Gujarat Mineral Development Corp Ltd - India
- Savvy Resources Ltd - HongKong
- Jorong Barutama Greston.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- The University of Queensland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Link Ltd, New Zealand
- GAC Shipping (India) Pvt Ltd
- Carbofer General Trading SA - India
- Essar Steel Hazira Ltd - India
- MS Steel International - UAE
- Vedanta Resources Plc - India
- Ministry of Transport, Egypt
- Latin American Coal - Colombia
- AsiaOL BioFuels Corp., Philippines
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- PTC India Limited - India
- Pendopo Energi Batubara - Indonesia
- Tata Chemicals Ltd - India
- Therma Luzon, Inc, Philippines
- Sojitz Corporation - Japan
- Planning Commission, India
- SMG Consultants - Indonesia
- Bukit Makmur.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- GVK Power & Infra Limited - India
- Bhoruka Overseas - Indonesia
- Mercuria Energy - Indonesia
- Salva Resources Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- SN Aboitiz Power Inc, Philippines
- Ambuja Cements Ltd - India
- London Commodity Brokers - England
- Lanco Infratech Ltd - India
- Thai Mozambique Logistica
- CIMB Investment Bank - Malaysia
- Sarangani Energy Corporation, Philippines
- Eastern Energy - Thailand
- Goldman Sachs - Singapore
- Larsen & Toubro Limited - India
- Bhatia International Limited - India
- Kapuas Tunggal Persada - Indonesia
- Indika Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Iligan Light & Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Bayan Resources Tbk. - Indonesia
- Coal and Oil Company - UAE
- Global Green Power PLC Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Simpson Spence & Young - Indonesia
- IEA Clean Coal Centre - UK
- Australian Coal Association
- Minerals Council of Australia
- Dalmia Cement Bharat India
- Bank of Tokyo Mitsubishi UFJ Ltd
- International Coal Ventures Pvt Ltd - India
- Rio Tinto Coal - Australia
- Energy Development Corp, Philippines
- Central Electricity Authority - India
- Tamil Nadu electricity Board
- Binh Thuan Hamico - Vietnam
- Global Coal Blending Company Limited - Australia
- Miang Besar Coal Terminal - Indonesia
- Singapore Mercantile Exchange
- Meralco Power Generation, Philippines
- Port Waratah Coal Services - Australia
- Formosa Plastics Group - Taiwan
- Sakthi Sugars Limited - India
- Intertek Mineral Services - Indonesia
- Coastal Gujarat Power Limited - India
- Malabar Cements Ltd - India
- South Luzon Thermal Energy Corporation
- Samtan Co., Ltd - South Korea
- The Treasury - Australian Government
- Cement Manufacturers Association - India
- Pipit Mutiara Jaya. PT, Indonesia
- Antam Resourcindo - Indonesia
- Borneo Indobara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Aboitiz Power Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Mercator Lines Limited - India
- Bhushan Steel Limited - India
- Altura Mining Limited, Indonesia
- Makarim & Taira - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Authority, New Zealand
- Mintek Dendrill Indonesia
- Kumho Petrochemical, South Korea
- Kobexindo Tractors - Indoneisa
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- Xindia Steels Limited - India
- VISA Power Limited - India
- The State Trading Corporation of India Ltd
- European Bulk Services B.V. - Netherlands
- Globalindo Alam Lestari - Indonesia
- Standard Chartered Bank - UAE
- Australian Commodity Traders Exchange
- Riau Bara Harum - Indonesia
- Sical Logistics Limited - India
- Price Waterhouse Coopers - Russia
- Bulk Trading Sa - Switzerland
- Alfred C Toepfer International GmbH - Germany
- Mjunction Services Limited - India
- Kartika Selabumi Mining - Indonesia
- Indian Oil Corporation Limited
- Deloitte Consulting - India
- Ceylon Electricity Board - Sri Lanka
- Central Java Power - Indonesia
- Jindal Steel & Power Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petron Corporation, Philippines
- Coalindo Energy - Indonesia
- McConnell Dowell - Australia
- Aditya Birla Group - India
- Commonwealth Bank - Australia
- Georgia Ports Authority, United States
- Bahari Cakrawala Sebuku - Indonesia
- Kepco SPC Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Orica Australia Pty. Ltd.
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