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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, 08 December 15
HOW TO MITIGATE LEGAL RISKS WHEN PURCHASING BUNKERS - LESSONS LEARNED FROM THE OW BUNKER COLLAPSE - THE SWEDISH CLUB
KNOWLEDGE TO ELEVATE
About a year has passed since OW Bunker & Trading A/S filed for bankruptcy. The collapse shows that there are signifi ...
Monday, 07 December 15
5000 GAR CS (I) COAL INDEX REMAIN THE SAME OVER LAST WEEK
COALspot.com: The 5000 GAR CS (i) coal index remain the same over last week.
According to the CS (i) coal (system generated) index, the CS 50 ...
Monday, 07 December 15
COAL DEMAND IN 2016 FAILS TO SUPPORT PRICES; CFR SOUTH CHINA COAL SWAPS SEEN AT $US 42 A TON
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery declined US$ 1.70 (3.88%) per ton month over month.
A commodity swap ...
Sunday, 06 December 15
THE BDI DECLINED BY 3.09 PERCENT TO 563 POINTS ON 4 DECEMBER
COALspot.com: The BDI declined by 3.09 percent to 563 points on 4 December 2015.
The Cape index was also declined by 10.01 percent to 890 poin ...
Sunday, 06 December 15
DRY BULK MARKET ON REVERSE MODE, SET TO BREAK NEW ALL-TIME LOWS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has been the negative “star” of the shipping industry for quite some time. In fact if it wasn’t for the boomi ...
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- Jindal Steel & Power Ltd - India
- Bukit Makmur.PT - Indonesia
- New Zealand Coal & Carbon
- Timah Investasi Mineral - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Ambuja Cements Ltd - India
- Ministry of Transport, Egypt
- Global Green Power PLC Corporation, Philippines
- Medco Energi Mining Internasional
- LBH Netherlands Bv - Netherlands
- PTC India Limited - India
- CIMB Investment Bank - Malaysia
- Global Business Power Corporation, Philippines
- Commonwealth Bank - Australia
- Baramulti Group, Indonesia
- Planning Commission, India
- London Commodity Brokers - England
- ICICI Bank Limited - India
- Thai Mozambique Logistica
- Petron Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Ind-Barath Power Infra Limited - India
- CNBM International Corporation - China
- Kalimantan Lumbung Energi - Indonesia
- Coal and Oil Company - UAE
- Banpu Public Company Limited - Thailand
- Indonesian Coal Mining Association
- Billiton Holdings Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Mintek Dendrill Indonesia
- Agrawal Coal Company - India
- International Coal Ventures Pvt Ltd - India
- Wood Mackenzie - Singapore
- South Luzon Thermal Energy Corporation
- Pendopo Energi Batubara - Indonesia
- Straits Asia Resources Limited - Singapore
- Coastal Gujarat Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Port Waratah Coal Services - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chamber of Mines of South Africa
- The Treasury - Australian Government
- Sree Jayajothi Cements Limited - India
- Sinarmas Energy and Mining - Indonesia
- Tamil Nadu electricity Board
- Interocean Group of Companies - India
- McConnell Dowell - Australia
- Videocon Industries ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Binh Thuan Hamico - Vietnam
- The University of Queensland
- Simpson Spence & Young - Indonesia
- Ministry of Mines - Canada
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Renaissance Capital - South Africa
- Kobexindo Tractors - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Heidelberg Cement - Germany
- Siam City Cement - Thailand
- Anglo American - United Kingdom
- Lanco Infratech Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Wilmar Investment Holdings
- Trasteel International SA, Italy
- Carbofer General Trading SA - India
- PNOC Exploration Corporation - Philippines
- Bhushan Steel Limited - India
- VISA Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- San Jose City I Power Corp, Philippines
- Georgia Ports Authority, United States
- Indian Oil Corporation Limited
- Cement Manufacturers Association - India
- Madhucon Powers Ltd - India
- Mjunction Services Limited - India
- AsiaOL BioFuels Corp., Philippines
- Jorong Barutama Greston.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Bangladesh Power Developement Board
- PetroVietnam Power Coal Import and Supply Company
- Karbindo Abesyapradhi - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Minerals Council of Australia
- Gujarat Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Leighton Contractors Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- Electricity Authority, New Zealand
- SMC Global Power, Philippines
- Savvy Resources Ltd - HongKong
- Karaikal Port Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Bharathi Cement Corporation - India
- Borneo Indobara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Therma Luzon, Inc, Philippines
- Attock Cement Pakistan Limited
- Aditya Birla Group - India
- Grasim Industreis Ltd - India
- Australian Coal Association
- Africa Commodities Group - South Africa
- Malabar Cements Ltd - India
- Tata Chemicals Ltd - India
- White Energy Company Limited
- Petrochimia International Co. Ltd.- Taiwan
- Intertek Mineral Services - Indonesia
- Orica Australia Pty. Ltd.
- Neyveli Lignite Corporation Ltd, - India
- Asmin Koalindo Tuhup - Indonesia
- Orica Mining Services - Indonesia
- Independent Power Producers Association of India
- Eastern Energy - Thailand
- Uttam Galva Steels Limited - India
- Xindia Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Larsen & Toubro Limited - India
- Vedanta Resources Plc - India
- Bukit Asam (Persero) Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indo Tambangraya Megah - Indonesia
- Thiess Contractors Indonesia
- PowerSource Philippines DevCo
- TeaM Sual Corporation - Philippines
- Ministry of Finance - Indonesia
- Bhatia International Limited - India
- MS Steel International - UAE
- India Bulls Power Limited - India
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Parry Sugars Refinery, India
- Bhoruka Overseas - Indonesia
- Dalmia Cement Bharat India
- Power Finance Corporation Ltd., India
- Bayan Resources Tbk. - Indonesia
- Global Coal Blending Company Limited - Australia
- Ceylon Electricity Board - Sri Lanka
- Deloitte Consulting - India
- GMR Energy Limited - India
- Star Paper Mills Limited - India
- GVK Power & Infra Limited - India
- ASAPP Information Group - India
- Makarim & Taira - Indonesia
- Oldendorff Carriers - Singapore
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Salva Resources Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Posco Energy - South Korea
- Iligan Light & Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Parliament of New Zealand
- Semirara Mining Corp, Philippines
- Standard Chartered Bank - UAE
- Bukit Baiduri Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Latin American Coal - Colombia
- SMG Consultants - Indonesia
- Mercuria Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Eastern Coal Council - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Electricity Authority - India
- IEA Clean Coal Centre - UK
- Coalindo Energy - Indonesia
- Australian Commodity Traders Exchange
- Holcim Trading Pte Ltd - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Rio Tinto Coal - Australia
- Sindya Power Generating Company Private Ltd
- Merrill Lynch Commodities Europe
- Sical Logistics Limited - India
- Singapore Mercantile Exchange
- GAC Shipping (India) Pvt Ltd
- Kideco Jaya Agung - Indonesia
- Goldman Sachs - Singapore
- Energy Link Ltd, New Zealand
- Altura Mining Limited, Indonesia
- Electricity Generating Authority of Thailand
- Miang Besar Coal Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Central Java Power - Indonesia
- Sarangani Energy Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Economic Council, Georgia
- Price Waterhouse Coopers - Russia
- Formosa Plastics Group - Taiwan
- Globalindo Alam Lestari - Indonesia
- Indian Energy Exchange, India
- Riau Bara Harum - Indonesia
- Indogreen Group - Indonesia
- Meralco Power Generation, Philippines
- Marubeni Corporation - India
- Vizag Seaport Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Development Corp, Philippines
- Sakthi Sugars Limited - India
- Siam City Cement PLC, Thailand
- Maheswari Brothers Coal Limited - India
- Romanian Commodities Exchange
- Kapuas Tunggal Persada - Indonesia
- Gujarat Sidhee Cement - India
- Mercator Lines Limited - India
- Barasentosa Lestari - Indonesia
- Indika Energy - Indonesia
- Sojitz Corporation - Japan
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