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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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Thursday, 03 December 15
PANAMAX BUSINESS REMAINED UNDER PRESSURE LAST WEEK
COALspot.com: Following the new record lows the Dry Bulk market witnessed the week prior, the BDI took a much needed breath during the past days.
...
Wednesday, 02 December 15
Q3' 16 FOB RICHARDS BAY COAL SWAP SLIGHTLY UP FOR THE THIRD STRAIGHT WEEK
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q1’ 2016 up month over month and fell week over week.
The Q1’ 2016 &nbs ...
Wednesday, 02 December 15
MARKET INSIGHT - VASSILIS LOGOTHETIS
Boom and bust cycles in commodity prices are not something rare, yet they have important implications both for the world economy in general and for ...
Tuesday, 01 December 15
FOB NEWCASTLE COAL SWAP UP THIS PAST WEEK
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery slid $3.75 per ton (9.26%) month over month to US$ 36.75 per ton. The swap ...
Tuesday, 01 December 15
TANKERS VERSUS BULKERS - JUST PLAYING CATCH UP? - CLARKSONS
It’s now more than a year since the tanker market took off. In mid-2014 tanker earnings picked up and since then have been in the $30-$40,000 ...
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- Gujarat Sidhee Cement - India
- Bulk Trading Sa - Switzerland
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- Bukit Asam (Persero) Tbk - Indonesia
- Makarim & Taira - Indonesia
- Sindya Power Generating Company Private Ltd
- Thiess Contractors Indonesia
- Mintek Dendrill Indonesia
- Larsen & Toubro Limited - India
- Ministry of Mines - Canada
- Leighton Contractors Pty Ltd - Australia
- Romanian Commodities Exchange
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- Africa Commodities Group - South Africa
- Sakthi Sugars Limited - India
- The University of Queensland
- PNOC Exploration Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Bhatia International Limited - India
- Ministry of Finance - Indonesia
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- Rio Tinto Coal - Australia
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- Tamil Nadu electricity Board
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- Australian Coal Association
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- Meenaskhi Energy Private Limited - India
- Attock Cement Pakistan Limited
- Petron Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Merrill Lynch Commodities Europe
- Australian Commodity Traders Exchange
- Economic Council, Georgia
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- Energy Development Corp, Philippines
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- VISA Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Indonesian Coal Mining Association
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- Edison Trading Spa - Italy
- Petrochimia International Co. Ltd.- Taiwan
- Cigading International Bulk Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- PTC India Limited - India
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- Parliament of New Zealand
- Lanco Infratech Ltd - India
- Independent Power Producers Association of India
- SN Aboitiz Power Inc, Philippines
- Semirara Mining Corp, Philippines
- The State Trading Corporation of India Ltd
- Iligan Light & Power Inc, Philippines
- Deloitte Consulting - India
- Chamber of Mines of South Africa
- Port Waratah Coal Services - Australia
- IHS Mccloskey Coal Group - USA
- Energy Link Ltd, New Zealand
- Tata Chemicals Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- European Bulk Services B.V. - Netherlands
- Sojitz Corporation - Japan
- Rashtriya Ispat Nigam Limited - India
- Cement Manufacturers Association - India
- Salva Resources Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Eastern Coal Council - USA
- Antam Resourcindo - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Transport, Egypt
- White Energy Company Limited
- McConnell Dowell - Australia
- Madhucon Powers Ltd - India
- Global Coal Blending Company Limited - Australia
- Price Waterhouse Coopers - Russia
- Therma Luzon, Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- New Zealand Coal & Carbon
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- Central Java Power - Indonesia
- Wood Mackenzie - Singapore
- Billiton Holdings Pty Ltd - Australia
- The Treasury - Australian Government
- Vijayanagar Sugar Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Savvy Resources Ltd - HongKong
- South Luzon Thermal Energy Corporation
- Samtan Co., Ltd - South Korea
- TeaM Sual Corporation - Philippines
- Jindal Steel & Power Ltd - India
- London Commodity Brokers - England
- Pendopo Energi Batubara - Indonesia
- Star Paper Mills Limited - India
- Planning Commission, India
- MS Steel International - UAE
- Formosa Plastics Group - Taiwan
- Barasentosa Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Oldendorff Carriers - Singapore
- Kideco Jaya Agung - Indonesia
- Electricity Authority, New Zealand
- Grasim Industreis Ltd - India
- Borneo Indobara - Indonesia
- Indian Energy Exchange, India
- International Coal Ventures Pvt Ltd - India
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- AsiaOL BioFuels Corp., Philippines
- Bhushan Steel Limited - India
- Baramulti Group, Indonesia
- Global Business Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Directorate Of Revenue Intelligence - India
- Minerals Council of Australia
- Latin American Coal - Colombia
- Videocon Industries ltd - India
- Malabar Cements Ltd - India
- Agrawal Coal Company - India
- Kumho Petrochemical, South Korea
- IEA Clean Coal Centre - UK
- Goldman Sachs - Singapore
- Vedanta Resources Plc - India
- Kalimantan Lumbung Energi - Indonesia
- Commonwealth Bank - Australia
- Thai Mozambique Logistica
- Directorate General of MIneral and Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Coal and Oil Company - UAE
- Singapore Mercantile Exchange
- Indian Oil Corporation Limited
- Miang Besar Coal Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Electricity Regulatory Commission - India
- GMR Energy Limited - India
- GAC Shipping (India) Pvt Ltd
- Manunggal Multi Energi - Indonesia
- Intertek Mineral Services - Indonesia
- Indika Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- CNBM International Corporation - China
- Jaiprakash Power Ventures ltd
- ASAPP Information Group - India
- Bhoruka Overseas - Indonesia
- Georgia Ports Authority, United States
- Karbindo Abesyapradhi - Indoneisa
- Trasteel International SA, Italy
- Banpu Public Company Limited - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
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- SMC Global Power, Philippines
- Power Finance Corporation Ltd., India
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- San Jose City I Power Corp, Philippines
- Posco Energy - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Coastal Gujarat Power Limited - India
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- ICICI Bank Limited - India
- Krishnapatnam Port Company Ltd. - India
- Sical Logistics Limited - India
- India Bulls Power Limited - India
- Marubeni Corporation - India
- Eastern Energy - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement PLC, Thailand
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- Toyota Tsusho Corporation, Japan
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