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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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Sunday, 22 November 15
INDIA COULD PROVIDE SILVER LINING FOR SHIPPING INDUSTRY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The rise of India as a global player in the shipping market could be just a couple of years away, as the country has the potential to become a seco ...
Friday, 20 November 15
U.S. COAL PRODUCTION FOR THE WEEK ENDING NOVEMBER '14; NO CHANGE FROM LAST WEEK
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 16.5 million shor ...
Friday, 20 November 15
NO IMPROVEMENT SEEN IN NEAR-TERM COAL DEMAND; SWAPS CLOSE LOWER
COALspot.com: Indonesian coal swap for delivery Q1 2016 declined month on month and flat on week over week. Price of coal seen no improvements this ...
Friday, 20 November 15
CHANGING CRUDE SUPPLY TRENDS MAY HELP EUROPEAN REFINERS - FITCH RATINGS
COALspot.com: Changes in global oil supply trends, including high Russian production, the expected renewal of Iranian heavy crude exports and the p ...
Thursday, 19 November 15
CHINA STEEL PRODUCTION CAPACITY TO PEAK IN 2016 - FITCH RATINGS
COALspot.com: Fitch Ratings today says that China's steel production capacity is likely to peak in 2016, with capacity elimination over the nex ...
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- Sojitz Corporation - Japan
- Attock Cement Pakistan Limited
- Bhushan Steel Limited - India
- Meenaskhi Energy Private Limited - India
- Interocean Group of Companies - India
- Indika Energy - Indonesia
- Petron Corporation, Philippines
- Coalindo Energy - Indonesia
- The State Trading Corporation of India Ltd
- Kobexindo Tractors - Indoneisa
- Savvy Resources Ltd - HongKong
- Mjunction Services Limited - India
- Goldman Sachs - Singapore
- London Commodity Brokers - England
- Jorong Barutama Greston.PT - Indonesia
- Mintek Dendrill Indonesia
- Mercator Lines Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coastal Gujarat Power Limited - India
- Marubeni Corporation - India
- Planning Commission, India
- Orica Australia Pty. Ltd.
- Gujarat Sidhee Cement - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ICICI Bank Limited - India
- Manunggal Multi Energi - Indonesia
- SMC Global Power, Philippines
- Lanco Infratech Ltd - India
- CNBM International Corporation - China
- Kideco Jaya Agung - Indonesia
- GAC Shipping (India) Pvt Ltd
- Cigading International Bulk Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Gujarat Mineral Development Corp Ltd - India
- Electricity Authority, New Zealand
- Minerals Council of Australia
- Global Green Power PLC Corporation, Philippines
- Thiess Contractors Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Standard Chartered Bank - UAE
- Vizag Seaport Private Limited - India
- Madhucon Powers Ltd - India
- Larsen & Toubro Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Finance - Indonesia
- Bangladesh Power Developement Board
- Jindal Steel & Power Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Transport, Egypt
- Heidelberg Cement - Germany
- Bhatia International Limited - India
- Sree Jayajothi Cements Limited - India
- Siam City Cement - Thailand
- Alfred C Toepfer International GmbH - Germany
- Agrawal Coal Company - India
- McConnell Dowell - Australia
- Karbindo Abesyapradhi - Indoneisa
- Carbofer General Trading SA - India
- Kumho Petrochemical, South Korea
- Bahari Cakrawala Sebuku - Indonesia
- The Treasury - Australian Government
- Australian Commodity Traders Exchange
- Simpson Spence & Young - Indonesia
- Karaikal Port Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Videocon Industries ltd - India
- Ambuja Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Indonesian Coal Mining Association
- Straits Asia Resources Limited - Singapore
- Samtan Co., Ltd - South Korea
- MS Steel International - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The University of Queensland
- New Zealand Coal & Carbon
- Mercuria Energy - Indonesia
- Wood Mackenzie - Singapore
- GMR Energy Limited - India
- Semirara Mining and Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Medco Energi Mining Internasional
- Ceylon Electricity Board - Sri Lanka
- TeaM Sual Corporation - Philippines
- Merrill Lynch Commodities Europe
- Kartika Selabumi Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kapuas Tunggal Persada - Indonesia
- Renaissance Capital - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- European Bulk Services B.V. - Netherlands
- Sinarmas Energy and Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- Electricity Generating Authority of Thailand
- OPG Power Generation Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Borneo Indobara - Indonesia
- Singapore Mercantile Exchange
- Indo Tambangraya Megah - Indonesia
- Independent Power Producers Association of India
- Indian Energy Exchange, India
- Parry Sugars Refinery, India
- Georgia Ports Authority, United States
- Makarim & Taira - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Banpu Public Company Limited - Thailand
- Metalloyd Limited - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Petrochimia International Co. Ltd.- Taiwan
- Sakthi Sugars Limited - India
- Port Waratah Coal Services - Australia
- Chettinad Cement Corporation Ltd - India
- Therma Luzon, Inc, Philippines
- Ministry of Mines - Canada
- Central Java Power - Indonesia
- Tata Chemicals Ltd - India
- Intertek Mineral Services - Indonesia
- Barasentosa Lestari - Indonesia
- Uttam Galva Steels Limited - India
- Energy Link Ltd, New Zealand
- Billiton Holdings Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Trasteel International SA, Italy
- IEA Clean Coal Centre - UK
- Aditya Birla Group - India
- Siam City Cement PLC, Thailand
- Africa Commodities Group - South Africa
- Riau Bara Harum - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- South Luzon Thermal Energy Corporation
- PNOC Exploration Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Coal and Oil Company - UAE
- Eastern Coal Council - USA
- Altura Mining Limited, Indonesia
- Timah Investasi Mineral - Indoneisa
- Australian Coal Association
- Oldendorff Carriers - Singapore
- Aboitiz Power Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- IHS Mccloskey Coal Group - USA
- Bukit Baiduri Energy - Indonesia
- Dalmia Cement Bharat India
- Price Waterhouse Coopers - Russia
- GVK Power & Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- Parliament of New Zealand
- Wilmar Investment Holdings
- Chamber of Mines of South Africa
- Formosa Plastics Group - Taiwan
- Thai Mozambique Logistica
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Makmur.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Star Paper Mills Limited - India
- Economic Council, Georgia
- Edison Trading Spa - Italy
- Iligan Light & Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Tamil Nadu electricity Board
- Sical Logistics Limited - India
- Vedanta Resources Plc - India
- White Energy Company Limited
- Miang Besar Coal Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Malabar Cements Ltd - India
- India Bulls Power Limited - India
- ASAPP Information Group - India
- Toyota Tsusho Corporation, Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Anglo American - United Kingdom
- Kaltim Prima Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Power Finance Corporation Ltd., India
- Bulk Trading Sa - Switzerland
- Salva Resources Pvt Ltd - India
- Grasim Industreis Ltd - India
- Rio Tinto Coal - Australia
- Antam Resourcindo - Indonesia
- Orica Mining Services - Indonesia
- Global Business Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Romanian Commodities Exchange
- Xindia Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- PTC India Limited - India
- Indian Oil Corporation Limited
- Sindya Power Generating Company Private Ltd
- Essar Steel Hazira Ltd - India
- Posco Energy - South Korea
- Baramulti Group, Indonesia
- Globalindo Alam Lestari - Indonesia
- Meralco Power Generation, Philippines
- Eastern Energy - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Cement Manufacturers Association - India
- Energy Development Corp, Philippines
- SMG Consultants - Indonesia
- Indogreen Group - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Commonwealth Bank - Australia
- Kepco SPC Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Deloitte Consulting - India
- CIMB Investment Bank - Malaysia
- VISA Power Limited - India
- Latin American Coal - Colombia
- PowerSource Philippines DevCo
- Krishnapatnam Port Company Ltd. - India
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