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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, 19 November 15
Q3' 16 RICHARDS BAY COAL SWAP CLOSED 9% LOWER THAN Q1' 16 DELIVERY PRICE
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q1’ 2016 up week over week and month over month.
The Q1’ 2016 swa ...
Thursday, 19 November 15
RATES FOR CAPES KEPT MOVING SOUTH - INTERMODAL
COALspot.com: With the BDI currently standing at less than 30 points above the historical lows marked in February this year and with activity acros ...
Wednesday, 18 November 15
MARKET (SHIPPING) INSIGHT - THEODORE NTALAKOS
Supply VS Demand
According to data from the IMF, global growth for 2015 is projected at 3.1 percent, 0.3 percentage point lower than in 2014, ...
Tuesday, 17 November 15
KOMIPO INVITES BIDS FOR (SEMI) ANTHRACITE COAL FOR SEOCHEON POWER PLANT
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender for 70,000 Metric Tons of (Semi) Anthracite for Ja ...
Tuesday, 17 November 15
FOB NEWCASTLE COAL SWAPS FALL: Q1'16 SLID 11.45% M-M
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery slid $4.75 per ton (11.45%) month over month to US$ 36.75 per ton. The swap ...
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- Mjunction Services Limited - India
- Bhoruka Overseas - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Cement Manufacturers Association - India
- South Luzon Thermal Energy Corporation
- Kepco SPC Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
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- Sarangani Energy Corporation, Philippines
- Indian Oil Corporation Limited
- Power Finance Corporation Ltd., India
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- Eastern Energy - Thailand
- Georgia Ports Authority, United States
- Price Waterhouse Coopers - Russia
- Timah Investasi Mineral - Indoneisa
- Altura Mining Limited, Indonesia
- CNBM International Corporation - China
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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- Trasteel International SA, Italy
- San Jose City I Power Corp, Philippines
- ASAPP Information Group - India
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- Karaikal Port Pvt Ltd - India
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- Kumho Petrochemical, South Korea
- MS Steel International - UAE
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- Orica Australia Pty. Ltd.
- Bahari Cakrawala Sebuku - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Borneo Indobara - Indonesia
- Goldman Sachs - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- European Bulk Services B.V. - Netherlands
- PowerSource Philippines DevCo
- Aboitiz Power Corporation - Philippines
- Lanco Infratech Ltd - India
- Deloitte Consulting - India
- Leighton Contractors Pty Ltd - Australia
- GMR Energy Limited - India
- Barasentosa Lestari - Indonesia
- VISA Power Limited - India
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- Parliament of New Zealand
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- IHS Mccloskey Coal Group - USA
- Bukit Makmur.PT - Indonesia
- McConnell Dowell - Australia
- Asmin Koalindo Tuhup - Indonesia
- Australian Coal Association
- Jaiprakash Power Ventures ltd
- Sakthi Sugars Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Generating Authority of Thailand
- Rio Tinto Coal - Australia
- Maheswari Brothers Coal Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement PLC, Thailand
- Vijayanagar Sugar Pvt Ltd - India
- ICICI Bank Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Interocean Group of Companies - India
- Sree Jayajothi Cements Limited - India
- Attock Cement Pakistan Limited
- Kideco Jaya Agung - Indonesia
- Bharathi Cement Corporation - India
- Tamil Nadu electricity Board
- Pendopo Energi Batubara - Indonesia
- Essar Steel Hazira Ltd - India
- Coalindo Energy - Indonesia
- The Treasury - Australian Government
- SMG Consultants - Indonesia
- Ministry of Finance - Indonesia
- Banpu Public Company Limited - Thailand
- Meralco Power Generation, Philippines
- Parry Sugars Refinery, India
- Baramulti Group, Indonesia
- Edison Trading Spa - Italy
- Samtan Co., Ltd - South Korea
- Agrawal Coal Company - India
- Sical Logistics Limited - India
- Toyota Tsusho Corporation, Japan
- Petrochimia International Co. Ltd.- Taiwan
- Alfred C Toepfer International GmbH - Germany
- Ministry of Transport, Egypt
- Global Coal Blending Company Limited - Australia
- Carbofer General Trading SA - India
- Electricity Authority, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Medco Energi Mining Internasional
- Coal and Oil Company - UAE
- Larsen & Toubro Limited - India
- Bangladesh Power Developement Board
- India Bulls Power Limited - India
- Ind-Barath Power Infra Limited - India
- Coastal Gujarat Power Limited - India
- PTC India Limited - India
- Marubeni Corporation - India
- The State Trading Corporation of India Ltd
- PNOC Exploration Corporation - Philippines
- Savvy Resources Ltd - HongKong
- GAC Shipping (India) Pvt Ltd
- Merrill Lynch Commodities Europe
- London Commodity Brokers - England
- Star Paper Mills Limited - India
- Anglo American - United Kingdom
- LBH Netherlands Bv - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- Latin American Coal - Colombia
- SN Aboitiz Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Mercuria Energy - Indonesia
- Malabar Cements Ltd - India
- Vedanta Resources Plc - India
- Minerals Council of Australia
- Indonesian Coal Mining Association
- AsiaOL BioFuels Corp., Philippines
- Meenaskhi Energy Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Oldendorff Carriers - Singapore
- Sojitz Corporation - Japan
- OPG Power Generation Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Global Business Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Mintek Dendrill Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Global Green Power PLC Corporation, Philippines
- Indika Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- IEA Clean Coal Centre - UK
- Aditya Birla Group - India
- CIMB Investment Bank - Malaysia
- Africa Commodities Group - South Africa
- Vizag Seaport Private Limited - India
- White Energy Company Limited
- New Zealand Coal & Carbon
- Port Waratah Coal Services - Australia
- GVK Power & Infra Limited - India
- Eastern Coal Council - USA
- Renaissance Capital - South Africa
- Romanian Commodities Exchange
- TeaM Sual Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Xindia Steels Limited - India
- Bhushan Steel Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- Formosa Plastics Group - Taiwan
- Chamber of Mines of South Africa
- Mercator Lines Limited - India
- Madhucon Powers Ltd - India
- Indian Energy Exchange, India
- Energy Link Ltd, New Zealand
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Indo Tambangraya Megah - Indonesia
- Videocon Industries ltd - India
- Commonwealth Bank - Australia
- The University of Queensland
- Bhatia International Limited - India
- Sindya Power Generating Company Private Ltd
- Globalindo Alam Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Bukit Baiduri Energy - Indonesia
- Ambuja Cements Ltd - India
- Australian Commodity Traders Exchange
- Wilmar Investment Holdings
- Straits Asia Resources Limited - Singapore
- International Coal Ventures Pvt Ltd - India
- Central Electricity Authority - India
- Standard Chartered Bank - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Neyveli Lignite Corporation Ltd, - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dalmia Cement Bharat India
- Intertek Mineral Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Economic Council, Georgia
- Heidelberg Cement - Germany
- Kobexindo Tractors - Indoneisa
- Therma Luzon, Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Rashtriya Ispat Nigam Limited - India
- Orica Mining Services - Indonesia
- Singapore Mercantile Exchange
- Semirara Mining Corp, Philippines
- Indogreen Group - Indonesia
- Posco Energy - South Korea
- Central Java Power - Indonesia
- Manunggal Multi Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Bayan Resources Tbk. - Indonesia
- Kaltim Prima Coal - Indonesia
- Uttam Galva Steels Limited - India
- Binh Thuan Hamico - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Planning Commission, India
- Petron Corporation, Philippines
- Thai Mozambique Logistica
- Ministry of Mines - Canada
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