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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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Wednesday, 31 January 24
CHINA'S INNER MONGOLIA COAL OUTPUT HIT 1.21B TONS IN 2023 - XINHUA
North China’s Inner Mongolia autonomous region churned out 1.21 billion tons of coal in 2023 as it strives to guarantee the country’s e ...
Wednesday, 31 January 24
GAS EXPORTS COST U.S. CONSUMERS MORE THAN $100 BILLION OVER 16-MONTH PERIOD - IEEFA
Limited Demand Growth Could Dampen the Dry Bulk Market in the Coming Months BIMCOStarting in late 2021—before its invasion of Ukraine—R ...
Tuesday, 30 January 24
LIMITED DEMAND GROWTH COULD DAMPEN THE DRY BULK MARKET IN THE COMING MONTHS - BIMCO
Demand
In our base scenario, we expect cargo demand to grow by 0-1% in 2024 and 0.5-1.5% in 2025. This is a 0.5 percentage point reduction for ...
Friday, 26 January 24
RED SEA DIVERSIONS ADD NEARLY A MILLION DOLLARS PER VOYAGE TO SHIPPING COSTS WHILE DOUBLING TRANSIT TIME - LSEG
The incremental costs of diverting a tanker from Asia to NW Europe via the Cape of Good Hope is accounting for an extra $932,905 USD per voyage whi ...
Friday, 26 January 24
HARD COAL GUARDIAN ANGEL OF THE ENERGY SUPPLY - GERMANY COAL IMPORTERS ASSOCIATION
- No security of supply without hard coal
- The Substitute Power Plant Provision Act (EKBG) must be extended
- Higher grid fees due to the ...
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- Chamber of Mines of South Africa
- Kepco SPC Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Bukit Makmur.PT - Indonesia
- Orica Mining Services - Indonesia
- Toyota Tsusho Corporation, Japan
- Salva Resources Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Ministry of Finance - Indonesia
- Indogreen Group - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Global Coal Blending Company Limited - Australia
- Jorong Barutama Greston.PT - Indonesia
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- Interocean Group of Companies - India
- Jaiprakash Power Ventures ltd
- Coal and Oil Company - UAE
- Star Paper Mills Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Riau Bara Harum - Indonesia
- Eastern Coal Council - USA
- Kohat Cement Company Ltd. - Pakistan
- Intertek Mineral Services - Indonesia
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- Australian Coal Association
- Kapuas Tunggal Persada - Indonesia
- Therma Luzon, Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- PTC India Limited - India
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- Wilmar Investment Holdings
- New Zealand Coal & Carbon
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- Bukit Asam (Persero) Tbk - Indonesia
- Mjunction Services Limited - India
- Meralco Power Generation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- The State Trading Corporation of India Ltd
- Siam City Cement - Thailand
- Power Finance Corporation Ltd., India
- India Bulls Power Limited - India
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- Commonwealth Bank - Australia
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- Bulk Trading Sa - Switzerland
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- Antam Resourcindo - Indonesia
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- IHS Mccloskey Coal Group - USA
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- Romanian Commodities Exchange
- Parry Sugars Refinery, India
- Rio Tinto Coal - Australia
- Xindia Steels Limited - India
- Sical Logistics Limited - India
- Kideco Jaya Agung - Indonesia
- Straits Asia Resources Limited - Singapore
- Karaikal Port Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Latin American Coal - Colombia
- Semirara Mining and Power Corporation, Philippines
- Eastern Energy - Thailand
- Edison Trading Spa - Italy
- Krishnapatnam Port Company Ltd. - India
- Cigading International Bulk Terminal - Indonesia
- Borneo Indobara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Ambuja Cements Ltd - India
- Tata Chemicals Ltd - India
- Standard Chartered Bank - UAE
- Formosa Plastics Group - Taiwan
- Baramulti Group, Indonesia
- Electricity Generating Authority of Thailand
- Economic Council, Georgia
- Aditya Birla Group - India
- Essar Steel Hazira Ltd - India
- IEA Clean Coal Centre - UK
- Kumho Petrochemical, South Korea
- San Jose City I Power Corp, Philippines
- Heidelberg Cement - Germany
- Independent Power Producers Association of India
- Global Green Power PLC Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indonesian Coal Mining Association
- GMR Energy Limited - India
- Dalmia Cement Bharat India
- Asmin Koalindo Tuhup - Indonesia
- Anglo American - United Kingdom
- Savvy Resources Ltd - HongKong
- AsiaOL BioFuels Corp., Philippines
- Indo Tambangraya Megah - Indonesia
- Sree Jayajothi Cements Limited - India
- Medco Energi Mining Internasional
- Australian Commodity Traders Exchange
- Posco Energy - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Videocon Industries ltd - India
- Makarim & Taira - Indonesia
- Central Electricity Authority - India
- Samtan Co., Ltd - South Korea
- Globalindo Alam Lestari - Indonesia
- Deloitte Consulting - India
- Holcim Trading Pte Ltd - Singapore
- Iligan Light & Power Inc, Philippines
- Grasim Industreis Ltd - India
- MS Steel International - UAE
- Rashtriya Ispat Nigam Limited - India
- Thai Mozambique Logistica
- Global Business Power Corporation, Philippines
- London Commodity Brokers - England
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- Jindal Steel & Power Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Sojitz Corporation - Japan
- Neyveli Lignite Corporation Ltd, - India
- The Treasury - Australian Government
- Petrochimia International Co. Ltd.- Taiwan
- Wood Mackenzie - Singapore
- Singapore Mercantile Exchange
- Bharathi Cement Corporation - India
- Manunggal Multi Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Malabar Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- TeaM Sual Corporation - Philippines
- Planning Commission, India
- VISA Power Limited - India
- Sindya Power Generating Company Private Ltd
- LBH Netherlands Bv - Netherlands
- Electricity Authority, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Pendopo Energi Batubara - Indonesia
- Bhatia International Limited - India
- Semirara Mining Corp, Philippines
- Minerals Council of Australia
- PowerSource Philippines DevCo
- Lanco Infratech Ltd - India
- Coalindo Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Bangladesh Power Developement Board
- Uttam Galva Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- South Luzon Thermal Energy Corporation
- Attock Cement Pakistan Limited
- Barasentosa Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Mercuria Energy - Indonesia
- Altura Mining Limited, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Ministry of Mines - Canada
- Madhucon Powers Ltd - India
- Simpson Spence & Young - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Petron Corporation, Philippines
- Tamil Nadu electricity Board
- Meenaskhi Energy Private Limited - India
- Parliament of New Zealand
- Bhushan Steel Limited - India
- Indian Oil Corporation Limited
- Bayan Resources Tbk. - Indonesia
- SMC Global Power, Philippines
- Energy Link Ltd, New Zealand
- Gujarat Sidhee Cement - India
- Sakthi Sugars Limited - India
- Central Java Power - Indonesia
- The University of Queensland
- Binh Thuan Hamico - Vietnam
- Africa Commodities Group - South Africa
- ASAPP Information Group - India
- Port Waratah Coal Services - Australia
- Timah Investasi Mineral - Indoneisa
- Thiess Contractors Indonesia
- Vizag Seaport Private Limited - India
- Energy Development Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cement Manufacturers Association - India
- GAC Shipping (India) Pvt Ltd
- Mintek Dendrill Indonesia
- European Bulk Services B.V. - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Directorate General of MIneral and Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Vedanta Resources Plc - India
- GN Power Mariveles Coal Plant, Philippines
- Bukit Baiduri Energy - Indonesia
- Siam City Cement PLC, Thailand
- White Energy Company Limited
- Ministry of Transport, Egypt
- Gujarat Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Trasteel International SA, Italy
- Indian Energy Exchange, India
- International Coal Ventures Pvt Ltd - India
- Georgia Ports Authority, United States
- CNBM International Corporation - China
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