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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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Friday, 05 January 24
BANGLADESH’S 2023 COAL-FIRED POWER OUTPUT TRIPLED, EASING SHORTAGES - REUTERS
Bangladesh nearly tripled its coal-fired power output in 2023, a Reuters analysis of government data showed, helping it tide over the worst power s ...
Tuesday, 02 January 24
COAL TRADE CONTINUES TO HEAD EAST - BALTIC EXCHANGE
The global coal trade, once concentrated in the Pacific and Atlantic basins, is undergoing a significant transformation, as highlighted in the Inte ...
Tuesday, 02 January 24
COAL CARGOES: AVOIDING EXPLOSION AND SELF-HEATING - GARD
KNOWLEDGE TO ELEVATE
Despite its contribution to greenhouse gas emissions, global coal consumption climbed to an all-time high in 2022 and is ...
Tuesday, 02 January 24
SINOPEC FORECASTS CHINA’S COAL CONSUMPTION TO PEAK AROUND 2025 - REUTERS
China Petrochemical Corp, or Sinopec, expects coal consumption to peak around 2025 at 4.37 billion metric tons, the state energy group said in an o ...
Thursday, 07 December 23
CHINA TO SET UP COAL PRODUCTION RESERVE TO STABILISE PRICES - REUTERS
China will establish a back-up coal production system by 2027 to stabilise prices and secure coal supply, the state planner said on Wednesday, even ...
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- Simpson Spence & Young - Indonesia
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- Uttam Galva Steels Limited - India
- Sree Jayajothi Cements Limited - India
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- Jaiprakash Power Ventures ltd
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- Australian Coal Association
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- Economic Council, Georgia
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- Planning Commission, India
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- Kobexindo Tractors - Indoneisa
- Parliament of New Zealand
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- Marubeni Corporation - India
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- Intertek Mineral Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Generating Authority of Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The Treasury - Australian Government
- Gujarat Mineral Development Corp Ltd - India
- CNBM International Corporation - China
- Metalloyd Limited - United Kingdom
- Eastern Energy - Thailand
- International Coal Ventures Pvt Ltd - India
- McConnell Dowell - Australia
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- PTC India Limited - India
- Petron Corporation, Philippines
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- MS Steel International - UAE
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- Kepco SPC Power Corporation, Philippines
- Interocean Group of Companies - India
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- Pendopo Energi Batubara - Indonesia
- Semirara Mining Corp, Philippines
- Energy Link Ltd, New Zealand
- Sindya Power Generating Company Private Ltd
- Central Java Power - Indonesia
- Vizag Seaport Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Cement Manufacturers Association - India
- Vijayanagar Sugar Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Larsen & Toubro Limited - India
- Billiton Holdings Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Ceylon Electricity Board - Sri Lanka
- ASAPP Information Group - India
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- Africa Commodities Group - South Africa
- Price Waterhouse Coopers - Russia
- Sojitz Corporation - Japan
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- Wilmar Investment Holdings
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- LBH Netherlands Bv - Netherlands
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- Banpu Public Company Limited - Thailand
- Semirara Mining and Power Corporation, Philippines
- Global Business Power Corporation, Philippines
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- Miang Besar Coal Terminal - Indonesia
- London Commodity Brokers - England
- Indonesian Coal Mining Association
- Global Green Power PLC Corporation, Philippines
- IEA Clean Coal Centre - UK
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- Cigading International Bulk Terminal - Indonesia
- Coal and Oil Company - UAE
- AsiaOL BioFuels Corp., Philippines
- Attock Cement Pakistan Limited
- VISA Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Latin American Coal - Colombia
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- Alfred C Toepfer International GmbH - Germany
- Goldman Sachs - Singapore
- Lanco Infratech Ltd - India
- Rio Tinto Coal - Australia
- Grasim Industreis Ltd - India
- IHS Mccloskey Coal Group - USA
- Power Finance Corporation Ltd., India
- Bukit Makmur.PT - Indonesia
- Posco Energy - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Malabar Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- Chamber of Mines of South Africa
- Ministry of Transport, Egypt
- Jindal Steel & Power Ltd - India
- Savvy Resources Ltd - HongKong
- Sical Logistics Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Wood Mackenzie - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bangladesh Power Developement Board
- Tata Chemicals Ltd - India
- Orica Mining Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- PowerSource Philippines DevCo
- TeaM Sual Corporation - Philippines
- Port Waratah Coal Services - Australia
- Borneo Indobara - Indonesia
- GMR Energy Limited - India
- Agrawal Coal Company - India
- Meralco Power Generation, Philippines
- Bukit Baiduri Energy - Indonesia
- Dalmia Cement Bharat India
- Tamil Nadu electricity Board
- New Zealand Coal & Carbon
- GVK Power & Infra Limited - India
- White Energy Company Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Authority, New Zealand
- Holcim Trading Pte Ltd - Singapore
- Gujarat Sidhee Cement - India
- Carbofer General Trading SA - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Singapore Mercantile Exchange
- SMC Global Power, Philippines
- Siam City Cement - Thailand
- Gujarat Electricity Regulatory Commission - India
- The University of Queensland
- Coalindo Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- The State Trading Corporation of India Ltd
- Minerals Council of Australia
- Independent Power Producers Association of India
- Bhoruka Overseas - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Indian Oil Corporation Limited
- SMG Consultants - Indonesia
- Bharathi Cement Corporation - India
- South Luzon Thermal Energy Corporation
- Bhushan Steel Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- Sakthi Sugars Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karaikal Port Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- Edison Trading Spa - Italy
- Kideco Jaya Agung - Indonesia
- Mintek Dendrill Indonesia
- Kaltim Prima Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Parry Sugars Refinery, India
- Deloitte Consulting - India
- Iligan Light & Power Inc, Philippines
- Aditya Birla Group - India
- Standard Chartered Bank - UAE
- Thai Mozambique Logistica
- Asmin Koalindo Tuhup - Indonesia
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