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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, 15 April 16
U.S WEEKLY COAL OUTPUT FALLS ACROSS ALL BASINS - EIA
COALspot.com – U.S the world’s second largest coal producer has produced approximately totaled an estimated 10.2 million short tons (mm ...
Thursday, 14 April 16
AUSTRALIAN MINING SERVICES SECTOR SQUEEZED BY MINERS' COST CUTS - FITCH RATINGS
Fitch Ratings says mining services companies' revenues and margins will remain under pressure as miners continue to focus on reducing costs ami ...
Thursday, 14 April 16
DRY BULKERS' PRICES COULD BE HEADING UPWARDS AS BUYERS' APPETITE INCREASES - HELLENIC SHIPPING NEWS
Investment sentiment is beginning to trend upwards in the market for second hand dry bulk carriers. According to the latest weekly report from ship ...
Wednesday, 13 April 16
U.S COAL PRODUCTION IS EXPECTED TO DECREASE BY 16 PER CENT IN 2016; THE LARGEST ANNUAL PERCENTAGE DECLINE SINCE 1958 - EIA
EIA estimates that U.S. coal production in March 2016 was 52 million short tons (MMst), a 2 MMst (4%) decrease from the previous month and 29 MMst ...
Tuesday, 12 April 16
INDONESIA COAL BENCHMARK PRICE INCREASES FOR SECOND STRAIGHT MONTH
COALspot.com: The Indonesia Coal Benchmark Price Increases For Second Straight Month in April 2016.
The Director General of Mine ...
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- Oldendorff Carriers - Singapore
- Kideco Jaya Agung - Indonesia
- Sojitz Corporation - Japan
- Goldman Sachs - Singapore
- Kumho Petrochemical, South Korea
- Ministry of Transport, Egypt
- Semirara Mining Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Indian Energy Exchange, India
- SMG Consultants - Indonesia
- TeaM Sual Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Medco Energi Mining Internasional
- Samtan Co., Ltd - South Korea
- Gujarat Sidhee Cement - India
- Kartika Selabumi Mining - Indonesia
- Altura Mining Limited, Indonesia
- Meenaskhi Energy Private Limited - India
- Interocean Group of Companies - India
- Coal and Oil Company - UAE
- GMR Energy Limited - India
- Billiton Holdings Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- The Treasury - Australian Government
- Bhatia International Limited - India
- Petron Corporation, Philippines
- Borneo Indobara - Indonesia
- Indian Oil Corporation Limited
- Sinarmas Energy and Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Wilmar Investment Holdings
- Neyveli Lignite Corporation Ltd, - India
- Videocon Industries ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pendopo Energi Batubara - Indonesia
- Makarim & Taira - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Tata Chemicals Ltd - India
- Africa Commodities Group - South Africa
- Georgia Ports Authority, United States
- Price Waterhouse Coopers - Russia
- Electricity Authority, New Zealand
- Kobexindo Tractors - Indoneisa
- PowerSource Philippines DevCo
- Energy Development Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Planning Commission, India
- Eastern Coal Council - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sakthi Sugars Limited - India
- Indogreen Group - Indonesia
- Riau Bara Harum - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- OPG Power Generation Pvt Ltd - India
- Ministry of Finance - Indonesia
- Jindal Steel & Power Ltd - India
- MS Steel International - UAE
- Baramulti Group, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Ambuja Cements Ltd - India
- Orica Australia Pty. Ltd.
- Latin American Coal - Colombia
- Timah Investasi Mineral - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Binh Thuan Hamico - Vietnam
- Agrawal Coal Company - India
- Bharathi Cement Corporation - India
- Antam Resourcindo - Indonesia
- Madhucon Powers Ltd - India
- IHS Mccloskey Coal Group - USA
- Carbofer General Trading SA - India
- Commonwealth Bank - Australia
- Thiess Contractors Indonesia
- Marubeni Corporation - India
- Metalloyd Limited - United Kingdom
- Rio Tinto Coal - Australia
- PTC India Limited - India
- Therma Luzon, Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Orica Mining Services - Indonesia
- Iligan Light & Power Inc, Philippines
- The University of Queensland
- Dalmia Cement Bharat India
- Bhoruka Overseas - Indonesia
- Bangladesh Power Developement Board
- Jorong Barutama Greston.PT - Indonesia
- Merrill Lynch Commodities Europe
- Attock Cement Pakistan Limited
- Indo Tambangraya Megah - Indonesia
- Toyota Tsusho Corporation, Japan
- Posco Energy - South Korea
- Wood Mackenzie - Singapore
- Bayan Resources Tbk. - Indonesia
- Indonesian Coal Mining Association
- GN Power Mariveles Coal Plant, Philippines
- European Bulk Services B.V. - Netherlands
- SN Aboitiz Power Inc, Philippines
- Eastern Energy - Thailand
- Semirara Mining and Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Minerals Council of Australia
- McConnell Dowell - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Uttam Galva Steels Limited - India
- The State Trading Corporation of India Ltd
- Salva Resources Pvt Ltd - India
- Grasim Industreis Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Lanco Infratech Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meralco Power Generation, Philippines
- CIMB Investment Bank - Malaysia
- Ceylon Electricity Board - Sri Lanka
- Star Paper Mills Limited - India
- PNOC Exploration Corporation - Philippines
- Renaissance Capital - South Africa
- South Luzon Thermal Energy Corporation
- Mintek Dendrill Indonesia
- Kepco SPC Power Corporation, Philippines
- Tamil Nadu electricity Board
- Sindya Power Generating Company Private Ltd
- GVK Power & Infra Limited - India
- Parliament of New Zealand
- Barasentosa Lestari - Indonesia
- ASAPP Information Group - India
- Chamber of Mines of South Africa
- CNBM International Corporation - China
- Jaiprakash Power Ventures ltd
- Kohat Cement Company Ltd. - Pakistan
- Cement Manufacturers Association - India
- Electricity Generating Authority of Thailand
- Petrochimia International Co. Ltd.- Taiwan
- San Jose City I Power Corp, Philippines
- Power Finance Corporation Ltd., India
- Chettinad Cement Corporation Ltd - India
- Xindia Steels Limited - India
- Mercuria Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Holcim Trading Pte Ltd - Singapore
- IEA Clean Coal Centre - UK
- Savvy Resources Ltd - HongKong
- Cigading International Bulk Terminal - Indonesia
- Coalindo Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Larsen & Toubro Limited - India
- Coastal Gujarat Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Kaltim Prima Coal - Indonesia
- Trasteel International SA, Italy
- Simpson Spence & Young - Indonesia
- Intertek Mineral Services - Indonesia
- Independent Power Producers Association of India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Business Power Corporation, Philippines
- Central Electricity Authority - India
- Ind-Barath Power Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Anglo American - United Kingdom
- India Bulls Power Limited - India
- Port Waratah Coal Services - Australia
- Aditya Birla Group - India
- ICICI Bank Limited - India
- Vizag Seaport Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Mines - Canada
- Manunggal Multi Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement PLC, Thailand
- Edison Trading Spa - Italy
- Singapore Mercantile Exchange
- VISA Power Limited - India
- Heidelberg Cement - Germany
- Sree Jayajothi Cements Limited - India
- Banpu Public Company Limited - Thailand
- Australian Commodity Traders Exchange
- Mjunction Services Limited - India
- Bulk Trading Sa - Switzerland
- Romanian Commodities Exchange
- Thai Mozambique Logistica
- London Commodity Brokers - England
- Parry Sugars Refinery, India
- White Energy Company Limited
- Australian Coal Association
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Sical Logistics Limited - India
- Bhushan Steel Limited - India
- Malabar Cements Ltd - India
- New Zealand Coal & Carbon
- Deloitte Consulting - India
- Essar Steel Hazira Ltd - India
- Siam City Cement - Thailand
- Energy Link Ltd, New Zealand
- SMC Global Power, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Standard Chartered Bank - UAE
- Vedanta Resources Plc - India
- Rashtriya Ispat Nigam Limited - India
- Formosa Plastics Group - Taiwan
- Alfred C Toepfer International GmbH - Germany
- Mercator Lines Limited - India
- Leighton Contractors Pty Ltd - Australia
- Central Java Power - Indonesia
- Economic Council, Georgia
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