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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, 10 February 16
OWNERS APPEAR WILLING TO DISPOSE OF TONNAGE THE SOONEST IT HITS THE 10 YEAR MARK - TIMOS PAPADIMITRIOU
COALspot.com: The last two months of 2015 made a case for traditional shipowners to invest in the dry bulk sector, doing so though based purely on ...
Monday, 08 February 16
DRY-BULK SHIPPING DIVING DEEP
COALspot.com: The freight markets continued to fall this past week.
The Baltic Dry Index (BDI) of dry-bulk shipping freights, a measure of glo ...
Monday, 08 February 16
DRY BULK: SHIPBROKER SEES BDI MARKET REACHING LOW POINT OF 236 POINTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The endless pit that is the dry bulk market over the past two months, has been the issue of debate among ship owners, shipbroker and analysts alike ...
Friday, 05 February 16
COAL INDIA EYES COAL MINES IN SOUTH AFRICA - PTI
“Coal India Ltd has plans of acquiring coal mines in South Africa,” an official said. It is looking at acquiring mines in partnership w ...
Friday, 05 February 16
U.S. WEEKLY COAL OUTPUT ROSE 4.2% TO 13.6 MMST
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 13.6 million shor ...
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- Power Finance Corporation Ltd., India
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- Sindya Power Generating Company Private Ltd
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- TNB Fuel Sdn Bhd - Malaysia
- Goldman Sachs - Singapore
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- Wood Mackenzie - Singapore
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- Bukit Makmur.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- ASAPP Information Group - India
- Salva Resources Pvt Ltd - India
- San Jose City I Power Corp, Philippines
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- Directorate General of MIneral and Coal - Indonesia
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- Star Paper Mills Limited - India
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- Minerals Council of Australia
- Parliament of New Zealand
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- Indika Energy - Indonesia
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- Global Business Power Corporation, Philippines
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- Chamber of Mines of South Africa
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- MS Steel International - UAE
- OPG Power Generation Pvt Ltd - India
- Thai Mozambique Logistica
- Globalindo Alam Lestari - Indonesia
- The Treasury - Australian Government
- Ministry of Mines - Canada
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- Heidelberg Cement - Germany
- Central Java Power - Indonesia
- Energy Development Corp, Philippines
- Renaissance Capital - South Africa
- Global Coal Blending Company Limited - Australia
- Barasentosa Lestari - Indonesia
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- London Commodity Brokers - England
- Merrill Lynch Commodities Europe
- AsiaOL BioFuels Corp., Philippines
- Romanian Commodities Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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- Medco Energi Mining Internasional
- Jindal Steel & Power Ltd - India
- Aditya Birla Group - India
- Bhushan Steel Limited - India
- Petron Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Wilmar Investment Holdings
- Bayan Resources Tbk. - Indonesia
- Rio Tinto Coal - Australia
- Gujarat Sidhee Cement - India
- Bhatia International Limited - India
- Interocean Group of Companies - India
- Meenaskhi Energy Private Limited - India
- Tamil Nadu electricity Board
- Economic Council, Georgia
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- Alfred C Toepfer International GmbH - Germany
- Grasim Industreis Ltd - India
- SMG Consultants - Indonesia
- SN Aboitiz Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Xindia Steels Limited - India
- Kideco Jaya Agung - Indonesia
- Siam City Cement - Thailand
- Sojitz Corporation - Japan
- Port Waratah Coal Services - Australia
- Indogreen Group - Indonesia
- Kartika Selabumi Mining - Indonesia
- Australian Coal Association
- Metalloyd Limited - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Aboitiz Power Corporation - Philippines
- Eastern Energy - Thailand
- Baramulti Group, Indonesia
- Intertek Mineral Services - Indonesia
- Uttam Galva Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Coalindo Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Georgia Ports Authority, United States
- CIMB Investment Bank - Malaysia
- TeaM Sual Corporation - Philippines
- Sakthi Sugars Limited - India
- IEA Clean Coal Centre - UK
- Petrochimia International Co. Ltd.- Taiwan
- Kapuas Tunggal Persada - Indonesia
- Therma Luzon, Inc, Philippines
- New Zealand Coal & Carbon
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- Independent Power Producers Association of India
- VISA Power Limited - India
- Altura Mining Limited, Indonesia
- Africa Commodities Group - South Africa
- Leighton Contractors Pty Ltd - Australia
- Planning Commission, India
- Bukit Asam (Persero) Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tata Chemicals Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Coastal Gujarat Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Madhucon Powers Ltd - India
- White Energy Company Limited
- Indian Oil Corporation Limited
- Bahari Cakrawala Sebuku - Indonesia
- Sree Jayajothi Cements Limited - India
- Ministry of Transport, Egypt
- Meralco Power Generation, Philippines
- Coal and Oil Company - UAE
- Jaiprakash Power Ventures ltd
- Bhoruka Overseas - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- PTC India Limited - India
- Directorate Of Revenue Intelligence - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cement Manufacturers Association - India
- Latin American Coal - Colombia
- Indonesian Coal Mining Association
- Maharashtra Electricity Regulatory Commission - India
- Deloitte Consulting - India
- Kohat Cement Company Ltd. - Pakistan
- Indian Energy Exchange, India
- Edison Trading Spa - Italy
- Malabar Cements Ltd - India
- Vizag Seaport Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- ICICI Bank Limited - India
- Sarangani Energy Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Price Waterhouse Coopers - Russia
- Oldendorff Carriers - Singapore
- GVK Power & Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- Central Electricity Authority - India
- Bangladesh Power Developement Board
- Kobexindo Tractors - Indoneisa
- Makarim & Taira - Indonesia
- Energy Link Ltd, New Zealand
- PowerSource Philippines DevCo
- Asmin Koalindo Tuhup - Indonesia
- SMC Global Power, Philippines
- Mintek Dendrill Indonesia
- PNOC Exploration Corporation - Philippines
- Posco Energy - South Korea
- Indo Tambangraya Megah - Indonesia
- Ind-Barath Power Infra Limited - India
- Manunggal Multi Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Essar Steel Hazira Ltd - India
- Kaltim Prima Coal - Indonesia
- Electricity Generating Authority of Thailand
- The University of Queensland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Eastern Coal Council - USA
- Attock Cement Pakistan Limited
- Sical Logistics Limited - India
- Ministry of Finance - Indonesia
- Formosa Plastics Group - Taiwan
- Vedanta Resources Plc - India
- Billiton Holdings Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- McConnell Dowell - Australia
- The State Trading Corporation of India Ltd
- CNBM International Corporation - China
- Semirara Mining and Power Corporation, Philippines
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