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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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Tuesday, 26 January 16
Q3'16 CFR SOUTH CHINA COAL SWAP DROPPED BELOW $41 A TON
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery rose US$ 0.82 (1.94%) per ton month over month.
A commodity swap is ...
Tuesday, 26 January 16
OUTLOOK FOR GLOBAL OIL MARKETS - OPEC SECRETARY GENERAL
Opening address by HE Abdalla S. El-Badri, OPEC Secretary General, at the Chatham House Conference: Middle East and North Africa Energy 2016, Theme ...
Monday, 25 January 16
5700 GAR COAL INDEX CLOSED $ 50.08 PER TON, $0.20 LOWER FROM LAST WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin decline 1.35 percent week over week to averaging $39.39 per ton on this past Friday, ...
Monday, 25 January 16
SHOULD A DEFAULTING PARTY BE ENTITLED TO AN INNOCENT PARTY'S SAVING, FOLLOWING THEIR BREACH OF CONTRACT? - THE NEW FLAMENCO REVISITED
KNOWLEDGE TO ELEVATE
This case was addressed by the club in our of January 2015, when the High Court decision became available. The background ...
Monday, 25 January 16
DRY BULK SHIPPING: A MISERABLE START TO A NEW YEAR, WHERE THE MARKET STRUGGLES TO GROW AT ALL - BIMCO
The global production of steel dropped in 2015 compared to 2014, to a larger extent outside China, as China exported its surplus of steel to destin ...
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- Central Java Power - Indonesia
- Formosa Plastics Group - Taiwan
- Medco Energi Mining Internasional
- Jindal Steel & Power Ltd - India
- Parliament of New Zealand
- International Coal Ventures Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Goldman Sachs - Singapore
- Meralco Power Generation, Philippines
- Madhucon Powers Ltd - India
- Australian Coal Association
- Maharashtra Electricity Regulatory Commission - India
- Pipit Mutiara Jaya. PT, Indonesia
- Makarim & Taira - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bukit Asam (Persero) Tbk - Indonesia
- Vizag Seaport Private Limited - India
- Kartika Selabumi Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kobexindo Tractors - Indoneisa
- Price Waterhouse Coopers - Russia
- TeaM Sual Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Gujarat Mineral Development Corp Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Ind-Barath Power Infra Limited - India
- Barasentosa Lestari - Indonesia
- Mintek Dendrill Indonesia
- Mercator Lines Limited - India
- Ambuja Cements Ltd - India
- Electricity Generating Authority of Thailand
- Africa Commodities Group - South Africa
- Trasteel International SA, Italy
- Electricity Authority, New Zealand
- Rio Tinto Coal - Australia
- Energy Development Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Baramulti Group, Indonesia
- Iligan Light & Power Inc, Philippines
- Lanco Infratech Ltd - India
- White Energy Company Limited
- Antam Resourcindo - Indonesia
- Interocean Group of Companies - India
- Coastal Gujarat Power Limited - India
- Orica Mining Services - Indonesia
- Energy Link Ltd, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Siam City Cement PLC, Thailand
- Kohat Cement Company Ltd. - Pakistan
- Thiess Contractors Indonesia
- Cement Manufacturers Association - India
- Ministry of Mines - Canada
- MS Steel International - UAE
- The University of Queensland
- Grasim Industreis Ltd - India
- London Commodity Brokers - England
- European Bulk Services B.V. - Netherlands
- Deloitte Consulting - India
- Holcim Trading Pte Ltd - Singapore
- Neyveli Lignite Corporation Ltd, - India
- OPG Power Generation Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Wilmar Investment Holdings
- Mjunction Services Limited - India
- Coalindo Energy - Indonesia
- SMC Global Power, Philippines
- Petron Corporation, Philippines
- Agrawal Coal Company - India
- New Zealand Coal & Carbon
- Petrochimia International Co. Ltd.- Taiwan
- IEA Clean Coal Centre - UK
- Power Finance Corporation Ltd., India
- Sical Logistics Limited - India
- Sarangani Energy Corporation, Philippines
- Latin American Coal - Colombia
- Parry Sugars Refinery, India
- Central Electricity Authority - India
- Indonesian Coal Mining Association
- ASAPP Information Group - India
- Thai Mozambique Logistica
- Standard Chartered Bank - UAE
- Binh Thuan Hamico - Vietnam
- Metalloyd Limited - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Orica Australia Pty. Ltd.
- Samtan Co., Ltd - South Korea
- Kepco SPC Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- VISA Power Limited - India
- Heidelberg Cement - Germany
- Asmin Koalindo Tuhup - Indonesia
- Bulk Trading Sa - Switzerland
- Anglo American - United Kingdom
- Wood Mackenzie - Singapore
- Krishnapatnam Port Company Ltd. - India
- Xindia Steels Limited - India
- Chamber of Mines of South Africa
- LBH Netherlands Bv - Netherlands
- Aditya Birla Group - India
- Meenaskhi Energy Private Limited - India
- Bangladesh Power Developement Board
- Maheswari Brothers Coal Limited - India
- Jaiprakash Power Ventures ltd
- Ministry of Finance - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMG Consultants - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Edison Trading Spa - Italy
- Sakthi Sugars Limited - India
- Economic Council, Georgia
- Attock Cement Pakistan Limited
- Vijayanagar Sugar Pvt Ltd - India
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- PTC India Limited - India
- Bayan Resources Tbk. - Indonesia
- Riau Bara Harum - Indonesia
- Global Business Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Aboitiz Power Corporation - Philippines
- Planning Commission, India
- GN Power Mariveles Coal Plant, Philippines
- Romanian Commodities Exchange
- Indian Energy Exchange, India
- Rashtriya Ispat Nigam Limited - India
- Indo Tambangraya Megah - Indonesia
- Globalindo Alam Lestari - Indonesia
- Indika Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Oldendorff Carriers - Singapore
- Banpu Public Company Limited - Thailand
- PowerSource Philippines DevCo
- South Luzon Thermal Energy Corporation
- Miang Besar Coal Terminal - Indonesia
- GVK Power & Infra Limited - India
- Australian Commodity Traders Exchange
- Gujarat Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- GMR Energy Limited - India
- Chettinad Cement Corporation Ltd - India
- Independent Power Producers Association of India
- Bukit Baiduri Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- AsiaOL BioFuels Corp., Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Transport, Egypt
- SN Aboitiz Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Global Green Power PLC Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Manunggal Multi Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Salva Resources Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Georgia Ports Authority, United States
- Tamil Nadu electricity Board
- Larsen & Toubro Limited - India
- ICICI Bank Limited - India
- Therma Luzon, Inc, Philippines
- Borneo Indobara - Indonesia
- Vedanta Resources Plc - India
- Star Paper Mills Limited - India
- Indogreen Group - Indonesia
- Toyota Tsusho Corporation, Japan
- The Treasury - Australian Government
- Essar Steel Hazira Ltd - India
- GAC Shipping (India) Pvt Ltd
- Altura Mining Limited, Indonesia
- Karaikal Port Pvt Ltd - India
- Eastern Energy - Thailand
- Coal and Oil Company - UAE
- Tata Chemicals Ltd - India
- Commonwealth Bank - Australia
- Carbofer General Trading SA - India
- Indian Oil Corporation Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Sidhee Cement - India
- Eastern Coal Council - USA
- Minerals Council of Australia
- Dalmia Cement Bharat India
- IHS Mccloskey Coal Group - USA
- Simpson Spence & Young - Indonesia
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Bhushan Steel Limited - India
- Siam City Cement - Thailand
- Intertek Mineral Services - Indonesia
- Kumho Petrochemical, South Korea
- Pendopo Energi Batubara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Singapore Mercantile Exchange
- India Bulls Power Limited - India
- McConnell Dowell - Australia
- Merrill Lynch Commodities Europe
- Semirara Mining Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Malabar Cements Ltd - India
- Bhatia International Limited - India
- Bhoruka Overseas - Indonesia
- Straits Asia Resources Limited - Singapore
- CNBM International Corporation - China
- Videocon Industries ltd - India
- Posco Energy - South Korea
- Port Waratah Coal Services - Australia
- Ceylon Electricity Board - Sri Lanka
- Renaissance Capital - South Africa
- Kaltim Prima Coal - Indonesia
- Sojitz Corporation - Japan
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