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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, 18 December 15
WHEN IS A MASTER ENTITLED TO REFUSE DAMAGED CARGO? A REMINDER - THE STANDARD CLUB
KNOWLEDGE TO ELEVATE
A master’s authority to clause bills of lading issued by or on his behalf can sometimes become the cause of disagreeme ...
Friday, 18 December 15
CHINA GROWTH SHOCK TO HIT ENERGY, SHIPPING, STEEL MOST - FITCH
Energy, shipping and steel would be the hardest-hit sectors in Asia-Pacific (APAC) in the event of a sharp slowdown in Chinese growth, says Fitch R ...
Friday, 18 December 15
WEEKLY U.S. COAL PRODUCTION REMAINS FLAT ACROSS ALL BASINS
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 16.1 million shor ...
Thursday, 17 December 15
THE LOW DEMAND AND EXCESS COAL OUTPUT, KEEP THE FOB INDONESIA COAL SWAPS UNDER PRESSURE
COALspot.com: Indonesian coal swap for delivery Q1 2016 rose month on month and decline slightly week over week. For the week ended December 11, 20 ...
Thursday, 17 December 15
GLADSTONE PORT COAL RECORD LOOMING, EXPORTS UP 12% - GLADSTONE OBSERVER
COAL exports from Gladstone's port have taken a leap, with more than seven million tonnes leaving the wharves in November.
That increase i ...
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- Ministry of Finance - Indonesia
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- Economic Council, Georgia
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- Energy Development Corp, Philippines
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- Uttam Galva Steels Limited - India
- Pendopo Energi Batubara - Indonesia
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- Parliament of New Zealand
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- Independent Power Producers Association of India
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- Sindya Power Generating Company Private Ltd
- Krishnapatnam Port Company Ltd. - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Medco Energi Mining Internasional
- Parry Sugars Refinery, India
- Mercuria Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Sree Jayajothi Cements Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Vizag Seaport Private Limited - India
- Eastern Coal Council - USA
- Orica Australia Pty. Ltd.
- Karbindo Abesyapradhi - Indoneisa
- Malabar Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Coal and Oil Company - UAE
- Commonwealth Bank - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PTC India Limited - India
- Riau Bara Harum - Indonesia
- Antam Resourcindo - Indonesia
- Borneo Indobara - Indonesia
- Meenaskhi Energy Private Limited - India
- Makarim & Taira - Indonesia
- Electricity Authority, New Zealand
- Tata Chemicals Ltd - India
- Attock Cement Pakistan Limited
- Metalloyd Limited - United Kingdom
- Ministry of Mines - Canada
- Kideco Jaya Agung - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Indian Oil Corporation Limited
- Bukit Baiduri Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Heidelberg Cement - Germany
- Savvy Resources Ltd - HongKong
- Bulk Trading Sa - Switzerland
- TeaM Sual Corporation - Philippines
- Wood Mackenzie - Singapore
- International Coal Ventures Pvt Ltd - India
- Sojitz Corporation - Japan
- Dalmia Cement Bharat India
- Star Paper Mills Limited - India
- Mjunction Services Limited - India
- SMG Consultants - Indonesia
- Sakthi Sugars Limited - India
- PowerSource Philippines DevCo
- Manunggal Multi Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Rashtriya Ispat Nigam Limited - India
- Timah Investasi Mineral - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Therma Luzon, Inc, Philippines
- Petron Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Chamber of Mines of South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Cement Manufacturers Association - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- The State Trading Corporation of India Ltd
- The University of Queensland
- Coastal Gujarat Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Ind-Barath Power Infra Limited - India
- Renaissance Capital - South Africa
- Formosa Plastics Group - Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Videocon Industries ltd - India
- McConnell Dowell - Australia
- Australian Coal Association
- Petrochimia International Co. Ltd.- Taiwan
- Romanian Commodities Exchange
- Kapuas Tunggal Persada - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Central Electricity Authority - India
- Jindal Steel & Power Ltd - India
- Oldendorff Carriers - Singapore
- Singapore Mercantile Exchange
- Gujarat Mineral Development Corp Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bayan Resources Tbk. - Indonesia
- Global Green Power PLC Corporation, Philippines
- Indonesian Coal Mining Association
- European Bulk Services B.V. - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- Ministry of Transport, Egypt
- Bhoruka Overseas - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- India Bulls Power Limited - India
- Aboitiz Power Corporation - Philippines
- Posco Energy - South Korea
- Billiton Holdings Pty Ltd - Australia
- Latin American Coal - Colombia
- Georgia Ports Authority, United States
- SMC Global Power, Philippines
- Globalindo Alam Lestari - Indonesia
- Lanco Infratech Ltd - India
- Deloitte Consulting - India
- Directorate Of Revenue Intelligence - India
- Merrill Lynch Commodities Europe
- Ambuja Cements Ltd - India
- Intertek Mineral Services - Indonesia
- IEA Clean Coal Centre - UK
- Rio Tinto Coal - Australia
- Miang Besar Coal Terminal - Indonesia
- Orica Mining Services - Indonesia
- Standard Chartered Bank - UAE
- South Luzon Thermal Energy Corporation
- Siam City Cement PLC, Thailand
- Indo Tambangraya Megah - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Marubeni Corporation - India
- IHS Mccloskey Coal Group - USA
- ICICI Bank Limited - India
- Energy Link Ltd, New Zealand
- Banpu Public Company Limited - Thailand
- Bhushan Steel Limited - India
- Kartika Selabumi Mining - Indonesia
- Xindia Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Electricity Generating Authority of Thailand
- Bangladesh Power Developement Board
- Maheswari Brothers Coal Limited - India
- Madhucon Powers Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- San Jose City I Power Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- White Energy Company Limited
- Mintek Dendrill Indonesia
- CIMB Investment Bank - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Carbofer General Trading SA - India
- CNBM International Corporation - China
- Price Waterhouse Coopers - Russia
- GVK Power & Infra Limited - India
- Semirara Mining Corp, Philippines
- Indian Energy Exchange, India
- Indika Energy - Indonesia
- Siam City Cement - Thailand
- Samtan Co., Ltd - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Iligan Light & Power Inc, Philippines
- Thai Mozambique Logistica
- Planning Commission, India
- Grasim Industreis Ltd - India
- Power Finance Corporation Ltd., India
- Eastern Energy - Thailand
- GMR Energy Limited - India
- Simpson Spence & Young - Indonesia
- Altura Mining Limited, Indonesia
- Salva Resources Pvt Ltd - India
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