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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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Monday, 14 December 15
CFR SOUTH CHINA COAL SWAP IS STILL SLIDING
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery declined US$ 0.93(2.18%) per ton month over month.
A commodity swap ...
Sunday, 13 December 15
THE LOW VESSEL DEMANDS PUSHED DOWN BALTIC DRY INDEX FURTHER DOWN
COALspot.com: The low vessel demand across nearly all vessel sizes pushed the Baltic Exchange’s main sea freight index further down in this F ...
Sunday, 13 December 15
DRY BULK RATES KEEP ON FALLING AS LOW VESSEL DEMAND IS STILL THE NORM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market nowadays is in an endless downward spiral, which as it turns out is unable to recover, at least as long as the current balance ...
Friday, 11 December 15
US COAL PRODUCTION UP 7.7% IN WEEK ENDED DECEMBER 5, 2015
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 16.1 million shor ...
Thursday, 10 December 15
CANADIAN MINER TECK ANNOUNCES LNG HAUL TRUCK PILOT PROJECT
Teck Resources Limited is piloting the use of liquefied natural gas (LNG) as a fuel source in six haul trucks at its Fording River steelmakin ...
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- Coal and Oil Company - UAE
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- Ministry of Finance - Indonesia
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- Savvy Resources Ltd - HongKong
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- Directorate General of MIneral and Coal - Indonesia
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- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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- Orica Australia Pty. Ltd.
- Rashtriya Ispat Nigam Limited - India
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- Eastern Coal Council - USA
- Economic Council, Georgia
- Kumho Petrochemical, South Korea
- Billiton Holdings Pty Ltd - Australia
- ICICI Bank Limited - India
- Trasteel International SA, Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Goldman Sachs - Singapore
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- PNOC Exploration Corporation - Philippines
- Deloitte Consulting - India
- Ceylon Electricity Board - Sri Lanka
- Indian Energy Exchange, India
- Coastal Gujarat Power Limited - India
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- Borneo Indobara - Indonesia
- Videocon Industries ltd - India
- Vedanta Resources Plc - India
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- McConnell Dowell - Australia
- Sarangani Energy Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Mercuria Energy - Indonesia
- The State Trading Corporation of India Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Renaissance Capital - South Africa
- Cement Manufacturers Association - India
- Global Green Power PLC Corporation, Philippines
- Xindia Steels Limited - India
- ASAPP Information Group - India
- Gujarat Sidhee Cement - India
- CNBM International Corporation - China
- Vizag Seaport Private Limited - India
- Dalmia Cement Bharat India
- Petron Corporation, Philippines
- Meralco Power Generation, Philippines
- Port Waratah Coal Services - Australia
- Oldendorff Carriers - Singapore
- Mercator Lines Limited - India
- Edison Trading Spa - Italy
- Mintek Dendrill Indonesia
- Bayan Resources Tbk. - Indonesia
- Uttam Galva Steels Limited - India
- Romanian Commodities Exchange
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- Independent Power Producers Association of India
- Bhatia International Limited - India
- Neyveli Lignite Corporation Ltd, - India
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- Aboitiz Power Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Lanco Infratech Ltd - India
- Sindya Power Generating Company Private Ltd
- Maharashtra Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Karaikal Port Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Bulk Trading Sa - Switzerland
- Kobexindo Tractors - Indoneisa
- Wood Mackenzie - Singapore
- Merrill Lynch Commodities Europe
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- Planning Commission, India
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- Malabar Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Indian Oil Corporation Limited
- New Zealand Coal & Carbon
- Ministry of Transport, Egypt
- European Bulk Services B.V. - Netherlands
- Medco Energi Mining Internasional
- Straits Asia Resources Limited - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Miang Besar Coal Terminal - Indonesia
- Thiess Contractors Indonesia
- Riau Bara Harum - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Binh Thuan Hamico - Vietnam
- GAC Shipping (India) Pvt Ltd
- Kapuas Tunggal Persada - Indonesia
- Singapore Mercantile Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Georgia Ports Authority, United States
- Maheswari Brothers Coal Limited - India
- VISA Power Limited - India
- Parry Sugars Refinery, India
- GMR Energy Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Makarim & Taira - Indonesia
- Parliament of New Zealand
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- Baramulti Group, Indonesia
- Sakthi Sugars Limited - India
- Wilmar Investment Holdings
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- PTC India Limited - India
- Marubeni Corporation - India
- Central Java Power - Indonesia
- San Jose City I Power Corp, Philippines
- TeaM Sual Corporation - Philippines
- MS Steel International - UAE
- The University of Queensland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Alfred C Toepfer International GmbH - Germany
- Indika Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Semirara Mining and Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement - Thailand
- Coalindo Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Latin American Coal - Colombia
- Banpu Public Company Limited - Thailand
- Sree Jayajothi Cements Limited - India
- Minerals Council of Australia
- Meenaskhi Energy Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Carbofer General Trading SA - India
- Energy Link Ltd, New Zealand
- Larsen & Toubro Limited - India
- Electricity Authority, New Zealand
- SMG Consultants - Indonesia
- Interocean Group of Companies - India
- Bukit Makmur.PT - Indonesia
- Ministry of Mines - Canada
- Ambuja Cements Ltd - India
- Heidelberg Cement - Germany
- Attock Cement Pakistan Limited
- The Treasury - Australian Government
- Altura Mining Limited, Indonesia
- Rio Tinto Coal - Australia
- CIMB Investment Bank - Malaysia
- Grasim Industreis Ltd - India
- IEA Clean Coal Centre - UK
- TNB Fuel Sdn Bhd - Malaysia
- Sojitz Corporation - Japan
- Manunggal Multi Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Orica Mining Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Bukit Baiduri Energy - Indonesia
- Energy Development Corp, Philippines
- Essar Steel Hazira Ltd - India
- Timah Investasi Mineral - Indoneisa
- Therma Luzon, Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- London Commodity Brokers - England
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