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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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Sunday, 06 December 15
DESPITE TEMPTING NEWBUILDING PRICES, CONTRACTING IN DRY BULK REMAINS LOW - BIMCO
The current newbuilding prices for dry bulk ships has dropped so much that they just passed the lows of 2012 heading downwards and are now at the l ...
Friday, 04 December 15
FOB INDONESIA COAL SWAPS ARE ALMOST FLAT OVER WEAK DEMAND
COALspot.com: Indonesian coal swaps for delivery Q1 2016 declined month on month and rose slightly week over week. Coal prices seen very margi ...
Friday, 04 December 15
COAL PRODUCTION IN THE U.S. FOR W/E NOVEMBER 28TH FELL SLIGHTLY FROM THE PREVIOUS WEEK
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 15.0 million shor ...
Friday, 04 December 15
MINING OUTLOOK WEAKENS FURTHER ON FALLING CHINESE DEMAND - FITCH
COALspot.com: Fitch Ratings' outlook for the global mining sector in 2016 is firmly negative, reflecting our view that Chinese demand will cont ...
Thursday, 03 December 15
DRY BULK: THERMAL COAL LOWER USAGE UNDER A POTENTIAL NEW CLIMATE DEAL WILL ADVERSELY IMPACT THE MARKET'S RECOVERY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
In direct contrast to the tanker market, the dry bulk one has seen demand for key commodities, such a coal, dwindling down over the course of the p ...
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- Jaiprakash Power Ventures ltd
- Grasim Industreis Ltd - India
- European Bulk Services B.V. - Netherlands
- Gujarat Electricity Regulatory Commission - India
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- Goldman Sachs - Singapore
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- Bangladesh Power Developement Board
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- Indonesian Coal Mining Association
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- London Commodity Brokers - England
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- Salva Resources Pvt Ltd - India
- Xindia Steels Limited - India
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- Sojitz Corporation - Japan
- Global Coal Blending Company Limited - Australia
- Directorate General of MIneral and Coal - Indonesia
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- Meralco Power Generation, Philippines
- Trasteel International SA, Italy
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- Star Paper Mills Limited - India
- Semirara Mining and Power Corporation, Philippines
- Heidelberg Cement - Germany
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- Indian Energy Exchange, India
- VISA Power Limited - India
- Samtan Co., Ltd - South Korea
- Carbofer General Trading SA - India
- IEA Clean Coal Centre - UK
- PowerSource Philippines DevCo
- Bayan Resources Tbk. - Indonesia
- Central Electricity Authority - India
- White Energy Company Limited
- Intertek Mineral Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Vizag Seaport Private Limited - India
- Latin American Coal - Colombia
- Bulk Trading Sa - Switzerland
- Uttam Galva Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- Wood Mackenzie - Singapore
- Sical Logistics Limited - India
- Tamil Nadu electricity Board
- Formosa Plastics Group - Taiwan
- Parry Sugars Refinery, India
- Energy Link Ltd, New Zealand
- MS Steel International - UAE
- TeaM Sual Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Anglo American - United Kingdom
- Global Business Power Corporation, Philippines
- Georgia Ports Authority, United States
- Merrill Lynch Commodities Europe
- Iligan Light & Power Inc, Philippines
- Madhucon Powers Ltd - India
- Straits Asia Resources Limited - Singapore
- Marubeni Corporation - India
- Dalmia Cement Bharat India
- Kumho Petrochemical, South Korea
- SMG Consultants - Indonesia
- Indian Oil Corporation Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TNB Fuel Sdn Bhd - Malaysia
- Alfred C Toepfer International GmbH - Germany
- The Treasury - Australian Government
- India Bulls Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Miang Besar Coal Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Bhatia International Limited - India
- Minerals Council of Australia
- PTC India Limited - India
- Oldendorff Carriers - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Mintek Dendrill Indonesia
- Bharathi Cement Corporation - India
- Antam Resourcindo - Indonesia
- Standard Chartered Bank - UAE
- Price Waterhouse Coopers - Russia
- Makarim & Taira - Indonesia
- Renaissance Capital - South Africa
- Indika Energy - Indonesia
- Borneo Indobara - Indonesia
- Altura Mining Limited, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Cement Manufacturers Association - India
- Australian Coal Association
- Ambuja Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Vijayanagar Sugar Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Petron Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Coastal Gujarat Power Limited - India
- ASAPP Information Group - India
- GMR Energy Limited - India
- Metalloyd Limited - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- GVK Power & Infra Limited - India
- Ministry of Mines - Canada
- Eastern Energy - Thailand
- Chamber of Mines of South Africa
- Kaltim Prima Coal - Indonesia
- Thiess Contractors Indonesia
- LBH Netherlands Bv - Netherlands
- Manunggal Multi Energi - Indonesia
- Siam City Cement - Thailand
- Simpson Spence & Young - Indonesia
- Riau Bara Harum - Indonesia
- Electricity Authority, New Zealand
- Kobexindo Tractors - Indoneisa
- Gujarat Sidhee Cement - India
- Pendopo Energi Batubara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kepco SPC Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Bahari Cakrawala Sebuku - Indonesia
- The University of Queensland
- Power Finance Corporation Ltd., India
- Medco Energi Mining Internasional
- GN Power Mariveles Coal Plant, Philippines
- Eastern Coal Council - USA
- Barasentosa Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Java Power - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Lanco Infratech Ltd - India
- Savvy Resources Ltd - HongKong
- Coal and Oil Company - UAE
- South Luzon Thermal Energy Corporation
- Larsen & Toubro Limited - India
- Kartika Selabumi Mining - Indonesia
- Energy Development Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Bukit Baiduri Energy - Indonesia
- Sakthi Sugars Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Coalindo Energy - Indonesia
- Aditya Birla Group - India
- CIMB Investment Bank - Malaysia
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Attock Cement Pakistan Limited
- Wilmar Investment Holdings
- Planning Commission, India
- SN Aboitiz Power Inc, Philippines
- Australian Commodity Traders Exchange
- Posco Energy - South Korea
- Meenaskhi Energy Private Limited - India
- Indogreen Group - Indonesia
- Toyota Tsusho Corporation, Japan
- Thai Mozambique Logistica
- Sree Jayajothi Cements Limited - India
- Rio Tinto Coal - Australia
- Global Green Power PLC Corporation, Philippines
- Mercator Lines Limited - India
- Timah Investasi Mineral - Indoneisa
- ICICI Bank Limited - India
- Africa Commodities Group - South Africa
- Maheswari Brothers Coal Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- CNBM International Corporation - China
- Bhoruka Overseas - Indonesia
- SMC Global Power, Philippines
- Baramulti Group, Indonesia
- Indo Tambangraya Megah - Indonesia
- Mjunction Services Limited - India
- McConnell Dowell - Australia
- Economic Council, Georgia
- Directorate Of Revenue Intelligence - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Maharashtra Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Videocon Industries ltd - India
- Orica Mining Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Interocean Group of Companies - India
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