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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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Thursday, 03 December 15
PANAMAX BUSINESS REMAINED UNDER PRESSURE LAST WEEK
COALspot.com: Following the new record lows the Dry Bulk market witnessed the week prior, the BDI took a much needed breath during the past days.
...
Wednesday, 02 December 15
Q3' 16 FOB RICHARDS BAY COAL SWAP SLIGHTLY UP FOR THE THIRD STRAIGHT WEEK
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q1’ 2016 up month over month and fell week over week.
The Q1’ 2016 &nbs ...
Wednesday, 02 December 15
MARKET INSIGHT - VASSILIS LOGOTHETIS
Boom and bust cycles in commodity prices are not something rare, yet they have important implications both for the world economy in general and for ...
Tuesday, 01 December 15
FOB NEWCASTLE COAL SWAP UP THIS PAST WEEK
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery slid $3.75 per ton (9.26%) month over month to US$ 36.75 per ton. The swap ...
Tuesday, 01 December 15
TANKERS VERSUS BULKERS - JUST PLAYING CATCH UP? - CLARKSONS
It’s now more than a year since the tanker market took off. In mid-2014 tanker earnings picked up and since then have been in the $30-$40,000 ...
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- Aboitiz Power Corporation - Philippines
- New Zealand Coal & Carbon
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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- Latin American Coal - Colombia
- GMR Energy Limited - India
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- LBH Netherlands Bv - Netherlands
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- Essar Steel Hazira Ltd - India
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- Coalindo Energy - Indonesia
- Gujarat Sidhee Cement - India
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Indian Energy Exchange, India
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- Wilmar Investment Holdings
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- Oldendorff Carriers - Singapore
- Salva Resources Pvt Ltd - India
- SMG Consultants - Indonesia
- Meralco Power Generation, Philippines
- Coastal Gujarat Power Limited - India
- Australian Coal Association
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- MS Steel International - UAE
- IEA Clean Coal Centre - UK
- Edison Trading Spa - Italy
- Ambuja Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Wood Mackenzie - Singapore
- The University of Queensland
- SMC Global Power, Philippines
- Global Business Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Coal and Oil Company - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kumho Petrochemical, South Korea
- Independent Power Producers Association of India
- Alfred C Toepfer International GmbH - Germany
- Bukit Baiduri Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Anglo American - United Kingdom
- Commonwealth Bank - Australia
- Timah Investasi Mineral - Indoneisa
- Global Coal Blending Company Limited - Australia
- Tamil Nadu electricity Board
- Georgia Ports Authority, United States
- European Bulk Services B.V. - Netherlands
- Iligan Light & Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Romanian Commodities Exchange
- VISA Power Limited - India
- Standard Chartered Bank - UAE
- Ministry of Finance - Indonesia
- Parliament of New Zealand
- Indogreen Group - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bulk Trading Sa - Switzerland
- Gujarat Mineral Development Corp Ltd - India
- Ind-Barath Power Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petron Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- London Commodity Brokers - England
- Orica Mining Services - Indonesia
- Thai Mozambique Logistica
- Ceylon Electricity Board - Sri Lanka
- Sree Jayajothi Cements Limited - India
- Banpu Public Company Limited - Thailand
- Parry Sugars Refinery, India
- Rio Tinto Coal - Australia
- Altura Mining Limited, Indonesia
- Deloitte Consulting - India
- Central Electricity Authority - India
- Bhatia International Limited - India
- Indian Oil Corporation Limited
- Bhoruka Overseas - Indonesia
- Kepco SPC Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Sinarmas Energy and Mining - Indonesia
- Eastern Coal Council - USA
- Singapore Mercantile Exchange
- Bangladesh Power Developement Board
- ICICI Bank Limited - India
- Therma Luzon, Inc, Philippines
- Uttam Galva Steels Limited - India
- Kobexindo Tractors - Indoneisa
- Borneo Indobara - Indonesia
- Vedanta Resources Plc - India
- Maheswari Brothers Coal Limited - India
- Krishnapatnam Port Company Ltd. - India
- ASAPP Information Group - India
- The Treasury - Australian Government
- Renaissance Capital - South Africa
- Orica Australia Pty. Ltd.
- Lanco Infratech Ltd - India
- Electricity Authority, New Zealand
- Price Waterhouse Coopers - Russia
- The State Trading Corporation of India Ltd
- Baramulti Group, Indonesia
- Sindya Power Generating Company Private Ltd
- Billiton Holdings Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Sarangani Energy Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Grasim Industreis Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Minerals Council of Australia
- Planning Commission, India
- Africa Commodities Group - South Africa
- Kideco Jaya Agung - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Toyota Tsusho Corporation, Japan
- Simpson Spence & Young - Indonesia
- Dalmia Cement Bharat India
- Petrochimia International Co. Ltd.- Taiwan
- PetroVietnam Power Coal Import and Supply Company
- GAC Shipping (India) Pvt Ltd
- Leighton Contractors Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Energy Development Corp, Philippines
- Savvy Resources Ltd - HongKong
- Sical Logistics Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Binh Thuan Hamico - Vietnam
- Chamber of Mines of South Africa
- McConnell Dowell - Australia
- Ministry of Transport, Egypt
- Attock Cement Pakistan Limited
- Chettinad Cement Corporation Ltd - India
- Marubeni Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Star Paper Mills Limited - India
- Metalloyd Limited - United Kingdom
- South Luzon Thermal Energy Corporation
- Semirara Mining Corp, Philippines
- Energy Link Ltd, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Australian Commodity Traders Exchange
- Meenaskhi Energy Private Limited - India
- Jindal Steel & Power Ltd - India
- Riau Bara Harum - Indonesia
- Malabar Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Kalimantan Lumbung Energi - Indonesia
- White Energy Company Limited
- Agrawal Coal Company - India
- Karaikal Port Pvt Ltd - India
- India Bulls Power Limited - India
- Barasentosa Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Rashtriya Ispat Nigam Limited - India
- Global Green Power PLC Corporation, Philippines
- Mintek Dendrill Indonesia
- Medco Energi Mining Internasional
- Xindia Steels Limited - India
- Indika Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Makarim & Taira - Indonesia
- Ministry of Mines - Canada
- Posco Energy - South Korea
- Heidelberg Cement - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercator Lines Limited - India
- Goldman Sachs - Singapore
- Bhushan Steel Limited - India
- Siam City Cement PLC, Thailand
- Eastern Energy - Thailand
- Port Waratah Coal Services - Australia
- Mercuria Energy - Indonesia
- Electricity Generating Authority of Thailand
- AsiaOL BioFuels Corp., Philippines
- Jorong Barutama Greston.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Economic Council, Georgia
- GVK Power & Infra Limited - India
- Trasteel International SA, Italy
- CNBM International Corporation - China
- Antam Resourcindo - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Sojitz Corporation - Japan
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