i-law

Voyage Charters

Page 1059

Chapter 60

Lien
21. LIEN. The Owner shall have an absolute lien on the cargo for all freight, deadfreight, demurrage and costs, including attorney fees, of recovering the same, which lien shall continue after delivery of the cargo into the possession of the Charterer, or of the holders of any Bills of Lading covering the same or of any storagemen.
60.1 See generally the discussion of the lien clause in the Gencon form in . 60.2 The lien granted by the Asbatankvoy form covers freight, deadfreight and demurrage, as does the lien clause in the Gencon form, but it also grants a lien for the costs of recovering that freight, deadfreight and demurrage, which costs include lawyers’ fees; whether lawyers’ disbursements are within the term “fees” is debatable, but it is submitted that the general entitlement is to costs of recovery and those disbursements would fall under that general heading. The clause does not in terms grant a lien for the costs of exercising a lien, as distinct from recovering the freight, deadfreight and demurrage.1 However, it is submitted that, as long as the exercise of the lien can be fairly described in any particular case as part of the costs of recovering the freight, deadfreight and demurrage, then the lien granted by the Asbatankvoy form ought to embrace also those costs. 60.3 As indicated in the discussion of the Gencon lien clause, the essence of a lien is that it is possessory and is lost if possession is given up, at least to anyone other than an agent or storageman appointed by the owner. The difficulty in reconciling this clause with the possessory nature of a lien was commented on by Evans J. in The Boral Gas,2 in which he held that the lien applied only to the cargo to which the claims related and not to claims under a consecutive voyage charter in respect of earlier voyages or cargoes. It is certainly unclear precisely what the nature of the owner’s continuing lien is once delivery is given to the charterer or bill of lading holder. Similar difficulties arise in connection with those lien clauses sometimes found in time charters which provide that the time charterer shall have a lien on the ship for hire paid and not earned, and other claims, and the courts have shown a reluctance to reach the conclusion that such provisions are wholly ineffectual.3 It may be, therefore, that clause 21 qualifies the act of delivery by the owner retaining some form of constructive possession, or entitles him to restrain a further disposal by way of injunction4 or otherwise.

Page 1060

U.S. Law

60A.1 Clause 21 provides that the owner’s lien on cargo for freight shall survive discharge and delivery. In The Ogden Charger,5 the owner’s notification to the charterer and receivers that it would exercise its right to a lien on cargo unless freight was paid was held prudent and not actionable for trade libel, as it was not erroneous or misleading. See also The Halki,6 where the issue as to whether discharge delays were so unreasonable that the owner should have considered preserving its lien by discharging cargo without delivery to the receivers, was raised but not addressed as the charterer had not proven the availability of tanks or barges. 60A.2 An owner may properly withhold discharge until freight due “before breaking bulk” is paid.7 Discharge may also be withheld until the bill of lading or a suitable bank guaranty is presented.8 A clause 21 lien does not arise and withholding of discharge is improper, however, unless freight has been earned.9 60A.3 Clause 21 incorporated in a consecutive voyage charterparty was held not to give rise to a lien on cargo on the most recent voyage for demurrage incurred during prior voyages.10 A.4 See also , above.