Transcript Slide 1
Payments under problem charters – the continuing effectiveness of the lien David Pitlarge Partner Marine, Trade and Energy 1. Introduction: continuing relevance • What you might achieve • Alternative rights to recovery – Rule B – Freezing orders – Payment orders – Possessory Liens/Cargo 2. Introduction: Where to find it • NYPE 1946 – Clause 18: “The Owners shall have a lien upon…all sub-freights for any amounts due under this charter”… • Other “sub-freight” clauses: – – – – – Baltime 1939 – Clause 17 Gastime – Clause 24 Linertime - Clause 20 Intertanktime 80- clause 27 Barecon ’89 ( but not 2001, which includes sub hire and b/l freight) 2. Introduction: Where to find it cont’d • Wider terms/sub-hires: – NYPE 1993 – Clause 23 – Boxtime 2004 – Clause 15 (B) – BPtime 3 – Clause 14 – Gentime – Clause 14(D) • Offshore/ salvage: Supplytime – Clause 19 (“lien on all cargoes and equipment”) – Wreckhire 2010 / Wreckstage 2010 3. Nature of the Lien • Not a lien as such – Not possessory – Contracts: cargo, – General law: Freight, GA, unpaid seller, shares • Distinct from maritime lien • Equitable assignment and the rival theories: “the Western Moscow” – (Western Bulk Shipowning III A/S v Carbofer Maritime Trading APS and Others [2012] EWHC (Comm). 4. What it covers/wording • “Sub-freights”…does not include sub hire … • “The Cebu No.1” – Cave Shipping Corporation v Latin American Shipping Corporation [1983] 1 Lloyd’s Rep. 302 • “The Cebu No. 2” – Itex Itagrain Export S.A. v Cave Shipping Corporation and Others [1990] 2 Lloyd’s Rep. 316 • “The Bulk Chile” – Dry Bulk Handy Holding Inc and Another v Fayette International Holdings Ltd and Another [2012] EWHC 2107 (Comm) 5. What it covers: The “Bulk Chile” chain: tc DBHH/ CSAV; tc CSAV/KLC; tct KLC/Fayette; vc Fayette /Metinvest….owners’ bill, Metinvest as shippers • KLC fail to pay – rehabilitation in Korea , recognised subsequently under Cross Border Insolvency Regulations • Notice served on Fayette and Metinvest; Metinvest pay freight to Fayette • “Owners” could recover: b/l freight, v/c freight (even though not payable as of notice date)…and for post withdrawal service 5. • • • • What it covers: So we can look at… Sub freight, perhaps hire Sub , sub freight ( and, if provided for , sub, sub hire) “Assignments of assignments”: charterers’ and sub charterers’ rights to receive • Bill of lading freight ( free-standing right , see The Spiros C” [2000] 2 Lloyd’s Rep 319, “The Bulk Chile”) ….BUT this is technically a different right and a function of the owner’s contract with the shipper. 6. Execution and Priorities • Notice requirements per the “Bulk Chile”: 1. -owners assignees of debts owed/ to be owed 2. - what debts assigned 3. - an amount due under head charter- an amount; not how much…no breakdown required 4. -owner requires payment of assigned debt directly • Effective on service • Priorities 7. Risks, Challenges and Disputes (A) The Risk: • Double jeopardy • “Attika Hope” -[1988] 1 Lloyd's Rep. 439 8. Risks, challenges and Disputes (B) Challenges • • • • The language of the clause Registration: “The Ugland Trailer” – Re Welsh Irish Ferries Ltd (in Receivership and in Liquidation) [1985] 2 Lloyd’s Rep. 372 “The Anangel Glory [1988] 1 Lloyd’s Rep. 45 Companies Act 2006 s. 860 ( replacing s.395 CA 1985) 9. Risks, Challenges and Disputes (C) Disputes: • Forum for determination of the lien rights • Forum for the assigned claim (see the “Western Moscow”) • The impact of foreign insolvencies - Cosco Bulk Carrier Co. Ltd v Armada Shipping SA and another Re Armada Shipping SA [2011] EWHC 216 (Ch)) : - Cosco/ Armada/ STX - Armada in liquidation in Switzerland; lien issues to be determined in London arbitration as per c/p 10. Summary and Practical Tips • Drafting – as wide as possible – BIMCO Lien clause: – In addition to c/p lien clause – Any sums due under any sub charterperties (in addition to freights and sub freights) – Lien on bunkers – Vesting of property in bunkers on withdrawal. • Consider registration issues at the outset 10. Summary and Practical Tips • • • • • Timely service of effective notices Notice to the proper parties Consider deductions Forum for disputes Pragmatic solutions and escrow For further information please contact: David Pitlarge - Partner Hill Dickinson Direct Dial +44 (0)20 7280 9251 Email [email protected] Fax +44 (0)20 7283 1144 Website www.hilldickinson.com