Breaking Bulk

Although one generally thinks of immobilising of assets involving money any portable asset may be the subject of such an injunction.  One case some years ago assisted a port agent with disbursement outstanding against a time charterer.  It was impossible to arrest the ship as the debts were not due by the shipowner but she was still on hire to the same charterers and so some of the bunkers in her were the charterer’s property and it was that oil that became the subject of a Mareva injunction. This effectively immobilised the ship as there was no way for her to move away without taking the oil outside the jurisdiction.  Judges will always be very careful in cases like this, however, because they will have to be convinced that there is no risk of an innocent third party being adversely affected.  In this case it could have been the shipowner had the judge not been reassured that the time charter still had some time to run. The manager may have to invoke the law when freight or hire payments are late.  All voyage charters will say exactly when freights have to be paid and if, for example, the charter states that freight is payable ‘before breaking bulk’ there is a difficult decision to be made if the ship is at discharging port but there is no sign of the cash. If discharging is allowed to proceed you start losing your hold on the means to enforce payment as there is no obligation to deliver the cargo until freight is paid.  While the cargo is in the ship you do not have to resort to any complex legal proceedings, you just refuse to allow it to be taken off. Simply sitting there idle, however, is not earning income for the owner and you may need help via your agent from a local lawyer. One device could be letting the cargo go ashore but to place a lien on it so that the importer cannot take possession of it until he has paid. It may not be, in fact it seldom is, as easy as that in many parts of the world and this is where skill and foresight are the ship manager’s most vital assets.  Every time a fixture is concluded the manager or owner is taking a calculated risk.  They are using their judgement as to whether the charterer will comply with his side of the bargain and, if he does not, whether recourse to legal action will be effective.