Cargo Lien

Lien is the right given to a shipowner, in contract, to retain possession of the cargo at the port of discharge as security for the payment of freight or other charges due to the shipowner. A shipowner may exercise a lien given to him at common law that is not by express contractual terms, for: 1. The recovery of general average contributions due from cargo.2. Any expenses incurred by the shipowner in protecting the cargo. 3. To recover freight due on delivery of the cargo. In addition, it is very common within charterparties to see an express contractual term granting the shipowner a right of lien: Asbatankvoy: Part II Clause 21 The owner shall have an absolute lien on the cargo for all freight, dead freight, demurrage and costs, including attorney fees, on recovering the same, which 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 storage.’ The standard form of Asbatankvoy charterparty sets out the form of bill of lading that must be used with it. A standard form bill of lading provides that all of the terms of the charterparty which, of course, include the provision for a lien for demurrage are incorporated into the bill of lading. In the ‘Miramar’ case the owners exercised a lien over the cargo to require demurrage to be paid by the consignees. Disputes were referred to court and ultimately, in the House of Lords the owners were unsuccessful. The court held that references made to ‘the charterer’ in the charterparty should be construed literally to mean only the charterer of the vessel and not the consignee. Therefore, the inclusion of the lien clause in the charterparty into the bill of lading was ineffective.