Nature

At times the parties to a contract may expressly incorporate into the contract a clause providing for a lien to rise on the occurrence of particular circumstances. The nature and extent of the lien now depends upon the contractual words which create the lien. Contractual liens are a common feature of charter parties. e.g. Clause 21 of the Exxonvoy 1969 Charter party form which provides for the owner to have an absolute lien on the cargo for all freight, deadfreight and costs… and for the lien to continue after delivery of the cargo. This obviously, therefore, incorporates the qualities of both common law possessory liens and equitable liens. It should be noted that in Miramar Corporation v Holborn Oil Trading (1984), Lord Diplock, referred to this as a ‘curiously drafted’ lien clause and expressed the view that the time had come for the House of Lords to re-examine this and other standard forms of lien clauses. Lord Diplock was of the opinion that such clauses were in need of ‘clarification and simplification’, opportunity for which was not afforded in this case. His Lordship’s main concern appears to have been in respect of a lack of certainty which arises as to the exact extent of such liens. Similar judicial concern has been expressed as regards the shipowners’ contractual lien on sub-freights under Clause 18 of the NYPE. form of timecharter.