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What is carriers lien on cargo in a charter party agreement ?

Lien clause

In common law, a carrier may exercise a possessory lien on any part of the cargo in respect of which freight is owing at the destination, and also for money which has been spent in protecting the cargo (e.g. where reefer goods have been warehoused by the shipowner while a damaged reefer vessel has been drydocked). A common law lien is not allowed on unpaid deadfreight or demurrage. However, carriers often insist on the insertion in the contract of carriage of a Lien Clause giving themselves a contractual lien on the cargo for deadfreight and demurrage, and sometimes also for damages for detention. A contractual lien for anything other than freight must be clearly expressed in the contract terms.



The carrier’s lien is exercised by the shipowner’s port agent or by the master as agent of the shipowner; it is not the master’s lien.

Once delivery of the goods is made, the lien is lost. (For this reason most dry cargo charter party forms require freight to be paid on or at some time before delivery.)

To preserve his lien, the carrier must retain actual or constructive possession of the goods on which freight is due. The cargo on which the lien is exercised should therefore be discharged into a warehouse under the exclusive control of the carrier’s agent who should be given instructions to release the goods only after surrender of an original bill of lading and payment of freight.

If freight is still not paid after a certain period of time, local law may allow the goods to then be sold to pay freight, storage charges, customs duty, etc.

Many bills of lading have a clause (such as a “London Clause”) giving the master the right to discharge cargo immediately on arrival and without notice to receivers.


Outturn of cargo- How to solve discrepancies between the loaded & discharged quantity in a cargo ships trade ?

Problems may arise over the outturn of cargo, i.e. discrepancies between the loaded (or “bill of lading”) quantity and the discharged quantity. The carrier is obliged to deliver the cargo in the same quantity and condition as when loaded and has a prima facie case to answer if any loss or damage occurs during the voyage. The carrier must then be able to show that he is exempt from liability under one or more of the exceptions in the contract of carriage. If he cannot prove that the loss/damage was covered by one of the exceptions in the contract, he will be liable for the loss/damage.

If the carrier can prove exemption from liability, however, the cost of the loss/damage will lie with the party bearing the risk in the cargo (e.g. the consignee), subject to possible recovery from the seller or the cargo insurer. In order to provide the necessary proof, the carrier will require full documentary evidence from the ship.





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