Owners’ Liens On Cargo For Unpaid Freight In China

A shipowner client comes to us with a problem. The charterer has defaulted on freight payments and/or will not pay freight due and payable under the charterparty. The charterer has also gone incommunicado. The following diagram sets out the basic framework:

The vessel is en route to discharge its cargo in China. The bill of lading is held by the buyer/cargo receiver to whom the charterer has sold the cargo. The shipowner wants to know whether he can exercise a lien on the cargo against the lawful holder of the bill of lading until he has been paid the freight due to him from the charterer.

This article sets out some basic guidance and tips for the shipowner who finds himself in a similar scenario.