Protecting Your Lien On Sub-Freight And Sub-Hire – Practical Guidance

The vast majority of charter parties will include in their terms a lien clause which confers on the owner a lien over sub-freight (and sometimes sub-hire), for any amounts due to the owner under the head charter party. If the owner exercises his lien, sums which would otherwise be payable by the sub-charterer to the charterer under the sub-charter party, should instead become directly payable to the owner.

The right to exercise a lien over sub-freight is a right which the charterer grants to the owner in their charter party and it is therefore a contractual right. If the lien over sub-freight were not granted in the charter party, it would not exist.

It is not to be confused with a "maritime lien" which may arise in relation to certain types of claims^[1] and which attach to the ship or cargo, and which in an insolvency situation should confer priority on the claimant who has a maritime lien over unsecured creditors.