273. Itex Itagrani Export SA v Care Shipping Corp (The “Cebu”) (No.2) [1990] 2 Lloyd’s Rep 316

Chain of time charters – lien on freight not extending to hire paid under last charter for a single voyage

The facts

Three charters were entered into back to back on the NYPE form. The final charter was a time charter for a voyage from Portland, Oregon to Bandar Abbas to carry a cargo of grain.

Clause 18 in all three charters provided that owners would have a lien on all cargoes and sub-freights.

Head charterers defaulted on payment of hire and owners purported to exercise a lien over the hire to be paid on the third charter.

Findings

Steyn J in the Commercial Court refused to follow Lloyd J in the Cebu (No.1) who found that the lien extended to hire.

He held that although the terms “hire and “freight” were treated as synonymous in the old cases, they had evolved into seperate and distinct concepts.

Accordingly, he found that the owners did not have a lien on the hire paid on this trip time charter.

Commentary

As hire and freight are both species of remuneration, there is no justification in principle for treating them differently.

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