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Lien – shipowners entitled to storage expenses incurred while exercising lien over cargo in respect of unpaid General Average contribution.

The facts

A cargo of steel coils and a deck cargo of hatch covers were shipped under bills of lading incorporating the terms and conditions of a voyage charter, from China to St Petersburg.

Two bills were straight bills naming a Russian company as consignees.  The same consignees were endorsees under two other bills of lading.  Four bills covered the entire cargo of steel coils.  The consignees/endorsees were also the receivers of the steel coils in Russia.

The vessel was captured by Somali pirates and held to ransom, paid eventually by the owners.  After the release by the pirates, the vessel suffered main engine breakdown and was towed into a port of refuge, Salalah, Oman.

The owners declared General Average. The receivers of the steel coils were liable for approximately one third of the GA disbursements.

Owners requested security in the form of a General Average bond backed by an insurers’ guarantee, alternatively, a cash deposit.

The receivers of the hatch covers provided security for General Average by the provision of a bond and an insurers’ guarantee and the hatch covers were delivered to them at the first discharge port in Germany.

When the vessel arrived in St Petersburg, Russian receivers refused to provide a bond or a cash deposit in respect of any part of the cargo.

A portion of the cargo carried under the fourth bill of lading (9% of the cargo) was insured and an Insurers’ Guarantee was provided for that portion of the cargo.

Owners continued to demand a GA Bond from the receivers in respect of the entire cargo of steel coils. This was refused by receivers.

Owners exercised their lien and discharged the entire cargo into a warehouse thereby incurring storage charges.

Receivers denied liability for a General Average contribution and counterclaimed in an arbitration for alleged conversion of the cargo.  Owners sought to recover the General Average contribution and storage costs.


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