Exercising of the Lien on the Cargo by the Shipowners
Various voyage charter proformas , for example, Synacomex 2000 and Gencon 1994, provide for the right of the lien on the cargo by the shipowner at the port of discharge in the case of non-payment of freight, demurrage and other payments (may vary depending of type of the charter proforma). However, despite the direct indication of such right in the charter the shipowners must be careful using this method of the claim’s security as not all states’ local legislation allows to retain the cargo without a court order. In case of contradiction of a charter and laws of the country where the lien on the cargo is exercised, the court will be guided by local regulations. Therefore, before one decides to exercise the lien on the cargo he should seek for an advice from a lawyer in the country where he is going to retain the cargo, even if the charter is governed by the law of another state. If this precaution is not observed, the shipowner runs the risk that the consignee will file the claim to the court against him for the recovery of the goods and the claim for damages due to delayed unloading of the cargo. Also the consignee may initiate the ship arrest.
It should be noted that the Ukrainian legislation, namely Art. 163 Merchant Shipping Code of Ukraine, provides for the right of the shipowner to exercise the lien on the cargo by retaining it on board the vessel or to turn the cargo in for storage in a warehouse until the payment of the costs incurred due to shipping, demurrage, freight or general average contribution. Also, for speeding-up of the cargo unloading consignee can provide an adequate security to the shipowner in respect of the above payments.