When is the Carrier allowed to exercise the lien on cargo for unpaid freight/demurrages?
The Spanish Shipping Act introduced some developments in this matter and clarified certain aspects which had not been regulated before.
The general rule is that the Carrier can refuse delivery of the cargo for unpaid freight due by the subject cargo if the BL is claused “freight collect”. The carrier shall also be allowed to refuse delivery if the BL contains a lien clause.
In case of a Time Charter, where the cargo is not owned by the Charterer, the Owner shall only have a lien on cargo if the freight due by the Consignee to the Charterer is still outstanding and limited to that freight amount, not to the hire. Although the Act is referring to T/C only our view is that the same spirit applies to a C/P coexisting with a sub-charter.
If the Consignee exceeds the free time given to take delivery of the cargo, the Carrier will also be entitled to refuse delivery until demurrages/ storages are duly settled. In all the situations where the Carrier is allowed to refuse delivery of the cargo, he can apply for its sale by a Public Notary (this is commented in this article).