Non-paym ent o f h i re

As will be seen from the “Lien on Cargo” section of this book, clauses purporting to give the owners of a time chartered ship a right to lien the cargo on board for unpaid hire maybe of little or no practical assistance. The below points may serve as a check list of points to be observed whenever there is late or non-payment of hire:

(i) Charterers must be notified in clear terms of the owners’ intention to withdraw the vessel and the master should be instructed accordingly.

(ii) Keep in mind that if late payments have been routinely accepted, it is vital that the charterers are informed that the owners will no longer accept late payments. Such notificationmust be submitted to the charterers well in advance of the next hire payment.

(iii) The owners’ bank must be instructed to reject payment of any late payment of hire.

(iv) The vessel cannot be withdrawn with cargo on board in view of the owners’ bill of lading liability vis à vis the bill of lading holders.

(v) Lien on cargo is possible only if the cargo on board belongs to the time charterers, i.e. when the bill of lading holders and the time charterers are identical.

(vi) The owners’ P+I club should be consulted with a view to attempt to place a lien on voyage sub-freights or bill of lading freight.

(vii) The owners’ club should also be consulted with a view to take steps aimed at securing time charterers’ assets, if any.

(viii) First and last, approach the club as soon as hire problems arise with a view to assesses which is the better approach in the particular circumstances.

Some of the standard time charter parties contain suspension of services provisions, such as clause 11 of the NYPE 93 and clause 8(c) of the GENTIME. This type of clause willensure that the contract remains alive even though the vessel does not render the services required. These suspension of services provisions do not deprive the owners of theirright to withdraw the vessel, it rather adds another tool available to the owners in case of delay in or non-payment of hire, which may be more appealing since the contract will notbe terminated if the owners apply that remedy. Hence, under the above charter party forms the owners actually have two options they may utilise in case of delay in ornon-payment of time charter hire.

Keep in mind, however, that, if there is no suspension of services provision in the charter party, such as in the Nype (46), and the owners purport to suspend services temporarilythe effect is that the charter party will be terminated, it will cease to exist.

Arrest of vessels for time charterers’ debts

It is an unfortunate fact of life that ships get arrested from time to time for debts incurred by time charterers. To diminish this risk, use of disclaimers is recommended, regardless ofthe trading pattern intended and ports visited by the ship.

‘A’

(To be signed by owners or their agents and posted by registered letter, return receipt requested, addressed to all of the charterers’ known stevedores, suppliers of fuel and othernecessaries or services at the prospective ports of call.)

“Dear Sirs,(date)

We have recently chartered our (nationality) flag (type) vessel named the (name) to Messrs. (name) of (place) as charterers.

It has come to our attention that in your capacity of (type of furnisher) at the port(s) of (name of port) where our said vessel may be trading, you may be called upon by saidcharterers to furnish (type of supplies or services) for their use in connection with the vessel.

We wish to advise for your guidance that under the terms of the charter between us, as owners of said vessel, and said charterers, neither the charterers nor the Master nor anyother person has power or authority to pledge either our or our said vessels credit, or to create, or permit to be created, any liens on our said vessel, and that accordingly any such(type of supplies or services) furnished by you to our said vessel will be so furnished solely upon the credit of Messrs. (name) as charterers, and not on the credit of the vessel orourselves as her owners”. (signed)

‘B’(To be endorsed as a prominent and legible rubber or typed stamped legend by the Master, Chief Officer, Chief Engineer and all other ship’s officers signing receipts or otherpapers submitted by suppliers of fuel, stevedoring and other necessaries or services which are not, under the governing charter, ordered for the account of the owners.)

‘Important Notice’The goods and/or services being hereby acknowledged, receipted for, and/or ordered are being accepted and/or ordered solely for the account of charterers of the S/S/M/S ......and not for the account of said vessel or her owners. Accordingly, no lien or other claim against said vessel or her owners can arise therefor.

(name) OWNERS OF THE (type) VESSEL (name).

‘C’(Suggested form of the last two sentences of Clause 18 of Nype (46) or equivalent clause in other time charters, of Time Charter, underscored language is the proposed additionto the form.)

“Charterers will not suffer, nor permit to be continued, any lien or encumbrance incurred by them or their agents, which might have priority over the title and interest of the ownersin the vessel. In no event shall charterers procure, or permit to be procured, for the vessel, any supplies, necessaries or services without previously obtaining a statement signedby an authorised representative of the furnisher thereof acknowledging that such supplies necessaries or services are being furnished on the credit of charterers and not on the

Non-payment of hire - BIMCO https://www.bimco.org/Members/Chartering/Time_Chartering/Non_pa...

1 of 1 4/27/2010 6:00 PM