common law lien or a contractual lien; whereas in the traditional civil law it is based
on statute and there is no concept of a contractual lien.
2 The purpose of this lien is to
provide an effective remedy to the shipowner in the event of a charterer’s failure to
pay any amounts to the owner required under the charterparty. The provision in
question is referred to as a lien clause and is typical of the one found in Article 23 of
New York Produce Exchange (NYPE) 2015, which stipulates that—“[T]he Owners
shall have a lien upon all cargoes. . .belonging or due to the Charterers or any
sub-charterers, for any amounts due under this Charter Party, including general
average contributions. . .”
3
When a charterer commits a breach, the shipowner as a lawful possessor of the
cargo, is entitled to exercise his legal or contractual right over it without any
intervention. The cargo lien, referred to above, is in effect a self-help remedy
afforded to the shipowner who is the innocent party at the receiving end of the
charterer’s breach. Further to that is the question whether the shipowner is obliged to
act reasonably while exercising his right of self-help.
1.2 Purpose
The principal purpose of this chapter is to examine from the dual perspectives of
English and Chinese law whether the so-called lien clause in a charterparty accommodates an implied duty on the part of the shipowner to act reasonably and in good
faith, otherwise known as bona fides, in the course of exercising his right. In this
context, it must be observed that the standard lien clause in different charterparties
does not expressly provide for any obligation on the part of the shipowner to act
reasonably while he is exercising his right under this clause. It is trite that the
fundamental purpose of the lien clause is to protect the shipowner’s interests in the
face of the charterer’s breach of his contractual obligation. It may be arguable
therefore, that in such instance there is no ground for the contention that there is
any obligation of the shipowner owing to the cargo owner. A subsidiary purpose of
the present investigation is to determine whether and to what extent that is a
conclusion sound and supportable by law in the English and Chinese legal systems.
1.3 Structure
The chapter first addresses the English law on the subject and then the Chinese law in
succession. Following the “Introduction”, insofar as the English law is concerned,
2 In recent years, in some civil law jurisdictions this is changing because of reconsideration of the
implication of numerus clausus so that party autonomy may apply in the system of security.
3 See also Article 8 of Gencon 1994, Article 14 (d) of Gentime 1999 and other standard forms.
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on statute and there is no concept of a contractual lien.
2 The purpose of this lien is to
provide an effective remedy to the shipowner in the event of a charterer’s failure to
pay any amounts to the owner required under the charterparty. The provision in
question is referred to as a lien clause and is typical of the one found in Article 23 of
New York Produce Exchange (NYPE) 2015, which stipulates that—“[T]he Owners
shall have a lien upon all cargoes. . .belonging or due to the Charterers or any
sub-charterers, for any amounts due under this Charter Party, including general
average contributions. . .”
3
When a charterer commits a breach, the shipowner as a lawful possessor of the
cargo, is entitled to exercise his legal or contractual right over it without any
intervention. The cargo lien, referred to above, is in effect a self-help remedy
afforded to the shipowner who is the innocent party at the receiving end of the
charterer’s breach. Further to that is the question whether the shipowner is obliged to
act reasonably while exercising his right of self-help.
1.2 Purpose
The principal purpose of this chapter is to examine from the dual perspectives of
English and Chinese law whether the so-called lien clause in a charterparty accommodates an implied duty on the part of the shipowner to act reasonably and in good
faith, otherwise known as bona fides, in the course of exercising his right. In this
context, it must be observed that the standard lien clause in different charterparties
does not expressly provide for any obligation on the part of the shipowner to act
reasonably while he is exercising his right under this clause. It is trite that the
fundamental purpose of the lien clause is to protect the shipowner’s interests in the
face of the charterer’s breach of his contractual obligation. It may be arguable
therefore, that in such instance there is no ground for the contention that there is
any obligation of the shipowner owing to the cargo owner. A subsidiary purpose of
the present investigation is to determine whether and to what extent that is a
conclusion sound and supportable by law in the English and Chinese legal systems.
1.3 Structure
The chapter first addresses the English law on the subject and then the Chinese law in
succession. Following the “Introduction”, insofar as the English law is concerned,
2 In recent years, in some civil law jurisdictions this is changing because of reconsideration of the
implication of numerus clausus so that party autonomy may apply in the system of security.
3 See also Article 8 of Gencon 1994, Article 14 (d) of Gentime 1999 and other standard forms.
312
S. Jia and H. Yu