China: Owner’s lien on cargo for unpaid freight


Published: 25 February 2014

The Association is grateful to Wai Yue Loh of Ince & Co, Beijing, for contributing to this update.

When freight has not been paid, Owners / Operators need to consider how best to secure their position as against the defaulting party. One of the main traditional options was to seek a lien on cargo for the unpaid freight.

Exercising liens, however, can be a practically challenging task.

Key points to the successful exercise of a lien, include:

  1. there must be a right of lien under the charterparty
  2. that right of lien must also exist in the contract of carriage
  3. sufficient steps need to be taken to exercise the lien in due time
  4. the lien must be recognised by the law of the country in which it is sought to be exercised
  5. there must be practical means of securely holding on to the cargo

In the article accompanying this update, Ince & Co illustrate the issues of seeking to exercise a lien in the P.R. China. Given the importance of China to maritime trade and the volume of cargo consigned to her ports, it is a frequent topic on which the Association is asked to give advice on for our Members.