A dispute about a lien on cargo

Regarding the amount of USD 1,698,461.45 and VND 1,528,046,010 requested by Claimant, it was found that the Respondent chartered the Vessel to “legally carry the cargo” as stipulated in the Trip Time Charter but shipped the cargo suspected to have origin from North Korea, causing damage to the Claimant; Respondent had not paid enough hire and expenses; Claimant had taken reasonable measures to limit the loss. Therefore, according to the Trip Time Charter, the Appendix, the inspection report upon delivery of the Vessel; bunker charges, hire payments..., specified in Clause 1, Article 227 of the 2015 Vietnam Maritime Code (“Maritime Code”) on payment of hire, Articles 302, 305 of the 2005 Commercial Law on compensation for damage, on applying reasonable measures to limit losses; The Arbitral Tribunal had grounds to compel the Respondent to pay in full the hire, costs under the Trip Time Charter, and to compensate the Claimant for damage as follows:

For the amount of USD 1,698,461.45 including the hire from the date of delivery of the Vessel of April 3, 2019 to the time of redelivery of the Vessel on April 22, 2019 which was USD 97,586.67, minus 3.75% commission, remaining USD 93,927.17, pursuant to Articles 10 and 11 about hire of the Trip Time Charter, Clause 1, Article 227 of Maritime Code on the payment of hire, the Arbitral Tribunal accepted this amount. Regarding the detention per day, the Claimant corrected the “hire” as USD 1,480,108.68, the Arbitral Tribunal said that this was actually also the hire because the Respondent could not redeliver the Vessel until December 5, 2019, as stipulated in Article 215, Clause 3 Article 223 of Maritime Code on the definition of a time charter party and the obligation to redeliver the vessel. After deducting 3.75% commission, the remaining amount of USD 1,424,604.61 was accepted by the Arbitral Tribunal. The Communication charge of USD 9,859.03; IFO (fuel oil) cost at Vessel delivery of USD 183,531.29 and MDO (diesel oil) USD 29,931.40; the bunkers supplied by Claimant of USD 239,043.73; cargo hold cleaning charge of USD 3,000; deviation cost of USD 10,000, and the amounts payable by the Claimant of bunkers at redelivery (USD 37,516.89 and USD 26,698.06); the amount paid by the Respondent to the Claimant (USD 74,700.00, USD 102,020.81 and USD 50,000)... had fully appropriate documents and confirmations; Respondent was informed of these amounts, costs and charges but did not have any comments or objections, therefore, the Arbitral Tribunal accepted the total amount of USD 1,698,461.45.

For the amount of VND 1,528,046,010 including expenses such as travel, hotel... meeting Charterer/ Shipper of VND 53,867,238; working with Squadron 3 VND 19,411,364... had fully appropriate documents/ confirmations. These were damages incurred directly, so this amount was also accepted by the Arbitral Tribunal.

Regarding the claim “... declared Claimant had the right to exercise a lien on cargo of 26,400 metric tons of coal”, the Arbitral Tribunal found that 26,253.25 metric tons of coal (a decrease in quantity after inspection in Vietnam) carried on the Vessel was confiscated according to the Confiscation Minute dated February 13, 2020 of Squadron 3 (implementing the above sanctioning Decision No. 163 of the General Department of Customs). Therefore, the Arbitral Tribunal did not have the authority to consider a lien on cargo because the confiscation of goods was already under the jurisdiction of the customs authority.

Conclusion: The Arbitral Tribunal (i) partially accepted the Claimant’s claim, forcing the Respondent to pay the Claimant the amount of USD 1,698,461.45 and VND 1,528,046,010, and (ii) did not accept Claimant’s claim to exercise a lien on cargo.