Care Shipping Corporation v. Latin American Shipping Corporation (The Cebu) Q.B.D. (Com. Ct.) (Lloyd J.) - 10 November 1982

NYPE form - Whether lien on “sub freights” entitles owners to intercept hire due from sub-sub-charterers

The plaintiffs were the owners of the vessel Cebu . They time-chartered her under the NYPE form to N (the charterers). N sub-chartered the vessel to L (the sub-charterers) on identical terms. By a third charter, also on the NYPE form, L sub-sub-chartered the vessel to I (the sub-sub-charterers). Disputes arose between the owners and Head Charterers which were the subject of arbitration proceedings. The owners claimed an amount in respect of unpaid hire, but liability was denied by N. The issue before the Court was whether the owners were entitled to exercise their lien under clause 18 of the Head Charter by requiring I (the sub-sub-charterers) to pay to the owners any hire which might be due from I to L.