Cesser and lien clauses

A cesser clause provides that the charterer’s liability ceases on shipment of the cargo, and a lien clause gives the owner a right to retain cargo, and often to intercept freight and sub-freights, as security for sums due. The two are drafted together because the cesser is conventionally read as effective only so far as the owner has an equivalent lien to fall back on.

That pairing is the practical point: a cesser clause that leaves the owner without a workable lien, or with a lien that cannot be exercised at the discharge port under local law, transfers risk to the owner rather than merely relocating security. Whether a lien on sub-freights can be exercised at all, and against whom, varies by jurisdiction.

The full article will cover the construction of the cesser clause and its limits, the lien on cargo and how it is exercised in practice, the lien on freight and sub-freights and its characterisation, the effect of local law at the discharge port, and the interaction with the cargo owner’s rights under the bill of lading.