Atlas Claims InsightsPublished 14 October 2026 · Reviewed 14 October 2026 · 5 min readKey takeaways
- Owners often have a contractual lien on cargo and sub-freights for unpaid freight, hire or demurrage.
- A lien on sub-freights works by notice to the party who owes the freight, before it is paid onward.
- Exercising a lien wrongly can expose the owner to a claim, so check the charter wording first.
- Speed matters: once cargo is delivered or freight is paid on, the leverage is usually gone.
When a charterer stops paying, an owner’s strongest practical leverage is often a lien: the right to hold cargo, or to intercept freight payable further down the chain, until it is paid.
Liens on cargo
Many charter parties give the owner a lien on cargo for freight, dead freight, demurrage and other sums due. Whether the lien can actually be exercised depends on the charter wording, who owns the cargo, the bill of lading terms and the law at the place where the cargo is held. Holding cargo also carries costs and risks, including claims if the lien turns out not to be available.
Liens on sub-freights
Time charters, such as the NYPE forms, commonly give owners a lien on sub-freights and sub-hires. It is exercised by sending a notice to the party who owes the freight (for example a sub-charterer or shipper), instructing it to pay the owner rather than the charterer. The notice must arrive before the freight is paid onward.
Timing is everything. Once cargo has been delivered or sub-freight has been paid to the charterer, the leverage is usually gone.
Before exercising a lien
- Check the exact wording of the lien clause and the bill of lading.
- Confirm the sums due and that they fall within the clause.
- Consider the law at the discharge port and any insolvency proceedings.
- Take advice before refusing to discharge or deliver cargo.
Alongside the lien
A lien is a tool for negotiation as much as a remedy. Combined with a clear statement of account and a credible next step, it often brings a defaulting charterer to settle quickly.
Quick answers
Can a shipowner keep cargo until freight is paid?
Often, if the charter or bill of lading gives a lien, and subject to its wording and local law at the discharge port.
What is a lien on sub-freights?
A right to intercept freight owed by a sub-charterer or shipper to the charterer, exercised by giving notice before that freight is paid.
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This guide is general information about the law of England and Wales as at October 2026. It is not legal advice and may not cover your situation. Atlas Claims is not a law firm; for advice on your legal rights or on litigation, consult a qualified solicitor.
