Cornish Shipping Ltd and Anr v International Nederlanden Bank NV and Anr (The “Filoktitis”) - US Ct of Appeals (2nd Circuit) (Newman CJ, Miner and Cabranes Ct JJ) - 20 April 1995

Shipowners’ lien on subfreights - Whether lien attaches to funds remitted to charterer by consignee after consignee had received notice that shipowner was exercising lien

The vessel Filoktitis was chartered to carry a cargo of steel scrap CIF Korea. The buyers were to pay for the steel scrap, its transport and insurance under a letter of credit. Approximately $1.6 million was attributable to the cost of transport. The charterparty provided that the shipowners reserved a lien on all subfreights earned by the vessel for amounts due under the charter. In addition to the steel scrap, the charterers planned to use the vessel to transport a cargo of stainless steel, which they were selling to the buyers of the steel scrap cargo under a separate contract and under separate financing arrangements.