Supreme Court decision
The Supreme Court recently had to determine whether the Ghent Court of Appeal had applied statute correctly in refusing the benefits of a lien (ie, a right of retention) exercised by a sea carrier over trailers belonging to a party other than the debtor.
The trailers were due to be delivered by the debtor in question (which was the charterer and shipper). They were received, transported and were to be delivered to the debtor at their destination by the sea carrier. However, the debtor went into liquidation.
The sea carrier exercised a lien on all the trailers in its possession for costs relating not only to the last carriage of those trailers, but also for other, older claims against the debtor arising from the carriage of trailers.
After the liquidation the owner of the trailers challenged the sea carrier's lien. Ghent Court of Appeal ruled that the sea carrier could not exercise a lien on assets belonging to a party other than the debtor. The court found that the owner's property rights in rem prevailed over the lien rights of the sea carrier.
In characteristically concise but clear style, the Supreme Court annulled the Ghent Court of Appeal decision. It held that:
"The right of retention is, in respect of movable goods, also opposable to the owner of the retained goods that is not the debtor, on condition that the creditor acts in good faith. The creditor acts in good faith when, at the moment of receiving the goods, it [reasonably] believes that the creditor is the owner of those goods or, at least, could trust that the creditor had authority to conclude contracts in respect of those goods which could give rise to the exercise of a right of retention on those goods."
In order for a sea carrier (or any party that receives moveable goods from another) to exercise a lien, it is necessary but sufficient for the recipient sea carrier, when it receives the goods, to believe that the party presenting the goods:
- is the owner thereof: or
- is entitled to conclude contracts in respect of such goods which may give rise to a lien.
As a result, it may be difficult for owners of moveable goods which are transported by sea to avoid a lien, as carriers in general may believe that the party which delivers the goods for carriage, even if not the owner, is entitled to conclude contracts in respect of such goods. Contracts of carriage can always give rise to a lien. However, this principle does not alter the rights that holders of bills of lading may have.
This keenly awaited decision clarifies the lien rights of carriers.
For further information on this topic please contact André Kegels at Kegels & Co by telephone (+32 3 257 1771), fax (+32 3 257 1474) or email ([email protected]).