Maritime lien
Encyclopedia
A maritime lien in admiralty law
is a privileged claim upon maritime property, such as a ship, in respect of services rendered to, or the injuries caused by that property. In common law
, a lien
is the right of the creditor to retain the properties of his debtor until the debt is paid.
It is a proprietary lien which interest is about the “res” (property). It should be understood that “res” may be the vessel (including its appurtenances and equipment), the cargo, the freight or even the proceeds of sale. The rights include jus in re (right on the property) and jus in rem (right against the property). The doctrine of Maritime Lien is that a ship will be treated as a wrongdoer, not the owner, that the loss, damage or harm is caused by the maritime property, itself, and it has to make good for the loss. The attachment of maritime lien will start when the cause of action arises and will not be eliminated even by change of ownership in good faith
purchase.
Normally, a Maritime Lien relates to the different marine transactions in the admiralty jurisdiction and creates the maritime claims. It will be created by the statute such as the Ship Mortgage
Act.
Although there is a list recognized by the admiralty jurisdiction
, the definitions and criteria are not the same under the maritime law of differing jurisdictions. For example, bunker suppliers are not protected by maritime lien under UK law. However the supplier of bunker goods has the right of lien in the US.
is the contractual party. It may entitle the shipowner to retain the cargoes as security for the payment of a debt. The contractual shipowner’s lien is currently found in all contracts for carriage of goods by sea nowadays, and may be claimed if the shippers fail to pay the due on time. However, some authorities state that there is no difference between shipowner’s lien and maritime lien.
(property) is an action separated from the action in personam
. The action is against the maritime property such as vessel, cargo
or freight, but not against the owner. This concept is why such an action is said to be against “all the world”.
Claimants take advantage of the action in rem, rather action in personam, because an action in rem is more easy and convenient to institute. It is more difficult, in an action in personam, to summon the defendant via writ outside the jurisdiction unless the defendant is a resident of EU or EFTA
countries. Besides, the processes to find the rightful shipowner, the defendant, are very complicated and time consuming due to the complex and inconsistent ship registration in different countries. An action with respect to a bareboat ship will frequently encounter this problem.
The Admiralty action in rem will concern when the claims and ship are put within the Admiralty Jurisdiction, an adequate and secure place for the claimants to ask for compensation. If the defendant does not provide enough security as compensation, the court may sell the “res” in order to get the satisfaction for the claim.
, laches
, foreclosure
, and sale or destruction of the res.
The lienholder could give up the right of maritime lien either by expressed or implied intention. The intention to waive the lien should be shown clearly required by the court and the credit of the lienholder will be considered.
Laches is a form of estoppel
for delay. A person fails to arrest the ship within a reasonable time may result in cancellation of the original claim. The time of delay will be determined on a case-by-cause basis. The idea is that the holder must show diligence exercising the lien.
An other method is an execution sale in a rem. This also removes the attachment of the lien. The new shipowner will get the vessel with clear title. This rule could be applied in case of an international judicial sale, such as an action in rem.
Destruction of the res results in the extinction of the lien. In this case, the lien is eliminated when the whole ship is destroyed. However, partial destruction of the vessel will not extinguish the lien and the lien will be attached to the remaining part of the vessel.
” is the decision as to which territorial law is to govern the contract, defines the obligations of the contractual parties and determines whether the contract
is valid and legal. It also determinates the effects and conditions of discharge. Selection of the “proper law” to adjudicate the marine contract is a difficult task in Admiralty Jurisdiction because the issue of whether enforcement of the maritime lien is allowed by international law may turn on interpretaion of the law of the country where the litigation is. So, the question is over the priority of the law where the lien was created (lex loci
), as opposed to the law of where the court exercising jurisdiction (lex fori
).
The answer is found in the application of a multiplicity of contract analysis process. The court will weight and analyze all related factors between the transaction and the respective legal systems by a case-by-case analysis. The factors may include: (a)the need of the international system; (b)the protection of justified expectation; (c)ease in determination and application of the law to be applied; (d)relevant policies of other interested states; (e)the place of the wrong; (f)the law of flag; (g)the allegiance or domicile of the injured party; (h)the law of forum; (i)the place of the contract; (j)the allegiance of the defendant shipowner and so on. The prefect decision will result from a balance between the relevant factors.
However, the US courts will choose the factors which could be applied to protect the American. If the relevant factors direct to select international law, the case may be dismissed on the grounds of forum non conveniens
. If the choice of law is to apply the US law, the court will retain jurisdiction. The reason for this is that Federal
Maritime Lien Act is used to protect the American, not the foreigners.
Admiralty law
Admiralty law is a distinct body of law which governs maritime questions and offenses. It is a body of both domestic law governing maritime activities, and private international law governing the relationships between private entities which operate vessels on the oceans...
is a privileged claim upon maritime property, such as a ship, in respect of services rendered to, or the injuries caused by that property. In common law
Common law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...
, a lien
Lien
In law, a lien is a form of security interest granted over an item of property to secure the payment of a debt or performance of some other obligation...
is the right of the creditor to retain the properties of his debtor until the debt is paid.
It is a proprietary lien which interest is about the “res” (property). It should be understood that “res” may be the vessel (including its appurtenances and equipment), the cargo, the freight or even the proceeds of sale. The rights include jus in re (right on the property) and jus in rem (right against the property). The doctrine of Maritime Lien is that a ship will be treated as a wrongdoer, not the owner, that the loss, damage or harm is caused by the maritime property, itself, and it has to make good for the loss. The attachment of maritime lien will start when the cause of action arises and will not be eliminated even by change of ownership in good faith
Good faith
In philosophy, the concept of Good faith—Latin bona fides “good faith”, bona fide “in good faith”—denotes sincere, honest intention or belief, regardless of the outcome of an action; the opposed concepts are bad faith, mala fides and perfidy...
purchase.
Normally, a Maritime Lien relates to the different marine transactions in the admiralty jurisdiction and creates the maritime claims. It will be created by the statute such as the Ship Mortgage
Ship mortgage
In a ship mortgage, a shipowner gives a lender an interest in a ship as security for a loan. Similar to other types of mortgage, a ship mortgage legally consists of three parts: the mortgage loan, the mortgage document and the rights derived from the mortgage deed onto money lender. Ship...
Act.
Characteristics of maritime lien
The Characteristics of Maritime Lien are as follows:- Wages of the ship’s master and crew
- SalvageMarine salvageMarine salvage is the process of rescuing a ship, its cargo, or other property from peril. Salvage encompasses rescue towing, refloating a sunken or grounded vessel, or patching or repairing a ship...
operations - General average claims
- Claims for the breach of a charter partyCharter PartyThe Charter Party of Cincinnati, Ohio, United States, is a minor political party. The party is Cincinnati's third party. Members of this party are called "Charterites."-History:...
- Preferred ship mortgages
- Claims under maritime contracts for repairs, supplies, towageTowageTowage can refer to:*Towing, or a charge or fee associated with it*Tugboat, a boat that maneuvers larger boats...
, pilotage and a wide variety of other “necessaries” - Claims for maritime torts including personal injury and death, and collision claims
- Claims for the damage or loss of cargo
- Claim by the carrier of cargo for unpaid freight and demurrageDemurrageThe term demurrage originated in vessel chartering and refers to the period when the charterer remains in possession of the vessel after the period normally allowed to load and unload cargo . By extension demurrage refers to the charges that the charterer pays to the shipowner for its extra use of...
- Pollution claims
Although there is a list recognized by the admiralty jurisdiction
Jurisdiction
Jurisdiction is the practical authority granted to a formally constituted legal body or to a political leader to deal with and make pronouncements on legal matters and, by implication, to administer justice within a defined area of responsibility...
, the definitions and criteria are not the same under the maritime law of differing jurisdictions. For example, bunker suppliers are not protected by maritime lien under UK law. However the supplier of bunker goods has the right of lien in the US.
Distinguished from shipowner’s lien
A shipowner’s Lien is a possessory lien which is the major difference between it and other maritime liens. The right to this lien can be applied only on the goods which are delivering by the shipowner when the shipperShipper
A shipper can be:*Someone who sends goods for shipment, by packaging, labeling, and arranging for transit, or who coordinates the transport of goods*Shipping , someone who supports a fictional romantic relationship, usually on the Internet...
is the contractual party. It may entitle the shipowner to retain the cargoes as security for the payment of a debt. The contractual shipowner’s lien is currently found in all contracts for carriage of goods by sea nowadays, and may be claimed if the shippers fail to pay the due on time. However, some authorities state that there is no difference between shipowner’s lien and maritime lien.
Advantage of action in rem
Action in remIn rem
In rem is Latin for "against a thing." In a lawsuit, an action in rem is directed towards a piece of property rather than against a person . The action disputes or seeks to transfer title to property. When title to real estate In rem is Latin for "against a thing." In a lawsuit, an action in rem...
(property) is an action separated from the action in personam
In personam
In personam is a Latin phrase meaning "directed toward a particular person". In a lawsuit in which the case is against a specific individual, that person must be served with a summons and complaint to give the court jurisdiction to try the case, and the judgment applies to that person and is called...
. The action is against the maritime property such as vessel, cargo
Cargo
Cargo is goods or produce transported, generally for commercial gain, by ship, aircraft, train, van or truck. In modern times, containers are used in most intermodal long-haul cargo transport.-Marine:...
or freight, but not against the owner. This concept is why such an action is said to be against “all the world”.
Claimants take advantage of the action in rem, rather action in personam, because an action in rem is more easy and convenient to institute. It is more difficult, in an action in personam, to summon the defendant via writ outside the jurisdiction unless the defendant is a resident of EU or EFTA
EFTA
EFTA may refer to:* European Family Therapy Association, an NGO.* European Fair Trade Association, an association of eleven Fair Trade importers in nine European countries....
countries. Besides, the processes to find the rightful shipowner, the defendant, are very complicated and time consuming due to the complex and inconsistent ship registration in different countries. An action with respect to a bareboat ship will frequently encounter this problem.
The Admiralty action in rem will concern when the claims and ship are put within the Admiralty Jurisdiction, an adequate and secure place for the claimants to ask for compensation. If the defendant does not provide enough security as compensation, the court may sell the “res” in order to get the satisfaction for the claim.
Discharge and distinction of lien
Although the maritime lien is attached to the maritime property whoever the shipowner is, it is possible to discharge or eliminate the lien by several ways. They include payment of the claims, waiverWaiver
A waiver is the voluntary relinquishment or surrender of some known right or privilege.While a waiver is often in writing, sometimes a person's actions can act as a waiver. An example of a written waiver is a disclaimer, which becomes a waiver when accepted...
, laches
Laches
* Laches : an equitable principle in Anglo-American law* Laches : an Athenian aristocrat * Laches : a Socratic dialogue of Plato-See also:* Lache...
, foreclosure
Foreclosure
Foreclosure is the legal process by which a mortgage lender , or other lien holder, obtains a termination of a mortgage borrower 's equitable right of redemption, either by court order or by operation of law...
, and sale or destruction of the res.
The lienholder could give up the right of maritime lien either by expressed or implied intention. The intention to waive the lien should be shown clearly required by the court and the credit of the lienholder will be considered.
Laches is a form of estoppel
Estoppel
Estoppel in its broadest sense is a legal term referring to a series of legal and equitable doctrines that preclude "a person from denying or asserting anything to the contrary of that which has, in contemplation of law, been established as the truth, either by the acts of judicial or legislative...
for delay. A person fails to arrest the ship within a reasonable time may result in cancellation of the original claim. The time of delay will be determined on a case-by-cause basis. The idea is that the holder must show diligence exercising the lien.
An other method is an execution sale in a rem. This also removes the attachment of the lien. The new shipowner will get the vessel with clear title. This rule could be applied in case of an international judicial sale, such as an action in rem.
Destruction of the res results in the extinction of the lien. In this case, the lien is eliminated when the whole ship is destroyed. However, partial destruction of the vessel will not extinguish the lien and the lien will be attached to the remaining part of the vessel.
Conflict of laws and choice of law
“Proper lawProper law
The Doctrine of the Proper Law is applied in the choice of law stage of a lawsuit involving the conflict of laws.-Explanation:In a conflicts lawsuit, one or more state laws will be relevant to the decision-making process. If the laws are the same, this will cause no problems, but if there are...
” is the decision as to which territorial law is to govern the contract, defines the obligations of the contractual parties and determines whether the contract
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
is valid and legal. It also determinates the effects and conditions of discharge. Selection of the “proper law” to adjudicate the marine contract is a difficult task in Admiralty Jurisdiction because the issue of whether enforcement of the maritime lien is allowed by international law may turn on interpretaion of the law of the country where the litigation is. So, the question is over the priority of the law where the lien was created (lex loci
Lex loci
In conflict of laws, the term lex loci is a shorthand version of the choice of law rules that determine the lex causae.The relevant rules are:* Lex fori* Lex loci actus* Lex loci arbitri* Lex loci celebrationis...
), as opposed to the law of where the court exercising jurisdiction (lex fori
Lex fori
Lex fori is a legal term used in the conflict of laws used to refer to the laws of the jurisdiction in which a legal action is brought...
).
The answer is found in the application of a multiplicity of contract analysis process. The court will weight and analyze all related factors between the transaction and the respective legal systems by a case-by-case analysis. The factors may include: (a)the need of the international system; (b)the protection of justified expectation; (c)ease in determination and application of the law to be applied; (d)relevant policies of other interested states; (e)the place of the wrong; (f)the law of flag; (g)the allegiance or domicile of the injured party; (h)the law of forum; (i)the place of the contract; (j)the allegiance of the defendant shipowner and so on. The prefect decision will result from a balance between the relevant factors.
However, the US courts will choose the factors which could be applied to protect the American. If the relevant factors direct to select international law, the case may be dismissed on the grounds of forum non conveniens
Forum non conveniens
Forum non conveniens is a common law legal doctrine whereby courts may refuse to take jurisdiction over matters where there is a more appropriate forum available to the parties...
. If the choice of law is to apply the US law, the court will retain jurisdiction. The reason for this is that Federal
Federal government of the United States
The federal government of the United States is the national government of the constitutional republic of fifty states that is the United States of America. The federal government comprises three distinct branches of government: a legislative, an executive and a judiciary. These branches and...
Maritime Lien Act is used to protect the American, not the foreigners.