Maritime lien Information & Maritime lien Links at HealthHaven.com

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 their appurtenances and equipments), 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 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 star to the related property when the cause of action arises and will not be eliminated even the change of ownership in good faith purchase.

Normally, Maritime Lien is raised by 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.

[edit] Characteristics of maritime lien

The Characteristics of Maritime Lien are shown as following:

Wages of the ship’s master and crew
Salvage operations
General average claims
Claims fir the breach of a charter party
Preferred ship mortgages
Claims under maritime contracts for repairs, supplies, towage, 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 demurrage
Pollution claims

Although there is a list recognized by the admiralty jurisdiction, the definition and criteria are not the same case by case under different maritime law. For example, bunker suppliers are not protected by maritime lien under UK law. On the contrary, the supply of bunker has the right of lien in US. The court needs long time to recognize the form of lien and a new form will be established under new condition in future.

[edit] Distinguished from shipowner’s lien

Shipowner’s Lien is a possessory lien which is the major difference with maritime lien. It meant that the right could be applied on the goods only which are delivering by the shipowner when the shipper 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 has a wide extent of the right because the shipowners have this right under all contracts for carriage of goods by sea nowadays if the shippers fail to pay the due on time. However, it is stated that there is no difference between shipowner’s lien and maritime lien.

[edit] Advantage of action in rem

Action in rem (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 for the owner. This concept could be applied “all the world”.

The reason why the claimants take the advantage of the action in rem, rather action in personam, is that action in rem is more easy and convenient to institute. It is difficult of the action in personam to summon the defendant via writ outside the jurisdiction unless the defendant is the 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. Bareboat ship will cause this problem.

The Admiralty action in rem will concern when the claims and ship are put within the Admiralty Jurisdiction, where is the 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.

[edit] Discharge and distinction of lien

Although the maritime lien is attached to the maritime property whoever the shipowner is under good faith, it is possible to discharge or eliminate the lien by several ways. They include payment of the claims, waiver, laches, foreclosure, and sale, and destruction of the res.

The lienholder could give up the right of maritime lien either by expressed or implies 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 the reasonable time resulted in revoking from the original claims. The time of delay will be described on case-by-cause principle and the conviction is that the holder must show the great diligence to exercise the lien.

Others method is an execution sale in a rem. It also removes the attachment of the lien. The new shipowner will get the vessel with clear title. This rule could be applied for the international judicial sale as an action in rem.

Destruction of the res is resulted in the extinction of the lien. In this case, the lien is eliminated when the whole ship is destroyed or destructed. However, partially destroy of the vessel will not distinguish the lien and the remaining part will be attached.

[edit] Conflict of Laws and Choice of Law

“Proper law” is a law to govern the contract, which define the obligation of the contractual parties and make the contract to be valid and legal. It also determinates the effects and condition of discharge. Section of the “proper law” to justify the marine contract is the difficult task in Admiralty Jurisdiction because the enforcement of the maritime lien entitled by the international law may valid the law of the country where the jurisdiction are. So, the question is what the priority of the law where the lien was created (lex loci) and the law where the jurisdiction exercises (lex fori) is.

The answer is both. The application is a multiplicity of contract analysis process. The court will weight and analyze all related factors between the transaction and the legal systems under case-by-case principle. 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 wrongful place; (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 get the 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 the jurisdiction. The reason behind is that Federal Maritime Lien Act is used to protect the American, not the foreigners.

[edit] References

1. Hill, C. (1998). “Maritime Law”, 5th Edition, Chapter 4, Page 91-167.

2. Chan, F. , Ng, J. and Wong, KY. (2002). “Shipping and Logistics Law: Principles and Practice in Hong Kong”, Part I and II, Page 1-309.

3. Hodges, S. and Hill, C. (2001). “Principles of Maritimes Law”, Chapter 8, Page 445-523.

4. Schoenbaum, T.J. (2004). “Admiralty and Maritime Law”, 4th Edition, Chapter 7, Page 442-487.