MARITIME LIENS

There is a common misconception among ship agents that all disbursements incurred by a ship owner or a time charterer constitute a maritime lien which is automatically enforceable against the ship that incurred the debt. A wonderful idea but wrong.

The law relating to maritime liens differs from country to country and more particularly from civil law jurisdictions such as France and Belgium to common law jurisdictions such as England, Gibraltar, Hong Kong and Singapore, in fact any jurisdiction which bases its law on the English model. In England and other common law jurisdictions, the term maritime lien applies only to seamen’s wages, masters’ wages, masters’ disbursements and salvage. These are traditional maritime liens. Claims resulting from the supply of necessaries, bunker supplies, port services and towage etc. do not give rise to a maritime lien under English or other common law jurisdictions. It is commonly thought, that a mortgage constitutes a maritime lien under English law. However, this is not the case, although when it comes to the determination of priorities when a ship is sold by court auction, a mortgage is ranked higher than a ship agent’s disbursement account.

What does constitute a maritime lien? In many civil law jurisdictions the following claims against the owner, demise charterer, manager or operator of the ship shall be secured by a maritime lien on the ship:

a) claims for wages and other sums due to the Master, officers and other members of the ship’s complement in respect of their employment on the ship, including costs of repatriation and social insurance contributions payable on their behalf;

b) claims in respect of loss of life or personal injury occurring, whether on land or on water, in direct connection with the operation of the ship;

c) claims for reward for the salvage of the vessel;

d) claims for port, canal and other waterway dues and pilotage dues and it is of course this last item that ship agents are most concerned with. It should be noted that shipbrokers’ commission does not constitute a maritime lien.

The maritime liens as described above take priority over registered mortgages and charges. The importance of maritime liens is that they follow the ship, notwithstanding any change of ownership or flag, unless the ship has been sold by court auction. Maritime liens are usually extinguished after a period of one year unless, prior to the expiry of such period, the ship has been arrested or seized and such arrest or seizure leads to a forced sale. The one year period commences when the claims secured thereby arise. In France the maritime lien is extinguished after six months.

Some countries will enforce the maritime liens of another country even though the debts do not constitute a maritime lien in the country of arrest while other countries will use their own maritime lien criteria. Whether or not a maritime lien can be enforced against a ship which has been sold will depend largely upon which ports the ship calls at.

Once a maritime lien has been established it will take priority over registered mortgages and charges. Maritime liens usually rank in the order previously listed, provided, however, that maritime liens securing claims for reward for the salvage of the ship take priority over all other maritime liens.

The important thing for Members to remember, is the fact that maritime liens are usually extinguished after one year and any delay in forwarding a claim to the Club could well mean that an arrest of the ship concerned would not be possible.