Chapter 43

Tenth Edition (2017)

Maritime Lien

Only a limited class of maritime liens are recognised, the categories are
i.       Any claim for damage done by any ship
ii.      Any claim for damage received by any ship or sea-going vessel
iii.     Any claim in the nature of salvage services
iv.     Any claim by a master or crew for wages, etc.
v.      Any claim by a master in respect of disbursements
vi.     Any claim arising out of bottomry
Though this point has not come up for consideration, under Indian rules of conflict of laws, a foreign maritime lien may not be recognised and enforced as such by the Indian courts even though the proper law of the claim accords it a maritime lien status, e.g. a preferred ships mortgage, necessaries, repairs, supplies, towage, use of dry-dock, and a like, under United States law.

In case of the owners bankruptcy before arresting the ship, a claimant who has no maritime lien may require to ascertain and consider the claims having maritime liens such as for wages, damage, salvage, and like, or for mortgage, ranking in priority over his claim which may take away the entire sale proceeds with little or no surplus left. Often, the arrest or even a threat to arrest a ship, already loaded with a perishable cargo or of a time-chartered ship or one having a charter commitment, has the effect of inducing the owners to settle a claim though not maintainable in Admiralty. However, in the case of a claim clearly outside their Admiralty jurisdiction, the chances are that the courts will reject in limine an application for arrest.
A maritime lien adheres to the ship (res), from the time that the facts happened which gave the maritime lien, it travels with the ship (res) and is binding on the ship until it is discharged and it is immaterial as to who is in possession of the ship (res) even though he may be innocent of any liability to the lien holder and had no notice of the lien. Maritime lien continues until it is discharged, either by being satisfied or from the laches of the owner, or in any other way which, by law it may be discharged. It commences and there it continues binding on the ship until it comes to an end.

Action in rem and admiralty jurisdiction can be invoked for maritime lien.

In the matter of Epoch Enterrepots -v- m.v. Wong Fu before the Supreme Court of India (2002) the following passages were referred concerning maritime lien.

The Encyclopedia Britannica has the following to state as regards Maritime Lien and the same reads as below:

"Maritime liens: although admiralty actions are frequently brought in personam, against individual or corporate defendants only, the most distinctive feature of admiralty practice is the proceeding in rem, against maritime property, that is, a vessel, a cargo, or "freight", which in shipping means the compensation to which a carrier is entitled for the carriage of cargo.

Under American maritime law the ship is personified to the extent that it may sometimes be held responsible under no liability. The classic example of personification is the "compulsory pilotage" case. Some State statutes impose a penalty on a ship owner whose vessel fails to take a pilot when entering or leaving the waters of the State. Since the pilotage is compulsory, the pilot's negligence is not impugned to the ship owner. Nevertheless the vessel itself is charged with the pilot's fault and is immediately impressed with an inchoate maritime lien that is enforceable in Court.

Maritime liens can arise not only when the personified ship is charged with a maritime tort, such as a negligent collision or time tort, such a negligent collision or personal injury, but also for salvage services, for general average contributions and for breach of certain maritime contracts."

Sir John Jervis who probably for the first time in the Bold Buccleugh defined maritime lien as below:

"...a maritime lien is well mean a claim or privilege upon a thing to be carried into effect by legal process...that process to be a proceeding in rem..... This claim or privilege travels with the thing in whosoever' possession it may come. It is inchoate from the moment the claim or privilege attaches, and, when carried into effect by legal process by a proceeding in rem, relates back to the period when it first attached."

While the definition provided by Sir John Jervis, as above, stands accepted in various other decisions of the English courts, the definition by Atkin L.J. in The Tervaete became subject matter of criticism by reason of its failure to distinguish a maritime lien and its maritime right of action in rem. Atkiun L.J., however, in The Tervaete defined the maritime lien as below:

"...of the right by legal proceedings in an appropriate form to have the ship seized by the officers of the court and made available by sale if not released on bail."

Elizabeth's case (supra) has the following to state as regards the attributes of maritime lien. This Court observed in paragraphs 33 to 36 as below:

33. Be it noted that there are two attributes to maritime lien: (a) a right to a part of the property in the res; and (b) a privileged claim upon a ship, aircraft or other maritime property in respect of services rendered to, or injury caused by that property. Maritime lien thus attaches to the property in the event the cause of action arises and remains attached. It is, however, inchoate and very little positive in value unless it is enforced by an action. It is a right that springs from general maritime law and is based on the concept as if the ship itself has caused the harm, loss or damages to others or to their property and thus must itself make good that loss. (See in this context `Maritime Law' by Christopher Hill, 2nd Edn.)

34. As regards the concept of proceeding in rem and proceeding in personam, it should be understood as actions being related to the same subject-matter and are alternative methods pertaining to the same claim and can stand side by side.
35. In this context, reference may also be made to the observations of this Court in m.v. Elisabeth's case (AIR 1993 SC 1014) (supra), as stated below: -

"47. Merchant ships of different nationalities travel from port to port carrying goods or passengers. They incur liabilities in the course of their voyage and they subject themselves to the jurisdiction of foreign States when they enter the waters of those States. They are liable to be arrested for the enforcement of maritime claims, or seized in execution or satisfaction of judgments in legal actions arising out of collisions, salvage, loss of life or personal injury, loss or damages to goods and the like. They are liable to be detained or confiscated by the authorities of foreign States for violating their customs, regulations, safety measures, rules of the road, health regulations, and for other causes. The coastal State may exercise its criminal jurisdiction on board the vessel for the purpose of arrest or investigation in connection with certain serious crimes. In the course of an international voyage, a vessel thus subjects itself to the public and private laws of various countries. A ship traveling from port to port stays very briefly in any one port. A plaintiff seeking to enforce his maritime claim against a foreign ship has no effective remedy once it has sailed away and if the foreign owner has neither property nor residence within jurisdiction. The plaintiff may therefore detain the ship by obtaining an order of attachment whenever it is feared that the ship is likely to slip out of jurisdiction, thus leaving the plaintiff without any security.

48. A ship may be arrested (i) to acquire jurisdiction; or (ii) to obtain security for satisfaction of the claim when decreed; or (iii) in execution of a decree. In the first two cases the Court has the discretion to insist upon security being furnished by the plaintiff to compensate the defendant in the event of it being found that the arrest was wrongful and was sought and obtained maliciously or in bad faith. The claimant is liable for damages incase of wrongful arrest. This practice of insisting upon security being furnished by the party seeking arrest of the ship is followed in the United States, Japan and other countries. The reason for the rule is that a wrongful arrest can cause irreparable loss and damages to the ship owner and he should in that event be compensated by the arresting party. (See Arrest of Ships by Hill, Soehring, Hosoi and Helmer, 1985)".

36. In Halsbury's Laws of England, the nature of action in rem and the nature of action in personam is stated to be as below:

310. Nature of actions in rem and actions in personam. - An action in rem is an action against the ship itself but the view that if the owners of the vessel do not enter an appearance in the suit in order to defend their property no personal liability can be established against them has recently been questioned. It has been stated that, if the defendant enters an appearance, an action in rem becomes, or continues also as, an action in personam; but the Admiralty jurisdiction of the High Court may now in all cases be invoked by an action in personam, although this is subject to certain restrictions in the case of collision and similar cases, except where the defendant submits or agrees to submit to the jurisdiction of the Court.

The foundation of an action in rem is the lien resulting from the personal liability of the owner of the res. Thus an action in rem cannot be brought to recover damages for injury caused to a ship by the malicious act of the master of the defendant's ship, or for damage done at a time when the ship was in the control of third parties by reason of compulsory requisition. On the other hand, in several cases, ships allowed by their owners to be in the possession and control of charterers have been successfully proceeded against to enforce liens which arose whilst the ships were in control of such third parties.

The defendant in an Admiralty action in personam is liable, as in other actions in the High Court, for the full amount of the plaintiff's proved claim. Equally in an action in rem a defendant who appears is now liable for the full amount of the judgment even though it exceeds the vale of the res or of the bail provided. The right to recover damages may however be affected by the right of the defendant to the benefit of statutory provisions relating to limitation of liability."

In m.v. Al Quamar (supra) this Court spoke of two attributes of maritime lien as noticed herein before. The International Convention for Unification of Certain Rules relating to Maritime Liens and Mortgages at Brussels in 1967 defined the maritime lien to be as below:

a. wages and other sums due to the master, officers and other members of the vessel's complement in respect of their employment on the vessel;

b. port, canal and other waterways and pilotage dues;

c. claims against the owner in respect of loss of life or personal injury occurring, whether on land or water, in direct connection with the operation of the vessel;

d. claims against the owner based on tort and not capable of being based on contract, in respect of loss of or damage to property occurring, whether on land or on water in direct connection with the operation of the vessel;

e. claims for salvage, wreck removal and contribution in general average.

Incidentally, the Admiralty Court Act, 1861, read with the International Convention for Unification of Certain Rules relating to Maritime Liens and Mortgages, Brussels, 1926 read with Brussels Arrest (Of Seagoing Ships) Convention 1952 and Brussels Maritime Liens Convention, 1967 clearly indicates that a claim arising out of an agreement relating to the use and/or hire of the ship although a maritime claim would not be liable to be classified as maritime lien. (See in this context Thomas on Maritime Liens).

We have in the judgment herein before dealt with the attributes of maritime lien. But a simply stated maritime lien can be said to exist or restricted to in the event of (a) damage done by a ship; (b) salvage; (c) seamen's and master's wages; (d) master's disbursement; and (e) bottomry; and in the event of a maritime lien exists in the aforesaid five circumstances, a right in rem is said to exist. Otherwise, a right in personam exists for any claim that may arise out of a contract.

Further on this issue, Thomas on Maritime Liens states that it represents a small cluster of claims which arise either out of services rendered to a maritime res or from damage done to a res and listed five several heads of maritime liens as under:
(a) Damage done by a ship
(b) Salvage
(c) Seamen's wages
(d) Master's wages and disbursements
(e) Bottomry and Respondentia

The limited applicability of such a lien thus well illustrates that not every kind of service or every kind of damages, which arises in connection with a ship, gives rise to a maritime lien. We, however, hasten to add that this is apart from the statutory enactments, which may further list out various other forms of maritime liens. In the Ripon City [(1897) P. 226, 246], Gorrel Barnes, J. upon appreciation of this facet of a maritime lien and also, in part, to the surrounding policy considerations observed:

".........A maritime lien travels with the vessel into whosoever possession it comes, so that an innocent purchaser of a ship may find his property subject to claims which exist prior to the date of his purchase, unless the lien is lost by laches or the claim is one which is barred by the Statutes of Limitation. This rule is stated in The Bold be deducted from the civil law, and, although it may be hard on an innocent purchaser, if it did not exist a person who was the owner at the time a lien was attached could defeat the lien by transfer if he pleased."

As regards the issue of relationship between a maritime lien and personal liability of a res owner, Thomas has the following further to state:

"The issue as to the relationship between a maritime lien and the personal liability of a res owner is therefore one which may be answered differently as between individuals maritime liens. It is clear that the various maritime liens do not, in this regard, display common characteristics. The fact that there exists this disparity may in turn be a symptom of the absence of any clearly defined theoretical framework in the development of the law relating to maritime liens. It is also note-worthy that the emphasis on personal liability is most clearly established in relation to the damages and disbursement of maritime liens which were the last in point of time to be established."
BCAS: 7103-1001