Maritime Claim
• Maritime claims are claims arising out of maritime transactions
or activities, such as shipping, navigation, or transportation of
goods by sea etc.
• It is the claim that could be raised before the court having
jurisdiction.
• Only certain types of claims are cognizable in admiralty
jurisdiction.
• Earlier English legislations have progressively developed a fairly
exhaustive list of such claims
(like Admiralty Court Act, 1840; Admiralty Court Act, 1861 etc).
• However after MV Elisabeth Case, the Indian Admiralty court need
not fettered by any rule of English Admiralty Law and may draw upon
progressive developments of other countries, in keeping with
modern trends.
• Now Sec 4 of the Admiralty (Jurisdiction and Settlement of Claims)
Act, 2017, provides jurisdiction for High court to try maritime
claims listed in it.
Sec 4 of 2017 Act, The Act defines maritime claims as claims
arising from or relating to −
• A dispute over the possession or ownership of a vessel, or the
ownership of any share in it;
• A dispute between co-owners of a vessel over the vessel's employment
or earnings;
• A mortgage or a similar charge on a vessel;
• Loss or damage caused by vessel operation;
• Loss of life or personal injury occurring on land or on the water as a
direct result of vessel operation;
• Loss or damage to or relating to any goods;
•• An agreement relating to the carriage of goods or passengers on
board a vessel, whether included in a charter party or not;
•• Agreement concerning the use or hiring of the vessel, whether
contained in a charter party or not;
•• Salvage services, including, if applicable, special compensation for
salvage services in relation to a vessel that, by itself or its cargo,
threatens environmental damage;
•• Towage;
•• Pilotage;
• Goods, materials, perishable or non-perishable provisions,
bunker fuel, and equipment (including containers), supplied or
rendered to the vessel for operation, management,
preservation, or maintenance, including any fee payable or
leviable
• Vessel construction, reconstruction, repair, conversion, or
equipping;
• Dues in connection with any port, harbor, canal, dock, or light
tolls, other tolls, waterway, or charges of a similar nature
chargeable under any law in force at the time;
• claim by a master or member of the crew of a vessel or their heirs and
dependents
• disbursements incurred on behalf of the vessel or its owners;
• Particular average or general average;
• dispute arising out of a contract for the sale of the vessel;
• insurance premium (including mutual insurance calls) in respect of the vessel,
payable by or on behalf of the vessel owners or demise charterers;
• commission, brokerage or agency fees payable in respect of the vessel by or
on behalf of the vessel owner or demise charterer;
• Damage or threat of damage caused by the vessel to the
environment, coastline, or related interests;
• Costs or expenses incurred in raising, removing, recovering,
destroying, or rendering harmless a sunk, wrecked, stranded, or
abandoned vessel, including anything on board such vessel,
and costs or expenses incurred in preserving an abandoned
vessel and maintaining its crew; and
• Maritime lien
• These Claims can be broadly categorized as
(a)Claims to possession or ownership of a ship:
(b)General Maritime Claims
(c)Supplies Repairs and Dock Charges.
(d)Wages and Disbursement
(e)Average
(f)Environment
(g)Wrecks
(h)Maritime Lien
Order of priority of maritime claims – Sec 10
The order of maritime claims determining the inter se priority in an
admiralty proceeding shall be as follows:—
• (a) a claim on the vessel where there is a maritime lien;
• (b) registered mortgages and charges of same nature on the vessel;
• (c) all other claims.
The following principles shall apply in determining the priority of claims
inter se—
• (a) if there are more claims than one in any single category of priority,
they shall rank equally;
• (b) claims for various salvages shall rank in inverse order of time when
the claims thereto accrue.
Maritime Lien
Lien in General
• The term lien refers to a legal claim or legal right which is made against
the assets that are held as collaterals for satisfying a debt.
• A lien can be established by a creditor or a legal judgement.
• The purpose of the lien is to guarantee an underlying obligation such as
the repayment of the loan.
• In case the borrower fails to satisfy this underlying obligation, the lender
or the creditor has the legal right to seize the asset that is subject of the
lien.
Maritime Lien
• In general, maritime liens arise out of maritime transactions and maritime
accidents.
• A maritime lien is a privileged claim upon a maritime res or property in respect
of services done to or injury caused by it.
• The maritime res can be the ship, its apparel, cargo, or other thing connected with
the ship.
• A maritime lien may arise as the result of the commission of a maritime tort,
the breach of a maritime contract, an act of salvage etc.
• Typical cases include seamen suing for unpaid wages or suits for unpaid repair
and maintenance bills for work done on a vessel.
Possession of res
• Unlike a lien at common law, maritime lien does
not require possession of the res, for there is a
specific kind of legal process, called action in
rem, by which the claim or privilege on the res is
carried into effect.
Attaches with the res
• The Maritime lien is claimed against the ship.
• a ship is treated as a person for the limited purpose of action in
rem, arrest of ship and enforcement of maritime lien.
• The essence of this right was to identify the ship as a wrongdoer
and compel it by arrest to make good the loss.
• It travels with the res into whosoever possession it may come.
Notice of Lien
• There is no system of public registration of maritime liens and
are thus “Silent liens”.
• A subsequent owner or holder of interest in any res has no easy
and simple means of having notice of the lien, especially when
possession of the res is not a requirement of its existence.
Position of bonafide purchaser/ Subsequent holder
of res
• When the holder of the maritime lien obtains judgment in his
favour, the judgment binds all the world and he may after the
judgment follows the res into whosoever possession it may come
and it is immaterial that the person possessing is innocent of any
liability to the lien holder and has not had the notice of lien.
• Yet lien binds him even if he is a bonafide purchaser for value
without notice.
Choice of proceeding
Choice was given to person aggrieved
• to enforce the maritime lien in his favour by action in rem in
respect of the damage done to him or to his property by a
ship,
or
• to proceed in personam against the owner of the ship.
Maritime Lien under Indian
Law
Sec 2(g) read along with Sec 9 of Admiralty (Jurisdiction and
Settlement of claims) Act, 2017-
The Maritime liens are the following claims against the owner, demise charterer,
manager or operator of a vessel:
a. Claims for 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, 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 vessel
c. Claims for reward for the salvage of the vessel
d. Claims for port, canal and other waterway dues and pilotage dues
e. Claims based on tort arising out of loss or damage caused by the operation of the
vessel other than loss of or damage to cargo, containers carried on the vessel.
Exception to Maritime Lien
• There is of maritime lien attach to a vessel which arises out of or results from
(a)damage in connection with the carriage of oil or other hazardous or
noxious substance by sea (for which compensation is payable to the
claimants pursuant to international conventions or national law providing for
strict liability and compulsory insurance or other means of securing the
claims) or
•
(a)claims that result from radioactive properties or a combination of
radioactive properties with toxic, explosive or other hazardous properties of
nuclear fuel or of radioactive products or waste.
Limitations:
• The Maritime Lien shall continue to exist on the vessel for one
year after which it will be extinguished unless before the
expiration the vessel has been arrested or seized and led to
force sale by High Court.
• Provided for claim under Clause (a), period shall be two years.
Commencement of Lien:
The Maritime Lien will commence on:
(a) In relation to Clause (a), upon the claimant’s discharge from the
vessel.
(b) In relation to other clauses, it is when the claim arises.
And shall run continuously without any suspension or interruption.
(Also refer Art 4 of International Convention on Maritime Liens and Mortgages,
1993)
Priority over other Claims
• According to Sec 10 of the Admiralty (Jurisdiction and
Settlement of Disputes) Act, 2017 –
• Maritime Lien tops the list of order of maritime claims
determining the inter se priority in an admiralty
proceedings placed even above the registered
mortgages and charges.
Polygreen International DMCC and others v MT Pamboor (2022)
• The respondent had provided salvage services for a ship ‘MT Tresta Star’ owned by
another company with the same shareholding as the company interpleaded in this
suit.
• The ship for which salvage services had been provided was worthless as it was stuck
between volcanic rocks and there was no way to manoeuvre it out of the quagmire it
found itself in.
• The respondent procured an arrest of the MT Pamboor vessel.
• The issue before the court was whether the arrest against MT Pamboor was justified
when the maritime lien for salvage services existed for MT Tresta Star.
• The Court held that despite the commonality of shareholding between the two
companies, which owned the two ships, the case failed to make the case justifying
the lifting of the corporate veil.
• The fact that a director of the company owning MT Pamboor was copied on an email
hardly proved that the two companies were the same.
Ship Owner’s Lien vs Maritime Lien
