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Maritime Lien: Definition and Meaning
The Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 is Indian legislation that governs admiralty law, which is a branch of law that deals with maritime offenses and disputes. The Act, among other things, defines a maritime lien, a key concept in maritime law. A maritime lien is a type of charge used to secure specific types of claims. It is attached to the property and follows the property, which is typically a ship.
It is inchoate from the moment the circumstances that gave rise to it, attaching to the ship, traveling with the ship, and passing into anyone's possession for value without notice, even a bona fide purchaser, with the exception of a buyer at an admiralty court sale who has been perfected through legal means. Section 9 (1) of the Admiralty Act (2017) recognizes only a limited class of maritime liens.
Meaning of Maritime Lien
Maritime liens, in general, arise from maritime transactions and maritime accidents. It usually results from wage liens for seafarers; on the other hand, tort liens resulting from maritime accidents; for example, collisions or cargo damage, and salvage liens. A maritime lien is a privileged claim against maritime res (or property) for services rendered or damage caused by it. The ship, its cargo, apparel, furniture, tackle, or freight are all examples of maritime res.
Though the lien is not specifically mentioned or registered; nonetheless it grants rights against a vessel that endure the sale of the ship and that have priority over registered mortgages. Even if a charterer or manager of the vessel creates the lien, it may still give rise to rights against the vessel. The idea that the ship is a separate legal entity from the people who own it is the foundation for the existence of a maritime lien. The lien is created by the obligation that the vessel itself has under a contract, not by a security interest derived from the owner's or operator's individual obligation under a contract.
India is a signatory to the 1993 Convention on Maritime Liens and Mortgages. In accordance with the convention, Section 9 of the Admiralty Act classifies the following claims as maritime liens against the owner, demise charterer, manager, or operator of a vessel −
Claims for wages and other amounts owed to the master, officers, and other crew members in connection with their employment on the ship, including the costs of their return and any social security taxes that must be paid on their behalf
Claims for loss of life or injuries that happen on land or at sea and are directly related to the operation of the vessel
Claims for a reward for the vessel's salvage
Claims for pilotage fees and port, canal, and other waterway dues
Other than the loss of or damage to the cargo, containers, and passengers' effects carried on the vessel, claims arising out of physical loss or damage caused by the operation of the vessel
It is a proprietary lien, meaning that the interest relates to the property. It is important to realize that "res" can refer to a variety of things, including a vessel and all of its accessories and equipment, cargo, freight, or even sales proceeds. There are two types of rights: jus in rem (right against the property) and jus in re (right on the property).
According to the maritime lien doctrine, the ship, not the owner, will be held responsible for any losses, damages, or harm that it causes and must make up for them. Even if ownership changes as a result of a good faith purchase, the maritime lien attachment will still begin as soon as the cause of action materializes.
In civil law, there is a general rule i.e., "Prior in time is prior in right," it means the rights of the lien holder with the earliest lien are superior to those of later lien holders; whereas in maritime law, it is something different i.e., the rights of the most recent lien holder are superior, and all maritime liens are superior to all non-maritime liens. These are two key distinctions between maritime liens, which only exist in admiralty law, and the right to keep, which exists in general civil law.
Conclusion
A maritime lien is an important tool for enforcing maritime claims, particularly for maritime businesses. The Admiralty Act of 2017 introduced the concept of a maritime lien into Indian admiralty law. The Act defines a maritime lien as a privileged claim against a vessel resulting from a specific set of claims.
The maritime lien is a right in rem that gives the claimant priority over other claimants and attaches to the vessel itself. A maritime lien is a powerful tool for enforcing maritime claims because it serves as security for the claimant's claim.
Frequently Asked Questions
Q1. What is a Maritime Lien?
Ans. A maritime lien is a privileged claim made against a ship or vessel by certain people for goods or services provided to the ship. It arises naturally from the law. In the event of default or insolvency, a claimant has the right to receive payment from the proceeds of the sale of the vessel under this particular type of security interest in the vessel.
Q2. What is the legal framework for Maritime Liens in India?
Ans. In India, maritime liens are governed by the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017.
Q3. What is the priority of Maritime Liens?
Ans. The priority of maritime liens is determined by the date on which the lien was created. The first in time is the first in right, which means that earlier-created liens take precedence over later-created ones. However, some liens, such as wages and salvage claims, may have priority over others by the operation of law.
Q4. How can a Maritime Lien be enforced?
Ans. An action in rem can be brought against the vessel to enforce a maritime lien. A legal action in rem is one that is brought against the property itself, as opposed to the owner. This indicates that the vessel may be seized and sold in order to recover the claim.
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