Maritime Liens Revisited: From Historical Development to Contemporary National Law; a

Journey towards International Unification

Tafsir Matin Johansson

January, 2011

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Table of contents

Introduction........................................................................................................................3

Chapter 1

1.1 Historical evolution of Maritime Liens....................................................................4

1.2 Defining Maritime Liens..........................................................................................5

1.3 Maritime Liens: Unique characteristics peculiar to maritime law..............................6

1.4 Types of Maritime Liens: analysis in terms of common wealth and civil law

countries......................................................................................................................8

Chapter 2

2.1 Precedence in respect of simultaneous maritime liens: exploring classic cases..........10

2.2 Justifying priority ranking of maritime liens in the United States...............................11

2.3 Priority ranking of maritime liens in the United Kingdom..........................................12

2.4 Maritime lien ranking in Canada: Subtle differences with the United Kingdom........13

Chapter 3

3.1 Examining the approaches of Choice of law in the Conflict of laws........................14

3.2 International conventions relating to Maritime Liens..................................................15

3.3 An overview of the 1926 convention...........................................................................16

3.4 1962 Convention v. 1967 Convention (comparison in system of priorities)...............17

Chapter 4

4.1 Examining the recent convention on maritime liens (the 1993 convention)...............18

4.2 Problems of present conventions in force (the 1926 and the 1993 convention)..........19

4.3 Different national approaches relating to maritime liens.............................................21

4.4 A viable answer: drafting a new convention considering domestic approaches..........22

Conclusion...........................................................................................................................23

References...........................................................................................................................24

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Introduction

The substantive law as to the nature, number and priority ranking as between categories of

maritime claims vary in respect of different jurisdictions. Therefore, dissimilar national

approaches regarding foreign judgments on the subject of maritime liens has generated

divergence and discord among states. One of the core objects of the existing international

instruments on maritime liens is to categorize and limit the number of maritime liens which

precede maritime mortgage claims, so as to bring an international unification and secure the

rights of financers who contribute greatly in the development of maritime-fleet. In order to

understand conflicts of law in the domain of maritime liens it is important to compare

competing national laws. Although maritime liens and mortgages are inextricably connected

the scope of this paper is limited to the analysis and examination of maritime liens

exclusively and their priority ranking as incorporated in the international instruments as well

as the national laws of some of the major maritime countries. This is because in order to

examine maritime liens in the conflict of laws, it must be studied seperately. The key

objective of this paper is to trace the roots of maritime liens; examine the definition, nature

and classifications; emphasise on its priority ranking in three major maritime countries i.e. the

United States of America (hereinafter referred to as the United States), the United Kingdom

of Great Britain and Northern Ireland (hereinafter referred to as United Kingdom) and

Canada; analyse and compare the pertinent international conventions intended to categorize

and limit the number of maritime liens, pinpoint the drawbacks of those conventions, extract

different national approaches and finally provide recommendations on the matter of

international unification of maritime liens.

In an endeavour to scrutinise the maritime liens that exist in different

national laws and the international instruments, this paper narrows down to the ultimate

question, as to which law should be enforced to determine the priority ranking between

themselves, whether maritime liens can be restricted to limited numbers in an international

instrument and whether there can be a harmonization in this disunified international regime so

that problems as to conflict of laws may radically decline.

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Chapter 1

1.1 Historical evolution of Maritime Liens I, indeed, am Lord of the world, but the law is lord of the sea. Let it be judged by Rhodian Law, prescribed

concerning nautical matters, so far as no one of our laws is opposed.1

The very reply of Emperor Antoninus to a complain of a shipwreck vibrates an example of

conflict of maritime laws in ancient Rhodian law assimilated in the Digest of Justinian.2

Maritime liens as a proprietary interest in a res is an outcome of advancement through

centuries of custom, statute and judicial pronouncement and has ultimately taken a reshaped

and refined form in modern admiralty law. Evidence is deduced from the primitive and

ancient customs of the ancient Greek Law3 and the Roman Law4 to the Byzantine/Rhodian

Sea-Law5 (seventh or eighth century A.D.) and the Basilica6 (ninth century A.D.). From ninth

to twelfth century, an oral lex maritima in its authentic shape formed a part of the medieval

lex mercatoria (mercantile law), governed the relations of the merchants who merchandised

goods via sea.7 With the increased sophistication of maritime business in the medieval period

numerous maritime codes were endorsed to synchronize commercial maritime endeavours

among which Consulate de la mer(a) was significant as it dealt with the right of the seamen

against the ship as a security for their wages and later, spread throughout the Mediterranean

basin.8 The Rles of Olron9 (end of the twelfth century A.D.), which is the first recorded 1 William Tetley, Maritime Liens and Claims, Second Edition, 1998, Les ditions Yvon Blais, p. 8, para. 1. 2 Ibid., p. 8, para. 5, where W. Tetley mentions that Rhodian Law predates to c. 800 B.C. the codes of which were first indicated in the Digest of Justinian. 3 Ibid., p. 9, para. 1, where W. Tetley in brief extracts the essence of maritime liens from the case of Zemonthemis v. Demon, where the hypothecation of the ship and the cargo by a master in a foreign ship was permissible and established by declaration. 4 Ibid., p. 9, para. 3, where W. Tetley indicates the presence of four types of maritime liens i.e. the nautical loan; a loan to build, buy or equip a ship secured by a privilege; a privilege for repairing the ship or supplying the crew; and a privilege on cargo either by the ship-owner or the person who lent money for the payment of freight. 5 Ibid., p. 11, para. 2, where W. Tetley states that, [t]he Byzantine/Rhodian Sea-Law is divided into three main parts with many chapters in each part. Two chapters deal with primitive maritime liens. In part III, chapter 19, a captain in command, if he owns of the ship, would seem to have the power to borrow money on the credit of the ship. In part III, chapter 16, captains and merchants who borrow money on the ship, the freight, or the cargo may hypothecate the ship. This hypothecate, the text notes, is unlike a land hypothecation. 6 Ibid., p. 11, para. 3, where W. Tetley reaffirms Walter Ashburner on The Rhodian Sea-Law, 1909, p xiii, that, [b]ook 53 of the Basilica contains considerable maritime law and it is thought by Ashburner that the Byzantine/Rhodian Sea-law was attached to Book 53 as an appendix. 7 Ibid., p. 12, para. 12. 8 Paul M. Herbert, The origin and Nature of Maritime Liens, 1930, Tulane Law Review, The Tulane University of Louisiana, pp. 382-384.

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source of contemporary maritime law stated principles, reported judgments and incorporated the duties and responsibilities of the master, the crew, the ship-owner and the merchants.10 The Laws of Visby which developed around the Atlantic and Baltic ports were mostly contingent on the Rles of Olron, which dealt with the rights of the seamen against the ship as the security for their wages.11 The principles transparently articulated in the Rles coupled with Consulate de la mer(a) were the determinants of the Ordonnance de la Marine 1681 in France and contributed greatly to the growth of general

maritime law of England and Northern Europe.12 The dearth of a settled guidance to

adjudicate disputes among sea-faring people during the medieval period paved the way for

recording of judgments in individual cases.13 Apparently the recordings of these proceedings

led to the codification of the customary maritime laws which imposed a concrete obligation

on the mariners and the special maritime tribunals.

1.2 Defining Maritime Liens

Under a broad spectrum, the term lien may be deciphered as a legal right or interest in

anothers property that exists until a debt due in respect of it is satisfied.14 And when it is

enclosed with maritime, it relates to a valuable yet effective method of enabling the injured

party to make the vessel herself available as a security.15 The operation takes a turn to reality

by appropriation of the vessel itself and remains unaffected by alteration of ownership.16 This

seizure of the vessel of the maritime property is seen as a privileged claim17, mostly owing to

the notion that in the past, judgments rendered regarding collisions reflected maritime liens as

a privileged claim. Gorell Barnes, J. in The Ripon City18 held that:

9 Supra note 1, Willian Tetley states that, [t]he Rles came into existence towards the end of the twelfth century A.D. and consisted of both stated principles and reported judgments relating to the wine trade between Aquitaine (Guienne), England and Flanders and, later on, were influential in much of the maritime world, especially in the Baltic and Nordic countries. 10 Supra note 1, p. 13, para. 2. 11 Supra note 7. 12 Supra note 1, p. 18, para. 1. 13 Grant Gilmore and Charles L. Black, The Law of Admiralty, Second edition, 1957, New York Foundation press, pp. 3-8. 14 Bryan A. Garner, A Dictionary of Modern Legal Usage, 1987, Published by Oxford University Press (U.S.A), p. 341, See definition of lien. 15 Chorley and Giles, Shipping Law, Eighth edition, 1987, Published in Great Britain, p. 70, para.1, See General (7.11). 16 Ibid. 17 Supra note 1, where W. Tetley states that, The maritime lien for its part is a right, a right found in the lex maritima; in the civilian tradition, it is a privilege. 18 [1987] 7 Moo. P.C. 267 at p.284, 13 E.R. 884 at p. 890.

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a lien is a privileged claim upon a vessel in respect of a service done to it, or injury caused by it, to be carried into effect by legal process.19

Then again, Scott, L.J., in The Tolten20 opined that:

[t]he essence of the privilege was and still is, whether Continental or English law, that it comes into existence automatically without any antecedent formality, and simultaneously with the cause of action, and

confers a true charge on the ship and freight of a proprietary kind in favours of the privileged creditor.21

An analysis into the existing definitions demonstrate that till date it remains to be a

dormant title of empowerment to the injured by which a justified and legal claim can be

established and irreversibly executed by operation of law. Collisions among other hazards

that may befall a ship are capricious, and to compensate the aggrieved, maritime law has by

lien designed a proprietary interest in a res. Hence, the interest stands stagnant and clings to

the maritime property and the magnitude is further demonstrated where the lien stretches even

after the injurer intentionally or otherwise attempts to change the ownership. This absolute

right of the injured operates even against a good faith purchaser.22 It is due to the reason of

the power of its enforceability; it is termed by lawyers as a right in rem (or, action in rem i.e.

a right enforceable against the world at large) as opposed to right in personam (a right

enforceable against a particular person).23

1.3 Maritime Liens: Unique characteristics peculiar to maritime law

Maritime lien denoted as a special property interest (jus in re) in nineteenth century cases has

led theorists to state that the action in rem is brought literally against the vessel as the

offending thing.24 A right against the property25 and simultaneously, a right in the property

has established maritime lien as a subject peculiar to maritime law. Courts of common-law

countries designate it as hypothecation, an inchoate right, a proprietary right whereas in

France, it is known as Creances Privilegiees and in Japan as preferrential rights of ships

19 Supra note 1, p. 58, para. 4. 20 [1946] P. 135 at pp. 149-150, (1946) 79 Ll. L. Rep. 349 at p. 356. 21 Supra note 1, p. 59, para. 1. 22 Thomas J. Schoenbaum, Admiralty and Maritime Law, Fourth edition, Volume 1, 1987, West Publishing Company, p. 515, para. 1. 23 Supra note 15. 24 Supra note 22, p. 526, para. 1. 25 A right based upon the legal fiction that the ship itself is the offender. Also, See, Christopher Hill, Maritime Law, Sixth edition, 2003, Published in Great Britain, p. 119, where C. Hill states that, It is a right which springs from general maritime law and is based on the concept that the ship (personified) has itself caused harm, loss or damage to others or to their property and must itself make good that loss. The ship is, in other words, the wrongdoer, not its owners. (emphasis mine).

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creditors.26 Diverse as the terms may seem, the fundamental objective remains the same, and

under all circumstances it acts as a charge or encumbrance against maritime property.

Maritime lien as opposed to land-law-type lien is not influenced by either notice or

possession and preferred ship mortgage is only one of its kind which gets recorded in any

type of registry and therefore, maritime lien is a silent lien where custody over the property is

not a prerequisite.27 It acts independent of possession where consent of parties or judicial

process plays no role and remains affixed wherever it may go or whosoevers28 hand it may

fall. In short, it is fastened by law on the maritime property from the moment of occurrence

which manifests that a maritime lien has materialised. The claims fixed firmly by a maritime

lien are paid off from the proceeds of sale and this is accomplished in priority to all other

ordinary claims and mortgages. Then again, a maritime lien is a right against any maritime

property, whether it is against the ship herself, the freight or the accessories.29 Considering

the fact that it operates against any maritime property, it does not only adhere to the

procedural side, but also observes the substantive side and attributes to the substantive part of

the common-law countries. Scott, L.J., in The Tolten30 clarifies the substantive element of

maritime lien whereby it sets forth the operation of the Admiralty Courts executive function

of arresting and selling the ship.31 Moreover, maritime lien travels with the res secretively yet

unconditionally and attaches to the vessel by law when a claim evolves.32 The intention of

such unique characteristics lies in the fact that the holder of the lien may enforce his claim

against the ship and the owner (or person liable) is compelled to compensate or provide

security to avoid seizure or arrest of the ship in question. In this regard, it is not a prerequisite

for the owner to have personal liability, nor does the claimant need an absolute privilege

against any assets other than the ship i.e. bareboat or other demise charterer.33 In the absence

26 D. R. Thomas, Maritime liens, Vol. 14, 1980, London, Stevens and sons, p. 2. 27 Michael A. Orlando and Meyer Orlando on Gilmore and Black (The Law of Admiralty, second edition, 1985), A Lien is a Lien, but a Maritime Lien is not, June 2003. 28 Supra note 15, p. 70, states a brief analysis of The Bold Buccleugh: Harmer v. Bell, (1850), 7 Moo. P.C.C. 267, 13 E.R. 884. The cause of action sparked when The Bold Buccleugh ran down the plaintiffs vessel and prior to the proceedings in the Admiralty court, it was sold to a purchaser without notice of the incident. It was held that, The lien operated against a bona fide purchaser for value; it related back to the time when it attached. The lien is lost by negligence or delay, neither of which was proved in this cause. 29 The Editorial Staff of the American Law Book Company, Corpus Juris Secundum, 1948, New York: West Publishing Company, Vol. 55, p. 714. 30 Supra note 20. 31 Supra note 26, p. 23. 32 Essays on Maritime Legislation, Vol. 1, Seminar on Maritime Liens and Mortgages and on Enforcement of Securities, Undertaken by Comite Maritime International, Genoa, Italy, 1990, August, See Allan Phillip in Characteristic features of maritime liens p. 25, para. 1. 33 Ibid., para. 2.

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of any connection between the owner and the loss, the payment in its entirety is recoverable

by the owner from the person held liable for the claim. Subjective liability may vary

depending on designations as regards to the vessel. For a bareboat charter, the charterer faces

liability and in the case of a time charter the owner is responsible considering the time of the

charter hire.34 The charter party acts as the determiner (in the relationship between owner and

charterer) corresponding to third party claimants and most often the charter party may

incorporate a non-lien clause to exclude the charterers operation of the ship from giving rise

to maritime liens.35 However, it cannot influence the protection of third parties assumed

explicitly in article 4 and article 7 of the International Convention for the Unification of

Certain Rules Relating to Maritime Liens and Mortgages, 1926. In addition to these

inimitable features, maritime liens are valid against everybody without registration while it

appears to be a precondition to safeguard other rights in a ship.36

1.4 Types of Maritime Liens: analysis in terms of common wealth and civil law

countries

To ascertain and more specifically, in order to resolve the conundrums in matters of priority

between maritime liens, they have been categorized under two comprehensive headings; the

former relates to consensual arrangement and the latter corresponds to damages suffered from

tortious acts.37 The first caption consists of liens which generates from bottomry and

respondentia38, salvage39, seamens and masters wages40, masters disbursements41; while the

34 Ibid., para. 4. 35 Ibid., para. 4-5. 36 Ibid., para. 6. 37 Supra note 15, p. 71. 38 Gustavus H. Robinson, Handbook of Admiralty Law in the United States, 1939, West publishing Company, pp. 369-371, where it is expressed that neither bottomry or respondentia loan bear great contemporary importance owing to the upsurge of facility in present day communication and consequent ready touch with the owner. The rationalization of these claims was to support the master in obtaining credit outside the ships home port, however, the development of communication has helped the master to receive orders from the owner and the owner is constantly aware of the condition of the ship during continuance of her voyage. 39The creation of which should inevitably secure the remuneration of the salvors in cases where the party saved intentionally refuses to satisfy thereof. Article 2 of the Convention for the Unification of certain Rules of Law, Respecting Assistance and Salvage at Sea (1910 September 23, signed in Brussels) emphasises on the equitable remuneration which shall not exceed the value of the property salvaged, for every act of assistance or salvage. See also; Supra note 26, pp. 139- 140, where D.R. Thomas states the preconditions for the creation of maritime salvage. Considering the imminent danger that may befall a ship, pre-existence of salvage contract is not necessary because security of the salvor lien is preserved by salvage lien which is affixed to the salvaged property. Then again, right to salvage may arise from contract and the usual contract is LOF (Lloyds Open Form), 1980 which is considered to be a standard form of salvage contract. Since volunteering to act as a salvor is seen as a pre-condition, difficulties may arise for a person who is not a volunteer to claim salvage lien under LOF terms. Salvors may seek security to be

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second caption comprises of damage42 done by ship.43 The amalgamation of these classified

liens may under a broad term be addressed as traditional maritime liens, applicable in

England and the common-wealth states (according to the lex fori).44 Other amenities or

damages45 relating to a ship do not give rise to traditional maritime claims, rather to

statutory rights in rem where the right to arrest in an action in rem is awarded by the provided to Lloyds whereby they provide consent as not to arrest or detain the ship if the security is provided. See also Supra note 1, p. 341-342, where it is stated that The International Convention for the Unification of certain Rules of Law Relating to Maritime Liens and Mortgages, ranked salvage immediately after custodia legis and crew wages, the International Convention for the Unification of certain Rules of Law Relating to Maritime Liens and Mortgages, 1967 ranked salvage back in fifth position and the International Convention on Maritime Liens and Mortgages, 1993 ranked salvage further up the scale. 40 See Supra note 26, pp. 175,180,181-182 where it has been stressed that the foundation of seamens wages does not root back from Roman law, but the initial maritime codes recognizes that it ought to be given priority compared to other claims. In England, the indication of its presence is set forth in Johnson v. The Black Eagle (1597) where a decree for seamens wages was pronounced against a ship and ultimately it materialised indisputable privilege to the benefit the seamen himself. It can be argued that, the privilege emerges from the notion of rendering indispensable services to a ship and hence, the courts of admiralty from time immemorial have sheltered and endorsed this as a traditional maritime lien. In addition, The Merchant Shipping Act, 1970, Section 18 provides that the master shall receive the same lien for his remuneration, similar to seamen for his wages. Article 2(2) of the 1926 convention has explicitly laid down the foundations of lien right against a ship for the master and left it in an equal footing with that of seamen. But, neither master not seamen may assert their right of wage lien where a ship, except cargo is completely demolished owing to the fact that this specific right stems from services rendered exclusively to the ship. See also Supra note 1, p. 268-269, where it is stated that the 1926 convention ranked seamens and masters wages second immediately after law costs and custodia legis, the 1967 convention ranked this lien in the first position and in the 1993 convention two significant changes are brought in respect of this lien. 41 Supra note 1, p. 421-422, where it is stated that the theory of masters disbursement as a maritime lien has been instituted in Article 2(5) of the 1926 convention and in the 1993 convention which is to rank after maritime liens incorporated in article 4 and registered mortgages. See also Supra note 26, pp. 193-198, which states the pre-conditions that need to be satisfied under the common-law for a legitimate disbursement. This lien is distinctive in the sense that it is applicable to the advantage of the master and does not extend to either the seamen or the crew. Furthermore, this lien does not venture beyond the scope of ship or freight. Emphasis is given to the fact that the disbursement incurred or liability rendered must relate to an item or service immediate and necessary for the voyage and must be done in the ordinary course of the masters employment. 42 Supra note 15, p. 73, 43 Ibid., pp. 71-73, where it has been stated that the damage must be done by the ship herself. In Currie v. MKnight (1976), the crew of the Dunlossit tore the cables of the Easlade resulting in damage to the latter, where it was held that the owners had no maritime lien on the Dunlossit. Moreover, the lien is futile in the absence of support of a personal action. For a lien to be invoked, a liability of the owners for their own or the negligence or wrongful act of the employees must be demonstrated and verified. The term owner does not limit itself to registered owners, but also includes any other person in control of the ship. See also Supra note 1, p. 388-390, where it is stated that the 1926 convention includes this lien in a restrictive form, the 1967 convention divides it into two parts i.e. personal injury and property damage and the 1993 convention adds that such injury may occur on land or on water. 44 William Tetley, Maritime Liens in the Conflict of Laws, Law and Justice in a Multistate World: Essays in honor of Arthur T. von Mehren, Transnational Publishers Inc., Ardsley, N.Y. 2002 at pp. 439-457, < http://www.mcgill.ca/files/maritimelaw/marliensconf.pdf>, visited on 26 December 2010. 45 Necessaries provided to the vessel, claims for cargo damage, breaches of charterparty or contributions of the ship in general average.

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statue.46 However, the United States and other civil law jurisdictions have granted the

aforesaid liens the complete status of maritime liens by the national legislation or

international conventions.47 In the French code of Commerce of 1808, the claims secured by a

lien were featured as contractual and it was quite ambiguous whether the claims could be

secured against persons other than owners.48 Embarking on a new voyage would terminate the

lien which arose from a previous voyage.49 Moreover, the lien holders could not enforce it

against a voluntary sale of the ship and the performance of a voyage under the name of the

purchaser.50 In Germany, the liens were granted to claimants who could enforce it only

against the ship and were subject to limitation of liability system in force.51 Ultimately the

1926 convention has had a substantial impact on the civil law systems and the countries

within the scope of civil law52 where the Convention had not been ratified.53 Among the

quasi-maritime liens, general average is a condition under which unexpected sacrifice is made

or expenditure is incurred for the purpose of preserving from peril three classes of maritime

property i.e. interests in the ship, those in the freight, and in the cargo subject to common

maritime venture.54

Chapter 2

2.1 Precedence in respect of simultaneous maritime liens: exploring classic cases

In the Stream Fisher 55 the ship collided in succession with the Squawk, the Criterion, the

Enable, and the Rio Leopold resulting in damage to the vessels and in a question of priority

among the four vessels it was held that, in respect of several claimants, they rank pari passu

unless one of the claimants get judgment in respect of a claim.56 Since, all the judgments

(relating to four damaged vessels) were rendered thereafter subject to the issue of priority,

obtaining the first judgment could not be a possible solution, therefore the equitable answer

46 Supra note 43. 47 Ibid. 48 Supra note 32, p. 27. 49 Ibid. 50 Ibid. 51 Ibid., See Francesco Berlingieri in The maritime liens in the civil law systems, p. 28, para. 5. 52 e.g. Belgium, Brazil, France, Hungary, Italy, Poland, Rumania and Spain. 53 Ibid., p. 29, para. 3. 54 Supra note 1, p. 439, See also p. 444, where it is stated that the International Convention on Maritime Liens and Mortgages did not include this type of lien unlike the previous two conventions which advocated this quasi-maritime lien. 55 (1926) 26 Ll.L.Rep. 4 56 E.R. Hardy Ivamy, Casebook on Shipping Law, Fourth edition, 1987, Lloyds of London Press Ltd, p. 14, para. 2.

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was to set the claims on a common platform and rank them on equal footing. The Veritas

case57 lays down the judgment that, a maritime lien in respect of salvage services formerly

rendered is suspended to a maritime lien relating to collision damage because the salvor was

seen in the same rank as a creditor who received a lien ex contractu and hence, damage

claims were given priority over prior claims ex contractu and prior salvage.58 A maritime lien

in respect of collision damage was held to be postponed to a maritime lien of salvors in the

Inna case59 because the services rendered by the salvors produced the res for the other lien to

take effect upon.60 Then again, an accrued maritime lien of salvage has been pronounced to

take priority over the possessory lien of a ship repairer in the Russland case61, even though

they had benefitted from the repairs. Under a general heading of recent development, in the

group of maritime liens arising from contract, it is salvage that ranks ahead. This is followed

by wages and masters disbursement.62 On the other hand, damages arising from tort rank on

equal footing even if it is proved that various damage liens took place at different hours.63

2.2 Justifying priority ranking of maritime liens in the United States

The ranking of maritime liens are held to be governed stringently by American law (and

therefore by 46 U.S. Code section 31301 et seq.).64 In the absence of dictatorial American

cases which dissertate an overall ranking of maritime liens, it pertains to becoming doctrinal

since majority of the work has been left in the hands of legal text writers.65 The inverse order

rule has been given effect to compel the claimant to act promptly.66 The sole special

legislative right (ranked first) existing in U.S is for wreck removal and is granted to the

Secretary of the Army.67 Then again, the right of detention and sale granted to Saint

Lawrence Seaway Development Corporation for unpaid dues comprises the salient features of

special legislative rights. Expenses in custodia legis (ranked second) which reads at article

12(2)68 of the 1993 Liens and Mortgages Convention has been expressly stipulated in 46 U.S.

57 [1900-3] All E.R. Rep. 501. 58 Supra note 55, pp. 15-16. 59 (1938) 60 LI.l.Rep. 414. 60 Supra note 55, pp. 16-17. 61 (1924) 130 L.T. 763. 62 Supra note 15, p. 80. 63 Ibid., p. 81. 64 Supra note 1, p. 876. 65 Ibid., p. 868-869, para. 2. 66 Ibid., p. 870, para. 1. 67 Ibid., pp. 70-71. 68 Ibid., p. 225, Article 12(2) of the 1993 convention states that, [t]he costs and expenses arising out of the arrest or seizure and subsequent sale of the vessel shall be paid first out of the proceeds

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Code section 31326(b)(1).69 The preferred maritime liens70 (ranked third) comprises of a)

wages of master and crew (including maintenance and cure), b) salvage and general average,

d) maritime torts including personal injury, death, property damage and cargo tort liens, e)

Longshoremen (individual, not stevedore company), and e) U.S. contract maritime liens

which are entered into before the filing of a U.S. preferred mortgage respecively.71 In this

regard, the U.S. contract liens entered into after the filing of U.S. preferred ship mortgages

do not fall within the ambit of preferred maritime liens72 and as a result rank low to

preferred ship mortgage liens.73 Therefore, preferred ship mortgages74 on U.S. documented

vessel as well as preferred ship mortgages on foreign ships whose mortgages have been

guaranteed under the Merchant Marine Act 1936, rank immediately after preferred maritime

liens.75 Contract cargo damage liens and contract charterers liens rank instantly after foreign

ship mortgages and finally, unregistered mortgages, non-maritime liens (tax and other

government claims subordinate to maritime liens), state chattel mortgages and liens and liens

for maritime attachment secure the final rank in the hierarchy of maritime liens of the United

States.76

2.3 Priority ranking of maritime liens in the United Kingdom

Certain general directions of ranking order in United Kingdom denote that liens ex delicto

rank ahead of liens ex contractu which latter rank among themselves in an inverse order

which attaches to the ship.77 The general sequence is thus, maritime liens, possessory liens,

mortgages and statutory liens.78 As a consequence of the decision made by the Privy Council

in The Halcyon Isle79 it is now settled that the lex fori governs the recognition and ranking

of foreign maritime liens in the United Kingdom. Similar to the ranking order of U.S., special

of sale...The balance of the proceeds shall be distributed in accordance with the provisions of this convention, to the extent necessary to satisfy the respective claims. 69 Ibid., p. 225. 70 46 U.S. Code sections 31301(5) and 31326(b)(1). 71 Supra note 44, pp. 11-12. 72 Because post-mortgage liens do not fall within the scope of 46 U.S. Code section 31301(5) and are subordinate to preferred mortgage liens. 73 Supra note. 1, p. 875. 74 46 U.S. Code sections 31301(6) (A), 31322 and 31326(b) (1). 75 Supra note 1, p.875, 76 Ibid., p. 876 77 Ibid., p. 884. 78 Ibid. 79 The Halcyon Isle (Bankers Trust International Limited v. Todd Shipyards Corporation) [1981] A.C. 221, [1980] 2 Lloyd's Rep. 325, 1980 AMC 1221 (P.C.), where Lord Diplock representing the majority opined that maritime liens encompass rights which are remedial or procedural and therefore, is to be determined by English law as the lex fori.

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legislative rights (ranked first) and costs of arrest and custodia legis (ranked second) attains

the highest priority in the maritime liens hierarchy. Possessory liens (ranked third) and

traditional maritime liens (ranked fourth) which include a) salvage, b) damage liens, c)

seamens and masters wages, d) masters disbursements and e) bottomry, rank immediately

after each other.80 It is seen that registered British ship mortgages take the subsequent

position preceding all unregistered ship mortgages irrespective of date and service of notice.81

The ensuing position is reserved by the statutory rights in rem82 whereby after issuing a writ

if the ship is sold to a third party, the right in rem would travel with the ship and this paves

the way for specific qualities of inchoate maritime lien travelling with the ship are

appropriated by the statutory right in rem.

2.4 Maritime lien ranking in Canada: Subtle differences with the United Kingdom

The order of ranking in Canada is proposed to correspond to similar rankings of maritime

liens suggested under United Kingdom law.83 Here the term correspond maybe used in a

flexible form to portray the gap that seems to exist only in the statutory right in rem keeping

the position of the previous order of claims constant. However, the difference remains that

statutory right in rem is invoked in Canada by arrest of ship whereas in the United Kingdom it

takes place by issuing a writ.84 Furthermore, the owner or beneficial owner possesses the

authority to bind a ship in Canada the authority extends to demise charterer as well.85

Moreover, necessaries under statutory rights in rem extend to goods, materials, services and

insurance whereby in the United Kingdom it is confined to only goods and materials.86 In

addition, the statutory right in rem is not preserved for stevedores in the United Kingdom as

opposed to Canada where the right can be duly exercised.87

Chapter 3

80 Supra note 1, pp. 884-888. 81 Ibid. 82 Ibid, pp. 889-890, whereby it is stated that the statutory rights in rem include a) necessaries, b) repairmens liens, c) towage liens, d) general average e) pilotage, f) cargo damage liens g) charterers liens against the ship by virtue of section 20(2)(h) and (p) of the Supreme Court Act, 1981. 83 Ibid., pp. 892-897. 84 Supra note 44, p. 11. 85 Ibid. 86 Ibid. 87 Ibid.

14

3.1 Examining the approaches of Choice of law in the Conflict of laws

Due to the innate global feature of shipping, problems of conflict of law arise recurrently in

maritime law than any other fields. Under a broad spectrum conflict of law deals with choice

of the applicable law, jurisdiction of the courts and recognition coupled with enforcement of a

foreign judgment.88 Disparate laws and procedures have led to disinclination to ensure and

implement foreign judgments. A number of hypotheses exists relating to choice of law.

Although in theory, the courts of each country could apply the rules of lex fori in terms of

foreign contracts, in practice it could lead to substandard results.89 In the United Kingdom

where maritime liens have been termed as remedial rights rather than substantive property

rights reflects the weakness that the maritime claims have not been codified and invites forum

shopping.90 Apart from relocating the law of jurisdiction it defeats the expectations of

necessariesmen whose title should fall within the ambit of maritime lienors and their claims

under the heading of maritime liens. 91 Foreign maritime liens are revered highly in the

United States than in any other jurisdictions92 that pursue The Halcyon Isle.93 Since many

maritime conflicts of law embrace governmental interests or international questions bearing

foreign affairs, hence, the choice of law, conflicts of laws, choice of forum and forum non

conveniens (where United States and foreign law overlap) are governed by federal law

principles which apply to extraterritoriality and foreign constituents.94 The Canadian view is

influenced by the American system although the priority ranking is similar to the United

Kingdom.95 The groundbreaking decision on this theme is the Ioannis Daskalelis (the)96 decided in 1972 by the Supreme Court of Canada where identification of maritime lien was

88 Supra note 32, See Allan Phillip in Conflict of laws, p. 54, para. 1. 89 Ibid., para. 5, where it is explained that Companies involved in financing the construction of ships would be quite reluctant in the absence of certainty that mortgages created in one country would be recognized by others. 90 Supra note 44, p. 15. 91 Ibid. 92 Ibid., pp. 16-18, In Transol Bunker B.V v. M.V Andrico Unity, 1989 (4) S.A. 325, 1989 AMC 1561, the appellate division of the Supreme court of South Africa (ignored the closer connection of jurisdiction to Argentina where the Panamanian ship obtained supplies and later arrested in South Africa; In Hassanein v. The Hellenic Island [1989] 1 C.L.R. 406, the Cyprus Supreme court held that a claim for bunkers as maritime liens could not supersede a Singapore-registered first preferred mortgage against a Singapore ship; In The Betty Ott v. General Bills Ltd., [1992] 1 N.Z.L.R. 655, the New Zealand court of appeal refused to recognise an Australian ship mortgage as equivalent to a ship mortgage registered in New Zealand; In Morlines Maritime Agency Ltd. & Ors v. The Skulptor Vuchetich, [1998] AMC 1727, the Federal court of Australia rejected the necessaries claim of a U.S. container lessor under a lease agreement. 93 Ibid., p. 19. 94 Supra note 22, p. 265, para 2. 95 Supra note 44, p. 23. 96 [1974] S.C.R. 1248, [1974] 1 Lloyd's Rep. 174, 1973 AMC 176 (Supreme Court of Canada).

15

subject to lex causae (the law governing the underlying legal relationship in question).97 A

viable criticism opposing this approach would be that the parties may influence the choice of

law by supplementing a choice of law clause into their contract and provide for a maritime

lien not provided for in the proper law. However, in the United States a technicality is

adopted by applying the legal relationship to the creation of a maritime lien resulting in total

disregard to any agreements between the parties.98

3.2 International conventions relating to Maritime Liens

Despite the perception that maritime liens supersede contractual burdens i.e. mortgages and

hypothecs has been acknowledged in both the common and civil law jurisdiction, the general

approach in the number and variety of claims secured by maritime liens instituted a principal

inconsistency between them. In the civil law jurisdiction contractual claims invoked maritime

liens as opposed to common law dominion where maritime lien status arose from claims

regarding services rendered to the ship and damages caused by the ship.99 For the prevailing

inconsistencies and the need to bring an international uniformity in this respect a preliminary

work on a draft convention was initiated by Comite Maritime International (hereinafter

referred to as CMI) in Hamburg (in 1902), which later continued at conferences in

Amsterdam (in 1904), in Liverpool (in 1905), in Venice (in 1907) and ultimately the

diplomatic conference in Brussels in 1909 which paved the way for the adoption of the

International Convention for the Unification of Certain Rules Relating to Maritime Liens and

Mortgages, 1926 (hereinafter referred to as 1926 convention) and a revised form of that

convention in the International Convention for the Unification of Certain Rules Relating to

Maritime Liens and Mortgages, 1967 (hereinafter referred to as 1967 convention).100 The

failure of the latter convention to replace the former, in 1985 the International Maritime

Organization and the United Nations Conference on Trade and Development, with the help

of CMI began working on a new convention the outcome of which was the International

Convention on Maritime Liens and Mortgages, 1993 which entered into force in 5 September

2004.101 Then again, the concerned convention with arrest of vessels is the International

97 Supra note 44, p. 24. 98 Supra note 32, p. 56. 99 IMO, Considerations of Work In Respect of Maritime Liens and Mortgages..., LEG/55/4/1/, 18 September 1985, p. 16. 100 Jan Sandstrom, Abrogation of Maritime Liens for Masters Contracts, Sweden, Elander Boktryckeri Aktiebolag, Goteborg, 1965, p. 13. 101 Implementation and interpretation of international conventions (CMI yearbook 2007-2008), A Short Analysis Of Certain Rules On The International Convention On Maritime Liens and Mortgage,1993, p. 321-322, < www.cmi2008athens.gr/sub4.4.pdf>, visited on 7 December 2011.

16

Convention Relating to the Arrest of Seagoing Ships, 1952 and the International Convention

of Arrest of Ships, 1999.102 Subsidiary conventions associated are the Convention Relating

to the Limitation of Liability of Owners of Seagoing Ships, 1957 and the Convention of

Limitation of Liability for Maritime Claims, 1976.

3.3 An overview of the 1926 convention

The 1926 convention has furthered uniform recognition of ship mortgages and simultaneously

endeavoured to delimit the number of maritime claims entitled to the status of liens providing

uneven instructions with regards to priority demands.103 Belgium, Denmark, Estonia,

Hungary and Spain are the first signatories of this convention (June 2nd, 1930) whereas

Belgium, France, Italy and Poland have enacted domestic legislations based upon the

provisions of this convention.104 The principle that validity of ship mortgages should be

administered by the law of the flag has gained notable acceptance even in non signatory

countries i.e. the United Kingdom and the United States.105 The absence of concrete security

to verify the recovery of loan granted for the building or purchase of a ship was in existence.

This existing problem of international facet was the ascertainment of the number of liens

entitled to take preference over mortgages.106 The convention succeeded in limiting the

number of pre-mortgage liens in five general classes.107 In fact, this convention provided a

framework for the priority of maritime liens among themselves and between mortgages and

102 Robert Force, A.N Yiannopoulos and Martin Davies, Admiralty and Maritime Law, Volume 2, 2008, Beard Books (Washington D.C), visited on 7 December 2011, p. 266, where it is stated that, [e]nforcement problems raised by the 1952 Arrest Convention were addressed in 1999, in the International Convention on Arrest of Ships (Geneva, March 12, 1999), which has not yet come into force internationally (it needs 10 parties to do so; it presently has seven). 103 John M. Criz, Ship Mortgages, Maritime Liens, And Their Enforcement: The Brussels Conventions of 1926 and 1952, Duke Law Journal, Vol. 1963, No. 4 (Autumn, 1963), p. 672, Duke University School of Law, accessed via Jstor, < www.jstor.org/stable/1371249>, accessed on 29 November 2010. 104 Ibid., pp. 674-675. 105 Ibid., p. 676. 106 Ibid., p. 677, where it is explained that a vessel which is subject to a ship mortgage would pick u higher ranking of liens as it sailed from one port to another. Chances there may be that the ship after calculating the number of liens could ultimately prejudice the security of mortgages. 107 Supra note 32, See Francesco Berlingieri in The 1926 and 1967 Conventions, p, 18, para 1, Although the classes have been divided under a numerical order (five), but it must be remembered that each class consists of several types of liens. a) Judicial costs, taxes, cost of watching and preservation (of the ship), b) claims for wages for master and crew, c) claims for salvage reward and contributions in general average, d) Indemnities for damages in respect of collision, personal injuries and damage to goods and e) claims arising from contracts made by the master in his capacity as such outside the ships homeport for the preservation of the ship or the continuation of the voyage.

17

other claims.108 It does not provide any bar, rather encourages national law to grant liens in

respect of claims not specified in the convention without altering the priority specified.

Furthermore, the convention is to apply to all contracting states when the vessel to which the

claim relates belongs to a contracting state.109 Then again, article 3 of this convention

establishes that certain types of lien which include materialmens liens rank above mortgages.

This is as opposed to American law where under the preferred mortgages act of 1920,

registered mortgages take priority over succeeding materialmens liens and in the Great

Britain where registered ship mortgages rank higher than claims of supply and repairmen

under municipal law.110 Difficulties may arise when a vessel of a nonconventional is arrested

and sold in a contracting state.111 The reasons as to why important maritime countries112 have

abstained from ratifying this convention is assumed due to the multiplicity that exists in the

domestic legislations relating to maritime law in different countries and the technical loophole

that exists therewith in obtaining the approval of different commercial entities. The 1926

convention does not warrant any assurance to the distribution from the proceeds of sale to

follow accordingly and neither does limiting the number of maritime liens provide a

mortgagee with a comparatively high position. Apparently the objective of unification is left

undone, with miniscule changes to the detriment of the mortgagee.

3.4 1962 Convention v. 1967 Convention (comparison in system of priorities)

The 1967 convention (propounded as a revision of the 1926 convention) was designed quite

similar to that of the 1926 convention, but differences remain on the fact that this convention

reduces the number of maritime liens in so far as it eliminates the claims based on contract by

changing the priority between them, including provisions connected to deregistration of

vessels and adding a provision for termination in the event of a forced sale.113 It is meticulous

in the sense that the wording related to mortgages, priority ranking of liens and the authority

108 Article 1 of the International Convention for the Unification of Certain Rules Relating to Maritime Liens and Mortgages, 1926, p. 31, The American Journal of International Law, Volume 27, No. 1, Supplement: Official Documents (January 1933), , visited on 29 November 2010. 109 Ibid., Article 14, p. 34. 110 Supra note 98, pp. 677-678. 111 Ibid. 112 The United Kingdom, The United States of America, The Federal Republic of Germany, Japan, The Netherlands, The USSR. 113 Report by the UNCTAD (United Nations Conference on Trade and Development), secretariat, Maritime Liens and Mortgages: Preliminary analysis of possible reforms in the existing international regime of maritime liens and mortgages, Working group on International Shipping Legislation, Tenth session, Geneva, 24 September 1984, p. 12, [53(B)].

18

of the state to introduce liens are not listed.114 However, certain differences exist between the

two conventions. The 1926 convention separated costs due to the state and expenses incurred

by one or more creditors as opposed to the 1967 convention which is free from such

dichotomy only states that such cost is to be awarded by the court.115 Tonnage dues, light or

harbour dues and charges of same character (1926 convention, Article 2, No. 1) are

preserved in the 1977 convention with a slight change in wording i.e. port, canal and other

waterway dues.116 Then again, the cost of watching and preservation from the time of entry

of the vessel into the last port (1926 convention, Article 2, No. 1) are incorporated as cost

awarded by the court and arising out of the arrest and subsequent sale of the vessel in the

1967 convention (Article 11, paragraph 2).117 Furthermore, indemnities for loss of or damage

to cargo or luggage (1926 convention, Article 2, No. 4) was not retained in the 1967

convention.118 The fifth category of liens entered into article 2 of the 1926 convention was

quite rightly abolished by the 1967 convention owing to the fact that ship-owners should not

be permitted to borrow money for day-to-day operation of the ship so as to affect the interest

of the mortgage or hypothec.119 This reflects the prudence of CMI to avoid certain maritime

liens which have been the main criticism in so far as many countries are aware that the

commercial duties of the master have been reduced.

Chapter 4

4.1 Examining the recent convention on maritime liens (the 1993 convention)

The convention of 1993 signed by 57 countries and ratified (or acceded) by 11 countries came

into force in 5 September 2004 and has gained satisfactory international acceptance.120 An

extension which states ...including costs of repatriation and social insurance contributions

payable on their behalf is affixed to article 4, 1(i) of the 1967 convention and reserved in the

1993 convention [4, 1(a)] which.121 Article 4, 1(iii) of the 1967 convention relating to claims

114 Ibid. 115 Supra note 32, See Francesco Berlingieri in Unification of substantive law on maritime liens: the 1926 and 1967 Brussels Conventions, p. 49. 116 Ibid., See Francesco Berlingieri in The 1926 and 1967 Conventions, pp. 19-20. 117 Ibid., p. 21. 118 Ibid., whereby it is explained that owners of cargo or luggage do not require such protection as they are free to choose the carrier and moreover they are entitled to insurance depending on their willingness to insure. 119 Ibid., p. 22. 120 Supra note 98. 121 International Convention on Maritime Liens and Mortgages, 1993, Held at the Palais des Nations , Geneva from 19 April to 6 May

19

in respect of loss of life or personal injuries have safely secured its position in article 4, 1(b)

of the 1993 convention.122 However, article 4, 1(ii) of the 1967 convention on port, canal and

other waterway dues and pilotage dues of the 1967 convention, despite of being safely

preserved in the 1993 convention has been endowed a lower rank [article 4, 1(d)] compared to

the former convention. A change in the order is also observed where claims for salvage as

incorporated in article 4, 1(v) of the 1967 convention is given a rather high position [article 4,

1(c)] of the 1967 convention.123 It is also monitored that claims for salvage also ranks higher

than port, canal and other waterway dues and pilotage dues, a category which was given

second highest position in the 1967 convention. Then again, the claims based on tort arising

out of in respect of damage to property enumerated in article 4, 1(iv) of the 1967 convention

has been slightly modified by including physical loss or damage [article 4, 1(e)].124

Moreover, this category has been positioned in the last rank whereas it was prioritised over

claims for salvage, wreck removal and contribution in general average in the 1967

convention. It appears that the 1993 convention is lenient in so far as it empowered national

law to grant other maritime liens [article 6] in respect of claims not specified in the

convention.125 As regards to the peculiar features of maritime liens, article 8 of the 1993

convention states that the maritime liens incorporated in article 4 follows the vessel,

notwithstanding any change of ownership or of registration or of flag.126 As regards to

extinction of maritime liens, it safely preserves the one year period [article 9] as mentioned in

article 8 of the 1967 convention.127

4.2 Problems of present conventions in force (the 1926 and the 1993 convention)

Neither has the 1926 convention nor the 1967 convention has achieved pervasive

international acceptance.128 Despite the effort to revise and replace the former convention, the

1967 convention signed by 22 states was ratified by only four states, namely, Denmark,

1993., p. 2, visited on 7 January 2011. 122 Ibid. 123 Ibid. 124 Ibid. 125 Ibid., p. 3. 126 Ibid., p. 4, See Supra note 32, by Francesco Berlingieri in Unification of subtsantive law on maritime liens: the 1926 and 1967 Brussels conventions, p. 51, where it is stated that, the 1926 convention governs two peculiar features of maritime liens, the fact that they travel with the ship and the priority of claims secured thereby. On the other hand, the 1967 convention deals with all the unique characteristics of maritime liens. 127 Ibid. 128 Supra note 99.

20

Finland, Norway and Sweden.129 Till date only 11 countries have ratified or acceded the 1993

convention and therefore, the 1926 convention is still in force in certain jurisdictions. The

CMI anticipated in amalgamating and uniting the maritime law of liens and mortgages

ultimately improving the status of ship mortgage by reducing the number of liens.130 The

futile venture of such amalgamation and unification is reflected in the number of countries

ratifying the conventions. It has been assumed that the failure of both 1926 and 1993

conventions is probably the fact that maritime liens and mortgages have been under the

dominion of national legislation from time immemorial.131 Since national approaches differ

from one another regarding the number of claims ultimately has a repercussion on ship

financing possibilities.132 Both the existing conventions of 1926 and 1993 apparently

recognised too many maritime liens although the categories have been confined into five

classes. Some states put forward the proposal of increasing the number of liens or in the scope

of a particular lien in the 1926 convention.133 The most frequent suggestion of incorporating

social insurance contribution within the lien for wages which took its place in the 1993

convention.134 The signatories of the 1926 convention questioned the high ranking of port,

canal and other waterway dues and pilotage dues.135 In the 1993 convention this doubt was

eliminated by lowering its rank. Although the CMI has done much within its scope to

rearrange the orders and adhere to the preferences of the state parties, it seems that it still

remains to be inconsistent with various national approaches. It is argued that the inclusion of

manager in the 1993 convention is pertinent as the manager acts in the name and for the

account of the ship-owner and whatever liabilities are created during execution of the duties

are rendered upon the ship-owner. An intricate flaw of the 1993 convention is that the 1993

convention (article 4) does not state whether the maritime lien covers the claim itself or its

accessories as well.136 It bears a great significance for the application of this convention by its

129 Supra note 98, See footnote 3, where it is elaborated that Belgium, Brazil, Estonia, France, Hungary, Italy, Poland, Romania and Spain have ratified the 1926 convention and Algeria, Argentina, Cuba, Haiti, Iran, Lebanon and Madagascar have acceded to it. It has been in force the member states from 1931. Denmark, Finland, Norway and Sweden had ratified the 1926 Convention but denounced it in 1 March 1965. 130 The Difficult quest for a Uniform Maritime Law: Failure of the Brussels Conventions to Achieve International Agreement on Collision Liability, Liens and Mortgages, The Yale Law Journal, Volume 64, No. 6, 1995, May, p. 894, , accessed on 29 November 2010. 131 Supra note 110, p. 20, See (B), Different national approaches ,68. 132 Ibid. 133 Ibid., p.19, See 67(j). 134 Ibid. 135 Ibid., See 67(k). 136 Supra note 98, p. 329.

21

signatories. Then again, in certain jurisdictions wages cannot be attached or assigned and

therefore, the maritime lien arising from such claim cannot be attached.137 These diverse

characteristics and multiple preferences of maritime liens in different jurisdictions have acted

as hindrance in limiting the number of liens and leading to the failure of unification of the

present conventions in force.

4.3 Different national approaches relating to maritime liens

The United Kingdom has not ratified any of the three conventions and the classes of liens

under English law have emanated from both common law and statute.138 The categories of

incidents invoking maritime liens in the United States139 appear to be wider than under

English law and with the emergence of new situations it has to be decided whether the claim

falls within the ambit of liens.140 Under English law, a person in charge of supplying repairs

or other necessaries has to rely on possessory lien or a statutory action of right in rem under

section 20(2) (h) of the Supreme Court Act, 1981. But a person advocating the similar claim

will enjoy a maritime lien under the law of United States.141 The French maritime liens142 is

a major replication of article 2 of the 1926 convention. Then again, the laws of Australia,

India and New Zealand have a limited number of liens and similar to the United States it does

not include port, canal and other waterway dues and pilotage dues or wreck removal

expenses.143 China, the Republic of Korea, the Union of Soviet Socialist Republic, and

Poland have adopted the list incorporated in the 1926 convention while the maritime liens of

Denmark, Finland, Norway and Sweden are a reflection of article 4 of the 1967 convention.144

137 Ibid. 138 Supra note 110, p. 20, where a succinct list of claims have been stated; a) bottomry, salvage, seamens wages, collision damage, b) masters wages and disbursements, c) fees and expenses of receivers wreck, d) remuneration for services rendered by coastguards, e) damage to adjoining lands in case of shipwreck assistance. 139 Supra note 13, p. 512, where it is stated, [t]hey include liens for salvages, wages of officers and crew (but not masters wages), torts like collisions, claims for loss of life or personal injuries, loss of or damage to cargo, general average contribution, equipment, supplies and repairs to the ship, towage, pilotage, stevedores fees and dock duties. 140 Ibid., p. 21, para. 71. 141 Ibid. 142 Ibid., where it is explained that the French maritime liens are governed by Law number 67-5 of 3 January 1967 and decree number 67-967 of 27 October 1967. Article 31-1 and 31-2 consist of claims enlisted in article 2 with the deletion of expenses incurred in the common interest of the creditors in order to preserve the vessel and light dues. Furthermore article 31-3 covers claims which arise from contract of engagement which comprise of indemnities owed to the master and crew and fees featuring social character and connected to contract of agreement. 143 Ibid. 144 Ibid.

22

4.4 A viable answer: drafting a new convention considering domestic approaches

Attainment of uniformity among maritime liens of dissimilar jurisdictions (diverse national

approaches) is within the sphere of possibility. It should not be the self-confined approach of

the international maritime authorities, but the combined effort of national and international

shipping communities, banks and other financial institutions concerned.145 Maritime liens

ensure the safety of the ship and the safe continuance of its voyage. But this should not in any

way affect mortgagees security in the ship and obstruct ship financing. As regards to the

burning issue of the need for an uneven yet constant and international standard uniform list

of maritime liens, it must be acknowledged that uniformity means uniformity with regards to

the categories of liens and the ranking of liens.146 One of the major reasons as to why major

maritime states have abstained from ratifying the conventions on maritime liens is due to

wide range or restricted list of maritime liens.147 Furthermore, with respect to ranking, many

countries adhere to the law of the flag while some countries observe the law of the forum (lex

fori) which frustrates the enforcement of maritime claims.148 Although the conventions

empower state parties to accept other forms of maritime liens apart from those mentioned in

the convention, it again leaves a gap of uncertainty as to whether maritime liens accepted by

one jurisdiction be accepted in other jurisdictions. It is apparent that an entire amendment of

the conventions is a cumbersome process. One alternate approach maybe to draft a

completely new convention comprising a set of uniform rules of conflict of laws.149

Meticulous Re-examination of the existing conventions coupled with careful observation of

different national approaches to maritime liens should be prioritised. The new convention

should refer to the law of the flag in so far each country may be warranted that its own rules

on substantive law, including the rules on priority will apply to its own ships in all contracting

states.150

145 Jan Aser, Maritime Liens and Mortgages in the conflict of Laws, , Elander Boktryckeri Aktiebolag, Goteborg, 1963, p. 30, para. 1. 146 Ibid., para. 2. 147 Ibid. 148 Supra note 44, p.29, where it is explained that the Rome Convention 1980, by virtue of aritcle 3 and 4 should change the Halcyon Isle rule and establish the applicable law on contract rather than determination by the lex fori. 149 Ibid. 150 Ibid.

23

Conclusion

Although the existing conventions did not receive the international acceptance as expected, in

principle, the solution as regards to the law which should govern the ranking of maritime liens

is the law as stated in the convention. It is derived from the purpose of implementing a unified

law among the convention countries. Nevertheless, provisions as laid down by the convention

bestow the scope to accept maritime liens other than those stated in the conventions. This

must under all circumstances be interpreted as an obligation towards other states in so far as

the states are under the privilege to accept maritime liens acknowledged by other states. As to

the question of restricting the number of maritime liens, so as to secure the rights of the

mortgagee or the financer, it can be assumed that countries which have wide categories of

claims giving rise to maritime liens must come to a common plateau with other states for the

common benefit of the shipping industry. This restriction must be done taking into account

the national laws of every state intertwined with shipping business. The major maritime states

(developed countries) should step forward and assist CMI and UNCTAD (United Nations

Conference on Trade and Development) in narrowing down the most essential maritime liens.

This act of concession by states with acceptance a wide range of maritime liens will

encourage states that have abstained from ratifying the convention in accepting the uniformity

brought about by the process. Strategies should be formulated for either amendment of the

existing conventions or the creation of a complete new set of international instrument which

will comprise restricted number of maritime liens which preserves the security of maritime

claimants at large and at the same time balancing the security of the mortgagee. This must

however, not be crafted to favour the mortgagees at the expense of other claimants. Thus,

greater international participation can contribute in making a difference in the realm of

maritime shipping development. Furthermore, in order to reduce the problems in conflict of

laws, the weaknesses of the lex fori (which is applied only in procedural matters) must be

acknowledged. This encourages forum shopping where the party will attempt to obtain results

from the country where the law is favourable. In such a situation the law of the flag is most

preferable. The lex fori should not in any ways be allowed to displace the law of the

jurisdiction which is connected to the parties. In this way, the problems will dissipate

uplifting harmonization in the realm of conflict of laws.

24

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26