Documente Academic
Documente Profesional
Documente Cultură
By
*Sani M. Adam 1.
INTRODUCTION
means of interaction
aspect of international
on the efficacy
and sophistication
coupled
with
the
nature
risks traversing
of the world. This exercise, we are told, often where the ships are engaged in and for Cargo vessel
2.
as passenger
Hence, there must be understanding legal issues, rights, obligations, innumerable voyage and diverse
0; the
immunities, arising
benefits etc arising from the during the course of the been
situations
says a writer,
sometimes
in foreign jurisdictions
under laws
3
It is
These conventions
uniform
rules for the recognition the corpus jurist interests against which
and enforcement
and ratifying
recognisable
as attaching into
a ship or vessel
because they affect the paper intends to examine some of the prominent of such proprietary rights and interests in vessels, i.e. Maritime Liens and
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Mortgages, international
their
meaning,
evolution,
nature,
types
and the
various
2.0 2.1
MEANING,
LIENS
Meaning of Lien:
definitions
differing. A lien has been defined as "A right to retain lawful possession of a property of another until a claim by the person in possession against
5
further
regarded as a form of 'self help' by the person claiming the lien in order to induce the owner of the property to comply with his obligation or otherwise satisfy the claim of the other".
t.C, Ilogu defines a lien as
6
to pay
of another which renders for any claim arising Usually, he explains, transaction
such identified
"such interest or right arises from some commercial which imposes an obligation
the property (the lienor). Where such obligation unfulfilled, the other party to the transaction
exercise the right of 'lien' over the identified to the party in default until the obligation, or remedied".
7
property belonging
therefore
to the asset or
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The distinction
rights, for they are indeed similar. While the right of lien does not vest, but remains vests dormant or silent until exercised, its remedies a mortgage from the specifically it is of the
on creation
and describes
moment
created and with either the express agreement parties thereto as to the application
or understanding
8
of those remedies.
There are several types of lien which includes: Possessory lien, statutory lien, equitable lien and maritime lien. Our concern is Maritime lien, but we
other types first in order to bring out clearly, the lien and other types.
between maritime
Possessory lien as suggested from the name, arises mainly from a party being in 'Possession' of the property at the time of its accrual, and in most Jurisdiction, claiming property. at the time of enforcement. by asserting the The lien is lost once the party right loses 'possession' of the
damages
9
it from Maritime
lien in which case the lien travels with the property or "res" and does not depend on Possession. This type of lien (Possessory) is usually exercised by ship builders, ship repairers or vehicle dealers who seek to retain the vessel or vehicle until the cost of construction, price have been paid. repair, charges or purchase
However,
it
has been
established
that
what
amounts
to
been
"in
even though the master and crew remained on board, brando J. has a possessory repairers Newcastle lien while in The who carried were not out "in by
Gregos" where it was held that the plaintiffs repairs while the vessel was berthed near
possession"
of "self-help"
removing engine parts. In Nigeria, United Kingdom and most common law nations, the lien exercised by ship repairer is a possessory lien and also a
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statutory dependent
A statutory
is created
by statute
to exercise
a right attachable
property of another e.g. right of retention of the unpaid seller of goods by the Lagos State Sale of Goods Act, 1972 and the Nigerian Jurisdiction Admiralty
Act, 199113 which confers a right of action "in rem" against liens once certain
the vessel in cases which do not give rise to maritime statutory condition are satisfied.
difference
between statutory
lien is that
right does not come into being until a writ is issued against
lien on the other hand may be implied owing to fairness or wrong conduct.
or imposed Thus
into a
it is a right
against the property of a party who create it in a transaction who acquire interest subsequently (third parties) in such
on "possession"
as in the case of
2.1
Maritime Lien
operate in a different way. A Maritime lien/we are informed, is a privileged claim on a ship, or on her Cargo, or on either freight, maritime in respect of service done to or injury both of these and the caused by them.
16
state-owned by a
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by a foreign
state is engaged
in ordinary
trading,
no immunity
will be
granted to her."
Maritime lien is based on the concept that the ship (res) has itself caused harm, loss or damage to others or their property and must itself make and
not its owners and is liable to the party who suffers as a result of such wrongdoing. Thus upon the happening of the wrongful act, a maritime of the party concerned and attached lien
arises in favour
It is therefore
(history)
is traced
of common
and practices
of the Admirals
19
In France, these customs and practices were the rights of seamen to their wages, and which were accorded the Admiralty
20
and recognised
preferential as rights
court
basis of the rights or interest referred to in modern maritime nations, as maritime lien.
Judicial decisions and writings of learned authors have traced the origin of maritime lien and simultaneously exposing its important features. The
lien, as perceived under English law originated in The Bold Buccleugh"'. The court
in 1851 here,
decision
emphasised whosoever
that maritime
lien is a right which 'travels' with the ship into go. Thus, it does not depend
on possession nor upon notice through filing at a registry as .n the case of a mortgage. Emphasizing on this, a writer says:
lien attaches
without
any i.e. it
or any registration,
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i.e. obvious reason for this is that a ship's master another sinking vessel, for instance, could not
mid-ocean
or in a foreign
exists, the
It is therefore
often referred to as 'secret' lien and said to be indelible until court in an action in rem and 'good against of the vessel acting without
historical
point
of view
thus
and
having
regard
to some
variations,
maritime
liens usually arise either from contract, of the following claims: Seamen's
or operation
of law in respect
ship's tortious act e.g. collision, supply of necessaries (now USA only) and repairer's lien (USA only). From available sources, the following the salient features of maritime with same: 1. The lien arises upon the occurrence collision or wages becoming payable. 2. Once created, the lien is enforceable even if the ship is sold and of the event creating it, i.e. lien as they are consequences represents associated
whether or not the purchaser has notice of it; 3. The lien is enforceable through an action in rem and as part of this,
(a) the ship, cargo or freight subject to it is liable to arrest prior to a hearing on the merit; (b) Jurisdiction service of a writ in rem and arrest; 4. In respect of the ship, cargo or freight, the target for the action, the lien is enforceable against other creditors, (secured or unsecured) on the merit is founded on the
and subject to existing possessory lien, taken priority over all other
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creditors whether the claims of those creditors arose before or after the creation of the lien. 5. Properly arrested as part of an action in rem in the court enforcing the lien may be subject to judicial sale and the proceeds are
available to a lien holder and other claimants in rem; 6. Judicial sale as a step in enforcement transfers the lien to the proceeds; 7. The lien is extinguished freight to which it attaches; 8. The lien may be extinguished the debt and, possibly guarantee.
23
it and
by the destruction
of
by lodging
of a
3.0
MARITIME
MORTGAGES
as the creation
of a charge or encumbrance
24
in
who wishes to obtain money because of under-capitalisation his interest or property in the vessel to the or owner is
as security operating
and trading
as a profit-making or
possession provided he does not act in such a manner as to jeopardise put at risk the ship as security for the mortgage the mortgagee's position. The mortgagee and thereby
prejudicing
does not take actual possession is that the vessel shall be is called off on
because the whole idea behind the transaction redeemed repayment and the constructive transfer
to the mortgage
was that
will reconvey
discontinued
in most common
law countries
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The essential feature of a mortgage and upon satisfaction redeemed. property (mortgagor)
owner
remains in actual possession, and continues to use the vessel to the mortgagee's interest is done.
An equitable
mortgage
may also be effected by the deposit of the deed of of an existing loan. This loan with another because person in
in respect another
is possible
as earlier It
actual possession of the vessel is still in the mortgagor. by means of an agreement to enter
in consideration
a vessel
construction, constitute
in respect thereto
an equitable
mortgage of the vessel. The effect of an equitable mortgagee a preferential to the overriding right over interest of
subject
lien holders.
It is essential to emphasise that while lien does not vest title in the vessel on the lienee, the mortgage does vest title on the mortgagee distinguishing not necessarily feature between lien and mortgage. as the most
have the power of sale of the vessel (i.e. without sale etc.), the mortgagee ship registries
Further,
most
acknowledge
transactions
liens are
not registrable.
3.1
Registration
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A legal mortgage of a ship is normally done in writing and is registered or recorded in the ship'!) register at the Port of registry of the vessel in most jurisdictions.
21
to register,
Any mortgagee
does not register Is not entitled to the benefits under the Act especially in terms of priorities to be discussed in the later part of this paper, failure to register it must however be emphasised does not under the mortgage no registration of
void. It is also obvious that if a ship is not registered, mortgage can be effected on it. Registration public of the transaction
which is available for inspection by interested advantage creditors of registration of the mortgagor is obtaining
priority
mortgages.
precedence
to later registered
(a)
mortgages,
whether
has
(b) (c)
of earlier
knew of them; advances subsequently the made under a prior registered was that the mortgage (this
(d)
Additional mortgage
where
under
agreement advances
by the mortgagee
arises only under common law and not statute). A mortgagee priority over: (a) (b) Mortgages registered earlier; Maritime liens, whether earlier or later,
29
of a registered
mortgage
have
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(c)
been
arrested at the time when the mortgage was entered into; and (d) Any mortgages entered into under certificate of mortgage where
L C. Ilogu however inform us that the issue of priorities only arises where a 'res' has or is to be sold by the order of a court of competent or other authorised of a proprietary fails to appear informed obtaining further jurisdiction
body in order to satisfy the monetary claim of a holder against the res where the ship owner and put up security. action We are in rem or ranking in in the
the sanction
judgement
thereon does not enhance the claimant's interest must be positioned riqhts."
as appropriate
various conventions
seem to suggest
Cost of arrest sand sale of the res; Maritime liens which rank inter se from salvage, damage, seamen
and masters' wages to repairers (USA), necessaries (USA); 4. 5. 6. Possessory liens, necessaries; Registered mortgages, and charges; Statutory claimants, 7. 8. rights in rem which include cargo and charter party
in laws of countries
and
basis
of determining
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purposes of sharing the proceeds of sale of the res. It appear: to be the most prevalent order of priority amongst nation states. 4.
INTERNATIONAL MORTGAGES CONVENTIONS ON MARITIME LIENS AND
From
our examination
of the
issue of priorities,
and the
foregoing and
discussion so far, it is obvious that the recognition rules relating to maritime among the countries uniformly problem problem. recognised. of liens and mortgages
of the principles
is no uniform
and duties
of the world. Only very few principles and rules are But the situation resulting is still not helpful because of the from jurisdiction differences and
enforcement
international
conventions
on maritime
claims, namely the 1926, 1967 for the recognition and for
framework interest.
of these proprietary
to the
lack of consensus on the confect of laws principles governing the creation and operation priority of maritime liens. Also, the difficulty in accepting the
of maritime to the
attributed
effect of all these is that many nations are yet to implement conventions enforcement and therefore regimes. subjecting the proprietary
rights to divergent
The
1926
for
example over
recognises mortgages.
certain The
of also
maritime
priority
extinguished
after one year with a few registration state in which the vessel
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The 1967 International relating to maritime the 1926 convention from the recognised
Convention
of certain
rules
retains substantial
The International
convention
on maritime
1993 was
carried out under the auspices of the International (IMO) unlike the previous ones which were initiated It is substantially categories excluded average other similar to the earlier conventions
of maritime
conventions,
hazardous
where
is payable
provisions
enforcement
in accordance
with the law of the stage of the vessel's provides for registered
This convention
should continue.
may differ from those obtained under with the convention. nations Also, the the
conventions powerful
by most
especially
maritime
nations such as Japan, United States and the United This has increased the
Kingdom have not ratified the earlier conventions. conflict of laws principles and rules governing of these proprietary rights.
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Thus, the positive effects of the provisions of these conventions been appreciated applied operation in view of the fact that conflicts conflicting national
interests
of the
Nigeria
Although conventions
Nigeria earlier
is yet
to
ratify
and
for
implement of its
any
of these laws
mentioned,
most
provisions
national
substantially
salvage; or damage done by ship; or wages of the master or a member of the crew of a ship; or master's disbursements.
The Nigerian
Merchant
years limitation
Nigerian Admiralty
in 8.26(1) to
or pledge of and a charge on the ship or share" act, 1990 provides the requirements for
shipping
mortgaging
and priority
of such mortgages
From an examination
of the national laws of some countries especially the even though they have not ratified the laws conform substantially with the
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provision mortgages.
Conventions
on Maritime
liens and
5.0
ENFORCEMENT
PRINCIPLES
of the proprietary
liens of law
arising
differences categories
procedures of law
the various
claims. A conflict
is under an obligation
to adjudicate
some system of law other than that of the trial with a view to fulfilling the reasonable E.g. contract and made
or to be performed
In resolving conflict of law problem, three basic issues arise, namely (a) jurisdiction or Choice of forum; (b) Choice of Law; and sometimes (c)
5.1
Jurisdiction
relates to the ascertainment the subject matter of the power or authority by the parties of the the
jurisdiction court
to try
presented
under
applicable
national
legislation
establishing
to the
subject. jurisdiction
may be declined where the court lacks such, e.g. on clause in a contract or subject matter.
35
imposing the domicile of the defendant in countries within the European Union.
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5.2
Choice of Law
and it is determined that a court is is what law
Lex Fori, which means the domestic or national law of the forum; and Lex causae, which transaction means the law which governs the question may further be reduced into the or
and which
law of
recognised
principle
of International
law that
the by by of
of the parties
to an action
of procedure
the lex fori (local law). The problem determining what is a substantive
procedural.
international
means in resolving on
the one hand and on the other hand causes inequity or injustice in certain jurisdiction.
5.3
has no
33
The are
mainly issues of lex fori and vary from jurisdictions, for consideration been that it is a final judgment
81 I P age
5.4
In most common
2 types of legal
as an 'action in rem' and/or action against the owner known as 'action in personam'.
or substantive
It is regarded
on the commencement
action and the arrest of seizure of the vessel. The substantive prevalent
in U.S.A. and Canada and it is based on the legal principle that is enforceable against the "res" or person of the
vessel. The debate is not our concern, but judicial decisions do shed some light on the controversy. the conflict commence Hence, where procedural approach is adopted,
of laws is resolved
vessel can be located since any order or judgement is to be directed personam' at the res itself. On the other
being directed at the person of the owner, charter or operator should be commenced where he can be found, either
of the vessel
law jurisdictions,
can be served through master of the vessel to enforce maritime mortgages, some in civil law countries, countries are done e.g.
'in rem' actions are unknown France and the -the Belgium,
of these claims
enforcement
maritime
conservatory
attachment
assets from
821 P age
law countries
rem or in personam, the most commonest serves as a form of interim jurisdiction claim. over the matter U.S.A., there
relief or provisional
'security' similar
for the
In the
to arrest
The procedure
for judicial
to
another, but the end result is often that all rights in rem are extinguished.
40
A sale by a competent
court of authority
owner of the vessel free from all encumbrances in other jurisdlctlons." Trento
42
In support
of this assertion.
J.
in The
said:
II
the doctrine
that the sale of a vessel by a court of discharges her from liens of every
jurisdiction
attention
country's jurisdiction.
end result as earlier noticed is the inequity and injustice resulting from the non-recognition of some in certain jurisdictions. on the need to introduce Some writers have put of
forward suggestions
a system of registration
Maritime liens as done in the case of mortgages within a limited period of its accrual. While we concede to this suggestion, we shall be quick to point out that such is only practicable uniformly recognised written the scope of maritime liens is of
non-recognition
Another
likely to noted by
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when he said " .. it need not be gist fired. the or owner who salvage by expected, which possibly another
sinking vessel, for instance could not reasonably or in a foreign thousand undertake pert to hurry to a Registry their
mid-ocean could be to
have
many pressing
at sea, crew
Community
to ratify the
of the conception
and enforcement
on maritime
Thus there is the need for Conventions into the national need for this
the compelling
of the maritime
in the development
of International
nation states especially with the increasing level of International transportation by sea and use of ships.
ENDNOTES
*Sam M. Adam (LLM) Dept. of Property & Commercial Law Faculty of Law
University of jos 1. Christopher 1981) p. 23 2. i.c. Ilogu. Modus International 2, June 1997, p. 35 3. 4. Ibid The 1926, 1967 and 1993 International Liens & Mortgages Conventions on Maritime Law & Business Quarterly, Vol. 2 No. Hill, Maritime Law (Great Britain: The Pitman Press,
841 P age
5.
justice
R. D. Muhammed, International
on Maritime
Liens and
Mortgages:
Alfred H. Sivertown: The Law of Lien (1988) 6. 7. 8 Ibid L. C. Ilogu, op cit, p. 35 See generally "Enforcement of maritime Claims" by D.C. jackson,
2nd ed. as cited by t.C, Ilogu, op cit, p. 36 9. 10. 11. 12. 13. 14. 15. See The Ally (1952)2 Lloyd's Rep. 427; The Scio (1867) 1A & E353 (1977)1 lloyd's Rep. p. 256 (1986)2 lloyd's Rep. p. 347 See S. 91 Maritime Lien Act (46 US Code) S. 5 (4) of the Act See The Monicas (1967)2 lloyd's Rep. 113 See The Ugland Trailer (1985)2 lloyd's Rep. 372 and The Annangel Glory (1988)1 loyd's Rep. 4'j 16 17. 18 Fhe Rippon City (1897) p. 226 Vascongada v. Cristina (1938) AC 485 or (1938)1 Alier 719 See S. 10(2) The State Immunity Act, 1978 of U.K. and The
Philippine Admiral (1976) 1 Alier 78 19. 20. L. C. Ilogu, op cit, p. 37. William Tetley, Maritime liens & Claims, 1st ed; Chapter 1, p.38-41 and cited in t.C, Ilogu, op cit, p. 37 21. 22. 23. 24. 25. (1851)13 ER at 890 justice R. D. Muhammed, jCA, op cit, p.2 L. C. Ilogu, op. cit, p. 38 Christopher Hill, op, cit, p. 23 Merchant Shipping act, 7990 and U.K.
Merchant Shipping Act, 1988 which amended the 1894 Act 26. 27. 28. See King v. King (1735) 3P WMS 358 See S. 326(2) Nigerian Merchant Shipping act, 1990 See S. 323 (2) Nigerian Merchant Shipping Act, 1990; S 31 ID U.K. Merchant Shipping Act 1894 (As amended by the 1988 Act)
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29
See The
Loannis
Daskaleiis
(1974)
1 lloyd's
Rep. 174:
The
Pickanranny (1960)1 teyfs Rep. 533 and TheColorado (1923) 14 lloyd's Rep. 251 30. A Certificate of Mortgage is made to cover circumstances where the ship owner desires to mortgage it outside the country in which the ship's port of registry is located. The ship owner then applies to the registrar at the port of registry to issue a certificate of mortgage. See S. 42 of the U.K. Merchant Shipping act, 1894 31. 32. 33. 34. 35.
t.C, Ilogu, op cit p.46
Ibid Ibid. p. 40 Ibid See The Eleftheria 11969)2 ALLER 641; The Nordwind (1987)3 NSCI; The Atlantic Star (1974); The Abidin Daver (1984) AC 398
36.
See The Loannis Daskelelis (1974) 1 lloyd's Rep 174; The Halcyon Isle (1980)2 lloyd's Rep 325; The Scotia 35 F907 (SD. NY 1880)
37. 38.
(1986)2 NSC 638 See Dicey and Morris "The Conflict of Laws" 11th ed; cap 14 p. 418 as cited in t.C, Ilogu, op. cit, p.44
See Phrantzes v. Argenti (1960)2 QS 19 at 35 See The Edith (1976) 74 US 518 Per Lushington in the Tremont 166 ER 534 at 534 (1888) 4F 657 at 662 E.D. Mien.
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