Maritime Lien

Maritime Lien

The right of a particular individual to compel the sale of a ship because he or she has not been paid a debt owed to him or her on account of such vessel.

A maritime lien is designed to furnish security to a creditor and to enable a person to obtain repairs and supplies even in the event that the ship is a distance away from its owners and no significant amount of money is on board to pay for the goods and services that are provided.

Maritime liens are distinguishable from a majority of other types of liens since the creditor need not retain possession of the boat before asserting a claim. They can exist only on movable objects that bear some relationship to navigation or commerce on Navigable Waters: for example, every part of a vessel, such as the hull, engine and tackle; as well as flatboats, lighters, scows, and dredges used to deepen harbors and channels. Controversy exists concerning whether a maritime lien can attach to a raft; however, courts have not recognized maritime liens for repairs done on a seaplane while it is in a hangar on dry land or for bridges, dry docks, wharves, or floating structures permanently moored to shore, such as barges that are used for restaurants.

The amount of a maritime lien equals the reasonable value of services that are performed in maintaining the ship, coupled with supplies that are furnished plus interest, less any set-off for claims the ship has against the lienholders. The amount ordinarily arises out of a contract; however, a maritime lien can also be created for damages that are attributable to injuries that are caused by the ship.

An individual who is entitled to a maritime lien may forfeit his or her right if he or she delays in enforcing it or does something inconsistent with the lien. Allowing the ship to depart does not affect the lien; however, the complete destruction of a vessel extinguishes it.

A lienholder must sue in federal court in order to enforce a maritime lien, and anyone holding a lien against the ship can intervene in the action. The court may order a sale of the ship and its cargo and distribute the proceeds to those who establish a valid claim against the ship. Where there are insufficient funds to satisfy every claim, the court determines which liens have priority, and the percentage of recovery that each claimant is entitled to collect.

Cross-references

Intervention; Admiralty and Maritime Law.