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Friday, October 21, 2016

Parties May Not Create Maritime Lien by Agreement

October 11, 2006

The U.S. Court of Appeals for the Fourth Circuit ruled that parties may not create a maritime lien by agreement. In the instant case, a bunker company provided bunkers to a ship that was under time charter. The time charter provided that the charterer had no authority to create a lien against the vessel. The bunkers were supplied in South Africa and Brazil. The bunker contract provided that English law was controlling and the General Conditions Clause provided that the claim would constitute a lien against the vessel. The charterer went bankrupt. The bunker company brought suit against the ship in rem in a US port. The court held that the General Conditions clause of the contract could not be read to provide that US maritime lien law should be applied. Maritime liens are stricti juris and can not be created by contract. Source: HK Law

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