Attachment of Maritime Lien for Breach of Charter Party

Tuesday, June 11, 2002
A lesson in admiralty law was provided by the U.S. Court of Appeals for the Fifth Circuit when it ruled that a maritime lien for breach of a charter party attaches when the vessel is placed at the charterer's disposal. In the instant case, a vessel owner entered into a time charter and accordingly delivered the vessel. The vessel was then sold to a third party (subject to the time charter) and the new owner obtained a mortgage loan on the vessel. The bank providing the loan duly recorded its preferred ship mortgage. Soon thereafter, the new owner breached the time charter and then defaulted on the mortgage. Both the bank and the charterer sought to recoup their losses by having the vessel sold, but the proceeds were not expected to cover both claims. Therefore, the priority of the two liens became paramount. The bank asserted that its lien took precedence as its preferred ship mortgage was recorded before the time charter was breached. The court held that the maritime lien for a charter attaches when the vessel is placed at the disposal of the charterer, even though it remains inchoate until a breach arises. Thus, since the charter commenced prior to the vessel sale, the charterer's lien prevailed over the preferred ship mortgage. Source: HK Law
Maritime Reporter July 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Legal

Missing Person Rescued Near Brackettville

On July 31, Border Patrol Search Trauma and Rescue (BORSTAR) agents and CBP Office of Air and Marine rescued a man who was reported missing the previous morning.

Ross is Fleet Manager, Heidmar

Heidmar announced the promotion of Duncan Ross to Fleet Manager. Duncan joined Heidmar’s London office in 2012 as vessel manager.  Prior to joining Heidmar,

LR First to Certify Small Caribbean Ships

LR is the first class society to certify small commercial ships operating in the Caribbean After becoming the first classification society to issue Cargo

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Naval Architecture Offshore Oil Pipelines Port Authority Salvage Ship Electronics Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1049 sec (10 req/sec)