Waiver of Maritime Lien

Wednesday, October 26, 2005
The U.S. Court of Appeals for the First Circuit ruled that a letter from the holder of a maritime lien to the vessel owner that the lien holder was pursuing the dispute in a non-federal court and that it had no objection to sale of the vessel constituted a waiver of the maritime lien. In the instant case, the port authority had provided long-term berthing space to a vessel. The berthing fees were unpaid due to a dispute between the port authority and the vessel owner over the adequacy of the facilities. In order to expedite the sale and removal of the vessel, the port authority provided the vessel owner with a letter stating that it had no objection to the sale of the vessel and that the on-going dispute over berthing charges was being controverted in local court. The day after the sale was consummated, the port authority asserted its maritime lien and had the vessel arrested. The court held that the port authority had taken affirmative and purposeful steps to lead third parties to believe that it was foregoing the maritime lien. Puerto Rico Ports Authority v. Barge Katy-B, No. 05-1016 (1st Cir., HK Law).

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