Admiralty law or maritime law is a set of laws that governs commerce, navigation, and business transacted at sea. Admiralty law also governs accidents and injuries at sea, alleged violations of shipping lanes and rights-of-way, and mutiny and other crimes on board ships.
Under admiralty law, a ship is accorded its own identity. Therefore, the ship itself is liable and can be sued in rem. An action in rem is directed towards real or personal property not towards a person.
In admiralty law, in order to initiate an action in rem, a maritime lien should exist.[i] A lien is a creditor’s legal interest in property that secures payment of a debt or a liability. A lien entitles a creditor to take the property or to sell the property to raise money to pay a debt in default or a liability secured by the lien. A maritime lien is the right of a creditor to claim payment of a maritime liability for services rendered to the vessel or injuries suffered from selling a ship and/or its cargo.
A maritime lien is independent of the ship’s possession and attaches to the vessel whether it is on open waters or in a port. As ships travel out of a nation’s jurisdiction, creditors can claim maritime lien over ships for execution of their debts. A maritime lien is also called secret lien as it need not be filed anywhere. A creditor can arrest a vessel or its cargo without any proof of existing liability until someone files a counterclaim in court. A maritime lien can also be recorded and a recorded maritime lien is a strong defense against a counterclaim filed.
Generally, in admiralty law, a proceeding in rem is required to cover a claim arising from a maritime lien.[ii] In the case of a maritime contract as well as maritime tort, if there is no lien attached on a ship, no action in rem can result.[iii] However, when an action is of maritime nature and is for recovery of possession of a property, an action in rem can be instituted even if there is no lien over the property.[iv]
A person can institute an action in rem against a foreign ship although the foreign ship does not recognize a lien in a situation from which the cause of action arose.[v] When an incident in the territorial waters of another country provides a lien under U.S. law a person aggrieved can initiate an action in rem. The fact that the foreign country does not provide a lien in such situations is not a reason to inhibit an action in rem in a U.S. court.[vi]
[i] The Young Mechanic, 30 F. Cas. 873 (C.C.D. Me. 1855)
[ii] The Arcturus, 18 F. 743 (D. Ohio 1883)
[iii] “sabine”, 101 U.S. 384 (U.S. 1880)
[iv] Korthinos v. The Niarchos, 175 F.2d 730 (4th Cir. Va. 1949)
[v] Lauritzen v. Larsen, 345 U.S. 571 (U.S. 1953)
[vi] The Snetind, 276 F. 139 (D. Me. 1921)