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Effect of Insufficient Security for Res

The claimant has the right to dispute the value placed on a ship and its freight by a ship owner by filing a motion on the ground that that the funds deposited or the security given by the vessel owner are less than the value of the vessel owner’s interest in the vessel and freight.[i]

The admiralty court will impartially treat the vessel owners who appear to contest their liability as if they were brought into court by personal process.[ii]  The court will then appraise the value of the ship owner’s interest in the vessel and freight.  If the court finds that the deposit or security given by the ship owner is insufficient to satisfy the judgment awarded against the vessel, the court will award an in personam judgment against the vessel owner to that extent.

Therefore, as an effect of insufficient security for res the vessel owners will be subject to a personal decree against them.  In Belcher Co. of Alabama, Inc. v. M/V Maratha Mariner, 724 F.2d 1161, 1165 (5th Cir. Tex. 1984), the U.S court of appeals for the fifth circuit held that if the vessel owner has made an appearance in an in rem action, damages or costs in excess of the predetermined value of the vessel can be levied against them personally.  The amount of the final judgment against the vessel owners will exceed the amount of the security already given by them, but does not exceed the value of their interest in the vessel at the time an adequate bond has been given.  In such a case, an additional service of process or a new in personam action against the vessel owner is not required.

[i] USCS Admiralty and Maritime Claims R F

[ii] Triton Marine Fuels, Ltd. v. M/V Pac. Chukotka, 2009 U.S. Dist. LEXIS 111425 (D. Md. 2009)

Inside Effect of Insufficient Security for Res