A maritime lien is a special legal right or claim attached to a ship that serves as security for a debt or obligation. It allows the claimant (such as a seafarer, salvor, or creditor) to enforce their claim directly against the vessel, regardless of who owns it at the time. This right arises automatically and follows the ship, even if it is sold or transferred to a new owner.
Maritime liens originate from commercial transactions or tortious (wrongful) acts involving the vessel. These may include non-payment for necessaries supplied to the ship (such as fuel, repairs, or crew wages), salvage operations, collision damages, and injuries caused by the ship. Once the lien arises, the ship itself is treated as the “wrongdoer” and is held liable, irrespective of the fault or knowledge of the owner, manager, operator, or charterer.
In simple terms, a maritime lien is a type of “hold” or “retention right” over a ship due to services rendered to it or damages caused by it. It is based on the legal principle that the ship itself is treated as a separate legal entity and can be held liable for obligations incurred through its operation.
Claims Secured by Maritime Liens
In Nigeria, maritime liens are recognized under the Admiralty Jurisdiction Act, Laws of the Federation of Nigeria 2004, and the Merchant Shipping Act of 2007. It is also governed by the rules of court that empower the Federal High Court to adjudicate on its matters.
Under Nigerian law, certain types of claims are recognized as being secured by maritime liens against a vessel. These maritime liens attach to the ship itself and give the claimant a privileged and enforceable right, even in the hands of subsequent owners. The following categories of claims are legally recognized in Nigeria as giving rise to maritime liens:
- wages and other sums due to the master, officers, and other members of the ships complement in respect of their employment on the ship;
- disbursements of the master on account of the ship;
- claims in respect of loss of life or personal injury occurring whether on land or water in direct connection with the operation of the ship;
- claims for salvage, wreck removal, and contribution in general average, and
- Claims for ports, canals, and other waterways, dues, and pilotage dues.
All the claims listed above give rise to the right to arrest the vessel to secure or enforce the maritime lien. However, under the Merchant Shipping Act, maritime liens are subject to a statutory limitation period of one year from the date the cause of action arose, after which the lien may no longer be enforceable.
Additionally, Nigerian admiralty law allows the arrest of sister ships owned by the same legal entity as the offending vessel, but does not permit the arrest of associated ships with only common beneficial ownership.
Priorities and Order of Priority of Maritime Lien
The Merchant Shipping Act governs the order of priority of maritime liens. Generally, maritime liens are ranked in the order in which they are listed in Section 67 of the MSA, such as:
- Wages and crew-related claims
- Salvage operations
- Port charges and similar dues
- Damage caused by the ship
- Other listed claims
However, port charges and similar claims (Section 67(d)) may be given priority over earlier claims if they occurred before the others were registered. Claims like shipbuilders’ or repairers’ rights rank below maritime liens but may rank above mortgages if the vessel is still in their possession.
When multiple parties have claims against a ship, they may choose to agree among themselves on the order in which their claims will be settled, based on a mutual arrangement. However, if no such agreement exists, any party who has obtained a judgment against the vessel may apply to the court to decide the order of priority among the claims.
Additionally, according to Section 70 of the MSA, a shipbuilder or ship repairer may have a lien or right of retention over a vessel for unpaid claims arising from the building or repair of that ship. However:
- This lien is subordinate to all maritime liens listed in Section 67, meaning it ranks lower in priority.
- It may, however, take precedence over registered mortgages or other preferential rights, but only while the vessel remains in the builder’s or repairer’s possession.
- Once possession of the ship is lost, the lien or right of retention is extinguished.
Limitation Period for Claims of Maritime Lien
As previously mentioned, maritime liens in Nigeria are subject to a limitation period of one (1) year from the date the claim arose. If the claim is not enforced within this period, the lien becomes invalid. However, there is an important exception: if the ship is arrested and a court-ordered (forced) sale occurs before the one-year period expires, the maritime lien remains valid and enforceable through the sale proceeds.
Before a forced sale can take place, Section 73 of the Merchant Shipping Act (MSA) requires the court to issue at least 30 days’ written notice of the time and place of the sale to the following parties:
- All holders of registered mortgages and other preferential rights
- Holders of bearer mortgages or preferential rights and holders of maritime liens who have notified their claims to the appropriate officers;
- The Registrar of Ships.
Once the forced sale is completed, all existing maritime liens and claims attached to the ship are extinguished. This ensures that the new buyer receives the vessel free from prior encumbrances, and any valid claims can only be recovered from the sale proceeds.
In conclusion, the fundamental purpose of a maritime lien is to act as a form of security for specific types of maritime claims listed under Section 67 of the MSA, such as crew wages, salvage, or damages. It gives the claimant the right to arrest the vessel as a means of enforcing the claim. Importantly, this right arises automatically by operation of law, meaning that it does not require prior registration or notice to be valid.
