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Ship Arrests / Maritime Liens

There are many types of maritime liens.  If a person or a company has a maritime lien against a vessel, they can arrest the vessel and enforce their lien by making the owner of the arrested vessel either post a bond in the amount of their claim with the Court, or can require that the vessel be sold at auction by the U.S. Marshal and the amount of money paid into the registry of the Court and eventually paid to the lien holders.  Liens are paid off by the rank they are given according to the law.

Preferred Maritime Liens:
Preferred Maritime Liens have the highest rank as follows:

  1. Seaman's wages, Maintenance and Cure.  If a seaman works onboard a vessel and is not paid, he has a lien against the vessel for his wages and the possibility of penalty wages.  This is the highest ranking maritime lien and if there are any outstanding seaman's wages that are owed, they will be paid first before paying any other creditors.
  2. Wages of stevedores that are hired by the ship.
  3. Salvage claim against the vessel.
  4. General average claim against the vessel.
  5. Court actions against the vessel, in rem, for personal injury damages as a result of the unseaworthiness of the vessel, or for injuries to a longshoreman, damages to cargo, property damages to other property such boats, bridges, docks, etc.
  6. Contract liens for necessaries that are provided before a first preferred ship mortgage is perfected, meaning filed with the U.S. Coast Guard.  Examples of necessaries are pilotage, towage, stores, repairs, fuel, dockage, etc.
  7. First Preferred Ship Mortgage filed with the U.S. Coast Guard.

Non-Preferred Maritime Liens:

  1. Contract liens for necessaries provided after the First Preferred Mortgage has been perfected.
  2. Tax liens.
  3. Non-maritime liens under State Law.
  4. Forfeitures to the U.S. Government.

The law of maritime liens is probably the most complicated area of maritime law.  Whether or not it makes sense to arrest a vessel for a maritime lien is a difficult question to answer.  Where the maritime lien ranks in the hierarchy of maritime liens must be determined before the vessel is arrested.  For instance, if you have a maritime lien that comes after the First Preferred Ship Mortgage, and the First Preferred Ship Mortgage is more than the value of the vessel, it does not make sense to arrest the vessel because the vessel will be sold at auction and you will get nothing for your claim.  However, the arresting of a vessel is one of the best ways to get paid for a maritime lien because the owner of the vessel must either post a bond with the Court or allow their vessel to be sold at auction and the money used to pay off the liens.