Read and reply to the below discussion. Do you agree with the discussion or not? Why?
1. What is the nature of a maritime lien and how does it arise?
2. Read the case of Cavcar Co. v. M/V Suzdal, 723 F.2d 1096 (3rd Cir. 1983)at p. 425 of the casebook. Do you agree or disagree with the decision and why?
If a party has a maritime lien, it means that the party can sue the vessel in rem.[i] A maritime lien is held against a vessel, in a personified state, to account for torts and contractual obligations (i.e. debts) in order to keep the vessel in service. This type of security is held only on the vessel and its components and accessories, but does not apply to the cargo being carried. A maritime lien will be held on a vessel to its "grave" as long as any claims are made while the vessel can still be classified as such. Most maritime claims arising from torts, contracts, or a peculiarly maritime operations, such as salvage, give rise to maritime liens.[ii] Under the Federal Maritime Lien Act (FMLA), a prioritized right for lien is mandated per 46 USC ? 31301(5)-(6) and 31326(b)(1)-(2), and includes (in order): Custodia legis, the "preferred maritime liens"[iii], preferred ship mortgages, other maritime liens following a preferred ship mortgage, foreign preferred ship mortgages, and maritime contract liens. Although no statute of limitations is enforced, the lien holder is held liable for the accountability of the vessel and enforcement of the lien.
Cavcar Co. v. M/V Suzdal 723 F.2d 1096 (1984) examines the in rem liability for breach of a contract of carriage by the operator of the vessel when the vessel’s owner is not liable in personam for the breach.[iv] The Court examines, appellant, Auto Pars’s case against the ship for breach of contract in non-delivery of forty-nine broncos to Bandar Shahpour, Iran. Neither the ship owner, nor the vessel Finn Amer were parties to the bill of lading and the master of the ship had taken all relevant actions solely under the discretion of the operating company, Marine Transport Services.[v] The district court found no liability in personam of the ship owner, nor in rem on the vessel. Auto Pars appeals and the Supreme Court reexamines the issues.
Upon review of The Poznan, 276 F. 418 (SDNY), United Nations Children’s Fund v. S/S Nordstern, 251 F. Supp. 833 (SDNY, 1965), and Demsey & Associates, Inc. v. S.S. Sea Star, 461 F.2d 1009 (1972), the Court concludes that upon loading cargo, whether or not a bill of lading is signed by the Master does not exempt the vessel from maintaining its contract of carriage for the shipper in delivering their goods; the successful load of a cargo despite the absence of in personam liability of the shipowner, and lack of a Master’s signature on the bill of lading, constitutes a ratification of the bills of lading…Therefore, the vessel is liable in rem [under the personification theory] even though the [owner] is not personally liable in contract for the breach.[vi]
I concur with the Supreme Court’s ruling in the assumption of liability in rem for the operator’s carriage of goods. The duties bestowed upon a ship and its Master inherently offer the responsibility to deliver any cargo aboard; thus effect[ing] an implied ratification of a bill of lading, binding the ship to the obligations therein.[vii]