Collisions, maritime liens and Admiralty jurisdiction

Law, be it general law or maritime law, is largely about rights and remedies. Where a right is infringed or a duty breached, the law aims to provide a remedy to the injured party. Individuals have proprietary rights, contractual rights and the right to a duty of care from other individuals.
We have seen that under maritime law, remedies exist to protect property rights and to compensate persons injured as a result of breaches of contractual duties and duties of care. Hence persons who breach the rights of other persons become liable to those persons.

We have seen examples of breaches of contractual duties and duties of care in the carriage of goods by sea and the remedies available at law. In addition, shipowners and carriers contract with many other parties for services and goods such as pilotage, stevedoring, insurance, fuel, stores and ship repairs. They are liable under these contracts. People who use the sea have a duty of care to other users. Collisions between ships and casualties causing oil pollution incur liabilities to third parties. How are all these maritime liabilities to be enforced?
We have seen in module 10 that an act of salvage gives rise to a maritime lien in favour of the salvor. Maritime liens are rights in rem or rights against the res – the ‘thing’ itself. In the case of a maritime lien the ‘thing’ is the ship. Whoever has the right to a maritime lien always has that right and the right may be exercised against any owner of the ship, even if that owner was not the person originally incurring the liability giving rise to the lien. It gives a right to hold the ship against the satisfaction of the liability and is thus a very powerful tool for enforcing any rights.
The law also makes provision for enforcing a variety of maritime claims, not all of which are protected by liens. A special jurisdiction exists for enforcing maritime claims called Admiralty jurisdiction. In the United Kingdom the jurisdiction was originally invoked in Admiralty courts which later became part of the Probate, Divorce and Admiralty Division of the High Court.

Admiralty jurisdiction is now exercised by the Queen’s Bench Division of the High Court in the United Kingdom. In Australia, the Federal Court and Supreme Courts of the States and Territories exercise Admiralty jurisdiction both in rem and in personam under ss 9 and 10 of the Admiralty Act 1988. Why then does the law provide these special remedies and jurisdiction to enforce maritime claims?

You should note that the ship is a highly mobile and valuable asset capable of moving out of the jurisdiction at will. This mobility presents special problems of enforcement. Special problems require special remedies. Maritime liens and Admiralty jurisdiction attempt to provide special remedies.

For example, if a ship carrying cargo collides with another vessel, the carrier may be liable for damage to the cargo. The cargo owner may make a claim against the carrier under the contract of carriage – the bill of lading or the voyage charterparty. In addition, the owners of the other vessel and the owners of any cargo on board that other vessel, if they suffer loss or damage, may bring an action in tort.
The collision creates a charge or an obligation on the offending ship. This special charge is known as a maritime lien. This lien travels with the ship and can be enforced in Admiralty jurisdiction by an action in rem. It is the meaning of the terms collisions, maritime lien and Admiralty jurisdiction and their interrelationships with one another that we will examine in this module.

Focus questions

 

The purpose of this module is for you to be able to answer the following critical questions:

  1. What is an action in rem? What is an action in personam? How do these terms relate to maritime law?
  2. What are the 3 legal consequences of a collision at sea? Describe each of those consequences.
  3. What is ‘arbitration’, and why is used as an alternative to maritime litigation?
  4. Describe the various claims that may be made under ss.15-18 of the Admiralty Act 1988 (Cmth).
  5. Is the extraordinary step of arresting a ship pursuant to an in rem claim when no blame or wrongdoing has been proven against her a legitimate exercise? Justify your opinion on legal and commercial grounds.

Context

 

This module considers the consequences of collisions at sea. Most legal remedies are peculiar to shipping to the extent that a separate court was developed in the UK and a special division of Australia’s Federal Court were established. In this context, we examine maritime liens and the various legal consequences of collisions.

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