Commercial disputes involving vessels and their owners/operators are frequent. The mobility of a vessel and ability of a vessel to leave the United States for foreign waters increases the risk to a large degree and should be recognized when anyone enters into a maritime commercial relationship. For example, an agreement to paint a vessel for a sum certain becomes a nightmare for the service provider if the vessel simply “skips town” and leaves the country which is all too common. Fortunately, there are procedures exclusive to admiralty and maritime law that permit the prejudgment seizure of offending vessels to secure a provider’s claim. Whether to invoke these procedures is a highly specialized question as the sanctions for wrongfully doing so can be harsh. For over 25 years, the attorneys at McLeod Brock have represented individuals and business clients to resolve issues arising from:
- Enforcement and Defense of Maritime Liens, Maritime Arrest and Attachment
- Enforcement and Defense of Notes, Mortgages and Guarantees
- Contract Disputes and General Commercial litigation
- Marina and Boatyard disputes
- Bareboat, Time and Voyage Charter Disputes
- Broker Disputes
- Yacht Transactions & Closings
- Vessel Purchases & Sales
In many ways commercial maritime law is distinct from land-based law especially relative to the ability to obtain prejudgment security. While the dispute may arise from something as routine as non-payment similar to a land-based matter, there are special admiralty and maritime procedures that can be used to seize maritime property under a number of circumstances via arrest or attachment. When pre-judgment security is sought, these disputes are exclusively within the jurisdiction of the United States Federal Court and cannot be asserted in any other tribunal.
Maritime liens arise against vessels automatically and for many reasons. A maritime lien arises against a vessel when any artisan works on the vessel or provides necessary services to the vessel. The liens are often considered “silent” liens as there is no requirement to record them. Maritime liens also arise when a maritime tort is committed by the vessel, her owners, or operators such as in a personal injury matter. Failure to pay seaman wages, for salvage services and ship loans/mortgages are a prime examples of conduct giving rise to maritime liens. Maritime liens follow the vessel until extinguished even to subsequent purchasers/owners without notice. Maritime liens are extinguished by payment in satisfaction of the lien.
The unique power of a United States District Court to seize property to enforce a maritime lien cannot be understated. Accordingly, the penalty for wrongfully exercising this power can be harsh. Enforcement of the lien is sometimes referred as foreclosure of the lien. Maritime liens are enforced against the vessel itself as if the vessel was an individual. To bring the vessel within the personal jurisdiction of the United States Federal Court, the vessel is arrested by the United States Marshal. Notice of the arrest is not provided to the owner or operator of the vessel until the vessel is seized.
Once the vessel is seized, it remains in the custody of the U.S. Marshal or a substitute custodian until it is released following security for the lien being posted in the Court or resolution of the case. Accordingly, the foreclosure of a maritime lien can bring ship operations to a halt and often force immediate resolution.
When maritime liens are not available, there are occasions where a vessel may be seized via the process of maritime attachment as opposed to arrest. In these instances, the shipowner must be foreign to the district where the vessel is found. The same process for arrest is followed to attach a vessel. Attachment also is a very important component of maritime law and can provide prejudgment security for items beyond the scope of maritime liens such as contractual attorney fee claims.
The attorneys at McLeod, Brock, PLLC have over 25 years of experience asserting and defending disputes involving ship arrest and attachment throughout the United States, the Caribbean, and South America. McLeod Brock works with an international network of investigators and is able to work with institutional and individual clients on a regular basis to recover for and/or defend these claims customizing the course of action to meet the needs that best suits each client.