Maritime liens and the conflict of laws - an exegesis of the Anglo-common law decisions after The Halcyon Isle
| Date | 01 January 2011 |
| Published date | 01 January 2011 |
| DOI | 10.10520/EJC74140 |
| Pages | 373-446 |
373
10 MARITIME LIENS AND THE CONFLICT OF LAWS – AN
ExEGESIS OF THE ANGLO-COMMON LAW DECISIONS
AFTER The halcyon Isle
10.1 The Atlantic Divide
The Halcyon Isle1 has defined the debate about the recognition
and enforcement of foreign maritime liens in Anglo-common law
jurisdictions, with reference to what is widely regarded as the
lynchpin of the judgment: the classification of the maritime lien as
a procedural right under English conflict of laws. Following The
Halcyon Isle, the decisions of the courts in these jurisdictions may
be divided into two groups. The first group of cases has held that
the recognition and enforcement of foreign maritime liens are to be
determined according to the lex causae,2 more specifically, the lex
loci contractus in respect of the foreign maritime lien for necessaries
(in view of the underlying contractual claim). These decisions follow,
or are compatible with, the approach of the minority in The Halcyon
Isle.3 With the exception of The Har Rai at first instance,4 all the
Canadian decisions are in support of this position.5 The second
group of cases has held that the recognition and enforcement of
foreign maritime liens are to be determined according to the lex
fori.6 These decisions follow, or are compatible with, the approach
2 The lex causae is a convenient shorthand expression denoting the legal
regime governing the legal relationship between parties, and is used
in contrast to the lex fori, which always means the domestic law of the
forum. The lex causae may be more specifically denoted by a variety of
expressions, for example the lex patriae (law of the nationality), lex loci
contractus (law of the country where the contract has been concluded)
or the lex loci solutionis (the law of the country where the contract is to
be performed or where the debt is to be paid).
4 [1982] 2FC 617.
5 This is also the approach of the Supreme Court of Israel (Shamgar
P, Barak and Netanyahu JJ) − see The Nadja S (Griffin Corp v Koor
Sachar) 44(3) PD 45 (1990); PG Naschitz, “Maritime Liens and
Mortgages in Israel − Who has First Priority?” (1992) 23 Journal of
Maritime Law and Commerce 123. The position in Israel is thus that
the determination of the right is substantive and its implementation
procedural. Three different routes were, however, followed to reach
that conclusion: Shamgar P believed in the classification of the priority
of maritime liens and mortgages according to their proper law (the lex
causae) in all cases. Barak J preferred that approach only when the
various liens have a uniform base, and otherwise preferred the lex fori.
Justice Netenyahu propounded the lex fori in all cases.
6 See W Tetley, “Maritime Liens in the Conflict of Laws” in JAR Nafziger
and SC Symeonides (eds), Law and Justice in a Multistate World:
Essays in Honor of Arthur T von Mehren (Transnational Publishers
374
of the majority in The Halcyon Isle.7 With the exception of the
first South African decision on maritime liens and the conflict of
laws, The Khalij Sky,8 this is the position followed in all the other
South African decisions,9 as well as the decisions in Singapore,10
Malaysia,11 Cyprus,12 and New Zealand.13
10.2 The post- Halcyon Isle Canadian Decisions
10.2.1 The Har Rai at First Instance − A Temporary Deviation in
the Canadian Approach
The consistency of the Canadian decisions has been interrupted
by Mahoney J’s aberrant decision at first instance in The Har Rai.14
This was an action to enforce a maritime lien that arose under
American law in respect of the supply of bunker fuel. The plaintiff
was a Californian corporation and the defendant ship was of Indian
registry. The bunkers were ordered by the time charterer who
had no authority to do so. Although a maritime lien existed under
American law, no maritime lien existed under Canadian law. The
ship was arrested in Canada. The action instituted was both in rem,
Inc, Ardsley, 2002) 439 at 448 to 450 for a summary of the decisions
following The Halcyon Isle majority decision. It is interesting to note
that GA Zaphiriou, The Transfer of Chattels in Private International
Law (Athlone Press, London, 1956) at 153 advocated the application
of the lex situs of the vessel at the time when the maritime lien holder
purports to exercise the lien as the applicable law, which would in
effect be the lex fori.
(C); The Kalantiao 1987(4) SA 250 (D) The Andrico Unity 1989(4) SA
325 (A).
10 See, for example, The Ocean Jade [1991] SLR 583; Pacific Navigation
Co Pte Ltd v Owners of and Other Persons Interested in the Ship
or Vessel “Ohm Mariana” ex “Peony” [1992] 2 SLR 623; The Andres
Bonifacio [1993] 3 SLR 521.
11 Ocean Gain Shipping Pte Ltd v Owner and/or Charterer of Demise of
vessel “The Dong Nai” [1996] 4 MLJ 454.
12 See, for example, Kamal Hassanein v The Ship “Hellenic Island” now
lying in the Port of Limassol (1989) 1 CLR 406; Kamal Hassanein v
Hellenic Island (1994) 1 JSC 578; Nordic Bank plc v The “Seagull”
[1991] LRC (Comm) 113.
13 See, for example, the New Zealand decisions in The Betty Ott [1990]
3 NZLR 715; The Betty Ott [1992] 1 NZLR 655; The Offi Gloria [1993]
3 NZLR 576; Fournier v The Ship “Margaret Z” [1999] 3 NZLR 111.
But see also the criticism of The Betty Ott decision by P Myburgh,
“Recognition and Priority of Foreign Ship Mortgages” [1992] Lloyd’s
Maritime and Commercial Law Quarterly 155.
14 [1982] 2 FC 617.
375
against the ship, and in personam, against her owners, an Indian
company.15
Mahoney J accepted that, under American law, the plaintiff had a
maritime lien. He stated that, pursuant to The Ioannis Daskalelis,16
“a foreign maritime lien, which is given precedence over a registered
mortgage by its lex loci, will be given the same precedence under
Canadian maritime law. It is by no means clear that it is authority for
the proposition that a remedy in rem is available in Canada, at all,
in the absence of the owner’s liability in personam.”17 Accordingly,
it was held that The Ioannis Daskalelis18 was not binding authority
on the Canadian Federal Court to grant relief in rem against the
ship in the absence of liability of the owner in personam.
Since Mahoney J was of the view that the issue had not been
addressed by either the Canadian Supreme Court or the Canadian
Federal Court of Appeal, he relied on Westcan Stevedoring Ltd
v The Ship “Amar”19 and the interpretation of s 22(1), (2)(n) and
(3)(a) and (c) of the Canadian Federal Court Act to hold that the
shipowner had to be liable in personam in order for the Court to
enforce a right in rem -
“While the law of the United States determines the existence
of the plaintiff’s right in rem, its remedy, in this Court, is
determined by the law of Canada. This Court has jurisdiction
only if the ‘remedy is sought under or by virtue of Canadian
maritime law’ … If the owner were liable in personam, this
Court would enforce a right in rem arising under foreign law.
Apart from statute, however, a right in rem arising under
Canadian law cannot be enforced in the absence of liability
of the owner in personam. The question remains whether
Canadian maritime law provides for the enforcement of a
right in rem that arose under foreign law where the owner is
not liable in personam.”20
Although Mahoney J did not refer to The Halcyon Isle,21 his
judgment was couched in a language reminiscent of the majority
of the Judicial Committee of the Privy Council in this case. His
Honour’s reasoning was contrary to that of Mellish LJA in The
Strandhill, where it was held that, once the foreign maritime lien
15 See J Blom, “Conflict of Laws” (1988) 20 Ottawa Law Review 474 for
a discussion of this decision.
16 [1974] SCR 86 1248.
17 The Ship Har Rai [1982] 2 FC 617 at 620.
18 [1974] SCR 1248.
19 [1973] FC 1232.
20 The Har Rai [1982] 2 FC 617 at 619 to 620.
21 [1981] AC 221.
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