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News Notes No. 2 |
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April 2002 Newsletter
A Modern Boat Show of a Bygone Era
One annual East Coast boat show deserves
to be singled out from the rest. The show is miniscule
in size compared to boot D�sseldorf, New York, and Miami,
but much grander in scope than any of them. At the Maine
Boat Builders Show, you�ll find salesmen who can whittle
a piece of wood into a piece of floating furniture.
The boats there are different, and the builders seem
hewn from the same wood that is used to build the boats.
It is a show so completely different from others, where
you can see, touch, and feel the workmanship of a bygone
era.
Please don�t misconstrue�this is not a classic or antique
boat show. The high-tech processes are all there, from
WEST SYSTEM� epoxy and honeycombed coring to the jet
drives that seem to be taking the industry by storm.
But using these modern products are dedicated traditional
artisans reminiscent of fine boatbuilders from centuries
ago.
We spoke with several students of a local boatbuilding
school and asked why they chose to embark in the boatbuilding
industry rather than, say, computers. They replied that
it�s because they love boats and the ocean, the same
way their parents did.
The show was conducted in an old wooden warehouse building
converted to a boat building and repair facility, and
run by Portland Yacht Services. For many exhibitors
and attendees, the show is an annual gathering for regional
boatbuilding enthusiasts to see each other again after
a long winter. For others it is a chance to see �real
boats� and meet �real people.� This show is a must for
those who want to feel part of a bygone era and talk
grassroots boatbuilding with modern traditionalists.
To the show crew: if it ain�t broke don�t fix it. You�re
doing a great job�keep it up.
To learn more about the Maine Boat Builders Show go
to their Web site at www.portlandcompany.com.
Search for hidden liens on boats of all sizes�click
here
to explore the MarineLiens.com searchable global database.
MarineLiens introduced to consumer
market
Following the introduction of MarineLiens
Ltd. to the marine trade, the company is now entering
the third and final phase of its launch with the introduction
of its service to the recreational boating public, beginning
with the crowds at the Sail Expo show in Oakland, California.
For six months the company we have visited boat shows
around the world introducing our service as a central
clearinghouse for the industry to post claims of liens
for open and unpaid invoices for products or services
provided. We are now marketing the MarineLiens.com database
of liens to the buyers, lenders, insurance companies,
and boating public through the network of recreational
and commercial shows around the world.
For those commercial and recreational industry stragglers
who still have claims of liens to post, don�t be left
behind in the industry while others are getting results
with the site.
MarineLiens will also be exhibiting at the Power Expo
in Oakland, April 25�28. Please stop by with any questions
you may still have.
Other shows at which MarineLiens is tentatively planning
to be exhibiting and promoting the lien database are:
- Newport Spring Boat Show, May 31�June2, 2002,
Newport, RI
- Newport Boat Show, September 12�15, 2002, Newport,
RI
- Ft. Lauderdale International Boat Show, October
31�November 4, 2002, Ft. Lauderdale, FL
- Fish Expo & WorkBoat Show Northwest, November
14�16, 2002, Seattle, WA
- Marine Equipment Trade Show, November 19�21, 2002,
Amsterdam, The Netherlands
- International WorkBoat Show, December 4�6, 2002,
New Orleans, LA
- boot D�sseldorf International Boat Show, January
18�26, 2003, D�sseldorf, Germany
- International BoatBuilders Exhibition & Conference,
February 6�8, 2003, Ft. Lauderdale, FL
- Miami International Boat Show/Strictly Sail February
14�19, 2003, Miami, FL
Other potential shows will be announced as opportunities
arise.
Search for hidden liens on boats of all sizes�click
here
to explore the MarineLiens.com searchable global database.
MarineLiens Volume Discounts
Marine Liens Ltd. would like to remind users
of the discount for volume searches, for anyone who
maintains a minimum of 10 searches per month. Please
contact us at click here
and request information on our volume discount program.
Search for hidden liens on boats of all sizes�click
here
to explore the MarineLiens.com searchable global database.
Hot
Issue: Propeller Guards
There is currently much ado in the industry
surrounding propeller guards. Many vessels are already
using propeller guards. Look in any boatyard and see
lobster boats, fishing boats, work boats, recreational
trawler yachts, and many others equipped with guards.
Advantages:
- Help protect the propeller from submerged objects
(insurance companies what do you think?)
- Help prevent entanglement in buoy lines
- Help prevent bodily injury to persons in the water
- Creates revenues for the marine industry for fabrication,
installation and service
Disadvantages:
- Create frictional drag resulting in reduced fuel
efficiency (Designers can this be made up elsewhere?)
- Require additional cost to purchase and implement
Readers, what is your take on the issue? Please send
any comments to click here
Search for hidden liens on boats of all sizes�click
here
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Hot Issue: PWCs
What is the real issue with personal watercraft?
Is it the speed, the noise, or the reckless use that
is rousing the public to get aggressive against PWC?
If it is all of the above, then what is the solution?
There�s a lot of supposition when it comes to solutions.
Do we teach our kids manners? Is it only kids? Do
we give users sensitivity training on respect for
others? Are users so out of control they need to vent
their aggressions on coastal waters of the world?
Should we ban the craft or should we license the user?
Should there be a minimum age for the user? Should
there be fines for using excess speed and noise within
a distance of another boat? Is it the boat or the
user with which we have the problem?
We want to hear your
ideas. Direct any comments to click here.
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here
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Read More: Click here to return to newsletter table
of contents.
Hot Issue: SHARKS
In recent years, schools of sharks have
been reported around beaches in the United States. Sidney
Harbor, Australia is purported to be shark infested.
Some scientists have assert sharks� natural food chain
is fished out and are they looking for new sources of
nutrition. Others question whether the number of sharks
is actually increasing, or whether our global lifestyle
is just changing so dramatically that we are attracting
them to our shores.
Search for hidden liens on boats of all sizes�click
here
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Hot issue: Sunken Containers
Reports of vessels hitting submerged objects
in the open oceans have provoked interesting solutions.
Some think that with GPS and communication chip technology,
we have the ability to locate, identify, and recover
containers that have fallen or been discharged overboard.
If an electronic chip can be attached to a container
that enables tracking, then why not attach the chip
to a float on the end of a 50� line that is attached
to the container lying so close to the surface.
Who wins and who looses with this scenario?
Search for hidden liens on boats of all sizes�click
here
to explore the MarineLiens.com searchable global database.
Abandoned Crew
Recently we monitored an online chat revolving
around the topic of an offshore registered megayacht
that hired crew in the northeastern United States and
then abruptly discharged them in Florida with no means
to get home.
It was interesting to see how varied was the advice
given these poor bewildered souls. What is more interesting
is how little people know of their options when adversity
hits them. Is there anyone in our legal resource group
that might like to offer a few words on the topic?
Search for hidden liens on boats of all sizes�click
here
to explore the MarineLiens.com searchable global database.
Cargo liens in the eyes of the turkish
By: Dr.M.Fehmi �lgener
Under Turkish law, boat owners have a lien on any cargo
for outstanding freight, including demurrage, deadfreight
and distance freight. Therefore the owner has separate
types of facilities for collecting outstanding debts
by means of lien. First of all, in most charterparties
a lien clause is present, secondly there is a special
article in the Turkish Commercial Code regulating the
owners right of lien (TTK.art.1077). There are important
differences between those rights.
The scope of the contractual lien is dependent on the
construction of the relevant clause. Therefore, the
owners will have a lien for the type of outstanding
debts set out in the lien clause. While in most cases
freight, dead freight and demurrage create the lien,
in some charterparties �damages for detention� (Gencon
76), and even �all other amounts due under the charterparty�
(Gencon 94) are within the scope of the clause. Also
in many instances, charterparties� �subfreights� create
this right as well.
The scope of the lien stemming from the TTK is rather
different. The relevant article refers to TTK.art.1069,
according to which freight and all other similar rights
of the owners will be within the scope. Upon interpretation
of the owner�s rights, demurrage, deadfreight, and distance
freight are also included. On the other hand, any other
outstanding debts that cannot be considered �a right
of the owner� is not within the scope, on the grounds
that TTK.art.1069 regulates only the amounts payable
to the owner by means of remuneration in respect to
the chartering of a vessel / carrying the cargo. Thereupon,
any other amount payable to the owner will not create
a lien on cargo. (For example all types of compensation
in the nature of damages, including �damages for detention.�)
It is also important to state that according to TTK.art.1204,
a lien will also arise in respect to the general average
contribution of the cargo interests.
There is also an important difference in relation to
the procedures of the above-mentioned rights of lien:
- The contractual lien: In order to use this right,
the owner must keep possession of the cargo on board,
therefore the contractual lien becomes inoperable
after the delivery of the cargo.
- The lien as per TTK.art.1077: There is a special
provision stating that the lien can be used within
one month after the delivery of the cargo, provided
that the receiver keeps possession.
For that reason, the owner can make use of the contractual
lien for the type of the outstanding debts that are
falling outside the scope of the lien as per art.1077
only when the cargo is onboard of the vessel. (For example
under Gencon 94, �any other amount due under the charterparty.�)
For the types of outstanding debts within art.1077,
the owner can wait for the completion of discharging
/ delivery, even the arrival [or departure] of the vessel
from the port. (With this, the owner also can avoid
any counter proceedings of the receivers by means of
arrest of the vessel.)
Dr.M.Fehmi �lgener
�LGENER LEGAL CONSULTANTS:
Denizciler Is Merkezi,
A Blok,
Fahrettin Kerim G�kay Cd,
Altunizade,
81190, Istanbul,
Turkey,
Tel: +90 216 391 71 91,
Fax: +90 216 391 72 27,
Email: [email protected]
Search for hidden liens on boats of all sizes�click
here to explore
the MarineLiens.com searchable global database.
Read More: Click here to return to newsletter table
of contents.
Business Law 101: Insurance Pitfalls
By Nicholas Walsh, Attorney at Law
The challenge with your maritime insurance policy is
to make sure your business's claim falls within the
contract you sign. Here's a few ways to make sure you
get the coverage you thought you had.
A few days after I broke my leg, I got the nicest call
from an insurance adjuster. She asked me, in the kindest
way, how I was feeling (not great), what I was up to
when I fell (walking the dog), and whether, by the way,
the injury had anything to do with my employment (no).
Having satisfied itself that the injury wasn't compensable
under workers� compensation�a common exclusion in health
insurance policies�the company paid the claim.
When an insurance company gets a claim, it sets about
determining if it can avoid paying it. There's nothing
wrong with that; insurance is a contract between the
insured and the carrier, and if the claim doesn't fall
within the contract, the company shouldn't pay. Insurance
companies answer to their shareholders, and humanitarian
concerns play little role in the decision to honor a
claim.
The challenge is to make sure your business's claim
falls within the contract. Here's a few ways to make
sure you get the coverage you thought you had.
-
Read
the Policy Endorsements and Warranties.
Endorsements and warranties are attachments or paragraphs
that modify the policy. "Endorsements" are generally
used on auto, home, business and life-type polices,
while "warranties" are usually seen in marine insurance,
but they're essentially the same thing. On the marine
side, a typical warranty is a geographic or calendar
limitation. For example, your policy covers the
boat from various perils of the sea, but a warranty
attached to the policy says coverage exists only
from Eastport to Cape Cod to 100 miles offshore,
or requires the boat to be hauled by November 1.
Violate any warranty and
your coverage is gone, at least until
you are again in compliance with the warranty.
A Captain Warranty is common in commercial boat
policies. This warranty identifies the master of
the ship, and requires as a condition of coverage
that the insurance company approve any master. The
insurer of a Hawaiian longliner declined coverage
because the insurer had not approved the captain
who was on board when the boat sank. There was no
proof that any other captain�such as the one the
company had approved�could have prevented the sinking,
yet the court had little difficulty in letting the
insurance company off the hook. There wasn't even
a trial. Marine insurers have a hard time assessing
risk, the court said, and they are entitled to strict
enforcement of their warranties. Bottom
line: read and comply with your endorsements and
warranties.
-
Keep
Your Agent in the Loop. Let�s say you
are going to do something a little different: rent
boats, sell reconditioned outboards, or teach new
boat owners how to operate.
First, read your policy and make sure what you want
to do won't void your coverage. Second, and perhaps
more importantly, give
your agent a call. Tell him or her exactly
what you're up to and make sure coverage will exist.
For example, if you've always rented boats but now
you're going to give lessons before the rental,
tell your agent. If the agent says no problem, write
or e-mail the agent confirming the conversation.
Remember, often an inexpensive special endorsement
can cover new operations, but
it's up to you to tell the agent what you need covered.
If running a boat is part of your operation, give
your agent the details. You will get an endorsement
or policy protecting the business against a Jones
Act or similar claim. The policy or endorsement
may well restrict, perhaps by name, the persons
who can run the boat. A similar exclusion may state
how many employees can be on the boat at any time.
Read these exclusions carefully.
-
Don't
Lie to the Carrier. If you lie on the
insurance application, alter a vessel survey, or
otherwise lie to the carrier, don't expect to be
covered.
-
Take
Care of Your Physical Plant. If your
boat sinks because a seacock rusts away, or the
boat shed collapses because the sills rotted, you
may be out of luck. Policies do not generally protect
against loss due to normal deterioration and wear
and tear. Check with a
lawyer if you're denied on this basis.
-
Know
your theft coverage.
Theft of cash or valuables is often not covered
under the standard business policy. Many marine
policies claim to protect against "assailing thieves,"
in their quaint and ancient language, but the policy
may not cover a crook making off with the electronics.
Don't count on coverage
for electronics, cash, or valuables unless you have
specifically asked your agent for it.
This is one to watch out for.
If you are denied coverage, go to a lawyer who knows
insurance coverage. Many times a good argument can
be made that coverage exists, and the legal work
to make the case�or to confirm that the denial is
correct�is cheap compared with the loss.
�Nicholas (Nico) Walsh is a maritime and business
attorney at 111 Commercial Street in Portland, Maine.
A former commercial fisherman, merchant mariner,
and Coast Guard officer, he has served waterfront
businesses since 1988. 207-772-2191, or [email protected].
Search for hidden liens on boats of all sizes�click here
to explore the MarineLiens.com searchable global database.
Maritime Liens: An Overview
By Thomas A. Russell
Find out what makes maritime liens unique among other
liens, such as possessory liens and ship mortgages.
Maritime liens in the United States are derived from
ancient English admiralty law. Historically, maritime
liens have provided financial security for those who
furnished the goods and services that helped a vessel
to continue on its voyage. One court said they enable
a vessel to become the equivalent of a "floating credit
card."
Maritime liens allow one who has a contract to which
a vessel is bound, or who has suffered loss or damage
through the instrumentality of a vessel, to seek redress
directly from the vessel. Maritime law "personifies"
the vessel, allowing it to be sued as if it caused the
breach or tortious act.
Maritime liens can attach to a vessel regardless of
whether it is federally documented with the Coast Guard
or titled under state law. Unlike a state law lien,
which generally confers no property right in the collateral,
a maritime lien constitutes a right of property in the
vessel. It travels with the vessel wherever it may go.
Maritime liens may be secret and unrecorded. They are
not required by either state or federal law to be filed
in order to attach to a vessel and become perfected.
The Coast Guard may allow a lien claimant to file a
notice of claim of lien against a federally documented
vessel, but filing is not required and does not prove
the claim is valid. Nonetheless, Coast Guard filing
may be a cost effective way to encourage payment of
lien claims, and is useful where the amount in controversy
is not sufficient to justify a lawsuit to foreclose
the lien.
Not every breach of contract relating to a vessel is
secured by a maritime lien. Breach of a vessel construction
contract does not give rise to a maritime lien�the vessel
is not yet capable of navigation, so liens cannot attach.
After the vessel is completed, maritime liens can attach
for a wide variety of goods and services. Maritime liens
arise from repairs, slip fees, fuel, crew wages, supplies,
documentation services, and other "necessaries" for
keeping the vessel in operation. Maritime liens also
arise from torts involving the vessel, including those
related to collision and personal injury, to the extent
of the vessel's liability.
Maritime liens are non-possessory. They can only be
enforced through the judicial process of the federal
courts, not the claimant's taking possession of the
vessel. Although some claims may give rise both to maritime
liens and possessory state law liens, a court has the
power to take possession of the vessel from a self-help
lien claimant.
Maritime liens are enforced by the arrest and sale of
the vessel by a U.S. Marshal under the authority of
a federal court. Under court supervision, a Marshal
may seize a vessel wherever it is located in the United
States. Many foreign countries also allow vessels to
be arrested and sold to satisfy maritime liens. Nonetheless,
the cost of arrest often discourages the enforcement
of smaller claims.
A favorite security device of marine lenders is the
federal preferred ship mortgage. Congress created preferred
ship mortgages in 1920 because maritime liens had the
capacity to render state law security interests in vessels
"practically worthless," in the words of one court.
Maritime liens have priority over state law liens, including
state law security interests.
Preferred ship mortgages are only available for federally
documented vessels, not state-titled vessels. Preferred
mortgages are exempt from state usury laws and may bear
any interest rate agreed by the parties. They are similar
to maritime liens in some respects, and different in
others. Unlike a traditional maritime lien, a preferred
mortgage must be filed with the Coast Guard in order
to be perfected, and may be enforced out-of-court. Lenders
often use self-help to repossess and sell a vessel whose
preferred mortgage is in default. If this cannot be
done peacefully the lender can have the vessel arrested
by the U.S. Marshal.
Maritime liens are governed by special rules of priority.
Maritime liens for seamen's wages rank highly�as do
those for salvage and torts. These types of maritime
liens outrank preferred mortgage liens, which is one
reason why marine lenders often require borrowers to
have insurance.
Preferred mortgage liens typically outrank all contract
liens (including liens for costs of repair, maintenance,
and operation of the vessel) that arise after the mortgage
is filed with the Coast Guard. Like maritime liens,
preferred mortgage liens outrank all state law liens
and tax liens on the vessel. Superiority over these
other types of liens is one reason why marine lenders
typically favor preferred mortgages over UCC security
interests and state title liens, whenever a vessel can
be documented with the Coast Guard.
Maritime liens may be extinguished by payment of the
underlying claim, maritime foreclosure sale of the vessel
by the U.S. Marshal, waiver of the claim by the lien
holder, and laches�the judicial time bar resulting from
an unreasonably long delay in enforcement. Until extinguished,
a maritime lien travels with the vessel wherever it
may go, and remains an effective security device.
�Russell & Associates,
Long Beach, California.
Contact Tom Russell at Email: [email protected]
Search for hidden liens on boats of all sizes�click
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Regulations of the PRC on Int�l
Marine Shipping: Effective on January 1, 2002
By Wang Xuanjun, Attorney at Law
Regulations
of the People�s Republic of China on International Marine
Shipping ( the �Regulations�), effective
on January 1, 2002, applies to operation activities
and related auxiliary business of international marine
shipping incoming into and/or outgoing from the ports
of the People�s Republic of China.
The Regulations,
containing 61 articles, mainly includes general principles,
operator of international marine shipping and its auxiliary
business, operation activities of international marine
shipping and its auxiliary business, special provisions
on foreign investment operating international marine
shipping and its auxiliary business, investigation and
punishment, legal liabilities, supplementary provisions,
etc.
Management
Provisions of the People�s Republic of China on International
Marine Container Shipping, promulgated on
April 18, 1998, was abolished when the Regulations came
into force.
�Wang Xuanjun,
Attorney at Law,
Beacon Law Firm,
Beijing,
Tel: 86-10-84984678,
Fax: 86-10-84978968,
Email: [email protected],
[email protected],
Web: www.sino-laws.com
Search for hidden liens on boats of all sizes�click
here
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