Liens

In certain cases the shipowner has a lien on the cargo for unpaid sums thus a full understanding of the role of liens is essential. A lien may be defined as a right over the property of another which arises in respect of a debt owed by the owner of the property to the holder thereof. There are different types of liens: Common Law possessory liens – these are dependent upon possession of the property. Equitable liens – these are not dependent upon possession. An equitable lien will arise where Equity holds that a lien should exist, but in the circumstances the possessory lien is lost as the holder has parted with possession of the property. The equitable lien is extinguished once the property is sold to a third party who had no notice of the lien. Contractual liens – the formation of these liens is dependent upon the requirements as set out in the particular contract. Maritime liens – a ‘privileged’ lien arising in respect of maritime property. Maritime liens are not dependent upon possession of the property and are not defeated by a sale to the third party. Maritime liens are dealt with in depth in the course on Shipping Law.