Trinidad Foundry and Fabricating, Ltd. v. M/V K.A.S. Camilla

• Decision Date: 15 July 1992
• Docket Number: No. 91-5360,91-5360
• Citation: 966 F.2d 613
• Parties: , 23 Fed.R.Serv.3d 130 TRINIDAD FOUNDRY AND FABRICATING, LTD., Plaintiff-Appellant, v. M/V K.A.S. CAMILLA, her engines, boilers, tackle, etc., In Rem, K/A Kasmi, in Personam, K. Arnesen Shipping A/S, In Personam, Defendants-Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 613

966 F.2d 613

1992 A.M.C. 2636, 23 Fed.R.Serv.3d 130

TRINIDAD FOUNDRY AND FABRICATING, LTD., Plaintiff-Appellant, v. M/V K.A.S. CAMILLA, her engines, boilers, tackle, etc., In Rem, K/A Kasmi, in Personam, K. Arnesen Shipping A/S, In Personam, Defendants-Appellees.

No. 91-5360.

United States Court of Appeals Eleventh Circuit.

July 15, 1992.

Richard J. McAlpin, Mitchell, McAlpin & Associates, Jeffrey H. Simcox, Palmber, Biezup & Henderson, Philadelphia, Pa., for plaintiff-appellant.

Patrick E. Novak, Keller, Houck & Shinkle, P.A., Miami, Fla., for M/V K.A.S. Camilla.

Appeal from the United States District Court for the Southern District of Florida.

Before EDMONDSON and DUBINA, Circuit Judges, and ATKINS ^*, Senior District Judge.

DUBINA, Circuit Judge:

The question presented in this appeal is whether an English statutory right in rem constitutes a maritime lien for purposes of jurisdiction under Rule C of the Supplemental Rules for Certain Admiralty and Maritime Claims ("Rule C"). ¹ The district court answered the question in the negative and dismissed the in rem action for lack of jurisdiction. For the reasons which follow, we affirm.

I. BACKGROUND

Trinidad Foundry and Fabrication Ltd. ("Trinidad") is a corporation organized under the laws of Trinidad, West Indies, with its principal place of business located there. The M/V K.A.S. Camilla ("Camilla") is a Norwegian flag vessel owned by K/S Kasmi and K. Arnesen Shipping A/S ("the owners"). The owners are corporations organized under the laws of foreign countries, which have their principal places of business outside the United States.

At the request of the owners and pursuant to a repair contract, Trinidad made certain repairs and provided other "necessaries" ² to the Camilla at its repair facility in Trinidad. The repair contract specifically provided that the owners were to pay the full amount of the repairs plus interest and that all aspects of the agreement were to be governed by English law. The owners, however, failed to pay the outstanding balance due on the repair contract.

Subsequently, Trinidad filed an in rem admiralty action against the Camilla and an in personam action against the owners in the United States District Court for the Southern District of Florida for the monies owed it for the repairs. Trinidad asserted jurisdiction under Rule C. ³ The district court issued an order for a writ of arrest as to the Camilla. The owners made a special appearance for the sole purpose of challenging the court's in rem jurisdiction as to the Camilla and filed a motion to dismiss. Trinidad filed a memorandum and affidavits in opposition to the owners' motion. One of Trinidad's affidavits states that, in England, repairs are recognized as necessaries and, therefore, carry a right to issue a writ in rem against a vessel. The owners then posted a Letter of Credit and thereby secured the release of the Camilla.

The district court dismissed the in rem action against the Camilla finding that it lacked in rem jurisdiction because an English in rem action could not be considered tantamount to an American maritime lien under Rule C. Trinidad then perfected its appeal.

II. DISCUSSION

Trinidad argues that there are two proper bases for in rem jurisdiction over the Camilla under Rule C: (1) a maritime lien, and (2) a lien pursuant to a United States statute. We agree with the district court that Trinidad possessed neither a maritime lien nor a statutory lien.

A. Maritime Lien

Rule C(1)(a) is procedural ⁴ and sets forth the means to file an in rem action to enforce a maritime lien. ⁵ Neapolitan Navigation, Ltd. v. Tracor Marine, Inc., 777 F.2d 1427, 1429 (11th Cir.1985). The requirements of Rule C are to be read literally, and a vessel is not considered to be within the court's in rem jurisdiction when the rule has not been complied with, absent an agreement between the parties to the contrary. Nuta v. M/V Foutas Four, 753 F.Supp. 352, 353-54 (S.D.Fla.1990). However, maritime liens are not created by Rule C. Amstar Corp. v. S/S Alexandros T., 664 F.2d 904, 908 (4th Cir.1981). Instead, they are an aspect of substantive, rather than procedural maritime law. Id.

The contract agreed to by the parties in the present case states that English law shall govern. Such clauses are enforceable. See Scherk v. Alberto-Culver Co., 417 U.S. 506, 516, 94 S.Ct. 2449, 2455, 41 L.Ed.2d 270 (1974); Complaint of Sun Schiffahrts G.m.b.H. & Co., K.G., 608 F.Supp. 51 (E.D.Pa.1984). Therefore, English substantive maritime law governs this dispute.

When analyzing foreign law, the district court may consider any relevant material or source, including testimony, whether or not submitted by a party or admissible under the Federal Rules of Evidence. Fed.R.Civ.P. 44.1. In this case, the owners rely on an affidavit by Michael Francis Mallin ("Mallin"), a solicitor of the Supreme Court of England and Wales. Mallin's affidavit states that under English law various maritime liens exist by virtue of judicial development, ⁶ but no maritime lien is created by the furnishing of repairs and services to a vessel. Mallin asserts that instead of a maritime lien sections 20(2)(m) and (n) of the Supreme Court Act of 1981 ("SCA") provide that an action in rem may be initiated for "any claim in respect to goods or materials supplied to a ship for her operation or maintenance" and "any claim in respect of the construction repair or equipment of a ship or in respect of dock charges or dues." Affidavit of Michael Francis Mallin.

Neither of the affidavits submitted by Trinidad contradict Mallin's affidavit; in fact, the affidavit executed by Robert David Crighton ("Crighton"), a member of the English bar, admits that there are differences between an English maritime lien and an English action in rem.

The differences between an English action in rem and an English maritime lien were further explained in the leading English case, the Heinrich Bjorn, 10 P.D. 44 (C.A.1885) as follows:

[A] maritime lien arises the moment the event occurs which creates it; the proceeding in rem which perfects the inchoate right relates back to the period when it first attached: "the maritime lien travels with the thing into whosesoever possession it may come" ... and the arrest can extend only to the ship subject to the lien. But, on the contrary, the arrest of a vessel under the [in rem] statute is only one of several possible alternative proceedings ...; no right in the ship or against the ship is created at any time before the arrest; it has no relation back to any earlier period; it is available only against the property of the person who owes the debt for necessaries; and the arrest need not be of the ship in question, but may be of any property of the defendant within the realm. The two proceedings, therefore, though approaching one another in form, are different in substance: in the one case the arrest is to give effect to a pre-existent lien, in the other, the arrest is only one of several alternative modes of procedure....

Id. at 64. (Citations omitted.)

In The John G. Stevens, 170 U.S. 113, 18 S.Ct. 544, 42 L.Ed. 969 (1898), the United States Supreme Court acknowledged the distinction between a materialman's claim and a maritime lien by stating:

[B]y the law of England, materialmen, without possession, have no maritime lien for supplies, even to a foreign ship, but a mere right to seize the ship by process in admiralty, in the nature of an attachment. "Claims for necessaries, ... do not possess ... a lien; but carry only a statutory remedy against the res, which is essentially different."

Id. at 117, 18 S.Ct. at 546. (Citations omitted.) A maritime lien is strictly construed and cannot be extended by construction, analogy or inference. Fathom Expeditions, Inc. v. M/T Gavrion, 402 F.Supp. 390, 397 (M.D.Fla.1975) (citing Vandewater v. Mills (THE YANKEE BLADE), 60 U.S. (19 How.) 82, 89, 15 L.Ed. 554 (1857)). Therefore, under both English law and the Supreme Court's interpretation of English law, a claim for necessaries is not a maritime lien.

More recently, this issue was persuasively resolved in North End Oil, Ltd. v. M/V Ocean Confidence, 777 F.Supp. 12 (C.D.Cal.1991). In that case, North End Oil ("NEO") filed a complaint in rem alleging a maritime lien against the vessel, Ocean Confidence, based on the alleged failure of Mitsui O.S.K. Lines, Ltd. ("Mitsui"), the charterer, to pay for bunkers that were to be used on the ship. When the district court issued a warrant for the vessel's arrest, Mitsui entered a special appearance to defend on behalf of the vessel, seeking, among other things, to dismiss the complaint for lack of jurisdiction and for failure to state a claim. The district court found that English law governed and dismissed the action for lack of jurisdiction because English law did not recognize an enforceable maritime lien and did not give NEO a right to proceed in rem against the Ocean Confidence.

The district court held that an "action in rem must be initiated by a writ issued by the Admiralty Registry of the High Court and must be served within that court's jurisdiction." Since NEO did not have such a writ, an English court would not recognize its maritime lien. In an alternative holding, the district court reasoned that because NEO had no substantive right to a maritime lien under English law, it could not use an American procedural device, i.e., the in rem action, to create such a right.

Likewise, we hold that there is no jurisdictional basis for an in rem action to enforce a maritime lien, pursuant to Rule C(1)(a). In England a claim for repairs or necessaries does not give rise to a maritime lien, but merely yields a statutory right in rem. See, William Tetley, Maritime Liens and Claims p. 236 (1985). A statutory right in rem under English law is not equivalent to an American maritime lien. Because a maritime lien is a prerequisite for an action in rem under Rule C(1)(a), the...