The Arosa Star [1959] 2 Lloyd’s Rep 396: the priority status of maritime liens under Bermuda law

Every now and again, I come across a reference to an older Bermuda judgment in an English law report series.

Most recently, I have noticed the report of The Arosa Star [1959] 2 Lloyd’s Rep 396, being a judgment of Chief Justice Sir Newnham Worley of the Supreme Court of Bermuda, in which, amongst other findings, he held that a foreign seaman could recover, in an Admiralty action in rem for wages and with the priority accorded by a maritime lien, full pay during sick leave and employer’s contributions for social insurance, as being emoluments in the nature of wages to which he was entitled under his contract of employment.

The Arosa Star had arrived at St. George’s Harbour on 7 December 1958, and it was arrested that day on writs issued at the suit of Esso Standard (Switzerland) and Caltex Oil Companies claiming for bunkering services. Various other creditors sought to assert claims, for payment out of the proceeds of sale of the ship which had been paid into Court, including the Corporation of St. Georges (for port dues); the ship’s master and crew (for wages); and the ship’s agents (for the costs of repatriating the large number of American passengers who were on board the cruiseship at the time of its arrest).

Since the ship was owned and registered in Panama, the Bermuda Court had to consider expert evidence of Panamanian law when considering the legal meaning and effect of certain Panamanian mortgages relating to the ship.

The Judge held, however, that the determination of priorities was a matter for the lex fori (Bermuda): “The law of Bermuda on this subject is, I apprehend, the same as the law of England, since the jurisdiction in Admiralty is conferred by Imperial statutes“.

The Judge went on to hold that the master and the crew had a maritime lien with respect to their unpaid wages (including sick leave and social insurance contributions), which took preference over the claims of the mortgagees.

It’s remarkable to think that the Supreme Court of Bermuda has been dealing continuously with commercial disputes such as these for at least the past 60 years of its 400 year history.

 

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