1. Ship owners often take loans purchase of ships. For this purpose, the lenders and the ship owners enter into a contract giving the lender the right to realize the amount loaned by arrest and sale of the ship if and when the ship owner defaults in repayment on due dates.
2. Such agreements are called as “Mortgage Contracts”.
3. These mortgages will be noted on the Ship’s Registry and by referring the Registry one can find out if there are loans outstanding against the ship, which means, they are easily recognizable or visible claims on the vessel.
4. They are usually created through written agreements duly recorded with the ship’s registry.
Maritime Lien :
1. Maritime Lien means a right to a part of the property in question or a privileged claim upon a ship, aircraft or other maritime property in respect of services rendered to or injury caused by that property.
2. Maritime Lien once attached remains attached to the property travelling with it through changes of ownership.
a) Claims in salvage whereby the contractor has a maritime lien over the property, salved until the claims are paid,
b) Wages of master and crews if not paid whereby they have a Maritime Lien over the ship.
Possessory Lien :
1. This is defined as a right of one man to retain that which is in his possession belonging to another until certain demands to him, ( the person in possession) are satisfied.
Example – The ship-owner has a possessory Lien over the cargo on board under general average until the contribution by cargo interest have been paid.
* The holder of a maritime lien has a higher priority than any other liens.