Maritime Lien for Services Provided to Ship Under Construction Denied
In 2010 Canadian Maritime Law was changed by the enactment of Section 139 of the Marine Liability Act. That Section created a maritime lien where none existed previously. Prior to this enactment, unpaid Canadian suppliers of necessaries had at best only a statutory right in rem against the ship over which they rendered service. In contrast, in the United States, unpaid suppliers of necessaries to ships enjoy a maritime lien.
The holder of a maritime lien enjoys many advantages. A supplier who is considered a maritime lien claimant will typically outrank other creditors including bank mortgagees and his right in rem is not defeated by the sale of the ship. The difficulty arose in Canada when the Courts were dealing with conflict of laws issues involving a ship under arrest that had to be sold to satisfy claimants including mortgagees. The Canadian Courts recognized the American necessaries suppliers as maritime lien claimants giving them a priority above mortgagees, and other claimants, whereas the Canadian suppliers, under Canadian law, were given no such priority.