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What is an in rem action?

On Behalf of | Jan 23, 2024 | Admiralty & Maritime Defense

Disputes arising over unpaid debts can lead to maritime liens against a vessel. There are a few ways authorities could seize a vessel in this type of situation.

One method is the use of in rem proceedings. In rem proceedings are legal actions taken against a vessel rather than its owner.

Use of in rem

If a vessel owner has unpaid debts, the creditor could go after their ship.  In rem proceedings allow creditors who hold a lien to seize the vessel and hold it until the owner satisfies the debt.

This is a unique approach applicable to the maritime industry. Vessels can change ownership frequently, which makes it challenging to hold a particular individual accountable. By seizing the vessel, the creditor has a better chance of getting the money due to them.

Initiating in rem

To initiate in rem proceedings, a creditor must file a complaint in the appropriate court. This requires establishing the validity of the maritime lien. The court examines the specific circumstances surrounding the debt. It evaluates the nature of the services or supplies the creditor provided to the vessel and ensures they fall under the criteria for a valid lien.

Upon acceptance, the court issues an arrest warrant for the vessel in question. The warrant allows law enforcement or other authorized personnel to physically seize the vessel when it enters the court’s jurisdiction. After the arrest of the vessel, it becomes the subject of legal action. The court then determines the rightful resolution of the maritime lien to release the vessel.

During in rem proceedings, all parties must present clear and compelling evidence to support their claims. The court’s decision hinges on a thorough examination of the facts and the adherence to maritime law principles. This ensures a fair and just resolution that upholds the integrity of the maritime lien system.