June 14, 2024

Dede Law and Business Series: To Proceed in an Action in Rem and Action in Personam- which Way oh Claimant? (1)

In the establishment of a maritime claim, a claimant must first be sure that the claim is made before the right court or tribunal, in other words before the proper forum that has jurisdiction to entertain the matter in question. For a claim to be described as a maritime claim however, it must be defined as such under the laws of the country where the claim is being made. A maritime claim, which deals with the issues of causation and liability, falls under the substantive maritime law. However, being able to present the claim before the right court or tribunal is a matter of procedural law. Under procedural law with respect to a maritime claim, the claim could be established either “in personam ”“against the person” or “in rem”, against the property”. Both procedures will be examined and reasons for the commercial advantages of an “in rem” action will also be briefly analysed.

An action in rem or presenting one’s claim through the procedure of an action in rem, is procedure whereby a claimant seeks to determine the title to property and the rights of the parties on such property, here being the vessel. In Latin, “in rem” means “against or about a thing”. It derives from the word “res”, which means “the thing”. A cause of action proceeded upon in rem is therefore an action against a vessel and not against a person or the owner or persons with proprietary interest on the vessel in their personal capacity. Other items of property that an in rem action can be brought include cargo, freight or proceed of sale. 

An action in rem was inextricably intertwined with a maritime lien with a few exceptions under Nigerian Law that makes the claims through an action in rem wider than actions brought solely on the basis of a maritime lien, see sections 1, 2 and 3 of the Admiralty Jurisdiction Act 1991.

The English case of The Bold Buccleugh (1851) 7 MOO PC 267 is the locus classicus on the definition and operation of a maritime lien. It lays in general, the foundation of a claim that can be claimed through an in rem procedure. In that case, a maritime lien was interpreted to mean a privileged claim over a vessel or other maritime property. In particular, that a maritime lien is a right which accompanies the vessel into whose so ever possession she may subsequently pass. Such lien attaches to the vessel and may be invoked against her even where purchased by a bona fide purchaser, whether or not such purchaser is aware of the claim. 

The reasoning behind this decision was that the vessel is considered to be liable to pay for the wrong she has done irrespective of her owner. A maritime lien requires no registration and operates by the operation of law at the moment when the incident that gave rise to the cause of action occurs and by the laws of the jurisdiction where the claim was made. Therefore, a maritime lien is a foundation for a proceeding in rem, which in turn is the legal machinery to perfect a right that arises at the moment the lien attaches. In other words, a maritime lien is a claim or privilege upon a thing (res) to be carried into effect by legal process, namely the action in rem.

An action in rem therefore determines rights in a ship that are conclusive against the whole world. It can be brought against property of debtors in order to collect what is owed, for enforcement of liens and mortgages over a ship. Action in rem can only be exercised before a particular court when that court has authority over the ship or when the court’s jurisdiction extends to cover it that is the territorial waters within the jurisdiction of the court. 

An action in rem can also be used to execute a ship mortgage however, the rights of a mortgagee is subject to and ranked after a maritime lien. Examples of maritime liens are crewman’s wages, master’s wages, salvage, collision, accidents caused by the ship amongst others. 

For a claim to fall under the category for which a procedure through an action in rem can be commenced under Nigerian law, such claim needs to be classified as “proprietary”. The proprietary claim must touch or relate to the subject matter or the “res” of the maritime property such as the ship, cargo or freight. These connections are with respect to: 1. The title to or ownership of a ship or of a share of a ship, 2. Possession of a ship, mortgage of a ship or of a share in a ship, mortgage of a ship’s freight, earnings of a ship, satisfaction or enforcement of judgement against a ship, cargo or freight, interest or any of the foregoing claims – section 2(2) of the Admiralty Jurisdiction Act. 

Another important aspect of an action in rem is that the defendants named in the claim is the subject matter property and the person who would have been liable if the matter was filed directly against the person, in other words, “in personam”. Such person is commonly referred to as the “relevant person.” Different countries have different definitions for who a “relevant person” is. This is captured in Order 7 Rules 3 and 6 of the Admiralty Jurisdiction Procedure Rules 2011.

It is important to note that admiralty jurisdictions in civil countries continue to operate in personam procedure, that is a claim against the individual as against the ship/vessel. Civil law countries do not exercise action in rem procedures, instead the law recognises in their in personam suits, the right for the claimant to obtain a pre judgement seizure of the defendant’s ship or other assets including non-maritime property within the court’s territorial jurisdiction. Therefore, action in rem as distinct from an action in personam is majorly an admiralty law feature of countries based on the common law system of law. 

Foluke Akinmoladun is the Managing Solicitor of Trizon Law Chambers Nigeria. She is a lawyer, accountant, mediator and arbitrator. She is also a Chartered Secretary and Business Rescue & Insolvency Practitioner. She belongs to the panel of neutrals of numerous arbitral institutions.She was a onetime Director General of the African Ship owners Association of Nigeria and is a member of the Presidential National Action Committee on Nigeria’s Implementation of the African Continental Free Trade Agreement (AfCFTA) (Transportation stream). She is the secretary of the Lagos Chamber of Commerce (LCCI) Maritime Sector.
She can be reached at: Foluke.A@trizonlawchambers.com


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