Choice of Law

• Author: International Law Group
• Pages: 88-91

Page 88

Dresdner Bank AG in Hamburg, Kreditandstalt f¸r Wiederaufbau, and Norddeutsche Landesbank-Girozentrale (the Banks) filed a complaint in a Florida federal court in rem against the M/V OLYMPIA VOYAGER a 157.90 meter Blohm Voss GmbH motor vessel, Hull No. 961, her engines, tackle equipment, rigging, dinghies, furniture, appurtenances, etc., (the Vessel), a Greek-flagged passenger cruise vessel, to foreclose a preferred ship mortgage on a foreign vessel. The Banks also filed an in personam suit against Olympic World Cruises (OWC), the Vessel's owner.

The district court entered a default judgment of foreclosure against the Vessel and ordered it sold. The court also signed an order to require the Banks to provide security for any claims found to be superior in priority to the preferred ship mortgage. Many parties later filed claims or motions to intervene to assert claims against the Vessel or the proceeds of its sale. In response, the court allowed the Banks to stand in the shoes of the Vessel to defend against all claimants asserting priority in claims.

Aktina Travel, S.A. (Aktina) is a Greek travel agency, which orally contracted with the operators of the Vessel to provide airline tickets for its crew members. They would use the tickets to travel to and from the United States, either before boarding or after disembarking the Vessel. The parties entered into the agreement in Greece, and Aktina provided the travel arrangements from Greece by telephone and other electronic means.

Having successfully moved to intervene in this action, Aktina claimed that it was entitled to a maritime lien under the Commercial Instruments and Maritime Liens Act (CIMLA), 46 U.S.C. ß 31301 et seq. CIMLA grants priority to creditors holding maritime liens for necessaries provided in the U.S. over those holding preferred mortgages on foreign vessels. See 46 U.S.C. ß 31326.

The court first determined that a conflict existed between U.S. law, which would afford Aktina a maritime lien, and Greek law, which would not. After doing a choice-of-law analysis, the court applied U. S. rather than Greek law. The court essentially rested this ruling on two factual findings: (1) that the U.S. was the place of contract performance and (2) that the subject matter of the contract consisted of airline tickets located in the U.S.

On January 13, 2005, the court entered a final judgment in favor of Aktina on its claim against the Vessel. The court found that Aktina was entitled to a maritime lien under CIMLA, and that this lien prevailed over the Banks' preferred ship mortgage. The court fixed the dollar amount of the lien at $146,787.52. The...