The Court’s historical roots and traditions have resulted in two sets of rules governing its authority and made it one of the rare courts authorised to act as a prize court.
In the following, we will look at the Haifa Maritime Court’s historical rules and modern-day powers, as well as its position on owners’ liability in constituting a maritime lien.
Two sets of rules governing the Maritime Court’s authority
Israeli Maritime Law is in fact a legacy of the British Mandate for Palestine, which was officially valid from 1923 to 1948. By a King’s Order-in-Council dated 2 February 1937, the Supreme Court of Jerusalem was constituted as a Maritime Court under the Colonial Courts of Admiralty Act, 1890 (the Colonial Act). On the date the Colonial Act was enacted, the relevant acts of admiralty in force were the Admiralty Court Acts of 1840 and 1861. Accordingly, these continue to apply to the Israeli Haifa Maritime Court’s jurisdiction to this day.
Following the termination of the British Mandate and the establishment of the State of Israel in 1948, Israel enacted the Admiralty Court Act in 1952. This is merely an administrative act transferring all the authorities of the Supreme Court of Jerusalem (to act as a Maritime Court) to the Haifa District Court, which has acted as a Maritime Court ever since.
The act also states that, when deciding on an appeal on judgments of the (now established) Haifa Maritime Court, the Supreme Court will have (in addition to its authority as an appeal court) all the authority of the Maritime Court. The act does not, however, deal with the jurisdiction and the authority of the court itself.
When enacting the Israeli Shipping Act of 1960, the Israeli legislature included specific chapters on mortgages and liens adopting the continental lien regime of the Brussels Convention of 1926, preferring this regime to that of English law.
The result was that the Israeli Maritime Court (which is the Haifa District Court) has two non-identical sets of rules related to maritime liens. To add to this ambiguity, there were relatively few cases dealt with by the Supreme Court (in appeals from the Maritime Court’s judgments). Accordingly, besides a correspondingly low number of Supreme Court judgments relating to the basic principles, there were no Supreme Court precedents covering all aspects of maritime liens.
A maritime lien is a substantive right
In this regard, the main Supreme Court judgment relating to maritime liens is that rendered in the matter of MV Nadia S. The Court held that a maritime lien is a substantive right rather than a procedural right (and in this regard diverged from the majority opinion in the English judgment in the matter of the Halcyon Isle) attaching to the ship and following the res into the hands of third parties, and is determined according to the lex causae.
This judgment was rendered on 5 July 1990, after more than 28 years, during which time, and until recently, the Supreme Court has dealt with barely one or two matters relating to maritime liens.
Accordingly, Israeli maritime law has developed on an empirical basis in judgments rendered by the Maritime Court. These judgments have the status of District Court judgments and are considered to be persuasive, but do not constitute binding precedents.
Lately, however, given the fact that the Maritime Court has rendered judgments in matters not previously dealt with, and due to Supreme Court appeals, Israeli maritime law is heading towards greater certainty.
Only the contractual supplier is recognised as a necessary lien
The first in this line of judgments is the matter of MV Emmanuel Tomasus (2012), where it was held that only the contractual supplier was entitled to a maritime lien for the supply of necessaries, so the actual physical supplier was not entitled to recover its debt from the arrest and sale of the supplied vessel. The claimants filed an appeal before the Supreme Court, but withdrew the appeal at the hearing after the Court advised that it did not intend to intervene in the Maritime Court’s judgment.
Charges paid at foreign ports also constitute the lien for general port charges
In the matter of MV Mirage 1, the Haifa Maritime Court held that the lien for "general port charges" included port charges paid by the agent (for the vessel) at a foreign port.
Cargo claims and underwriters
Under the Order of Carriage of Goods by Sea, as amended in 1992, Israeli law has adopted the Hague-Visby Rules, which will apply to any Bill of Lading (B/L) which governs the sea carriage of cargo, either from any Israeli port or from any port of a country which is a party to either the Hague or the Hague-Visby Rules.
In a Supreme Court judgment in the matter of civil appeal 7779/09 HDI vs Orl, it was held that the quantities stated in the B/L are prima facia evidence, not only towards the owner but also towards the underwriter insuring the cargo in marine insurance. In a Supreme Court's decision in civil appeal 7195/18 Fhya vs Millobar (2018), it was held that if a claim filed within one year after the discharge of the cargo was filed by a claimant which had no title to sue, the one-year time limit (of Article III (6) of the Hague-Visby Rules) will not be "cut" and a later amendment of the claim (after one year) by adding an additional claimant with title to sue will not be allowed (due to the time-bar).
In a Supreme Court's decision in Appeal No 8518/19, the Supreme Court affirmed the decision handed by the Haifa Maritime Judge, the honourable R. Sokol, in Civil Claim 35583-11-18 relating to the MV Chrysopigi, that a foreign marine insurer has title to sue under the insurer rights which have been subrogated to him or her, even if the foreign insurer is not listed in the Israeli Insurance Supervisor's list as an insurer active in Israel and subject to the Supervisor's supervision. Under this decision, the court has given effect to the Israeli legislator's wording and meaning when excluding the marine insurance from supervision and other liabilities according to the Insurance Agreement Act of 1982. In the matter of Civil Claim 31521-01-20, the Haifa District Court further ordered that the act of subrogation does not relate to the manner in which an insurer handles its insurance agreements and therefore the act of subrogation should not be subject to local regulations and supervisions on the local insurers. Therefore, also in this matter, it was decided that a foreign marine insurer can use its subrogation rights and file a claim for damages, even if not registered as an Israeli or foreign insurer in Israel.
In the matter of MV Huriye Ana (2017), the Maritime Court held that Israeli law did not allow for a sister-ship arrest, as no such authority is mentioned either in the Admiralty Acts of 1840 and 1861 or in the Israeli Shipping Act of 1960. Furthermore, Israel is not a signatory party to any of the conventions allowing such an arrest (for example, the Brussels Convention 1952 and the Geneva Convention 1999). In the matter of MV OSOGOVO (2021), while denying a supplier's arrest application for necessaries supplied to sister-ship vessels of the subject vessel, the Haifa Maritime Court mentioned that it does not deny the possibility of extending, under "judicial legislation" the possibility of sister-ship arrest, leaving the path open for applying for such an arrest by using, for example, the legal principles of lifting the corporate veil.
The requirement for owners’ liability
The maritime lien “springs into existence the moment the circumstances give birth to it” and like an unseen demon “attaches itself to the res and subtracts from the Owner’s property in the vessel”. Owners and other creditors may assume it lies somewhere holding its quiet possession of the vessel, but they will not see it until it appears in a claim in rem carried into effect in a legal process.
The question of whether the maritime lien requires an owner's personal liability seems to be viewed differently by European civil admiralty law (rooted in Rhodian Sea Law, Roles (Rules) of Oleron, Consolato del Mare Laws of Visby and the Ordonnance de La Marine of 1861) and by English common law, which imported the concept of maritime lien through the Doctors’ Commons.
It seems that, while under English law “a proper maritime lien must have its root in personal liability of the owner” (The Castlegate (1893)), no such requirement appears in the European maritime lien regime, at least according to the Brussels Convention of 1926, which was adopted by the Israeli legislature when enacting the Israeli Shipping Act of 1960.
In MV Ellen Hudig (2004), the Haifa Maritime Court denied a maritime lien for “indemnities for loss of or damage to the cargo or baggage”. This was because alleged damages to the cargo (which were additional expenses related to its discharge from the arrested vessel in Haifa and additional freight paid to another vessel to complete its intended voyage to Singapore) resulted from the vessel’s arrest due to a claim filed by the crew for unpaid wages and the owners’ subsequent appearance before a Belgian court under bankruptcy proceedings within the following ten days, and therefore (according to the court's view) did not fall under the owners’ personal liability.
Ever since, the Ellen Hudig matter has been cited by the Haifa Maritime Court as an authority establishing the need to show owners’ liability in order to recognise a maritime lien.
Accordingly, in the matter of MV Nissos Rodos (2016) the Maritime Court cited MV Ellen Hudig, in so far as the local ship agent was not entitled to a maritime lien for port dues paid by the agent for the vessel. It was reasoned that the agent had no agreement with the owner, there was no personal liability on behalf of the owner to pay the agent and, due to the fact that a maritime lien requires personal liability on behalf of the owner, the agent had no maritime lien. The appeal filed by the agent before the Supreme Court was withdrawn after the court advised that it did not intend to intervene in the Haifa Maritime Court’s judgment.
In the matter of MV Captain Hurry (2016), the Haifa Maritime Court dismissed a bunker supplier’s claim due to res judicata. The owners had filed a declaratory claim before a German court, seeking a declaration that they were not liable to pay the supplier and that the supplier did not have a maritime lien, which was successful.
The supplier’s arguments before the Haifa Maritime Court were that the proceedings concerned the enforcement of a maritime lien and, as such, did not require an owner’s personal liability. The Haifa Maritime Court examined the German judgment and, after being convinced that the court held that no liability was imposed on the owners towards the bunker supplier and that all contractual relations took place between the bunker supplier and the charterer only, dismissed the claim.
In MV Captain Hurry, however, the Haifa Maritime Court also mentioned that the maritime liens differed from each other, whereby some were intended to secure voluntarily liabilities and others to secure liabilities under law. For example, the court added, it was obvious that a lien for salvage existed even if the owner was not liable for the circumstances that led the vessel to distress. How will these findings affect further court cases dealing with maritime liens and owners’ liabilities? Answers will be provided in future judgments.
In the matter of M/V Badr (2020) the Haifa Maritime Court held, under a decision accepting an application for an immediate relief for an attachment at the Israeli registration, that a vessel registered under a foreign registration cannot be registered under the Israeli registration unless properly deleted from its former registration, even if a new ownership arises from a writ of ownership issued by an Authority. The matter itself is scheduled for trial where the owners of the vessel's claim for the deletion of the registration of the vessel, which was registered in Israel, at the request of a buyer of the vessel who argues he had bought it from its alleged new owners according to a "writ of ownership" issued in Bulgaria and which is contested before the Bulgarian courts.
In the matter of Vapi Kredi Banaksi vs M/V Hurriye Ana (2020), the Haifa Maritime Court denied a bank's claim to enforce a mortgage which was written in the vessel's registration. The Court held that the validity of the loan agreement was not proven and that no information was provided in relation to the payment schedule agreed with the debtor (which was not the owners) and what was the exact amount of debt that remained. The fact that a mortgage is written in the vessel's registration is not enough to have it enforced.
Cost of COVID-19 Hospitalisation
In the matter of MV Moraz (2021), the Haifa Maritime Court accepted that the costs of medical treatment, provided by a local hospital to a crew member who became ill with COVID-19, constitute a maritime lien on the vessel, under the maritime lien for "payments claimed by the captain, crew and others who served on board, arising out of their employment in the vessel..."
Grounding and Marine Casualties Investigations
Under Folio No 67484-03-19 HDI Global Antwerp and Others vs State of Israeli/Ministry of Transportation and the Owners of MV Diana, the Haifa District Court held that the Administration of Shipping and Ports (within the Ministry of Transportation) will disclose to foreign cargo interests, the RCC communications which took place between the distressed MV Diana and the RCC centre at Haifa, prior to the grounding on 19 January 2018, 250 metres from the Haifa Bay shore. These were collected by the Administration while investigating the incident, and the Court held that the cargo interest of the cargo which was on board and damages due to the vessel's grounding are entitled to receive the communications following the Israeli Freedom of Information Act - 1998 and the Arbitration Act - 1968, and in view of the arbitration provided by the London Court of International Arbitration being conducted between the cargo interests and owners. The matter is open for further disclosure (of additional documents obtained by the Administration) and, if so, it will be ordered by arbitral awards in the London arbitration.
The Authority to Act as a Prize Court
In the matter of M/V FREEDOM and M/V KAARSTIEN (2021) the Haifa Maritime Court continued to establish its authority to act as a Prize Court according to the Naval Prize Act 1864, and to order, at the request of the State of Israel, on the confiscation and judicial auction sale of vessels which are captured by the Israeli navy while attempting to breach the naval blockade imposed upon the Gaza shore, and to order that the amount received from the sale will be transferred to the State of Israel (Ministry of Treasury).
These judgments follow the Haifa Maritime Court's decisions in the matters of the M/V Estelle (2014), the M/V Marianne (2016), and the M/V Zaytouna Olivia (2019), and clearly state that breaking the blockade (even) for purpose of protest against the blockade itself will result in confiscation of the attempting vessels, while humanitarian aid (if carried on the confiscated vessels), will be transferred to the Gaza strip through Ashdod port and inland carriage.
The Capture of a Vessel under the "Marine Cold War"
In July 2019, under what appeared to be a British-American co-operation, the Iranian tanker named Grace 1 was captured off the shore of Gibraltar due the tanker's intended violation of Council Regulation (EU) No 36/2012 imposing sanctions against Syria, as a result of the continuing violation of civil rights by the Syrian government. The Grace 1 was carrying oil intended for the Baniyas Refinery Company, which was listed in the 2014 extended sanctions as part of the Syrian Ministry of Petroleum, and its capture was upheld by the Court of Gibraltar.
Soon after, the British tanker Stena Impero was captured by the Iranian authorities while navigating to Saudi Arabia, due to, as explained by Iranian authorities " crossing a route other than the shipping lane in the strait of Hormuz, switching off its transponders and not paying attention to Iran's warning when it was seized by the Revolutionary Guards’ forces".
As a result, soon after, the Gibraltar Court was satisfied with an Iranian commitment that the Grace 1 would not deliver its fuel to the Syrian refinery and released the tanker (which subsequently changed its name, switched off its tracking devices near Iskenderun, and probably delivered its USD140-million worth of cargo to the Syrian refinery). A few weeks later, the Stena was released from its Iranian detention.
Ever since the capture and release of the Stena, "unexplained" explosions and other damages and detentions have taken place in relation to Iranian, Marshall Islands, and Panamanian tankers and vessels navigating the Saudi Arabian and Persian Gulfs.
On 29 July 2021, while navigating its way to the UAE, the Japanese-owned oil tanker Mercer Street, which is operated by the London firm, Zodiac Maritime, was attacked by a suicide drone, off the shore of Oman. As a result of the strike, two personnel aboard, Romanian and British citizens, were killed.
Soon after the Iranian News agency "Nournews" released a publication in which it was stated that, for about two years, to date, "a total of 12 Iranian vessels have been targeted by terrorist acts in the Red Sea and Mediterranean waters", including the Iranian ship Saviz which was by hit by marine mines on 6 April 2021, offshore of which were attached by "Israeli commandos" (the MV Savit which was by hit by marine mines on 6 April 2021, in the Red Sea off the shore of Eritrea). Under the aforementioned publication, the MV Mercer Street was described as an "Israeli ship" and the publication included a warning that "one should not expect that if the interests of others are harmed, the other party will remain handcuffed" and that "security is either for every one or not for anyone".
Currently, the marine cold war in the Persian Gulf has been "modified" to attacks and captures of vessels and installations relating to war in Yemen which are carried by the Iranian proxy, the Houthi, and does not seem to be at an end.
The Abraham Accords
The Treaty of Peace, Diplomatic Relations and Full Normalisation Between the United Arab Emirates and the State of Israel, followed by normalisation agreements with Bahrain, strengthen the strategic location of Israel and the Israeli ports and an increase in more volume of trade and transport between Israel and the Gulf states is expected. The Haifa Maritime Court has exercised its rights in favour of either a bunker supplier located in Dubai (arresting the MV Huseyn Javid for unpaid bunkers) or a Libyan owner (in attaching the registration of the M/V BADR) and, of course, after the conclusion of the Abraham accords, the Persian Gulf or other Middle East claimants and interests will find the Haifa Maritime Court and other Israeli courts to be a favourable jurisdiction.