## Facts

- BargeCarib, Inc. time-chartered a towboat (then M/V SOVEREIGN) from Offshore Supply Ships, Inc. for one year beginning August 15, 1996, and later exercised an extension option.
- Offshore sold the vessel to Global Towing, L.L.C. on May 20, 1997.
- To finance the purchase, Global granted First National Bank of Commerce (later Bank One, Louisiana N.A.) a $2,000,000 preferred ship mortgage, which was recorded May 21, 1997; the vessel was later renamed M/V MR. DEAN.
- Offshore and Global reassured BargeCarib the vessel would perform a scheduled voyage, but Global did not deliver the vessel or an acceptable substitute under the charter.
- In separate litigation, the charter was adjudicated breached; the breach date was set as July 10, 1997.
- Bank One later sued the vessel in rem and Global and Michael Blake (Global’s owner and guarantor) in personam to foreclose the preferred ship mortgage.
- Anticipating insufficient sale proceeds to satisfy both claims, BargeCarib intervened, asserting a maritime lien for breach of charter and claiming priority over the preferred ship mortgage.

## Issues

1. Whether a maritime lien for breach of a time charter attaches when the vessel is delivered to the charterer or only when the breach occurs.
2. Whether, under that attachment rule, BargeCarib’s charter-breach maritime lien had priority over Bank One’s preferred ship mortgage recorded after charter delivery but before breach.

## Decision

- The Fifth Circuit vacated the district court’s summary judgment for Bank One and remanded.
- The court held that a maritime lien for breach of charter attaches when the owner places the vessel at the charterer’s disposal (upon delivery), not at the later breach date.
- Because delivery occurred in August 1996 and the preferred ship mortgage was recorded in May 1997, BargeCarib’s charter-breach lien was senior to Bank One’s mortgage for priority purposes.

## Legal Principles

- A maritime lien for breach of charter exists as an inchoate, contingent property right upon delivery of the vessel to the charterer; the later breach ripens the claim but does not shift the lien’s attachment date for priority analysis.
- Maritime lien priority generally turns on temporal attachment; a preferred ship mortgage is subordinate to maritime liens that attached before the mortgage was recorded.
- For charter-breach liens, “attachment” occurs at the moment the vessel is placed at the charterer’s disposal, even though enforceability depends on a subsequent breach.

## Conclusion

The Fifth Circuit ruled that a charterer’s maritime lien for breach of a time charter attaches upon delivery of the vessel and therefore can outrank a preferred ship mortgage recorded after delivery, requiring reversal of a priority determination that relied on the later breach date.


Bank One, La., N.A. v. M/V Mr. Dean, 293 F.3d 830 (5th Cir. 2002)