## Facts

- Smit Americas, Inc. (Smit) performed salvage services for the motor tanker M/T Hobby near Puerto Rico while the vessel was owned by Metro Freighting Corp. (Metro).
- Smit filed suit in the District of Puerto Rico asserting (1) an in rem claim against the M/T Hobby to enforce a salvage lien and (2) an in personam claim against Metro.
- When the Puerto Rico action was filed, the M/T Hobby was not within the court’s territorial reach for an in rem proceeding, and Smit did not serve process on, or arrest, the vessel in the in rem case.
- Metro appeared and answered in the Puerto Rico in personam case, and Smit and Metro continued litigating that personal claim.
- Roughly three years after the salvage, the M/T Hobby was sold to Alchemy Shipping Corp. of Liberia (Alchemy).
- More than five years passed after the salvage, and Smit still had not perfected service of process on the M/T Hobby in the Puerto Rico in rem action, even though the vessel made more than 100 port calls within the United States, including multiple calls in Puerto Rico.
- Smit also did not record its salvage lien in the vessel’s home port.
- Smit later filed a new in rem action against the M/T Hobby to recover for the same salvage services.
- Alchemy opposed the new in rem claim, asserting it was barred by the two-year limitations period applicable to salvage claims; Smit argued the earlier in personam action against Metro stopped the clock.

## Issues

1. Whether the in rem salvage claim against the M/T Hobby was barred by the two-year limitations period applicable to salvage actions.
2. Whether Smit’s timely in personam salvage suit against the vessel’s former owner (Metro) tolled the limitations period for a later in rem action against the vessel itself.
3. Whether Smit’s earlier, unperfected in rem filing in Puerto Rico preserved the salvage lien so as to permit a new in rem action years later.

## Decision

- The court held that a two-year limitations period applied to the salvage claim and that Smit’s later in rem action was filed outside that period.
- The court rejected Smit’s argument that the Puerto Rico in personam litigation against Metro tolled the time to sue the vessel in rem.
- The court concluded that the earlier Puerto Rico in rem pleading—never followed by service or arrest of the vessel—did not preserve an otherwise stale in rem salvage claim.
- The in rem action against the M/T Hobby was dismissed as time-barred.

## Legal Principles

- Salvage claims are subject to a two-year limitations period recognized in U.S. admiralty practice (commonly traced to Article 10 of the 1910 Salvage Convention).
- An in rem salvage lien claim against a vessel and an in personam claim against an owner are distinct; pursuing the owner personally does not, by itself, stop the limitations period for an in rem action against the vessel.
- For an in rem salvage claim, simply filing a complaint without arrest or service on the vessel does not function as a timely enforcement of the maritime lien when the vessel is outside the court’s reach.
- Courts are reluctant to extend salvage time limits where the salvor had repeated opportunities to proceed against the vessel (such as numerous port calls within the forum’s reach) but did not act within the prescribed period.
- A later vessel purchaser may assert a limitations defense to defeat an out-of-time in rem salvage claim, supporting finality in vessel transactions.

## Conclusion

Smit’s attempt to enforce a salvage lien against the M/T Hobby in a later in rem action failed because the claim was brought after the two-year salvage limitations period, and neither the earlier in personam suit against the former owner nor an unserved, unarrested in rem filing in Puerto Rico extended or preserved the right to proceed in rem against the vessel after years of inaction.


Smit Americas, Inc. v. M/T Hobby, 2001 AMC 1456 (2001)