## Facts

- Olafur Thorsteinsson and Bergthor Havardsson, Icelandic seamen, served aboard the *M/V Drangur*, an Icelandic-flag cargo vessel owned by an Icelandic corporation.
- Icelandic creditors initiated proceedings in Iceland against the vessel’s then-owner; the Icelandic court had jurisdiction under Icelandic law but did not arrest the vessel in rem.
- The vessel was sold at a judicial auction in Iceland, and Utvegsbanki Islands HF (the Bank) purchased it, claiming title free and clear of liens under Icelandic law.
- After the *Drangur* arrived in Florida, the seamen filed an in rem admiralty action in the Southern District of Florida asserting maritime liens for unpaid wages and related seamen’s claims.
- The district court arrested the vessel; the Bank appeared as owner and posted a cash bond as substitute security for the res.
- The Bank moved for summary judgment, arguing comity required the U.S. court to treat the Icelandic sale as extinguishing the seamen’s liens.

## Issues

1. Whether comity required recognition of the Icelandic judicial sale as extinguishing maritime wage liens where the foreign proceeding did not include in rem arrest and did not provide meaningful notice and an opportunity to assert the liens.
2. Whether the seamen’s wage-related maritime liens, recognized and highly prioritized under U.S. maritime law, survived the foreign sale and could be enforced in rem against the vessel or substitute res in U.S. court.

## Decision

- The Eleventh Circuit reversed the summary judgment for the Bank and remanded.
- The court held the seamen asserted cognizable maritime wage liens enforceable in U.S. courts and accorded the highest priority (except for repatriation-related items).
- The court held comity did not compel lien-cleansing effect for the Icelandic sale because the foreign proceedings lacked the defining features of an in rem admiralty action and did not afford the seamen adequate notice and a fair opportunity to present their claims.

## Legal Principles

- Seamen’s wage claims give rise to maritime liens of the highest rank in U.S. admiralty lien priorities (with limited exceptions such as repatriation-related items).
- U.S. courts may recognize a foreign judicial sale as transferring title free of maritime liens only if the foreign proceeding is a true in rem admiralty proceeding, the vessel is arrested or brought under the foreign court’s control, and affected lienholders receive reasonable notice and an opportunity to be heard.
- Comity is discretionary and will be denied where recognizing the foreign proceeding would be inconsistent with basic fairness or would unjustly defeat strongly protected maritime lien rights.

## Conclusion

The Eleventh Circuit held that the Icelandic judicial sale did not extinguish the seamen’s U.S.-enforceable wage liens because the foreign process lacked an in rem arrest and did not provide adequate notice and opportunity to assert the liens; the case was reversed and remanded for further proceedings against the vessel or substitute security.


Thorsteinsson v. M/V Drangur, 891 F.2d 1547 (11th Cir. 1990)