Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.


February 22, 1974

T. S. SALZACHTAL, et al., Defendants

Bartels, D.J.

The opinion of the court was delivered by: BARTELS

BARTELS, District Judge.

This is a contest among a mortgagee, charterer and an agent of the owner of a foreign vessel to determine priority of their respective liens. The action comes before the Court on objections to a Master's report imposing liens for alleged "necessaries" and seamen's wages prior to a preferred mortgage lien upon the foreign vessel "T. S. Salzachtal" which was arrested in the Port of New York and subsequently sold on March 14, 1973, for $375,000, pursuant to an order of this Court dated March 2, 1973. Up to March, 1973, the Salzachtal was owned by Nelson Seeschiffahrts-Agenture und Reederei Gesellschaft m.b.H. & Co. of Vienna, Austria ("Nelson"), who purchased the vessel from intervenor Hapag Lloyd AG ("Hapag"), who, in turn, took back a purchase money mortgage for $162,282.59, executed in Austria on December 21, 1971.

 The issues are somewhat beclouded by the fact that a bizarre arrangement existed between Nelson and plaintiff P. T. Perusahaan Pelayaran Samudera Trikora Lloyd, Hamburg/Djakarta ("Trikora"), pursuant to which both executed on May 30, 1972, a charter party agreement entitled, "Uniform Time-Charter", and on May 31, 1972, also executed a "Confidential Agreement", dated May 9, 1972, which apparently cancelled and modified a number of provisions of the earlier charter party. Consequently, in construing the obligations and the relationship of the parties, certain difficulties of reconciliation and interpretation are presented. To these are added the complications caused by the financial instability of Nelson, resulting in the two arrests of the Salzachtal and the final abandonment of Nelson's interest in the vessel.

 Nelson and Trikora entered into a Time-Charter on May 30, 1972 for an unlimited time subject to cancellation in writing by either party, whereunder it was mutually agreed that the owners would let and Trikora as charterer would hire the Salzachtal, to be delivered at Hamburg, Germany. It was agreed, among other things, that the owners would provide and pay for all provisions, wages, insurance and all deck and engine-room stores, and also would efficiently maintain the vessel's machinery and hull, and that Trikora as charterer would pay as hire $1100 per day and would also pay for all port charges, pilotages, loading, unloading, stowing, delivery of cargoes and basically all other charges and expenses; that the Master would prosecute all voyages under the orders and directions of Trikora, who would advance to him "if required, necessary funds for ordinary disbursements for the Vessel's account" and further that the owners would have a lien upon all cargoes and Trikora would "have a lien on the Vessel for all moneys paid in advance and not earned."

 This charter was substantially changed and emasculated on the next day, May 31, 1972, when both parties entered into a so-called "Confidential Agreement" covering the vessel. In the Confidential Agreement it was provided that the vessel would "perform one Indonesian Roundvoyage" and that Nelson would pay all stevedoring and port charges and all financial obligations arising from the round voyage of Salzachtal, in return for which Trikora would "abstain from claiming the total gross freights collected on all cargo carried during said Charter" and Nelson would have free disposal of all "gross freights" collected from the shipment of cargo.

 Paragraph 8 of the Confidential Agreement stipulated that the charter party "is required for a formality only and not forming part of this Confidential Agreement unless in contrary with the general indemnity Clause as specified in point 12 a /b › Therefore Owners to indemnify Messrs. Trikora Lloyd for the complete wordings of the Charter Party. Any Claim resulting out of C/P is null and void." Paragraph 12 of the same agreement provided, in part, that Nelson would indemnify Trikora against:

"a) all operational risks and expenses arising out of the C/P;
b) all claims and unspecified risks;
c) Charterers' liability, such as:
1) entering vessel into P&I Club
2) Charterers' liability insurance;
3) Overage insurance payment;
4) all financial and operational consequences"

 and that

"Trikora Lloyd under guidance of NELSON and in full coordination of both parties, will operate the vessel at the risk and expenses of Messrs. NELSON Seeschiffahrts-Agentur und Reederei GmbH. & Co. KG., Wien, the latter being considered to be the actual operators. Messrs. Inca- (as partner) Kamtoro Natadiningrat- will act as supervisory organization under separate agreement."

 It further appointed Trikora as operator and provided that "wherever the word Charterers appears it is to be understood the Operators." To complete the arrangement provided by the Confidential Agreement Trikora was to receive 5% of the gross freights earned and in addition after costs were calculated in accordance with the specified formula, Trikora was to receive "extra compensation on a 50/50 basis." Finally, if both parties found the first roundvoyage satisfactory, further roundvoyages were to be considered and discussed "on vessel passing capetown homeward." This agreement was supplemented by testimony before the Master and by a subsequent agreement between the parties, dated December 7, 1972, from which it became clear that the Master was Nelson's agent rather than Trikora's agent.

 Sequence of Events

 After the vessel had proceeded from Hamburg to Indonesia and then to several United States ports on the Gulf coast, it arrived in New York harbor in early January, 1973, when its troubles began. On January 25, 1973, wages being unpaid, twenty-two members of the crew arrested the vessel in order to recover $14,000 in wage claims. On the same day the relationship between Trikora and Nelson was severed when Trikora redelivered the vessel to the Master, who accepted the return on behalf of the owner. Within the next few days the crew's wage claims were satisfied and, accordingly, the vessel was released from arrest. This, however, was a short reprieve. Six days later the vessel was libeled in rem and rearrested on January 31, 1973 by Trikora, who sought to obtain through in rem relief payment of maritime liens for alleged prior advances for wages and other necessaries in the amount of $137,000. At the same time it sought in personam relief against Nelson and Heinz Bayer, manager and chief officer of Nelson, in an amount totalling $261,751.

 On February 5, 1973, Universal Maritime Service Corp. ("Universal") was permitted to intervene in the action to recover sums owed it for stevedoring, terminal services and wharfage it provided the Salzachtal in New York. At a hearing before this Court on February 22, 1973, the Court, in order to preserve the business of the ship and in order to simplify matters, requested Trikora to pay Universal, which it did though payment to Universal by April 13, 1973 of the total sum of $114,453.50 for said services.

 On March 2, 1973, Hapag, the mortgagee, and K & K Marine Corp. ("K & K"), agents for Nelson, also intervened and asserted their claims against the Salzachtal. The owners being unable to post security to cover the claims, the Court on the same day with the consent of all the parties including the owners, ordered the United States Marshal for the Eastern District of New York to sell the vessel on March 14, 1973. Accordingly, the Salzachtal was sold at public auction for $375,000.

 On May 30, 1973 all claims to the proceeds of the sale were referred to a Special Master, Magistrate Vincent A. Catoggio (Master), to take proof and to report his findings of fact and conclusions of law as provided in F.R. Civ. P. Rule 53, 28 U.S.C. Pursuant to the Master's first report, to which no objections were made, orders of this Court were entered directing payment out of the proceeds of the sale of the Salzachtal to fourteen crew members, Universal, All Ships Repair Co., and the United States Marshal, in the total amount of $83,318.80. In his second report, dated August 27, 1973, the Master recommended allowances from, and preferred liens on the remaining proceeds of the sale of the Salzachtal in priority to Hapag, as follows: K & K Marine Corp. $11,653.55 World Travel Riese, etc. 13,852.41 Southern District Court Reporters 1,173.50 Trikora Lloyd 107,349.75 Hapag Lloyd 162,282.59

 The Master found that Hapag had a good and valid mortgage on the vessel, executed and recorded in accordance with the laws of Austria, in the amount of $162,282.59, and that the amount due on the mortgage exceeded the amount remaining for distribution among the claimants. *fn1" This finding the Court affirms as it does with respect to the claims of World Travel Riese and Southern District Court ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.