These proceedings arose from a dispute over claims and their priority against the sale proceeds of the container vessel M/S Katrina. The crew of the ship had been dismissed pursuant to s 43 of the Seafarers' Act after the shipowner had gone bankrupt.

The Pori Local Register Office drew up a list of creditors at a meeting on 24 May 1982 following a creditors' meeting for the compulsory auction of the ship. From the list of creditors, the Magistrate ordered that the following amounts be deducted from the claims included in the list: FIM 123,089.45 for the Finnish Seafarers' Union, FIM 41,837 for the Finnish Mechanical Engineers' Association, FIM 12,642 for the Finnish Radio Electricians' Association, and FIM 54,473.75 for the Finnish Shipmasters' Association, ie a total of FIM 232,042.40, relating to extra one-month salaries and fringe benefits based on s 57 of the Seafarers' Act.

The Ministry of Labour and the unions appealed against this decision to the Turku Court of Appeal. The Court of Appeal considered that there was no need to amend the list of creditors drawn up by the magistrate. The appellants further appealed to the Supreme Court.

Held: The pension contributions supervised by the Seamen's Pension Fund do not constitute a salary or other compensation to be paid to the crew, and thus do not constitute a maritime lien.

In a letter dated 19 May 1982 from the Finnish Seafarers' Union to the creditors' meeting held on 24 May 1982 prior to the compulsory auction, which was accompanied by a breakdown of the wage claims transferred to it separately for each employee, monitored the net wages instead of the gross amounts. As the Finnish Seafarers' Union did not correct the inaccuracy of its claim, it can no longer obtain an amendment to the list of creditors by means of appeals in this respect.

In so far as the other unions rely on s 57 of the Seafarers' Act, following the shipowner's insolvency on 23 February 1982, the entire crew of the vessel was terminated on that day pursuant to s 43 of the Seafarers' Act, ie before the compulsory auction of the vessel on 26 May 1982. Therefore, when the employment of the ship's employees has ended due to the bankruptcy of the employer and not due to the transfer of the ship, they are not entitled to extra compensation under s 57 of the Seafarers' Act.

The receivable supervised by the Seafarers' Pension Fund in the compulsory auction, entered in item 2 of List III of the Creditors' List, is based on the shipowner's failure to pay into the pension fund the equal insurance premiums paid from the employer's own wages.

The wages of the crew in their entirety, including the deductions from them for the payment of insurance premiums under the Seafarers' Pensions Act, constitute a wage claim against the shipowner secured by a maritime lien over the ship pursuant to s 212(1)(1) of the Maritime Act. After the shipowner had paid the part of the salary due to its employees after the wage deductions, the employees no longer had such a claim against their employer.

For the reasons set out above, and taking into account that the employees were not responsible for the payment of pension contributions deducted from their salaries to the Seamen's Pension Fund, and that the shipowner's failure to make such payments to the Pension Fund do not affect the crew's benefits under the Seamen's Pension Act, the pension contributions supervised by the Seamen's Pension Fund do not in any way constitute a salary or other compensation to be paid to the crew on the basis of their work within the meaning of s 212(1)(1) of the Maritime Act, and these insurance premiums do not constitute a maritime lien.

It is therefore appropriate to amend the Court of Appeal's decision and the list of creditors drawn up by the Local Register Office so that the FIM 370,795 receivable of the Seamen's Pension Fund is removed from the list of creditors in its entirety. In other respects, the Court of Appeal's decision is upheld.