Länsstyrelsen Stockholm (the Stockholm County Administrative Board/SCAB) applied to the District Court for an order obligating the shipowner Rederi K AB (K) to pay compensation in connection with the passenger vessel Birger Jarl of SEK 2,609,563, including interest, regarding a recourse claim for wage guarantees for unpaid wages paid by SCAB to Fartygsrestauranger Stadsgarden AB (FS), which provided catering services on the Birger Jarl. Moreover, SCAB demanded that the District Court order the arrest of the Birger Jarl for the claim.

As to the basis for its claim, SCAB stated that the wage claim involved work on the Birger Jarl, and that its recourse claim therefore combined with a maritime lien over the vessel. However, K contended that SCAB lost its right to claim under any maritime lien because the claim had arisen when the employment agreements were entered into, ie before K was declared insolvent, or at least at the latest when the insolvency trustee decided on payment in accordance with s 16 of the Wage Guarantee Act 1992 (the Act).

The District Court held that SCAB had shown probable cause that it enjoyed a recourse claim regarding wage guarantees for unpaid wages in respect of FS amounting to the sum claimed. Further, there were probable reasons that FS took care of the ship's operations in the manner referred to in Ch 3, s 36(1) of the Maritime Code 1994 (the Code) (which gives domestic effect to art 4.1.a of the MLM Convention 1993) and therefore SCAB's claim enjoyed a maritime lien over the Birger Jarl. When a claim is to be regarded as arising depends partly on the circumstances of the particular case, and partly on what constitutes a proportionate application of the provision in question. According to Ch 3, s 40 of the Code (which gives domestic effect to art 9 of the MLM Convention 1993) a maritime lien over a ship is extinguished when one year has elapsed since the claim arose, unless, prior to the expiry of such period, the vessel has been arrested or seized, such arrest or seizure leading to a forced sale. In terms of extinction of the maritime lien, it would entail unreasonable consequences if a claim, as K has argued, could in principle be statute-barred before it has even arisen. According to the District Court, therefore, the time of extinction of the maritime lien should be determined by when the last necessary element of the claim had occurred. The maritime lien had thus not been extinguished.

K appealed to the Court of Appeal.

Held: Appeal upheld.

According to Ch 3, s 40 of the Code, a maritime lien over a ship is extinguished after a period of one year unless, prior to the expiry of such period, the vessel has been arrested or seized, such arrest or seizure leading to a forced sale. The limitation period may not be extended or interrupted, but shall not apply while there are legal obstacles to the vessel being arrested or seized for the creditor's claim.

The issue for the Court of Appeal is primarily from what time the limitation period in the aforementioned provision is to be calculated when the State has paid out guarantee amounts in accordance with the Act. There is no definitive principle for when such a claim is to be considered to have arisen. The question becomes in many cases dependent on the spirit of the current rule (see NJA 2009 s 291).

The short limitation period for a maritime lien is justified by the credit conditions in the maritime industry. In order for the statute of limitations to be given a proportionate application to employees whose wage claims are combined with a seafarer's allowance, the time should run from when they have been able to request payment of their claim from the employer. The Court of Appeal therefore holds that the claim for unpaid wages which enjoy a maritime lien according to Ch 3, s 36(1) of the Code, when applying the limitation period in Ch 3, s 40 of the same Code, shall be deemed to have arisen when this was due for payment. The limitation period for the State's current claim should be calculated from the time when the employees could have requested payment from the employer for their claim for unpaid wages.

It appears in this case that the guaranteed amounts paid partly refer to wage claims that must have fallen due for payment more than one year before the District Court's decision. SCAB has thus not shown probable cause for a claim of SEK 2,609,563 which is combined with a maritime lien over the Birger Jarl. The District Court's decision on arrest must therefore be overturned.

The Court of Appeal annuls the District Court's arrest decision.