The plaintiff, Laminado Velasco SA, brought a claim against the defendant, Banco Exterior de España SA (formerly Banco de Crédito Industrial SA) alleging that the plaintiff contracted with a carrier, Compañía del Vapor Carmen SA, for the carriage of cold-rolled steel coils. The unloading of the coils in Bilbao was interrupted as a result of industrial action by the crew, and the cargo suffered significant damage. The plaintiff filed for voluntary jurisdiction and preventive arrest of the vessel. The defendant requested the instant dismissal of the arrest, alleging a property right over the vessel, which had been adjudicated in judicial public auction, as a consequence of the enforcement procedures initiated by the defendant. The court of first instance dismissed the plaintiff's claim.

The plaintiff appealed to the Provincial Court of Madrid. The appeal was dismissed. The plaintiff appealed to the Supreme Court, arguing that the Provincial Court had failed correctly to apply arts 2.4, 8, 9 and 11 of the Brussels Convention on Maritime Liens and Mortgages 1926 (the MLM Convention 1926).

Held: Appeal denied.

During the course of the judicial sale of the vessel, the defendant undertook to pay the plaintiff any damages arising from any stay of execution in the process due to arrest by third parties. The plaintiff did not understand that the endorsement had that limited purpose and applied to the court of Bilbao to execute what it called a guarantee. The court held that the guarantee provided by the defendant was not a guarantee to pay the debts of the carrier, but exclusively a guarantee of the damages which have been referred to, and that was conceded by the plaintiff. After lifting the arrest and adjudicating the ship, the defendant sold it to the Minosal Navigation Co of Panama on 30 May 1985 and the ship was exported on 6 September 1985.

Against this background, the plaintiff alleges that it has a privileged claim (maritime lien) against the defendant. The plaintiff argues that its privileged claim is based on art 31 of the Naval Mortgage Law of 21 August 1893, which refers to art 580.10 of the Commercial Code, which is in similar terms to the MLM Convention 1926, ratified by Spain on 2 June 1930.

There is no doubt that at present the ship is not owned by the defendant, and that it did not incur any credit derived from the transport in which the damage was caused to the cargo, whether or not the claim is privileged. There are only two ways to make the claim effective: to sue the debtor, or to sue the owner of the ship that is said to be subject to the payment of those damages. The defendant cannot be liable since it transferred the ship without having been subrogated passively and personally to the debts.

This appeal cannot be resolved without hearing who holds the status of shipowner, whether or not the claim is privileged, whether or not the MLM Convention 1926 is applicable to the case and whether or not the maritime lien has expired. As a consequence, it is not necessary to analyse the arguments about the MLM Convention 1926, or the validity of the claim and its lien status, or the undue application of art 9 of the same Convention on the extinction of liens.

We are faced with a carriage of goods from which the carrier's responsibilities were derived, concretised in damages to the cargo, to which, according to the law, the shipowner responds, in addition to the charterer who is subject to the payment of the credit. This claim can be privileged and follows the vessel regardless of its owner until the lien expires. The maritime lien does not expire, as well as the personal obligation to pay the debt, as long as it does not prescribe and the prescription is alleged, but it is neither constitutional nor procedurally possible to impose liability for damages on a party who no longer owns the vessel, nor was the contracting party responsible for the damage caused. The appeal is therefore rejected in its entirety with express imposition of costs on the appellant, and with loss of the appeal deposit.