The passenger motor ship Östanå I was operated by AB Roslagsmarin. On 19 November 1985, the ship was acquired by Ångfartygs AB Strömma Kanal (Strömma). Roslagsmarin was declared insolvent on 17 March 1986. According to the Act on State Wages Guarantees in the Event of Insolvency (the Act), a total of SEK 423,095 was paid on 18 June 1986 in salaries and holiday pay to a number of people who had been employed by the company.
On 27 June 1986, the State brought an action in the Stockholm District Court against Strömma, claiming that Strömma should be obligated to pay SEK 423,095 to the State, together with interest and compensation for legal costs. Furthermore, the State requested a declaration that the amounts were covered by a maritime lien according to s 244.1 of the Maritime Code 1891 (the Code) over the ship.
The State demanded that a lien be granted immediately over the ship. It emphasised that a maritime lien is statute-barred one year after receipt of the claim, unless attachment or foreclosure has been secured in the manner specified in s 248 of the Code, and that there was an imminent risk of prescription. It further alleged that there was an imminent risk that Strömma would move the ship if it became aware that an attachment measure was planned, thus making it impossible or difficult for the State to satisfy its rights.
On 27 June 1986, the District Court decided in accordance with Ch 15 ss 1 and 5.3 of the Rättegångsbalk 1942 (the Code of Judicial Procedure / RB) to order a lien to apply until further notice over the ship Östanå I as security for the State's claim, and that the vessel be arrested.
Strömma demanded that the District Court's interim arrest decision be revoked immediately. According to the RB, attachment can only be granted if it can reasonably be feared that the other party, by deviating, disposing of property, or proceeding in another way, will evade paying the debt. With regard to foreign vessels that constitute the debtor's only asset in Sweden, the attachment requisites have in practice been considered fulfilled, if it can be feared that the vessel will soon leave the country. As far as Swedish vessels in Swedish internal traffic that are not expected to leave the country are concerned, however, the opposite applies. The State had not reasonably shown support for its claim that Strömma would make it impossible or difficult for the State to exercise its possible maritime lien. Rather, the real reason seemed to be that certain parts of the alleged requirements risked becoming statute-barred. However, neither the RB's attachment rules nor the case law provides any possibility for attachment measures solely due to the risk of limitation of actions. According to current Swedish law, the applicant has to show that the attachment debtor is trying to dispose of property through special measures. That maritime lien claims may become statute-barred because an attachment cannot be obtained is, of course, in principle unsatisfactory.
On 25 July 1986, the District Court removed its approval for the State's arrest claim. The State lodged two appeals with the Svea Court of Appeal, requesting that the Court of Appeal order a maritime lien over the ship, and also arrest it. The Court of Appeal refused to approve the State's appeals. The State appealed to the Supreme Court.
Held: The issue is left without approval.
The State has shown probable cause that according to s 10 of the Act it has a claim against AB Roslagsmarin in insolvency, and that this claim is to some extent associated with a maritime lien over the Östanå I, which is now owned by Strömma. According to s 248 of the Code, a maritime lien over a vessel is extinguished when one year has elapsed since the claim arose, unless the attachment or foreclosure, which is subsequently accompanied by executive sale of the vessel, has been secured before the end of this period.
As a reason for arresting the ship, the State has argued that its maritime lien over the Östanå I is becoming statute-barred day by day, and that Strömma, who has objected to the statute of limitations, does not acknowledge its payment obligation, and therefore may seek to evade paying the debt. The fact that the ship can be easily moved to a foreign place means that it is in danger of being disposed of. Chapter 15 s 1 RB requires for attachment that it can reasonably be feared that the debtor, by deviating, disposing of property or proceeding in another way, will evade paying the debt. It cannot reasonably be feared that Strömma will get rid of the ship.
If arrest cannot be ordered in a case like this, the wording of the Code, based on the MLM Convention 1967, can often lead to the maritime lien being statute-barred, because a dispute in the matter does not have time to be resolved before the expiry date. The law's provisions on maritime liens then become ineffective. This suggests that the RB's rules on attachment should be given broad application when the purpose of the measure is to secure a lien. It can also be said that the wording of Ch 15 s 1 RB provides some scope for such an application. It could be argued that even the defendant's attitude to the plaintiff's claim may delay execution and result in the defendant avoiding paying from the ship as a result of the maritime lien's prescription. This would mean that a lien could be issued for the sole purpose of interrupting the limitation period, in each case when the defendant in court disputes the claim.
However, allowing such a precautionary measure on the basis that the defendant is using normal legal means to defend itself against the plaintiff's claims must generally raise concerns, and is also less in line with the function of the attachment institution according to the RB. The attachment provisions were not changed in connection with the amendments to the Code that concerned the maritime lien.
It is worth noting that the suspensive effect of arrest has a remarkable consequence, especially when a defendant who is not personally liable to pay wants to provide security that satisfies the purpose of the arrest, since only arrest followed by executive sale causes interruption of limitation. If the arrest is lifted, the statute of limitations may expire. The security would then have been provided for payment of the amount that would have been paid if the maritime lien had not expired, and the dispute may in future refer to a legal consequence other than payment from the ship. Although this - in itself unsatisfactory - consequence is unavoidable, even if the lien is granted for a reason other than a danger of limitation, it constitutes a reason against granting a lien solely for the purpose of interrupting the limitation period.
In view of the above, an application of the attachment provisions in the manner advocated by the State should not be carried out without being sanctioned by the legislator. At least this applies where the defendant has not, in a manifestly improper manner, sought to prevent the plaintiff from realising its right. The circumstances relied on by the State; that Strömma objected to the statute of limitations, and failed to acknowledge the obligation to pay, cannot be regarded as such conduct as is referred to in Ch 15 s 1 RB. The State's attachment claim can thus not be upheld on this ground either.