Chapter II：The Ship
Section II: Maritime Liens
The claims listed hereunder may be secured by maritime liens and are entitled to a preferential right of compensation:
1. Claims of the shipmaster, seafarer and other members of the ship’s complement which have arisen from their contracts of employment.
2. Claims against the shipowner in respect of loss of life or personal injury directly arising from the operation of the vessel.
3. Claims for salvage rewards, expenses for wreck removal and ships’ contribution on general average.
4. Claims against the shipowner, based on tort in respect of damage to or loss of property occurring, whether on land or on water, in direct connection with the operation of the vessel.
5. Harbor charges, canal and other waterway dues and pilotage dues.
The maritime liens listed in the preceding paragraph shall have priority over ship mortgages.
In the event that right of retention is granted in respect of a ship in possession of a creditor for securing claims for ship-building or repair of the ship, such right of retention shall be postponed to all maritime liens, but shall have priority over ship mortgages.
The provisions in respect of maritime liens in this Code shall not apply to the claims stipulated in sub-paragraph (iv), (v) and (vi) of paragraph 1 in Article 22.
Pursuant to Article 24 of this Code, the objects are entitled to a preferential right of compensation are as follows:
1. The ship, all her equipment and appurtenances, and any other residual materials.
2. The freight to be earned for the voyage the maritime lien has occurred.
3. Compensation due to the shipowner for material damage sustained by the ship, or for loss of freight during that particular voyage.
4. Compensation due to the shipowner in respect of general average.
5. Remuneration due to the shipowner for salvage rendered at any time before the end of the voyage.
Notwithstanding anything in paragraph 1(2) of the preceding Article 27, the claim arising under paragraph 1(1) of Article 24 would have priority over the total amount of freight due for all voyages made during the subsistence of the same contract of engagement.
Claims secured by a maritime lien and relating to the same voyage rank in the order in which they are set out in Article 24.
Claims included under any one of the sub-paragraphs in Article 24 share concurrently and rateably.
The claims mentioned under paragraph 1(3) of Article 24, in that article rank, in each of the two categories, in the inverse order of the dates on which they came into existence. Claim for salvage remunerations shall subject to have occurred on the time of which the salvage operation was completed.
Claims for general average contribution shall subject to the time of the general average act being made.
Claims arising from one and the same occurrence under sub-paragraph of the preceding paragraph 1 of Article 24 are deemed to have come into existence at the same time.
Claims secured by a maritime lien and relating not to the same voyage, the maritime lien attaching to the latter voyage have priority over those attaching to previous voyage.
Claims secured by a maritime lien follow the vessel into whatever hands it may pass.
The maritime liens set forth in paragraph 1 of Article 24 shall be extinguished upon the lapse of one year from the time when the claim has arisen. However, regarding to the compensation mentioned in sub-paragraph 1 of Article 24(1), the time will commence from the day of resignation.
Section III: Ship Mortgages
The creation of a mortgage upon a ship shall be made in writing.
A ship mortgage may be created upon a ship under construction.
Unless otherwise provided by law, a ship mortgage may be created only by the shipowner or by any other person specially authorized to do so by the shipowner.
No creation of ship mortgage can be set up against a third person unless registered.
When one or more co-owner(s) create(s) a ship mortgage by encumbering his (their) share(s) such a mortgage shall not be affected by a sale of the ship or a partition of the shares in the ownership of the ship.