§56305. Vessel encumbrances

(a) In General.-The existence of an encumbrance on a vessel does not prevent the requisition of the vessel under this chapter.

(b) Deposit in Treasury.-

(1) In general.-If an encumbrance exists, the Secretary of Transportation may deposit part of the compensation or advance of compensation to be paid under this chapter (but not more than the total amount of all encumbrances) in a fund in the Treasury. The Secretary shall publish notice of the creation of the fund in the Federal Register.

(2) Availability of amounts deposited.-Amounts deposited in the fund shall be available to pay the compensation or any of the encumbrances (including encumbrances stipulated to in a court of the United States or a State) existing at the time the vessel was requisitioned.

(c) Civil Action.-

(1) In general.-Within 6 months after publication of notice under subsection (b), the holder of an encumbrance may bring a civil action in admiralty, according to the principles of libels in rem, against the fund.

(2) Venue.-The action must be brought in the district court of the United States-

(A) from whose custody the vessel was or may be requisitioned; or

(B) in whose district the vessel was located when it was requisitioned.

(3) Service of process.-Service of process shall be made on the appropriate United States Attorney, the Attorney General, and the Secretary, in the manner provided by the Federal Rules of Civil Procedure (28 App. U.S.C.). Notice of the action shall be given to all interested persons as ordered by the court.

(4) As between private parties.-The action shall proceed and be determined according to the principles of law and the rules of practice applicable in like cases between private parties.

( Pub. L. 109–304, §8(c), Oct. 6, 2006, 120 Stat. 1655 .)

In this section, the words "encumbrance" and "encumbrances" are substituted for "any valid claim by way of mortgage or maritime claim or attachment lien" and "any valid claim by way of mortgage or maritime lien or attachment lien" to eliminate unnecessary words.

In subsection (b)(1), the words "The Secretary shall publish notice of the creation of the fund in the Federal Register" are added for clarity, based on language barring a civil action not brought within 6 months after publication of such a notice.

In subsection (c)(1), the words "Within 6 months after publication of notice under subsection (b)" are substituted for "prior to June 30, 1943, or within six months after the first such deposit with the Treasurer and publication of notice thereof in the Federal Register, whichever date is later" for clarity and to eliminate obsolete language.

Subsection (c)(3) is substituted for "and such suit shall be commenced in the manner provided by section 742 of this Appendix and service of process shall be made in the manner therein provided by service upon the United States attorney and by mailing by registered mail to the Attorney General and the Secretary of Transportation and due notice shall under order of the court be given to all interested persons" because the relevant sentences in 46 App. U.S.C. 742 were struck by an amendment in 1996. See generally Henderson v. United States, 517 U.S. 654, 116 S. Ct. 1638 (1996).

In subsection (c)(4), the words "any decree in said suit shall be paid out of the first and all subsequent deposits of compensation" and "any decree shall be subject to appeal and revision as now provided in other cases of admiralty and maritime jurisdiction" are omitted as surplus.