Diffusion Finance Vermittlung und Beratung GmbH (the plaintiff), a German finance company that acted as a guarantor of Sevastopol Ocean Fishing Enterprise (the defendant), claimed compensation for payments made for ship supplies. The plaintiff, in its capacity of the guarantor of a contract entered into with Baltic Atlant Técnica SL (Baltic) on 20 April 2001 paid for supplies and necessities to the defendant’s vessels. That contract stated that if the plaintiff paid for such expenses, it could then claim for compensation against the defendant. The plaintiff requested the court to declare that the claim had the character of maritime lien on the MV More Sodruzhestva according to arts 2.5 and 8 of the Maritime Liens and Mortgages Convention of 1926 (MLM Convention 1926). The plaintiff also alleged that the claim was governed by arts 1.1.k, 1.1.m and 1.1.n of the International Convention Relating to the Arrest of Sea-Going Ships 1952 (Arrest Convention 1952).

The defendant argued that the plaintiff was not entitled to claim, denied the maritime lien character of the claim and contended that the claim was time-barred. The first instance court dismissed the claim, and the plaintiff appealed the decision. The Court of Appeal asserted that the plaintiff was entitled to claim as an assignee of the credit, and that the claim had the character of a maritime lien. The court, however, dismissed the appeal declaring that the claim and the privilege were time-barred, according to art 9 of the MLM Convention 1926. The plaintiff recurred the decision in cassation before the Tribunal Supremo/Supreme Court (SC).

Held: The SC affirmed the decision. The SC acknowledged, as the Court of Appeal had done, that the claim had the character of a maritime lien according to art 2.5 of the MLM Convention 1926, but also found that the claim and the lien were time-barred. The plaintiff argued that as it had acquired the position of consignee of the defendants' ships under the assignment of rights, the right that it was enforcing was more complex than a mere claim for unpaid supplies. Hence, art 1964 of the Civil Code should have been applied, which established a longer period of limitation. The SC said that the construction of the limitation issue proposed by the plaintiff, based on art 1964 of the Civil Code, was not congruent with the legal foundation invoked in the lawsuit, which was based on the provisions of the MLM Convention 1926 and the Arrest Convention 1952. The plaintiff also alleged a violation of art 10 of the International Convention on Maritime Liens and Mortgages Convention 1993 (MLM Convention 1993). The SC held that this argument was irrelevant, considering the date on which the Kingdom of Spain had acceded to that Convention.