The vast majority of ships trading today are purchased with money advanced by a bank or other financial institution and are therefore subject to a mortgage. It will usually be agreed, however, that the owner will continue to trade the vessel himself so that the bank will not be directly involved in the ship's commercial operation. Indeed, it is likely to be the trading income earned by the owner which is used to pay the mortgage debt. But there will inevitably be occasions when the mortgagee bank wishes to exercise its option to enforce its mortgage, for example by arresting and selling the ship. Whatever the position between the bank and the shipowner, the effect of such an arrest may well be to prevent performance of the contracts of carriage to which the ship is then subject; thereby causing a breach of the charterparty between the owner and the charterer and/or the bill of lading contract between the owner and cargo interests. This article examines the extent to which the existence of a charterparty or bill of lading contract may inhibit the ability of a mortgagee to enforce his mortgage, and his potential liability if he goes beyond these limits.