The Law of Ship Mortgages

Description

Thought to be the most comprehensive guide to English law relating to ship mortgages, the second edition of The Law of Ship Mortgages has been highly anticipated. This fully-updated and complete explanation provides practitioners with a practical, commercially-based, and definitive guide to the English law of ship mortgages as well as important related areas such as conflict of laws and insolvency. The authors, being seasoned practitioners themselves, bring their practical experience to bear on a number of difficult and developing areas of the law, such as: mortgagees’ duties, liability to charterers, conflicts of laws, work-outs and cross border insolvency. New to this edition: In-depth analysis of noteworthy cases such as The WD Fairway litigation, PK Airfinance v Alpstream, and Tropical Reefer and Anton Durbeck v DNB Enhanced coverage of issues such as security interests in ships, priority, and third party involvement Completely revised and reordered content, to better reflect practitioner needs Written with practitioners in mind, this new edition will be extremely useful to legal professionals working in any jurisdiction that is involved in international ship finance, as well as post-graduate students and academics. Cover Half Title Title Copyright Dedication CONTENTS Foreword Preface Table of cases Table of legislation CHAPTER 1 HISTORICAL INTRODUCTION 1.1 Background 1.2 Maritime law and ship mortgages 1.3 Legislative reform 1.4 The nature of the statutory mortgage 1.5 Mortgages of unregistered ships CHAPTER 2 OWNERSHIP AND REGISTRATION 2.1 Legal ownership 2.2 Beneficial ownership 2.3 Registration 2.4 The Register 2.5 Fishing vessels 2.6 Small ships 2.7 Registration procedure 2.8 Effect of registration 2.9 Refusal of registration; termination and expiry of registration 2.10 The ship 2.11 Demise charters 2.12 Mortgages on demise chartered ships CHAPTER 3 SECURITY INTERESTS IN SHIPS 3.1 Introduction 3.2 Statutory mortgages – the primacy of registration 3.3 The current form of statutory ship mortgage 3.4 Common law mortgages 3.5 Disguised mortgages 3.6 Equitable mortgages 3.7 Equitable charges 3.8 Submortgages 3.9 Mortgages of a share in a ship 3.10 Mortgages of ships under construction CHAPTER 4 THE CONFLICT OF LAWS 4.1 Introduction 4.2 Property in registered ships under English domestic law 4.3 Property in registered aircraft under English domestic law 4.4 The mid-nineteenth century cases (on ships and on chattels generally) 4.5 The early/mid twentieth century cases on foreign government action 4.6 The cases on foreign ship mortgages 4.7 The cases on ownership and arrest jurisdiction 4.8 The conflict of laws dimension to priority issues 4.9 The WD Fairway litigation 4.10 International conventions 4.11 The general maritime law 4.12 International insolvency 4.13 The Blue Sky litigation 4.14 The FPSO OSX 3 in Brazil 4.15 Conclusions on the English conflict of laws position on lex situs CHAPTER 5 EXECUTION, SECURED OBLIGATIONS AND PROPERTY COVERED 5.1 Parties 5.2 Execution 5.3 The form of mortgage and obligations secured 5.4 Multiple obligations 5.5 Change of parties 5.6 Change of obligations 5.7 Usual terms of the mortgage (the collateral deed of covenant) 5.8 Special fees and ‘upside’ sharing arrangements 5.9 Property covered by the mortgage CHAPTER 6 REGISTRATION OF MORTGAGES 6.1 Introduction 6.2 Merchant Shipping Act 1995 6.3 Companies Act 2006 6.4 The Bills of Sale Acts 6.5 Reform of the registration system? CHAPTER 7 PRIORITY 7.1 Statutory registered priority 7.2 Agreed priority 7.3 Security over collateral assets 7.4 Failure to register a mortgage 7.5 Mortgages of unregistered ships 7.6 Equitable mortgages and charges 7.7 Floating charges and priority 7.8 Mortgages of foreign-registered ships 7.9 Tacking of further advances 7.10 Tabula in naufragio 7.11 Marshalling 7.12 Invalidity 7.13 The courts’ approach to priority of security 7.14 Debt subordination 7.15 Parties to a subordination or priorities agreement CHAPTER 8 MORTGAGOR’S OBLIGATIONS AND UNDERTAKINGS 8.1 Introduction 8.2 Deed of covenant 8.3 Certain issues on owners’ undertakings 8.4 Sanctions 8.5 Consents and discretions 8.6 Protection of security CHAPTER 9 AMENDMENTS, TRANSFER AND DISCHARGE 9.1 Amendment 9.2 Rectification 9.3 Transfer 9.4 Discharge 9.5 Consolidation CHAPTER 10 LIENS 10.1 Introduction 10.2 Common law liens 10.3 Equitable liens 10.4 Maritime liens 10.5 Statutory liens 10.6 Statutory possessory liens CHAPTER 11 DEFAULT, AND SELF-HELP ENFORCEMENT POWERS 11.1 Introduction 11.2 Default 11.3 Payment defaults 11.4 Status defaults 11.5 Covenant defaults 11.6 Discretions in relation to default 11.7 Waiver of events of default 11.8 Effect of default 11.9 Post-default interest and break-funding 11.10 The mortgagee’s options following a default 11.11 Enforcement 11.12 The right to take possession at common law 11.13 Method of taking possession 11.14 Factors relevant to the mortgagee’s decision to take possession 11.15 The rights of a mortgagee in possession 11.16 Sale of the mortgaged ship 11.17 Mechanics and effect of a mortgagee’s private sale 11.18 The mortgagee’s expenses of sale 11.19 Application of the proceeds of sale 11.20 Receivership 11.21 Foreclosure 11.22 Subordinate mortgagees 11.23 Enforcement of collateral security 11.24 Security over shares CHAPTER 12 THE COURTS’ PROTECTION OF THE MORTGAGOR 12.1 Introduction 12.2 Protection of the mortgagor’s right to redeem 12.3 The mortgagee in possession’s duties to the mortgagor 12.4 The mortgagee’s exercise of its power of sale 12.5 Sales to self or favoured buyers 12.6 Are ship mortgages different? 12.7 Derivative liability to relevant parties 12.8 Excluding duties 12.9 Marshalling 12.10 The perils of intermeddling 12.11 The conflict of laws CHAPTER 13 LIABILITIES OF THE MORTGAGEE TO THIRD PARTIES 13.1 Introduction 13.2 Liability to non-demise charterers and cargo interests 13.3 Liability to demise (bareboat) charterers 13.4 Third party purchase options 13.5 Liabilities of a mortgagee in possession to third parties 13.6 Interference with third party property 13.7 Issues arising under the Partnership Act 1890 13.8 Wider lender liability risks 13.9 Equitable subordination 13.10 Lender liability: An attempt to summarise CHAPTER 14 ENFORCEMENT BY ARREST AND COURT SALE 14.1 Introduction 14.2 The Admiralty jurisdiction of the High Court 14.3 Ship arrest procedure 14.4 Court sale procedure 14.5 Determination of priorities and payment out CHAPTER 15 INSOLVENCY 15.1 Introduction 15.2 Consensual restructurings 15.3 Schemes of arrangement under the Companies Act 2006 15.4 The EU Insolvency Regulation and the significance of the COMI 15.5 Other cross-border jurisdictional issues 15.6 UK winding up (liquidation) 15.7 UK administration 15.8 UK administrative receivership 15.9 UK company voluntary arrangement (CVA) 15.10 Circumstances in which a ship mortgage can be challenged in UK insolvency proceedings 15.11 Some European insolvency regimes of note in a shipping context 15.12 The effect of the EU Insolvency Regulation on ship mortgage enforcement 15.13 The effect of the UNCITRAL Model Law on Cross-Border Insolvency and the Cross-Border Insolvency Regulations on ship mortgage enforcement 15.14 Chapter 11 of the United States Bankruptcy Code CHAPTER 16 INSURANCE 16.1 Introduction 16.2 The nature of the mortgagee’s interest 16.3 The risks to a mortgagee 16.4 Composite interest 16.5 Assignment 16.6 The effect of notice of assignment 16.7 Assignment: Clubs and mutual associations 16.8 Loss payable clauses 16.9 Letters of undertaking 16.10 Claims 16.11 The conflict of laws 16.12 Illegality risk 16.13 Assignments of reinsurances 16.14 Mortgagees’ interest insurance 16.15 Mortgagees’ additional perils (pollution) insurance 16.16 Other mortgagees’ insurances CHAPTER 17 SECURITY OVER EARNINGS AND CHARTERPARTIES 17.1 Introduction 17.2 The commercial background 17.3 Present rights and future rights 17.4 Partial assignments and suspensory assignments 17.5 Legal assignments and equitable assignments 17.6 Notice of assignment 17.7 Certain set-off issues 17.8 The conflict of laws 17.9 Restrictions on assignment 17.10 Liens on sub-freights 17.11 Charterparties and step-in rights 17.12 Earnings account 17.13 Pooling arrangements 17.14 Financial collateral arrangements 17.15 Requisition compensation APPENDIX 1 STATUTORY MATERIAL A Merchant Shipping Act 1995, Part II B Merchant Shipping Act 1995, Schedule 1 C Merchant Shipping (Registration of Ships) Regulations 1993 (SI 1993/3138), Part VII (as amended) D Senior Courts Act 1981, section 20 APPENDIX 2 STATUTORY FORMS A Form MSF 4736 (Mortgage of a Ship to secure Account Current etc. other/obligation) B Form MSF 4737 (Mortgage of a Ship to secure Principal sum and Interest) C Form 4739 (Notice of Mortgage Intent) APPENDIX 3 SPECIMEN DEED OF COVENANT APPENDIX 4 INSTITUTE MORTGAGEES’ INTEREST CLAUSES – HULLS APPENDIX 5 THE ADMIRALTY MARSHAL’S CONDITIONS OF SALE AND BILL OF SALE Index