.jpg)
Maltese law provides for a well developed legal framework of maritime privileges and mortgages. Foreign mortgages are fully recognised. A registered mortgage securing a debt which is certain, liquidated and due, is deemed an executive title by law and enjoys higher ranking over other privileged claims. The purchase of many ships is financed by banks and financial institutions. Mortgages registered in Malta are in general considered to be a very good security by financiers intending to finance the purchase/refit of a yacht registered in Malta.
Registration of a mortgage over a ship / yacht is dependent on the existence of a provisional or permanent registration with the Malta Maritime Authority which is affected by means of the filing of a statutory mortgage form with the Authority. A ship under construction may also be registered as long as when finished it would qualify as a ship that can be registered under the Merchant Shipping Act. A mortgagee may prohibit the registration of further mortgages.
Assuming that a mortgage document has been duly executed the advantages of a mortgage are substantial in that the ship / vessel will constitute a class of moveables which is separate and distinct from the estate of their owners for the security of actions and claims to which the vessel is subject. Further, in the event of bankruptcy of the mortgagee all actions and claims to which the yacht may be subject shall have preference over all other debts of the estate.
In the event of default of any term and condition of a registered mortgage, or agreement or document referred to therein, the mortgagee may:
- take over possession of the vessel, but only insofar as making the vessel available as security for the mortgaged debt (as distinct from becoming the owner of the ship);
- sell the ship;
- apply for extensions, pay fees, and do generally all such things in the name of the owner in order to maintain the status and validity of the registration of the vessel.
A Maltese ship may not be voluntarily transferred outside the registry without the mortgagee’s prior consent and cannot be struck off the registry unless at least one month’s notice has been given by the Registrar of Ships to the mortgagee consequently. Maltese law also acknowledges the role of trustees acting on behalf of a person or a syndicate to whom any debt or other obligation is due.
For further information please contact This e-mail address is being protected from spambots. You need JavaScript enabled to view it