Mortgages Made Easier: Taking Over a British Ship

By Suzanne M. Pearson

Since the coming into force on 21st March, 1994 of the Merchant Shipping (Registration, etc.) Act 1993 (the “Act”) and the accompanying regulations, the Merchant Shipping (Registration of Ships) Regulations 1993 (the “Regulations”), the computerization of the Ships Registry has made a small but significant improvement in the mechanics involved in taking a mortgage over a British registered ship. The Act and Regulations together represent the biggest change in ship registration law and procedure since the 1894 Merchant Shipping Act. There are many detailed changes. The two which most affect mortgages are the centralization of the Registry at Cardiff and the institution of a priority system.

The Registry of Shipping and Seamen in its new location in Llanishen outside Cardiff now keeps a central computerized database and the individual hand-written registers previously maintained by Registrars of Ships in individual ports of British registry have been closed. Therefore, the involvement of Customs and Excise in the registration process has been brought to an end, and the ship mortgages are no longer entered on the registers kept at the 114 ports of registry in the United Kingdom. These remain ports of choice, which an owner may choose to be marked on his ship, but there is only one register, and that is at Cardiff.

When taking a mortgage over a British ship, timing is extremely important. When there are a number of mortgages registered on a single vessel, priority will go to the mortgagee who is first in point of time to register his mortgage.

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