Registration / Enforcement of Ship-Mortgages
The Cyprus Merchant Shipping (Registration of Ships, Sales and Mortgages) Law of 1963 allows a vessel or share in a vessel to be registered as security for the generation of a loan. Vessel registration at the Register of Cyprus ships automatically enables formation of mortgages and registration at the Register. Where the Owner is a legal person registration must also be effected with the Registrar of Cyprus Companies within three weeks of the mortgage formation. No stamp duty is required for the documents which form the mortgage and the secured amount can be in the form of any currency.
Registration outside the Republic of Cyprus is also possible and can be effected by a Consular officer who will then forward the deed to the Cyprus Registry.
Legal professionals and advocates in HSS Shipping Services can assist in the registration/transfer/discharge of ship-mortgages at the Cyprus Register, the consular officer abroad or the Registrar of Cyprus companies.
HSS Shipping Services can also assist in the enforcement of ship-mortgages. HSS experienced lawyers can appear before the Cyprus Admiralty Court or provide valuable advice on the legal implications of ship- mortgages and mortgagee’s rights.
Mortgagee’s rights are thoroughly protected by Admiralty law in the Republic of Cyprus.
- A mortgagee may initiate action for enforcement of a mortgage in a Cyprus court or effect his vested right of vessel’s disposal or its share which is subject to the mortgage.
- A mortgagee may sell the mortgaged vessel but if more than one mortgagee exists he/she needs a court order.
- On establishment of default, actions for ship sale had always been successful in all foreign courts.
- In the case of a forced sale via auction or private agreement mortgagees’ rights have priority in the distribution of proceeds
In the case where the vessel subject to the mortgage is a legal person (company) mortgagees rights will be fully protected against creditors and liquidator as the mortgage will be registered at the Registrar of Cyprus Companies.