The ship mortgage will be governed by the law of the flag the ship will fly. The form which the mortgage takes will thus be dictated by the legal system appropriate to the jurisdiction in which a ship is registered. Registration in the Dutch Ship’s Registry is a fair option, which has during the past years gained more interest, especially in the field of superyachts. Our firm can swiftly and cost-efficiently arrange for registration in a foreign registry as well, because of our valuable network.
Considering the global financial crisis, parties who seek or provide financial support have to deal with a new reality and new challenges to assess the value of investments, consider their rights and obligations and secure their claims. We can advise both owners and financial institutions in how to restructure problem shipping loans. Banks may consider to take certain pre-enforcement steps and we can also advise on the most efficient strategy.
Due to the global financial crisis, charter rates have substantially fallen which has caused the inability of owners to keep up the mortgage payments. In addition, this crisis has triggered a wave of newbuilding cancellations and delay in delivery. As a result, our firm has received a number of instructions to advice or ligitate on termination of contracts or to start up legal proceedings leading to a judicial sale of the ships involved. A mortgagee will require the right to take possession to enable it to arrange for the ship to be sailed to a jurisdiction where the ship can conveniently be arrested and sold (by public auction) to provide for coverage of its claim. Provided that there is an enforceable title, the Netherlands is one of the most favourable jurisdictions for this type of action because of the relative swiftness of the proceedings aforementioned and cost effectiveness. Sale through a public auction by the Court will guarantee that the market value of a vessel will be realized. Furthermore, in the current market, mortgagees may consider to make a bid themselves and acquire a ship for the present market price or wait for better times. Our firm can assist in all aspects and from any angle.