The main advantages of the Maltese legal regime of the mortgage of the vessel, established by the Merchant Shipping Act 1973 as amended in 1988, can be summarised as follows:
- A mortgage is an executive title under Maltese law and can be enforced upon default without the need for a special judgment;
- Vessels constitute a particular class of movables whereby they form separate and distinct assets within the estate of their owners for the security of actions and claims to which the vessel is subject. In case of bankruptcy of the owner of a vessel, all actions and claims to which the vessel may be subject shall have preference on the said vessel over all other debts of the estate;
- In case of default on behalf of the mortgagor, the mortgagee is entitled:
- to take possession of the ship;
- to sell the vessel;
- to take any action in the name of the owner as may be required in order to maintain the status and validity of the registration of the vessel;
- Mortgages enjoy a relatively high ranking among maritime claims;
- A clause may be inserted in the mortgage deed prohibiting further mortgages and transfer of ownership of the vessel without the prior consent of the mortgagee;
- Easy procedure for transfer of mortgage to any person;
- A vessel cannot be deleted from the Register without at least one month’s notice to the mortgagee given by the Merchant Shipping Directorate of Malta;
- The mortgage attaches not only to the vessel herself but also to the insurance compensation and indemnity for accidents.
We are on hand to assist clients in all aspects of ship and yacht finance for both owners and banks. Our services include drafting, reviewing and amending loan and finance agreements, mortgage recitals, legal opinions, as well as corporate documentation.