MOZAMBIQUE Law and Practice Contributed by: José Miguel Oliveira, Kenny Laisse and Caio de Mello Ferreira, VdA
changed/impaired – ie, for the relevant legal purposes, her foreign owners will remain holding full legal title. 1.6 Registration of Mortgages The creation of rights in rem (including possession, ownership and security) or of any security interests (including mortgages) in respect of, or related to, ves - sels sailing under the Mozambican flag is subject to mandatory registration with the CREL and the Central Registration Office for Securities Guarantees ( Central de Registo de Garantias Mobiliárias , or CRGM). On the basis of the foregoing, mortgages over vessels registered (or to be registered) in Mozambique and sailing (or to be sailing) the Mozambican flag must always be governed by the laws of Mozambique and registered in Mozambique as a condition of their effec - tiveness and enforceability against third parties (erga omnes). Notary Deeds Prior to – and as a condition for – registration, mort - gages encumbering Mozambican vessels must be executed by means of a notary deed before a local notary public or a consular office. The documents required for the execution of the notary deed include: • a commercial registry certificate or equivalent document of the borrower; • a power of attorney issued to the benefit of the representative(s) of the lender attending and sign - ing the notary deed, on the assumption that the lender is not going to be represented by any of its legal representatives/directors; • a power of attorney issued to the benefit of the representative(s) of the borrower attending and signing the notary deed, on the assumption that the borrower is not going to be represented at the notary deed by any of its legal representatives/ directors; • identification documents of the representatives of the parties signing the notary deed; • certified copies of the loan agreements and/or resolution issued by the relevant corporate body of the lender approving the loans and the underlying terms and conditions of the mortgage, notably the amount of principal plus the amount equivalent to five years of interest;
• a copy of the minutes of the resolution passed by the relevant corporate body of the borrower approving the granting of the mortgages to the benefit of the lender and the underlying terms and conditions, notably the amount of the principal plus the amount corresponding to five years of interest; and • certificates of ownership of the vessels issued by INAMAR and the CREL. All documents executed or issued outside Mozam - bique must have previously been legalised before the Ministry of Foreign Affairs (or equivalent), trans - lated into Portuguese and then consularised before the Mozambican consulate with jurisdiction over the country where the documents were issued, as a pre - condition for being deemed valid, acceptable and enforceable in Mozambique. The CRGM Once executed, the notary deed must be registered with the CREL and the CRGM. In this respect, the fol - lowing must be stressed. • Registration with the CREL is a condition prec - edent for the effectiveness of mortgages; in other words, pending said registration, mortgages remain ineffective for all legal purposes. • Mortgages registered with the CREL remain valid and enforceable for an indefinite period of time, unless: (a) the obligation secured is extinguished by per - formance; (b) the mortgaged assets (vessel) are transferred to a third party (in which case, termination of the mortgage will occur 20 years after registra - tion of the transfer of title and five years after the final maturity of the secured obligation); or (c) cancellation is authorised by the mortgagee. • The ranking of security interests or privileges over ships is linked to the order by which said interests or privileges were registered (prior in tempore, potior in iure). Registrations with the CREL and the CRGM are made by means of: • the filing of an official form; and
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