SPAIN Law and Practice Contributed by: José Antonio Domínguez, Mikel Garteiz-Goxeaskoa, Enrique Ortiz and Irantzu Sedano Beitia, Aiyon Abogados SLP
Vessels under construction can also be registered in the Registry of Movable Goods. In fact, registration in the Registry of Movable Goods is compulsory when the vessel under construction is subject to a mort - gage. 1.5 Temporary Registration of Vessels Temporary registration of vessels under the Span - ish flag is permitted when a foreign-flagged vessel is under a bareboat charterparty and the charterer has its domicile in Spain. The temporary registration will last for the duration of the charterparty. Similarly, Spanish-flagged vessels chartered by a per - son domiciled outside Spain may be temporarily reg - istered in the country of the charterers for the duration of the charterparty. Spain does not permit dual registration: vessels reg - istered in Spain may fly only the Spanish flag. Tempo - rary registration of a foreign vessel in Spain will only take place after the Registry is satisfied that the vessel has been suspended from its original flag. 1.6 Registration of Mortgages The constitution, modification or cancellation of a mortgage or encumbrance on a vessel or on a naval artefact must be recorded in the Registry of Movable Goods in the charge of the Ministry of Justice. The mortgage agreement may be granted by means of a private contract or a notarial deed. The mortgage agreement must identify: • the parties; • the loan guaranteed by the mortgage; • the date of payment of capital and interest; • the description and identification of the vessel/ naval artefact; • the value of the vessel/naval artefact; • if two or more vessels/naval artefacts are mort - gaged, the amount for which each vessel/naval artefact is mortgaged; and • any other contractual provision to which the parties have agreed. 1.7 Ship Ownership and Mortgages Registry The Registry of Movable Goods and the Maritime Registry are public. Any person may obtain informa -
tion from their records by applying to the registry and paying register dues for that information.
2. Ship Finance and Leasing 2.1 Ship Loan Finance
In Spain, typical ship financing combines bank credit with a naval mortgage registered on the Movable Property Registry, together with an additional guar - antee package (insurance covers, liens on freights, mother company guarantees, etc). In new buildings, private shipbuilder associations grant additional guar - antees to facilitate financing, together with public enti - ties (such as the Instituto de Credito Oficial ). There is also a typical Tax Lease structure that aids investment in new buildings with more effective taxa - tion. This usually requires a lease-type agreement. Finally, some new buildings are eligible for public aids or loans (at low rates or without the need for additional guarantees) if they incorporate cleaner energy tech - nologies or other advanced technologies. 2.2 Ship Leasing Ship leasing has traditionally coexisted with tradi - tional bank lending as part of the tax lease structure. Although there is no lease database publication, there is no indication that ship leasing is gaining ground. On the contrary, traditional bank lending remains domi - nant, based on the availability of local builders asso - ciation’s additional guarantee schemes. Under Spanish law, the main difference between a les - sor and a borrower lies in ownership: the lessor retains title to the vessel, whereas the lessee operates it. By contrast, a lender holds only a credit claim secured by a mortgage, with the borrower retaining both owner - ship and operational control of the vessel. Mortgage enforcement is a more structured remedy under Spanish law, whereas the lessor might have a remedy based on the International Convention on Arrest of Ships (the “Arrest Convention 1999”), which would require a prior court declaration of the right before enforcement can be obtained.
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