MARSHALL ISLANDS Trends and Developments Contributed by: Brad L. Berman, Berman Legal LLC
chase of a second-hand tonnage or taking deliv - ery of a newbuild where the new owner or the buyer needs to secure the relating financing by way of a mortgage over the purchased vessel. Section 304 If a vessel is subject to a validly recorded ship mortgage, it has never been possible for the Maritime Administrator to delete her from the Register unless she has been lost, destroyed or transferred to another registry following a court sale. The Maritime Administrator is always required to notify the mortgagee prior to delet - ing the vessel in this case. The amendment to Section 304, grants the RMI Administrator the authority to immediately strike and withdraw the ability for a shipowner to fly the MI flag, if its vessel is engaged in illegal activity or actions against the interests of the RMI. The amend - ment seeks to provide the Maritime Administra - tor with a discretion to immediately strike due to a wide range of situations, such as economic sanctions, sub-standard shipping practices or failure to comply with the requirements of the international maritime conventions. Section 306 The amended language removes the require - ment to attach a copy to the Bill of Sale to the Certificate of Registry in connection with a ves - sel deletion from the MI ship registry and trans - fer to another ship registry administration. This amendment is in line with the amendments to Section 225 of the RMI Maritime Act; for refer - ence, below is the old provision in Section 225: “Whenever a documented vessel is sold or transferred wholly or partly without change of flag, or is altered in form or burden, by being lengthened or built upon, or from one denomina - tion to another, by the mode or method of rigging or fitting, she shall be documented anew. Every
such sale or transfer shall be evidenced by a written instrument in the nature of a bill of sale. Otherwise the vessel shall not be documented anew...” Section 307 The Maritime Act was amended to clarify what may constitute written proof or evidence of the amounts and dates of any documents or evi - dence of mortgage debt to be submitted with or included in vessel mortgages, among other amendments affecting vessel registration and operation. The amendment states that such requirement may be satisfied by attaching to the mortgage the documents evidencing such debt, either in whole or in part and either with or without redactions, or by simply including a description of the debt terms (including the total amount) directly in the mortgage. Section 309 This amendment clarifies how to treat advances or other value provided in accordance with an agreement. This means that, once a mortgage has been executed and registered by a ship - owner, it is regarded as validly securing the loan amount stated in the mortgage, even when in reality, the loan has not been disbursed by the lender. Section 314 This statutory amendment eliminated the exist - ing law’s requirement to place a certified copy of a preferred mortgage instrument (Mortgag - es, Amendments, Assignments, Subordination Agreements, etc) on board the vessel. It is suf - ficient that a Notice of the Mortgage be posted on the vessel. Industry has accepted that this revision is in line with the wider movement in the maritime industry to streamline and digitise vessel documentation processes.
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