REGISTRATION, TRANSFER AND DISCHARGE OF A MORTGAGE
Under the Merchant Shipping Act, Cap 7.05, ships registered in St. Kitts & Nevis may be made as security for the repayment of a loan (mortgage of a ship). This includes yachts and non-propelled vessels and there is no lower size/tonnage/length limit. Refer to sections 77 to 83 inclusive of the Merchant Shipping Act. See pages 3 & 4 of this booklet
The Merchant Shipping Act follows the general principal of English Law on ship mortgages. The mortgagee may enforce the mortgage by taking possession of the ship and selling it by private sale or at auction.
It is usual for the mortgagor and the mortgagee to enter into an agreement setting out in detail the relation between them and the terms and conditions under which the mortgagee may enforce its rights under the mortgage. This document is commonly termed as a Deed of Covenant, Mortgage Deed, Loan Agreement or similar such name reflecting its contents and status to the parties.
The mortgagor then records the existence of the mortgage by completing Form A8 (may be downloaded from our website), see pages See pages 7 & 9 of this booklet and submitting same to the offices of the International Registrar of Shipping and Seamen, where the existence of the mortgage is then recorded in the ship’s records within the Registry Book. See Mortgage Registration, Transfer and Discharge Procedure, see pages 5 & 6.
The priority of the mortgage is determined by the date and time of its registration in the Registry Book. There are no provisions in the Merchant Shipping Act for the registration of the mortgage in the register of companies as a charge against the ship owning company.
Page 10 provides an example of a bill of sale. However an industry standard format is also acceptable.
Page 11 is an example of a finance house mortgage affidavit.
For some of the banks who have accepted St Kitts & Nevis Mortgage Legislation and granted mortgages to our ships, see page 12.
For guidance of shipowners and financiers as to the applicability of St. Kitts & Nevis mortgage legislation, please refer to the Legal Opinion prepared by Messrs Daniel Brantley & Associates.
Registration of Mortgages is allowed as soon as a vessel is provisionally registered.
For a vessel that is Provisionally Registered we require:
- The mortgagee (bank, shipyard, finance house etc) is to confirm that they have sighted the original evidence of ownership of title in the ship i.e. bill of sale, sale contract
- Completed Form A8 “Mortgage Registration, Transfer & Discharge” is to be submitted.
- An original or certified true copy of Covenant or similar document may also be submitted.
- Payment of Mortgage Registration fees is to be confirmed.
If registration is to be effected at SKANReg Head Office, documents (1), (2) & (3) are to be submitted
Once SKANReg Head Office receives the documents:
- Form A8 will be endorsed with the date and time of registration of the mortgage.
- The original endorsed Form A8 will be returned to the mortgagee and a copy retained in the ship’s records by the International Registrar.
- An entry will be made in the Registry Book, recording the registration of the mortgage.
If requested, a Transcript of Registry will be issued by the International Registrar.
If registration is to be effected at the office of an authorised Maritime Registrar or that of the Department of Maritime Affairs, documents (1), (2) & (3) are to be submitted;
After confirmation from the International Registrar:
- Form A8 will be endorsed, by the Maritime Registrar or the Director of Maritime Affairs, with the date and time of registration of the mortgage.
- The original endorsed Form A8 will be returned to the mortgagee and a copy transmitted by fax/email to SKANReg head office.
- An entry will be made in the Registry Book, recording the registration of the mortgage
If requested, a Transcript of Registry will then be issued by the International Registrar and sent by fax/email to the Maritime Registrar or Department of Maritime Affairs.
Documents (1), (2 – copy of endorsed document) & (3 above) will then be sent by the Maritime Registrar or Department of Maritime Affairs to SKANReg head office by courier.
On receipt of the original documents, the International Registrar shall release the original Transcript of Registry to the mortgagee via the Maritime Registrar or the Department of Maritime Affairs.
NOTES:
If the mortgagee is not a bank or is a company, a recent (issued within previous three-months) original Certificate of Good Standing or similar proof of existence will be required to be sighted by the Registrar.
The signature of the Mortgagor is to be the Ship Owner or in the case of a company, a duly authorised officer of that company. In the case of the Owner allowing their agent or another party to sign on their behalf, such authority is to be supported by a written testimony giving such authority, (e.g. Power of Attorney).
Transfer of a Registered Mortgage is allowed on any ship, whether provisionally or permanently registered.
For a vessel that is Provisionally Registered:
- the new mortgagee (bank, shipyard, finance house etc) is to confirm that they have sighted the original evidence of ownership of title in the ship i.e. bill of sale, sale contract etc.
- Completed Form A8 showing the original Mortgage Registration and new Mortgage is to be submitted.
- An original or certified true copy of any new accompanying Mortgage Deed of Covenant or similar document may also be submitted.
- Payment of Mortgage Registration fees is to be confirmed.
If registration is to be effected at SKANReg Head Office, documents (1), (2) & (3) are to be submitted.
Once received:
- Form A8 will be endorsed with the date and time of transfer of the mortgage.
- The original newly endorsed Form A8 will be returned to the mortgagee and a copy retained in the ship’s records by the International Registrar.
- An entry will be made in the Registry Book, recording the transfer of the mortgage.
If requested, a Transcript of Registry will be issued by the International Registrar.
If registration is to be effected at the office of an authorised Maritime Registrar or that of the Department of Maritime Affairs, documents (1), (2) & (3) are to be submitted;
After confirmation from the International Registrar:
- Form A8 will be endorsed, by the Maritime Registrar or the Director of Maritime Affairs, with the date and time of the transfer of the mortgage.
- The original endorsed Form A8 will be returned to the mortgagee and a copy transmitted by fax/email to SKANReg head office.
- An entry will be made in the Registry Book, recording the transfer of the mortgage
If requested, a Transcript of Registry will then be issued by the International Registrar and sent by fax/email to the Maritime Registrar or Department of Maritime Affairs
Documents (1), (2) & (3- copy of endorsed document) will then be sent by the Maritime Registrar or Department of Maritime Affairs to SKANReg head office by courier.
On receipt of the original documents, the International Registrar shall release the original Transcript of Registry to the mortgagee via the Maritime Registrar or the Department of Maritime Affairs.
In order to discharge a Mortgage:
- Completed Form A8 showing the original Mortgage Registration and entry for the Discharge is to be submitted.
- Payment of Mortgage Discharge fees is to be confirmed.
If discharge is to be effected at SKANReg Head Office, document (1) is to be submitted;
- Form A8 will be endorsed with the date and time of discharge of the mortgage.
- The original endorsed Form A8 will be returned to the mortgagee and a copy retained in the ship’s records by the International Registrar.
- An entry will be made in the Registry Book, recording the discharge of the mortgage.
If requested, A Transcript of Registry will be issued by the International Registrar.
If discharge is to be effected at the office of an authorised Maritime Registrar or that of the Department of Maritime Affairs, document (1) is to be submitted;
After confirmation from the International Registrar,
- Form A8 will be endorsed by the Maritime Registrar or the Director of Maritime Affairs with the date and time of discharge of the mortgage.
- The original endorsed Form A8 will be returned to the mortgagee and a copy transmitted by fax/email to SKANReg head office.
- An entry will be made in the Registry Book, recording the discharge of the mortgage
If requested, a Transcript of Registry will then be issued by the International Registrar and sent by fax/email to the Maritime Registrar or Department of Maritime Affairs.
Document 1 (copy of endorsed document) will then be sent by the Maritime Registrar or Department of Maritime Affairs to SKANReg head office by courier.
On receipt of the original document, the International Registrar shall release the original Transcript of Registry to the mortgagee via the Maritime Registrar or the Department of Maritime Affairs.
In the event that the original Form A8 is not available, on being satisfied that the mortgage has been properly discharged, the Registrar may record in the Registry Book that the mortgage has been discharged. In such circumstances apply to the office of the International Registrar for examples of acceptable evidence that the mortgage has been properly discharged.