Summary.
Article 1 proposes approval in full of the United Nations Convention on the International Effects of Judicial Sales of Ships, adopted in New York by the United Nations General Assembly (Asamblea General de las Naciones Unidas) on December 7, 2022. The Convention governs international recognition of judicial sales that give a purchaser clean title. It defines a judicial sale, a ship, mortgages, charges and maritime liens, as well as the owner, purchaser, subsequent purchaser and State of judicial sale. It covers sales conducted in a State Party when the ship is physically within that State’s territory. It excludes certain State ships used exclusively for non-commercial public service.
The sale takes place under the law of the State where it is conducted; that law also provides procedures for challenging the sale before its completion. Before a judicial sale certificate may be issued, the Convention requires prior notice to the ship registry; holders of registered mortgages and charges who meet its registry conditions; holders of maritime liens who have reported their claims; the owner; and, where applicable, the registered bareboat charterer and bareboat charter registry. The notice must contain the information in annex I, be published through notices in the press or other available publications, and be transmitted to the Convention’s repository. The provisions address translations for that transmission and the registry information used to identify notice recipients.
Once a sale complies with applicable law and the Convention and gives clean title, the competent authority issues a judicial sale certificate to the purchaser and promptly transmits it to the repository. The certificate records details of the sale, ship, authorities, former owner and purchaser, including the IMO number when available. It may be issued electronically if its information remains accessible and reliable methods identify the issuing authority and detect subsequent alterations. The certificate and any translation are exempt from legalization or a similar formality. A certified sale gives the purchaser clean title in the other States Parties.
At the request of the purchaser or subsequent purchaser, and upon presentation of the certificate, the competent registry cancels earlier mortgages and registered charges, deletes or registers the ship, and updates its records as applicable. Cancellation of a bareboat charter registration is also provided for. A registry may request a certified translation or an authenticated copy. For a claim arising before the sale, a court or other judicial authority dismisses an application to arrest the ship, or orders an existing arrest or similar measure lifted, when the certificate is presented. The Convention provides exceptions where the relevant result would be manifestly contrary to that State’s public policy.
Courts in the State of judicial sale have exclusive jurisdiction over applications to set aside the sale, suspend its effects or challenge issuance of the certificate. Courts in other States Parties must decline jurisdiction over such applications. Decisions setting aside or suspending a certified sale are transmitted to the repository. Another State Party may deny the sale’s international effect if its court finds that effect manifestly contrary to its public policy. The text places the repository under the Secretary-General of the International Maritime Organization (Organización Marítima Internacional) or a designated institution. These provisions concern judicial authorities, ship registries and the International Maritime Organization, and may affect shipping companies, ship purchasers, maritime creditors, financiers and insurers.
What it proposes.
- Approval of a convention on judicial sales of ships.
- International recognition of title acquired through a judicial sale.
- Notice, certification and ship registry action.
- Ship arrests, judicial jurisdiction and the public policy exception.
Who it would affect.
- States Parties and their judicial and registry authorities.
- Purchasers and subsequent purchasers of ships sold judicially.
- Owners, creditors and holders of mortgages, charges or maritime liens.
- Bareboat charterers whose charters are registered.
Key points.
- Approves in full the United Nations Convention on the International Effects of Judicial Sales of Ships.Art. 1
- The Convention applies to judicial sales in a State Party when the ship is physically in its territory and the sale gives clean title.Art. 1
- Requires notice to registries and persons holding rights in the ship, publication of notices, and transmission of the notice to the repository.Art. 1
- Provides for the issuance and publication of a judicial sale certificate, which may be electronic.Art. 1
- Recognizes the purchaser’s clean title in other States Parties and provides for registry action at the request of the purchaser or subsequent purchaser.Art. 1
- Provides for refusing or lifting arrests based on claims arising before the sale, subject to the stated public policy exception.Art. 1
- Reserves jurisdiction to set aside the sale, suspend its effects or hear a challenge to the certificate to the courts of the State of judicial sale.Art. 1