Mortgages over Maltese Vessels
A mortgage over a Maltese vessel may be registered in the Registry of Shipping at the Merchant Shipping Directorate by the filing of a mortgage deed. Mortgages are recorded in the order in time in which they are registered with the Registrar. Further mortgages or transfer of the vessel without the mortgagee’s prior written consent may be prohibited by a specific clause in the mortgage deed.
Some Protection afforded to the Mortgagee
A mortgaged vessel may not be deleted from the Maltese Register without the mortgagee’s prior written consent. In addition, a vessel may not be struck off the Register by the competent authorities without at least one month’s notice being given by the Registrar of Shipping to the mortgagee, and furthermore if the vessel is deleted in such circumstances, the Merchant Shipping Directorate will issue the deletion certificate save for any registered encumbrances and consequently the mortgage continues to attach to the vessel.
Enforcement of Mortgages
In the event of default of any term or condition of a registered mortgage, the mortgagee may upon giving notice to the mortgagor take possession of the ship and have the power absolutely to sell the ship or share therein, in respect of which he is registered. All mortgages, whether principal and interest or account current, are executive titles and enforceable upon default of the debtor without the need of a prior court judgment to enforce such mortgage. The Merchant Shipping Act also provides that foreign mortgages will be recognised as a mortgage and thereby benefit from mortgage status under the Merchant Shipping Act if all the requirements contained therein are met.
Apart from the mortgagee’s rights to take possession and sell the vessel secured by mortgage, upon default, the mortgagee is also empowered to take over and complete vessel registration formalities. Claims secured by a mortgage enjoy high ranking.