1993 convention on maritime liens and mortgages entering into force

The “Convention on maritime liens and mortgages” executed in Geneva on May 6, 1993 (1993 Convention), replaces the “International convention for the unification of certain rules relating to maritime liens and mortgages” executed in Brussels on April 10, 1926.

This 1993 Convention is the third attempt at standardizing the diverse domestic regulations in this field, after the unsuccessful attempt of the Convention of 1967 that Spain never ratified.

Its entry into force took place on September 5, 2004, six months following the date on which the tenth State (Nigeria) expressed its consent to be bound by it. Spain had ratified it years ago, by an Instrument of Accession dated 31 May, 2002 (deposited on June 7 of that same year).

Spanish domestic regulations on this matter, as contained within the Code of Commerce of 1885 and the Law on Ship Mortgages of 1893 were not expressly abolished by the Instrument of Accession of 2002. However, due to the enlarged scope of the 1993 Convention in comparison to that of its predecessor, recourse to the Spanish domestic regime, if any, shall be limited to very residual cases.

The 1993 Convention has reduced the number of maritime liens that take priority over registered mortgages, "hypothèques" and charges. The reason for this is probably due to its vocation to improve conditions for ship financing and for the development of merchant fleets. Preferential maritime liens have been short-listed to the following:

(a)     claims for wages and other sums due to the master, officers and other members of the vessel's complement in respect of their employment on the vessel, including costs of repatriation and social insurance contributions payable on their behalf;

(b)     claims in respect of loss of life or personal injury occurring, whether on land or on water, in direct connection with the operation of the vessel (except for claims that arise out of or result from (i) damage in connection with the carriage of oil or other hazardous or noxious substances by sea for which compensation is payable to the claimants pursuant to international conventions or national law providing for strict liability and compulsory insurance or other means of securing the claims; or (ii) damage caused by the radioactive properties or a combination of radioactive properties with toxic, explosive or other hazardous properties of nuclear fuel or of radioactive products or waste);

(c)     claims for reward for the salvage of the vessel;

(d)     claims for port, canal and other waterway dues and pilotage dues;

(e)     claims based on tort arising out of physical loss or damage caused by the operation of the vessel other than loss of or damage to cargo, containers and passengers' effects carried on the vessel (with the same exception described in paragraph (b) above).

Notwithstanding the list above, should there be a forced sale of the vessel, the costs and expenses arising out of the arrest or seizure and subsequent sale of the vessel shall be first paid out of the proceeds of sale.