Shipping operations are largely financed by banks and other financing institutions. There are various forms of structures and agreements that may be entered into in order to comprehensivley secure the financiars interest such as mortgages, finance leases, security by title transfer and operational charters. Maltese law provides a well-regulated legal framework of maritime mortgages and privileges. A registered mortgage securing a debt which is certain, liquidated and due, is deemed an executive title by law and enjoys higher ranking over other privileged claims. The procedure for mortgage registration in Malta is quite straight forward and such mortgage will typically make reference to a financing/loan agreement and deed of covenants as part of transactional deeds governing the mortgage-secured obligations. Foreign mortgages are also recognized in the Maltese system given that certain conditions are satisfied.
In the event of default of any term or condition of a registered mortgage or of any document or agreement referred to therein, the mortgagee shall, upon giving notice in writing to the mortgagor:
- be entitled to take possession of the asset or relevant share therein;
- have power absolutely to sell the asset or relevant share therein;
- have power to apply for any extensions, pay fees, receive certificates, and generally do all such things in the name of the owner as may be required in order to maintain the status and validity of the registration of the asset;
DF Advocates Shipping Department offers legal and advisory services on:
- ship financing, including the review and vetting of loan agreements, transaction and security documentation and drafting of Loan Agreements, Deeds of Covenant and other security documents;
- drafting of mortgage recitals, the registration, amendments and discharge of Maltese statutory mortgages, and the provision of legal opinions and advice on the enforceability of Maltese statutory mortgages;
- structuring of financing arrangements and tax advice.