Lloyd's Maritime and Commercial Law Quarterly
THE 1993 CONVENTION ON MARITIME LIENS AND MORTGAGES
Francesco Berlingieri
INTRODUCTION
The 1993 Convention on Maritime Liens and Mortgages is the third attempt, after the two Conventions of 1926 and 1967, to unify this particular area of the law. The main purpose of the 1926 Convention was to unify the law on maritime liens and to reduce their number in order to encourage ship financing by granting a better priority to the holders of mortgages and hypothèques. The Convention adopted mostly rules based on civil law systems and recognized an excessive number of maritime liens. For these reasons it was ratified almost exclusively by civil law countries. This prompted the CMI to make a new attempt to realize the two purposes that the 1926 Convention had failed to reach and a new draft was approved by the CMI Conference of 1965. Such draft constituted the basis of the Convention adopted in 1967. This Convention also was not successful. The reduction of the number of maritime liens and suppression of the continental system of the ranking of maritime liens per voyage were probably the reasons why the Convention has not been ratified by civil law countries. However, these changes were not sufficient to foster ratification by common law countries and the only relevant ratifications have been those of Scandinavian countries.
When IMO and UNCTAD decided to place on their work programme the revision of the two Conventions, the CMI offered its co-operation to both. From the replies to a questionnaire circulated to the National Associations, it appeared that the 1967 Convention was considered satisfactory, save some minor changes, by a significant majority of such Associations. At the first meeting of the CMI International Sub-Committee, it was thus resolved to take the 1967 Convention as a basis for further work and to investigate thoroughly what changes were desirable. The Sub-Committee agreed that the primary purpose of a Convention should be that of improving the security level of mortgages and hypothèques. In particular, it agreed that:
- (a) long-term financing is essential for the development of merchant marine;
- (b) the more readily available and less expensive security is the vessel itself;
- (c) the need for uniform rules is increasing, for ship financing is becoming more and more international;
- (d) the essential features of a satisfactory security are: (i) the possibility of enforcement wherever the vessel may be found, and to this effect the security must be recognized in as many countries as possible through an international Convention; (ii) the possibility of sale of the vessel at the market price, and to this effect it is necessary to offer the prospective buyer a valid title wherever the ship may go after the forced sale; (iii) the possibility of recovering the outstanding portion of the loan from the proceeds of the forced sale, and to this effect the claim of the lender must be granted the highest possible priority.
57