Under the Merchant Shipping Act, Cap 7.05, ships registered in St. Kitts & Nevis may be made a security for the repayment of a loan (mortgage of a ship). This includes yachts and non-propelled vessels and there is no lower size/tonnage/length limit. Refer to sections 77 to 83 inclusive of the Merchant Shipping Act. See pages 3 & 4 of this booklet
The Merchant Shipping Act follows the general principal of English Law on ship mortgages. The mortgagee may enforce the mortgage by taking possession of the ship and selling it by private sale or at auction.
It is usual for the mortgagor and the mortgagee to enter into an agreement setting out in detail the relation between them and the terms and conditions under which the mortgagee may enforce its rights under the mortgage. This document is commonly termed as a Deed of Covenant, Mortgage Deed, Loan Agreement or similar such name reflecting its contents and status to the parties.
The mortgagor then records the existence of the mortgage by completing Form A8 (may be downloaded from our website), see pages See pages 7 & 9 of this booklet and submitting same to the offices of the International Registrar of Shipping and Seamen, where the existence of the mortgage is then recorded in the ship’s records within the Registry Book. See Mortgage Registration, Transfer and Discharge Procedure, see pages 5 & 6.
The priority of the mortgage is determined by the date and time of its registration in the Registry Book. There are no provisions in the Merchant Shipping Act for the registration of the mortgage in the register of companies as a charge against the ship owning company.
Page 10 provides an example of a bill of sale. However an industry standard format is also acceptable.
Page 11 is an example of a finance house mortgage affidavit.
For some of the banks who have accepted St Kitts & Nevis Mortgage Legislation and granted mortgages to our ships, see page 12.
For guidance of shipowners and financiers as to the applicability of St. Kitts & Nevis mortgage legislation, please refer to the Legal Opinion prepared by Messrs Daniel Brantley & Associates.