Ship Mortgages in St. Vincent and the Grenadines: Legal Framework and Registration

Expert Legal Services for Ship Mortgages

At Temple Stoke, we provide comprehensive legal support for ship mortgage drafting, registration, and enforcement. We are regularly instructed by banks, lending institutions, and shipowners to draft customized mortgage instruments and provide legal opinions on their validity. Our services are tailored to meet the time-sensitive requirements of financial institutions, particularly in cases involving funding availability or mass vessel reflagging.

Types of Ship Mortgages and Secured Obligations

A ship mortgage secures the obligations of a vessel owner to a lender, typically a bank or financial institution. In St. Vincent and the Grenadines (SVG), mortgages may secure principal debt, interest, and contingent obligations, including swap agreements and other financial instruments.

Unlike some jurisdictions, SVG does not prescribe a standardized mortgage form. Instead, a first registered mortgage typically includes:

  • Basic legal requirements as per SVG’s Shipping Act 2004.
  • Covenants agreed upon by the parties that are not included in the primary debt documentation.

As a result, SVG ship mortgages tend to be more comprehensive than statutory form mortgages found in other jurisdictions.

Mortgage Registration Requirements

While there is no prescribed mortgage form, a valid ship mortgage in SVG must include:

✅ Vessel Identification – The mortgage must specify the registered vessel.
✅ Endorsement on the Certificate of Registry – The mortgage details, including time and date, must be recorded by SVG Maritime Administration (SVGMARAD).
✅ Details of Mortgagor and Mortgagee – Names and addresses of both parties must be included.
✅ Loan Amount and Maturity Date – The total amount secured and repayment terms must be explicitly stated.
✅ Executed and Witnessed Signatures – The mortgage must be signed, witnessed, and acknowledged.
✅ Affidavit of Good Faith – A sworn statement confirming that the mortgage is executed in good faith.

Mortgage Registration and Priority

Who Maintains the Mortgage Register?

Ship mortgages are registered with the SVG Maritime Administration’s Ship Registry (SVGMARAD). The registry operates under:

  • The Registrar of Ships and Seafarers (Kingstown, SVG).
  • The Commissioner of Maritime Affairs (Overseas Office).

Once a mortgage is properly registered, it becomes a first-priority mortgage under the Shipping Act 2004, granting the mortgagee a secured interest in the vessel.

Key Considerations for Mortgage Registration:

✔ The mortgage must state the full loan amount.
✔ A maturity date is required for valid registration.
✔ The underlying debt instrument is not required to be attached but must be sufficiently referenced in the mortgage.
✔ In practice, many lenders attach key debt documents as annexes for clarity in enforcement proceedings.

Transfer of Mortgage Interests in Loan Syndication

When a mortgagee acts as an agent or trustee for a lending syndicate, no additional filings are required when a lender transfers its share of the underlying debt. However, if the mortgagee itself is replaced, an assignment of mortgage must be recorded with SVGMARAD to maintain legal continuity.

Maritime Liens and Vessel Arrest

Recognition of Maritime Liens

SVG’s Eastern Caribbean Supreme Court recognizes maritime liens under the Admiralty and Prize Act and the Civil Procedure Rules 2000 (Part 70). Maritime liens cover a broad range of claims, including:

  • Seafarer wages
  • Collision claims
  • Salvage and wreck removal
  • Cargo damage and loss
  • Personal injury claims
  • Ship repair and supply debts

Priority of Maritime Liens Over Mortgages

Certain maritime liens have priority over registered mortgages, including:
✔ Seafarer wage claims
✔ Liens arising before the mortgage was recorded
✔ Claims listed in the Shipping Act 2004
✔ Custodial expenses during vessel foreclosure proceedings

These liens take precedence even if the mortgage was registered before the lien arose.

Non-Mortgage Liens and Third-Party Claims

SVG permits non-mortgage maritime liens to be recorded against vessels.

✔ A creditor may file a notice of claim of lien with SVGMARAD.
✔ This does not create a lien or alter priority, but it serves as notice to third parties.
✔ These notices can complicate future vessel sales or financing transactions.

Recognition of Foreign Mortgages

SVG courts recognize foreign ship mortgages, provided they are:
✔ Properly executed in accordance with the laws of the vessel’s home port.
✔ Registered in a centralized mortgage registry of the flag state.
✔ Enforceable under SVG’s debt recovery and contract enforcement laws.

Foreign mortgage holders may seek vessel arrest and judicial sale in SVG to recover unpaid debts, but their mortgage priority may not always align with locally registered mortgages.

Limitations on Mortgagee’s Self-Help Remedies

While self-help remedies may be available in some jurisdictions, SVG prohibits any enforcement actions that breach the peace. Mortgage enforcement must follow court-supervised procedures, ensuring fairness to owners, crew, and third-party creditors.

Duties of Mortgagees to Owners and Creditors

Under SVG law, a mortgagee’s primary duty is to act in good faith. However, beyond this obligation, a mortgagee has no direct duty to the vessel owner or other creditors, except as required by contract or law.

Expert Legal Support for Ship Mortgages

At Temple Stoke, we assist lenders and shipowners with:
✔ Drafting and reviewing ship mortgages to ensure legal compliance.
✔ Registering mortgages with SVGMARAD to secure priority status.
✔ Enforcing mortgage claims through vessel arrest and judicial sale.
✔ Providing legal opinions on the enforceability of domestic and foreign ship mortgages.

For legal advice on ship mortgages, vessel financing, or lien enforcement, contact Chevanev Charles, LL.M, at Temple Stoke.

📩 Email: ccharles@templestoke.com

Chevanev Charles, LL.M, is a practicing attorney in St. Vincent and the Grenadines with a Masters’ in International Maritime Law from the International Maritime Law Institute in Malta.