Regulations on Vietnamese ship mortgage

According to the Vietnam Maritime Code 2015, the ship owner shall have the right to provide the mortgagee with a Vietnamese ship under his ownership in accordance with regulations enshrined in this Code and other relevant laws or regulations.

Agreement on Vietnamese ship mortgage must be in writing. The ship mortgage must be consistent with Vietnamese laws and regulations.

Regulations on ship mortgage shall also be applied to mortgaging of a ship under construction.

1. Rules of ship mortgage

According to Article 38 of the Vietnam Maritime Code 2015, ship mortgage shall be in compliance with the following rules:

- Transfer of ownership of a mortgaged ship shall not be allowed, unless otherwise approved by the mortgagee.

- The shipowner must buy insurance for the mortgaged ship, unless otherwise agreed upon in the mortgage agreement.

- If the mortgagee has transferred the whole or a part of ownership of the debt secured by a ship secured by a mortgaged ship to another person, such ship mortgage shall also be transferred in an equivalent manner.

- One ship may be mortgaged to secure a lot of obligations if the value of the mortgaged ship is greater than the total value of such obligations, unless otherwise agreed.

Priority order of ship mortgages shall be determined, based on the order of registration of an equivalent ship mortgage recorded in the national register of ships of Vietnam.

- The mortgaging of a ship owned by two or more owners must be unanimously agreed by these owners, unless otherwise agreed.

- The ship mortgage shall be terminated under the following circumstances:

+ Obligations secured by such mortgage come to an end;

+ Such ship mortgage is canceled or replaced by other security alternatives;

+ The mortgaged ship has been treated under laws and regulations;

+ The mortgaged ship is subject to total loss;

+ As agreed upon by contracting parties.

The mortgagee shall only keep a copy of the certificate of registration of the mortgaged ship.

2. Registration of Vietnamese ship mortgage

According to Article 39 of the Vietnam Maritime Code 2015, registration of Vietnamese ship mortgage shall include the following basic contents:

- Name, place of office of the mortgagee and the shipowner;

- Name and nationality of the mortgaged ship;

- Mortgage sum, interest rate and debt repayment due date.

Mortgaging of a Vietnamese ship shall become effective if such mortgaging is recorded in the national register of ships of Vietnam.

Information about registration of the mortgaged Vietnamese ship shall be provided for persons who request such information.

Persons who register the ship mortgage and those who use information about the ship mortgage shall be liable for statutory fees.

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