UN convention to promote legal certainty in judicial sale of ships signed

UN convention to promote legal certainty in judicial sale of ships signed

Subject: IR

Section: International conventions

Key Points:

• In a significant development, 15 countries, including China, Saudi Arabia, Singapore and Switzerland, signed the UN Convention on the International Effects of Judicial Sales of Ships.
• Why this agreement is important?
  • Maritime transport plays a leading role in international trade, and it is estimated that more than 90 per cent of global traded goods are transported by sea. This makes the ship a vital asset.
  •  However, matters related to international shipping are often afflicted with legal difficulties arising from lack of international harmonisation.
  • Due to lack of harmonisation judicial sales are often stuck in legal issues, due to this judicial sales of the ships don’t receive proper valuation.
• What is the agreement?
  • It aims to promote legal certainty and predictability at the international level by creating a uniform regime for the international effects of ‘judicial’ sales of ships.
  • The Beijing Conventionon the Judicial Sale of Ships, as it is now known, was developed by the United Nations Commission on International Trade Law (UNCITRAL) to address the problem of bona fide new owners, find themselves dealing with previous creditors laying claim to the ship as security for a loan.
  •  The convention establishes a harmonised regime for giving international effect to judicial sales.
  •  By ensuring legal certainty to the title that the purchaser acquires in the ship as it navigates internationally, the convention is designed to maximise the price that the ship is able to attract in the market and the proceeds available for distribution among creditors, and to promote international trade.
• The International Maritime Organisation (IMO) said it was supporting the establishment of the convention by acting as the repository for these notices and certificates of judicial sale.
•  Information on pending and completed judicial sales of ships will be accessible online via a dedicated module on IMO’s Global Integrated Shipping Information System (GISIS) platform.
• With the Convention on the International Effects of Judicial Sales of Ships having now been adopted, the IMO is encouraging member states to ratify the agreement.