Ship Building Sale and Finance

Page 149


Ship mortgagees: enforcement and remedies

Ship mortgagees: enforcement and remedies

Charles Buss

Unprecedented numbers of shipowners have defaulted on their bank loans since the most recent global economic downturn began in 2008. Six years later, as the world economy makes a very slow and patchy recovery, shipowner loan defaults and insolvencies still continue. However, the arrest and lay-up of ships that was so prevalent in the immediate aftermath of the 2008 downturn, even converting the river Fal in Cornwall, whose sheltered location and deep draught makes it the ideal English location for mothballing ships, into a tourist attraction,2 has largely given way to alternative ship mortgage enforcement methods. In this chapter, I shall consider the benefits of the Admiralty enforcement process in England and other common law jurisdictions and the extent to which these may have been somewhat eroded by recent developments in the law and by the increasing use of insolvency proceedings by shipowners in financial difficulties.

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