What?
The Republic of Liberia (RL) recently introduced a series of amendments to the Liberian Maritime Law in an effort to modernise the legal framework when it comes to recordation of first preferred mortgage and lease finance charters.
When?
The amendments became effective on 9 August 2022. You may find a copy of the amendments to the Liberian Maritime Law here.
Major breakthroughs?
- E-recordation of mortgages and lease finance charters
Under the new amendments, the electronic recordation of first preferred mortgages and lease finance charters is formally legislated. Under this regime, it is no longer required to submit an original copy of the first preferred mortgages and lease finance charter with wet signatures to the Ship Registrar to perfect recordation.
The procedure that the Registrar will follow will be in line with the one introduced for COVID-19 without the need to follow up with the submission of any original documentation.
- Appendices to the first preferred mortgages
Under the new amendments, is no longer a requirement for a mortgage to be enforceable under Liberian law:
- to state any other terms and conditions or annex any copies or summaries of the instrument(s) which evidence the direct and/or contingent obligations secured thereby (for example to attach a copy of the loan agreement or the swap agreement or the guarantee); or
- to annex any copies or summaries of any agreement or other document that is incorporated by reference into the mortgage.
Similar provisions apply to lease finance charters.
- Amendments no longer required to be recorded:
The new amendments secure modifications, if any, that may be made from time to time in relation to the direct and/or contingent obligations secured thereby in respect of:
- interest rate and payment terms;
- a decrease in the total amount of the direct and/or contingent obligations secured by such mortgage;
- any maturity date (other than an extension of a maturity date stated in the mortgage – such for example when the mortgage is rendered pursuant to an agreement); and
- any covenants.
How will it be implemented?
The Liberian Ship Registry in line with the new amendments have further revised its Maritime regulations allowing for the new changes to become immediately applicable. You may find a copy of new Maritime Regulations here.
For further information, please contact:
Vanessa Tzoannos, Partner, Hill Dickinson
vanessa.tzoannos@hilldickinson.com
