International Convention on the Judicial Sale of Ships and Their Recognition Signed by 15 Countries
In December 2022, the United Nations General Assembly adopted the International Convention on the Judicial Sale of Ships and Their Recognition (“Beijing Convention”) (The United Nations (UN) Convention on the International Effects of Judicial Sales of Ships), which was signed by 15 countries in a ceremony held on September 5, 2023, in Beijing.
The Beijing Convention is an agreement that designates a harmonized regime for judicial sales of ships while allowing countries to maintain their domestic laws regulating forced sales. With this provision, the Beijing Convention aims to fill a significant gap in the maritime trade sector. By providing important harmonization, the convention seeks to eliminate situations where buyers of ships sold via judicial sale could face claims from creditors that arose before the sale, as well as the possibility of the ship being seized by creditors. It also aims to address challenges faced by good-faith buyers regarding the deletion of the ship from the registry and its re-registration in another jurisdiction.
According to UNCITRAL (The United Nations Commission on International Trade Law), while international efforts for harmonization in ship arrests have seen progress, much less has been achieved regarding the judicial sale of ships. Furthermore, according to the text, the Convention is a “closed” agreement, binding only on the states that are parties to it, as defined by UNCITRAL.
As mentioned at the beginning, this important Convention, closely related to Maritime Trade, was signed by 15 states on September 5. The first states to sign the convention include China, Saudi Arabia, Switzerland, and Singapore.
According to Eng Dih Teo, Director of the Singapore Maritime and Port Authority, who believes that the Convention will play an important role in ship transactions: “Beyond the commercial benefits, the signing of the convention, negotiated by various states, is a good reflection of multilateralism, as countries come together to create a common framework to address a shared issue.”
You can access the full text of the Convention via this link.
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