The International Chamber of Shipping (ICS) and the Liberian Registry have helped the holder of a Liberian mortgage to overturn a decision of the Brazilian courts which, if left uncontested, could have had serious legal and economic repercussions on the global shipping industry.
The status of the vessel OSX-3, acquired in March 2012 by a Dutch company and re-registered under the Liberian flag, was successfully challenged by the Banco BTG Pactual/Cayman Branch, in an action before the lower court in Brazil on the grounds that the mortgage was not registered with Brazil’s admiralty court.
The country’s superior court of justice has now unanimously granted the motion filed by the Liberian Registry and the ICS, against this decision.
The motion rescinded the lower court ruling, on the ground that it created uncertainty around the enforceability of mortgages for the majority of the world fleet, including those registers in major flag states such as the USA, Marshall Islands, China and Germany, when such vessels were trading in Brazil.
The registry said, “Liberia took swift and decisive action following the decision of the lower court by filing the joint amicus motion to the main proceeding through its local counsel, Basch and Rameh. Liberia successfully submitted to the Court that the decision of the lower court would have an adverse legal and economic impact on the shipping industry, that it overlooked international conventions, and ignored international custom.
Other ship registries, meanwhile, decided not to join the motion despite having major interests in Brazil and notwithstanding the possibility that their mortgages could be questioned and invalidated.
“Recognising that the lower court decision could have been detrimental to international maritime trade, we decided to join as an amicus party early on. Although we were navigating uncharted waters, we knew this was the right decision,” Hara Gisholt, vice-president, Business and Legal Affairs for the Liberian Registry, said.
CEO of the Liberian Registry, Scott Bergeron recognised the win as a historic one for ship financing, international commerce and the Liberian maritime programme.
Sea News, November 22