Buy sell transfer of vessel
Buy sell transfer of vessel
Maritime law in Greece FAQ
With shipping being a significant sector for Greece’s national economy, advancements in this industry continue unabated. Recent changes introduced by the new Private Maritime Law Code have altered the landscape in several areas, improving long-standing issues within the legal framework governing the maritime sector. Below, we provide answers to the ten most frequently asked questions about maritime matters in a straightforward and comprehensible manner.
How can you buy sell transfer of vessel today?
To answer this fundamental question, we must first distinguish between original acquisition (where the vessel is acquired without previously belonging to someone else) and derivative acquisition (where the opposite is true). Today, a ship can be originally acquired in the following ways:
– Through shipbuilding: a contract between the shipbuilder and the shipowner, where the former constructs the ship for the latter. A shipbuilder may also construct a ship for themselves, which is legally permissible, essentially making it a self-contract.
– Through adverse possession: as discussed in a previous article, this occurs when someone uses the ship as their own for an extended period and gains ownership from another, even though the ship initially did not belong to them. The conditions for this haven’t changed much, but it’s important to note that the period required for regular adverse possession is now three years, while extraordinary adverse possession requires ten years, shortening the deadlines.
Conversely, for derivative acquisition, the law provides the following methods:
– By transferring the ship through a contract, which will be discussed further below.
– Through inheritance, where the acceptance of inheritance that includes a ship must be recorded in the ship registry (the equivalent of the land registry but for ships).
– By open auction: if the shipowner has debts and the ship is subject to compulsory seizure, it will be auctioned off, and the highest bidder will automatically become the ship’s owner. However, the auction’s ratification must also be registered in the ship registry.
What must a valid buy sell transfer of vessel contract include?
Essentially, the buy sell transfer of vessel is a standard contract under Civil Law (such as sale, donation, exchange, etc.). The legal requirements remain largely unchanged but are adapted to the specificities of the ship.
– The person transferring the ship must be its owner, which can be easily verified through a search in the relevant ship registry where the ship is registered. If the ship is under seizure, it cannot be transferred unless the creditors who imposed the seizure consent. Additionally, a ship cannot be transferred by someone who does not own it to a buyer who is unaware that the seller is not the owner (this can happen only with movable items under certain conditions).
– A written agreement concerning the ship’s transfer is required, which can initially be made through either a notarial or private document. Therefore, the parties are free to choose the type of agreement, which must be registered in the ship registry, as the transfer will be considered invalid if not recorded. Once the agreement is registered in the ship registry, the transfer is legally completed, meaning the buyer does not need to take possession of the ship to be considered its owner.
Who is the shipowner exploiting the ship?
This term can cause practical issues due to confusion with other terms. Simply put, a shipowner is someone who exploits a ship they own for their own account, which can be a natural person or a legal entity. Ownership of the ship is easily confirmed by a search in the ship registry, as the shipowner’s name will be registered in the ship’s records.
– More than one person may jointly hold undivided shares of a ship, and in such cases, all will be considered shipowners of that ship. An important point is that if someone owns multiple ships, they do not have a single shipownership but as many shipownerships as there are ships they own. This distinction is crucial for the ship’s debts and for tax reasons, as each ship is treated as a separate unit, like a company.
– As mentioned earlier, to be considered a shipowner, one must exploit the ship for their own account. However, the law does not require the shipowner to exploit the ship themselves—they may use intermediaries like ship operators or charterers, which will be discussed later. Therefore, it is crucial to distinguish when someone exploits a ship for their own account and when for another’s account (in the latter case, they are not considered the shipowner).
And the liability?
The general rule is that the shipowner is liable for their acts/omissions in contracts they enter into with others and for any torts committed within the scope of their professional activity. Additionally, the shipowner has further legal liability:
– For the acts/omissions of the captain while performing their duties. If the captain acts towards third parties in violation of restrictions imposed by the shipowner in their contract, the shipowner is not bound by the captain’s actions unless the restriction was known to the third parties or they should have known.
– For the acts/omissions of other crew members, provided these occur during their work. Actions by crew members that are entirely unrelated to their work (e.g., in a different location or outside working hours) are not considered related to it and therefore do not create liability for the shipowner towards third parties.
– If the shipowner transfers the ship to another, they are no longer jointly liable with the buyer (and new shipowner) for the ship’s debts/taxes/general obligations until the point of transfer. This legislative innovation facilitates transactions and somewhat reduces the shipowner’s liability in this regard.
– The shipowner’s liability towards their employees/crew members for wages, working conditions, legal leave, and a healthy working environment is self-evident. For more details on the rights of seafarers during their employment, you can refer to our related text, where we discuss these extensively.
How does the shipowner differ from the ship operator?
Unlike the shipowner, a ship operator exploits a ship for their own account that belongs to someone else. Therefore, the ship operator must have the ship’s technical management, meaning they possess specialized knowledge. However, the technical management of the ship does not have to be performed by the ship operator personally; they can use the crew, such as the captain/pilot, etc., to manage the ship.
– For the ship operation to be valid, the agreement between the shipowner and the ship operator (the ship operation declaration) must be submitted to the port authority of the ship’s registry (something that can now also be done electronically). However, the ship operator legally operates the ship even without registering the declaration, as it only matters for third parties and not in the shipowner-ship operator relationship, where their agreement prevails.
– If the declaration mentioned above has not been submitted to the port authority, the law assumes that the shipowner is also the person exploiting the ship in this case, not the ship operator. Thus, the shipowner will bear the liability mentioned in the previous question, unless proven otherwise—that the ship operator is indeed the one exploiting the ship. The same right to prove otherwise is available to anyone with a legitimate interest under the law, such as the ship operator’s creditors or the ship operator themselves.
Is the ship operator different from a maritime agent?
The role of a maritime agent is different from that of the shipowner and ship operator. A maritime agent is an independent professional who takes on several responsibilities on the ship, such as repairs, routine expenses, cargo management, etc. Their role is primarily administrative and executive for ship-related matters.
– Therefore, a maritime agent requires special authorization from the shipowner and/or ship operator to act on their behalf, as the agent binds the ship with their actions and the contracts they sign with others. This special authorization is granted through the maritime agency contract the agent signs with the shipowner/ship operator.
– As above, the limitations on the agent’s authority must be known to third parties or should have been known by third parties for the shipowner and/or ship operator to be released from liability if the agent acts beyond their authority.
– According to the law, the contract mentioned above can also be made verbally, meaning no written form is required. It is self-evident that the maritime agent is entitled to remuneration for the work and services they provide on the ship, as well as reimbursement for all expenses incurred on behalf of the ship (e.g., prepayment of supplies for the ship’s resupply).
I want to exploit a ship jointly with others. How do I proceed?
Many people are interested in this sector. A well-known corporate form in the maritime industry is joint ownership, where multiple co-owners jointly exploit a ship.
– The key element of joint exploitation of the ship requires an agreement between the shipowners, which does not have to be in writing but can be oral.
– Joint ownership as a company does not have legal personality, but it has its own assets, which are distinct from the personal assets of the joint owners who are members.
– The shipowners are the only ones responsible for managing the joint ownership, as decisions are made exclusively by them, meaning third parties who are not members cannot participate in the management.
– As long as an absolute majority of shares is present during decision-making, the joint owners can represent the company in transactions and bind it by entering into contracts with third parties.
– If a joint owner wishes to transfer their share to another or a third party, they can do so freely, and if any restrictions have been set by the company agreement, these apply only among the joint owners and not against others.
How are joint owners liable?
Although joint ownership as a company resembles a general partnership under commercial law (where partners have unlimited and joint liability for the company’s debts), a variation of this rule applies to joint ownership. Each joint owner is liable up to the extent of their share in the joint ownership for the company’s debts and is not liable beyond that.
– This rule is also reflected in cases of default by a joint owner, where the shares of the other joint owners cannot be seized by creditors seeking to recover their claims against the defaulting joint owner.
– If a joint owner has paid off their share of the company’s debts, they may recourse against the other joint owners to contribute their share proportionately.
And the maritime company?
In practice, due to the restrictions imposed on joint ownership, the Maritime Company of Law 959/1979 is often chosen. This is a legal entity, separate from its shareholders, that can engage in activities such as ship ownership, construction, and leasing, among others.
– The maritime company has its own assets and liabilities distinct from its shareholders, which means it can enter into contracts, incur debts, and be sued independently of its shareholders.
– The shareholders are only liable up to the amount they have invested in the company and are not personally liable for the company’s debts, making this a preferred option for those seeking to limit their liability.
– Additionally, the maritime company is subject to specific tax advantages under Greek law, making it an attractive option for those in the maritime industry.
Is there any other corporate form in the maritime sector?
Yes, other corporate forms can be utilized in the maritime sector, such as the limited liability company (EPE), the société anonyme (AE), and the private capital company (IKE). Each has its own legal framework, advantages, and disadvantages, depending on the specific needs and goals of the parties involved.
– The limited liability company (EPE) is similar to the maritime company but is subject to more general corporate law.
– The société anonyme (AE) is a larger corporate form, typically used for more significant ventures, and is subject to more stringent regulatory requirements.
– The private capital company (IKE) is a flexible corporate form that has gained popularity in recent years due to its simplicity and lower regulatory burden.
– Each corporate form has its own advantages, and the choice will depend on the specific circumstances and goals of the parties involved in the maritime sector.
In conclusion, Greece’s new Private Maritime Law Code offers various legal forms and mechanisms tailored to the maritime sector, allowing for a broad range of activities and partnerships. whether you want to buy sale transfer a vessel, establish a maritime company, or exploit a vessel, the law provides clear guidelines and protections for those involved in the maritime industry.
Economou & Economou law office in Athens Greece, has a long and successful presence in maritime law industry, specializing in buy sell transfer of vessel ownership and vessel registration, shipbuilding contracts and maritime finance, well-versed in the complexities of maritime transactions, including drafting contracts, providing legal advice on maritime transactions and international maritime regulations.
when choosing a maritime lawyer or law office, it’s essential to consider their experience in the specific area of buy sell transfer of vessel transfer, their familiarity with both Greek and international maritime law, and their ability to handle the complexities of maritime transactions efficiently.
Contact the best maritime lawyers in Greece of Economou & Economou law office in Athens, in order to buy sale transfer of vessel, via email at econlaw@live.com, via tel at (+30) 2103603824 or fill the contact form here for consultations to discuss your specific needs and provide tailored legal advice.
