Once a vessel is provisionally registered, registration, transfer and discharge of mortgages may be effected immediately on presentation of the relative documents to the Registrar. The 1986, 1988, 1990 and 2000 amendments introduced important safeguards in respect of registered mortgages thus making financing of Maltese ships more attractive.
A ship registered in Malta together with its equipment, machinery and other accessories, or any share therein, may be made a security by way of mortgage. A mortgage is indivisible notwithstanding the divisibility of the underlying debt which it may secure. A mortgage over a Maltese ship shall have effect vis-à-vis third parties once it is duly recorded in the register. The priority of mortgages over the said ship is determined by the date and time of their record in the register.
Maltese mortgages offer adequate protection to ship financiers for the following reasons, among others:
- They enjoy a high priority in an eventual ranking of claims against a Maltese ship
- Mortgages constitute executive titles and may be enforced immediately without the need to institute lengthy court proceedings
- They attach to any proceeds from any indemnity as well as any insurance proceeds
- A mortgagee may prohibit the registration, without his prior written consent, of subsequent mortgages in favour of other creditors, unless such further mortgage is executed in favour of an existing mortgagee
- The Registrar of Ships is bound to notify the mortgagee upon the transfer of a registered ship to a new Maltese owner
- The sale of a Maltese ship to a foreign owner requires the prior written consent of all registered mortgagees;
- A mortgagee may apply for any extensions, pay fees and do all such things in the owners name in order to maintain the status and validity of the ships registration.