A Legal Study On The Mortgage Of Vessel Under Construction

It is a common practice in international shipbuilding industry that the security interest against a vessel under construction is created upon the vessel itself in order to obtain an enormous sum of money for shipbuilding, especially so required in a developing country such as China. However, the legal system for security of vessel under construction in China must be improved and developed greatly due to the fact that uncompleted prescription of Chinese law and the superficial research on theory, in which the result that the demand of financing under the shipbuilding in practice can not be satisfied.On the basis of a principal of traditional civil and commercial law, with a further analysis and research on the mortgage system under the common law and international convention to distinguish the mortgage system under the common law from the charge system in China, this paper defines the security interest for vessel under construction under Chinese law as the mortgage system under the civil law and not the charge system generally assumed in China. As stated above, some recommendation on amendments to relevant Chinese law are suggested, with a hope that it is beneficial to the research and improvement of the legal system of security interest for vessel under construction in China.