A Study On The Legal System Of Mortgage On Vessel Under Construction

Usually, vessel under construction is permitted to be establishedmortgage in states’ legislations and international conventions. But they seethe nature of the mortgage on vessel under construction mainly in threedifferent ways, chattel mortgage, floating charge and assemblage mortgage.However, I think, because of the variability about the property of vesselunder construction, relative certainty about its scope of property, and thespecialty that its value as a whole will be damaged after the splitting, themortgage on vessels shall not to be identified as chattel mortgage or floatingcharge, but as special assemblage mortgage.To clear the setting subject of the mortgage on vessel under constructionis very important, and the ownership is the key. I think, we should first makethe ownership clear through the principle of autonomy, and then determine the nature of the contract in accordance with the laws of some country.The determination of the scope of the property of the mortgagedetermines what property can be executed when a verdict about the mortgageis reached. Countries have different provisions about this, but our laws haveno specific provisions. I think, we can’t define the scope of its property easily.Instead, we should find out whether or not the property has objectivelyformed indivisible relations with the building ship.Registration has the effect of demonstration and opposing. Meanwhile,it determines the discharge order. In this paper, registration system on boththe ownership and the mortgage on vessel under construction are built.As to the applicable law of the mortgage on vessel under construction,we should distinguish such two aspects as establishment and legal effect,according to which, we determine different conflict rules. For the former, weshould first follow the basic principle of autonomy of will, if valid agreementhasn’t been reached, the law of place of shipyard should be applied. For thelatter, considering all the factors, law of place of registration is suggested tobe applied.About the implement ways of the mortgage on vessel under construction,I propose a new implement way, combining the receiver system of floatingcharge, system of alienation of guaranty, with our mortgage system, to fully ensure the implement of the mortgage of vessel under construction.In a word, the determination of the nature, the setting subject and theobject, the registration system, the applicable law as well as the implementmethods of the mortgage on vessel under construction are the keynote of thispaper. They play important role in the foundation and improvement of thelegal system of mortgage on vessel under construction.