Ship Mortgage and the Foundations of Registration
The relevant provisions of the Maritime Code regulate the ship mortgage — the pledge of a ship — comprehensively. Any ship, including one under construction, or a right in it may be mortgaged by the shipowner as security for a loan or other financial accommodation. The mortgagee may be any natural or legal person of Georgia or of a foreign country to whom a ship may by law be transferred as a pledge. The register of ships is kept by the agency, which issues the corresponding certificates and approves the rules of registration, of keeping the register and of recording maritime mortgages.
A certificate of temporary registration is issued before permanent or term registration for a period of not more than 6 months, and this period may be extended up to 1 year. In exceptional cases, upon a written application of the shipowner and with the consent of the chief registrar, the validity of the certificate may be extended further after expiry, but by not more than 1 year. A certificate of temporary registration gives rise to the same rights and obligations as permanent registration, which makes it a fully functional instrument during the transition to full registration.
The Mortgage Contract and Its Registration
The law requires the mortgage contract to indicate the names and addresses of the parties, the substance of the claims secured by the pledge, the form of the mortgage, the term for performance of the obligation, the valuation of the ship and its location, the registration, transfer and amendment of the mortgage, the priority of the registered mortgage, and any other condition raised and agreed by a party. The contract must be duly notarised and must necessarily pass through the State Register of Ships of Georgia, with an entry made in the certificate of ownership of the ship; for registration the original of the contract and a notarised copy must be submitted.
The agency is obliged to provide an extract from the register to the mortgagor and, on request, to the mortgagee and other interested persons; both registration and the issue of the extract are fee-based. It is also significant that a mortgage does not mean the alienation of the ship to the mortgagee, and the mortgagor is not deemed a person who loses the right of ownership in the ship. The rights and obligations of the parties under the contract are determined by the law of the mortgagee's country, unless otherwise agreed between them.