Mortgage Registration On Barbados Flag
Barbados has long been regarded as a fiscally responsible jurisdiction with a respected reputation worldwide, as evidenced by the wide-ranging number of banks, lenders and shipowners involved in financing of ships registered on Barbados flag.
Mortgages may be recorded against a ship as soon as the ship has completed all the registration requirements for initial (provisional) registration. The mortgage will remain recorded on the ship’s register until the loan is recorded as discharged and will not lose its priority if any further mortgage is recorded. Mortgages take priority according to the date and time of recording in the register, and not from the date shown on the mortgage.
The first mortgage to be recorded against a ship will be annotated with the letter ‘A’, any subsequent mortgage would be allocated the letter ‘B’ and consecutive letters of the alphabet being used for any further mortgages. In the event that Mortgage ‘A’ is recorded as discharged, then Mortgage ‘B’ would become the first priority mortgage. If a ship leaves the register without discharging any mortgage, the mortgage will remain on the register in perpetuity.
There are several different mortgage forms in use, with the most common being those to Secure Account Current etc (Body Corporate), and Mortgage (to Principal Sum and Interest) (Body Corporate) being Form 01 and 02 respectively.
There is one caveat with regard to completion of the mortgage document, and that is to avoid the use of the word ‘Trust’, in order to remain within the confines of the legislation enshrined in the Shipping Act 1994 (as amended).
Both the Mortgagor and the Mortgagee must be clearly identified by name and address of each party. The mortgage recital may refer to a Covenant or Loan Agreement if required, but not attached to the mortgage document. The Mortgage instrument must be notarised or under company seal or may be executed by an Attorney-in-Fact as a Deed, under a notarised Power of Attorney.
Fees for recording or discharging a mortgage are set fees regardless of the sums involved in the transaction.
The original mortgage must be presented to the Registrar, who will annotate, sign and date the mortgage document, with the original being returned to the sender or otherwise as instructed. A copy of the mortgage will be held on the register. A transcript of the register may be requested at any time on payment of a small fee.
Recording the discharge of a mortgage requires the lender to record the reverse side of the original mortgage document, either notarised or under company seal. Again, this may be effected by an Attorney-in-Fact, under a notarised Power of Attorney. The discharged mortgage will be recorded, and a copy retained on the register before the original is returned to the sender or otherwise as instructed.