Summary:

On March 14, 2024, at the UN Headquarters in New York, Belgium and the European Union signed the United Nations Convention on the International Effects of Judicial Sales of Ships, often known as the “Beijing Convention on the Judicial Sale of Ships”. The European Union complies with Article 18 by signing. In compliance with the convention’s Article 18, the European Union signs. On December 7, 2022, the United Nations General Assembly ratified the Convention, which had been drafted by UNCITRAL, the UN Commission on International Trade Law. The Convention creates a uniform framework for judicial sales to have international impact. By guaranteeing the buyer’s acquisition of a clear legal title to the ship during its international voyage. States and regional economic integration organizations are welcome to sign, ratify, accede to, or approve the Convention. 

Context: 

In a recent press release, the United Nations Commission on International Trade Law (UNCITRAL) confirmed that Belgium and the European Union had signed the Beijing Convention on the Judicial Sale of Ships, also known as the United Nations Convention on the International Effects of Judicial Sales of Ships. Article 18(1) of the Beijing Convention on Judicial Sale of Ships states that a Regional Economic Integration Organization composed of sovereign states having authority over certain matters covered by the convention may sign the convention; Belgium is the eighteenth state to do so. The EU has signed the convention in compliance with this provision. The Regional Economic Integration Organization is required by Article 18(2) of the convention to issue a declaration outlining the subjects covered by the agreement and the areas in which its member states have delegated authority to the organization.

With such declaration, the EU has indicated its authority over the subjects covered by the treaty. The United Nations Commission on International Trade Law (UNCITRAL) created the Beijing Convention on the Judicial Sale of Ships, as it is now known, to solve the issue of legitimate new owners and those funding the purchase of vessels having to deal, for example, with past creditors claiming the ship as security for a loan. The “Beijing Convention on the Judicial Sale of Ships,” which was adopted by the General Assembly on December 7, 2022, creates a uniform framework for giving judicial sales international effect while upholding national laws that regulate the process of judicial sales and the situations in which they grant clean title. The Convention is intended to maximize the price that the ship is able to attract in the market and the proceeds available for distribution among creditors, as well as to promote international trade, by providing legal certainty regarding the title that the purchaser acquires in the ship as it navigates internationally. The fundamental tenet of the Convention is that a judicial sale that takes place in one State Party and results in the buyer obtaining clean title has the same effect in all other States Parties (article 6). There is only one exception to the general rule, which is public policy (article 10).  The Convention regime prescribes guidelines for judicial sales, including deregistering or transferring registration upon purchaser’s request, preventing arrest based on extinguished rights or interests from prior agreements, and granting exclusive jurisdiction to the state’s courts to hear challenges to the sale, as per articles 7 and 8 of the convention. The Convention mandates the issuance of two instruments, a notice of judicial sale and a certificate of judicial sale, to facilitate the regime and protect the rights of parties involved in the ship, and to establish an open internet repository. To help studying or implementing the Convention, the UNCITRAL secretariat has produced an explanatory note that offers thorough analysis of each provision in the text.

Picture and Article Source: Xinde Marine News & Baird Maritime