Registration, transfer or transmission, and discharge of mortgages against a Cayman-registered vessel may be effective immediately upon submission of the required documentation to the Cayman Registrar.
When a vessel is being registered with Cayman a mortgage document may also be submitted to simultaneously register the interest of any mortgagee in respect of the vessel. The Registrar will record details of the mortgage on the Register and endorse the date and time of registration on the mortgage document itself.
Mortgages rank in priority by the date and time of registration and may be in one of two forms:
- Principal Sum and Interest - the Registrar will record the principal sum and interest as agreed, where available.
- Account Current - the Registrar will record that the mortgage amount due at a particular point in time is subject to the sum that is due on the account at that time.
In the event of a ship being seized or impounded, the mortgagee’s interest shall remain registered and subject to a Court Order, if applicable.
Where a mortgage document contains a “prohibition” against a transfer of ownership, termination of vessel registration, or the creation of further mortgages without the prior written consent of the original mortgagee, then Cayman will note such restrictions on the Register and will not deal with any of these matters unless the original mortgagee’s written consent is submitted or if Cayman is in receipt of a Court Order directing otherwise.
However, such prohibitions do not override Cayman’s right to delete a “non-compliant” vessel from its Register under Section 8 of the Merchant Shipping Law, (following proper notice as is required under this Law). Should it become necessary to delete a vessel under Section 8 of the Merchant Shipping Law, any mortgage will remain registered and the mortgagee informed.
Mortgage Transfers (from one British Register to another British Register)
A vessel may transfer registration from one British Register (say UK) to another British Register (say Cayman) and record the same ownership and mortgage details at the new British Register (Cayman).
For example, on a transfer from the Port of London (UK) to the Port of George Town (Cayman), the owner and mortgage details would be recorded in Cayman before the UK registration is closed, thereby maintaining continuous mortgagee protection, provided that the mortgagee has consented to the transfer of the vessel.
Duty and Tax Free
There are no duties or taxes payable to Cayman on the value of the registered mortgage. The mortgagee (i.e., the lender) need not be a “qualified person/s, company, or entity” nor have a “place of business” in Cayman in order to register a mortgage.
A mortgage document may be deposited at one of the following locations:
- CISR Head Office in George Town, Cayman Islands
- CISR European Regional Office in Southampton, UK
- Cayman Islands Government Office in London, UK
- CISR Asian Regional Office in Singapore
- CISR Representative Office in Athens, Greece
- CISR Representative Office in Tokyo, Japan
- CISR Representative Office in Fort Lauderdale, United States
Whether deposited at the Head Office or at one of the other depository locations, the mortgage is registered thereafter from the date and time of its initial deposit and remains an encumbrance on the vessel until discharged by Cayman.
A mortgage may be recorded irrespective of the underlying vessel registration type (full; interim; term; under construction or demise (bareboat) charter-out).
Cayman offers the option to record a "priority notice" which enables a party to articulate the intention to register a mortgage for a period of up to 30 days after the priority notice has been recorded with Cayman. This prevents (for 30 days) a subsequent priority notice or mortgage from gaining priority over the subject vessel before the party who issued the initial priority notice is able to register a mortgage.
This option may be particularly useful in cases where mortgage transactions take place outside the Cayman Islands.
One of two priority notice templates should be utilised – Priority Notice in Respect of a Ship Intended to be Registered in the Cayman Islands or Entry of Priority Notice (for a vessel already registered with the CISR). The Registration Section supplies these templates (please contact Registration).
Please note that priority notices may also be deposited in one of the seven worldwide mortgage depository locations.