ABSTRACT

This chapter considers the legal status of ship mortgagees following the opening of insolvency proceedings against debtor-mortgagors. It examines the rights of maritime creditors when collateral in the form of a transfer of title is selected rather than a mortgage. The Regulation is structured around the concept of promoting predictability and legal certainty for rights in rem in order to encourage the granting of credit. The use of title to the ship as a means of providing security for the creditor offers some positive results when the shipowning company enters insolvency proceedings. The risk of so-called recharacterization is present in jurisdictions that give more weight to the substantive characteristics of the agreement than its form. The choice of applicable law also depends, in part, on the nature of the insolvency proceedings. Lex navis is the rule adopted by Greek law and consistently applied, at least in respect of the validity and powers conferred by maritime liens.