In August 2023, the parliament of the Republic of the Marshall Islands, the Nitijela, adopted amendments to the Maritime Act of 1990 (the “Maritime Act”), which can be found here. Set forth below is a summary of the substantive changes resulting from these amendments to the Maritime Act. Except as otherwise noted below, the effective date of these amendments was April 10, 2023.
Electronic Filing of Instruments and Documents: According to the new Section 119 of the Maritime Act, the Maritime Administrator (the “Administrator”) will now accept electronic or digital transmissions of any document or instrument falling under the Maritime Act, as well as electronic or digital signatures to any instrument.
Bill of Sale for Sale, Transfer or Other Conveyance of a Vessel: In an update to Section 225, a vessel’s latest Certificate of Registry is no longer required to be attached to a bill of sale when a documented vessel is sold or transferred. Section 306 has received a similar update in that, going forward, any bill of sale of a vessel already documented no longer needs to include its latest Certificate of Registry.
Mortgages Valid and Effective at the Time of Recording: In an update to Section 302, the Maritime Act has clarified that a mortgage on a vessel that states that such mortgage becomes valid and effective when it is recorded with the office of the Administrator is valid and effective at the time of recording. Additionally, there is a clarification in Section 302(3) that the Administrator will only record instruments that meet all recording requirements.
Administrator Ability to Immediately Strike a Vessel in Certain Situations: Section 304(2) has been updated to add the Administrator’s ability to “…immediately strike a vessel following receipt of evidence that the vessel has engaged in illegal activity or actions against the interests of the Maritime Administrator or the Republic [of the Marshall Islands].”
Examples of Written Proof of Debt for Mortgage Recording: While the requirements remain in Section 307 regarding written proof of debts in relation to a mortgage, the Maritime Act now provides clarity on what is considered written proof. The written proof requirement can “…be satisfied by attaching to the mortgage the documents evidencing such debt (whether in whole, in part or with or without redactions), or by describing the terms of the debt in the mortgage, including the total amount.”
Advances or Other Value Given Pursuant to Mortgage: In Section 309(2)(a), the Maritime Act has been updated to clarify that when a preferred mortgage secures a maximum amount representing all debts or obligations between a debtor and a creditor within a specific time period, the mortgage can secure such amount regardless of whether or not the debts or obligations arose from commitments under the relevant agreement between the particular debtor or creditor that existed at the time the mortgage was recorded.
Requirement to Keep Notice of Mortgage on Board a Vessel: Section 314(1) has been updated so that instead of requiring a certified copy of a vessel mortgage be kept on board the vessel, only a notice of the mortgage must be kept on board the mortgaged vessel.
Updating the Limits of Liability for Maritime Claims in Line with Changes to the Convention on Limitation of Liability for Maritime Claims (the “LLMC”): Section 510 states that, for claims relating to the territory or waters of the Republic of the Marshall Islands, the limits of liability are as written in the 2012 Amendments to the Protocol of 1996 to Amend the LLMC. Such limits of liability are retroactive to June 8, 2015.
The new limit of liability on claims for loss of life or personal injury on vessels not exceeding 2,000 gross tonnage is raised from 2 million Special Drawing Rights (“SDR”) to 3.02 SDR and there are raises in the additional amount for each category of larger vessels as follows: (i) for each ton from 2,001 to 30,000 tons, the amount is raised from 800 SDR to 1,208 SDR, (ii) for each ton from 30,001 to 70,000 tons, the amount is raised from 600 SDR to 906 SDR, and (iii) for each ton in excess of 70,000, the amount is raised from 400 SDR to 604 SDR.
Additionally, the new limit of liability on property claims for vessels not exceeding 2,000 gross tons is raised from 1 million SDR to 1.51 million SDR and there are raises in the additional amount for each category of larger vessels as follows: (x) for each ton from 2,001 to 30,000 tons, the amount is raised from 400 SDR to 604 SDR, (y) for each ton from 30,001 to 70,000 tons, the amount is raised from 300 SDR to 453 SDR, and (z) for each ton in excess of 70,000 tons, the amount is raised from 200 SDR to 302 SDR.
If you have any questions regarding the foregoing, please contact either of the partners listed below or your primary Seward & Kissel attorney.