The International Chamber of Shipping (ICS) in partnership with Liberian Registry has been successful in assisting the the holder of a Liberian mortgage to overturn a decision of the Brazilian courts.
If the decision had been left unturned, it could have caused various adverse legal and economic consequences for the International maritime industry.
What happened?
The incident came into focus in 2012, after a FPSO (Floating, Production, Storage, and Offloading vessel) OSX-3 vessel owned by a Dutch company and re-registered under Liberian flag was mortgaged in favour of Nordic Trustee ASA, security trustee, and mortgagee of the vessel.
Mortgage challenged:
However, before any action could be taken by the Brazil lower court, Banco BTG Pactual S/A Cayman Branch, an unsecured third-party creditor challenged the status of the mortgage on the grounds that it was not registered with the Admiralty Court of Brazil and that it was only filed with Liberia.
On 16 November, 2017, the Superior Court of Justice in Brazil unanimously granted Nordic Trustee’s special appeal and the amicus (‘friend of the court’) motion filed jointly by the Liberian Registry and the ICS, of which the Liberian Shipowners’ Council is a member, against this decision.
If this motion was left untouched it would greatly affect all the major fleets such as the US, the Marshall Islands, China and Germany who are in trade relationships with Brazil.
Liberia takes swift action:
The Liberian Registry reportedly took swift and decisive action following the decision of the lower court by filing the joint amicus motion to the main proceeding through its local counsel, Basch & Rameh. Liberia was successful in submitting their side to the court by specifying the various adverse effects the maritime industry might face.
Hara Gisholt, Vice-President, Business & Legal Affairs for the Liberian Registry said, “This has been a long and difficult process but one we were determined to see through. Recognizing that the lower court decision could have been detrimental to international maritime trade, we decided to join as an amicus party early on. Although we were navigating uncharted waters, we knew this was the right decision”.
Scott Bergeron, CEO of the Liberian Registry further added, “This is an historic victory for ship financing, international commerce and the Liberian maritime programme. The Liberian Registry’s swift and meticulous actions exemplify what we stand for – excellence, quality and being a true partner for our clients”.
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Source: Liberian Registry
