Sale and Purchase of Ships under the Egyptian Maritime Law

Sale and purchase of ships in Egypt has alot of proceedings, Egyptian Maritime Law collected all of these proceedings in easy way to understand.

April 22, 2021
A ship is a maritime navigational establishment that is normally run or prepared to operate. The ship's home is the port where the ship is registered and where its actions are carried out, even though it is not for profit. The ship's home is critical in determining the jurisdiction of the crimes committed on its deck. If a ship is registered in one of Egypt's ports and is owned by an Egyptian natural or legal individual, it gains Egyptian nationality. The flag of the Arab Republic of Egypt must be raised if the ship is Egyptian. The ship must also have a name licensed by the competent authority, which must be shown on the back of the ship alongside the registration number.
Under merchant's law, a contract for the selling of a ship is one under which the seller is obligated to pass possession of the ship to another individual, the buyer, and the general sale of ships is a company. The selling of a ship is a formal arrangement, according to the Maritime Trade Act No.8 of 1990, which must be concluded in an official written form, otherwise, the act will be considered void "article 11”. Not only does this apply to the sale contract, but it also extends to all other actions on the ship, such as modifications. Furthermore, the contract must be registered with the Maritime Inspection Department, and the seller must guarantee hidden defects, ship delivery, and non-disturbance.
Most analysts believe that in order for a transaction to be called a business act, the goal must be profit. Thus, unless the seller is the shipbuilder, the selling of the picnic ship is not a venture.
The contract is void due to the lack of a subject. In certain cases, an Egyptian ship must be sold and registered in Egypt before the competent authorities. The Maritime Act, on the other hand, allowed the selling of an Egyptian ship outside of Egyptian territory if the sale was performed before an Egyptian Consulate abroad and the ship was registered before the competent registration office. However, in order for such a sale to be legal, the owner must first receive permission from the authorities to sell the ship. The owner or an approved agent is responsible for selling the ship.
In a separate case, if a foreigner wants to travel in Egyptian territorial waters with their own cruise (non-Egyptian), they must first receive a permit from the competent authority and register the cruise. The cruise must, however, fly the flag of the cruise's nationality.
The owner of a ship is required to register it, and this scheme has been in place in Egypt's maritime laws since 1949. The shipowner must apply to the appropriate authority for registration (Maritime Inspection Department and Port Service).
Purpose of registration of ship:
In general terms, to ensure that the ship to be registered meets the conditions required to carry the nationality and conforms with the terms and specifications.
The ship's registration has 2 main purposes:
  • The purpose of the registration is to identify the ship's owner, the order in which the ship was acquired, and any actions associated with the ship.
  • It is illegal to run a ship under the Egyptian flag on Egyptian waterways unless it is licensed. Foreign vessels, sea boats, and ships weighing less than 10 tons, however, are exempt from this requirement. For breaching such a duty, the legislator has created a statutory penalty of "imprisonment."
  • Furthermore, the new owner is responsible for filing all relevant information and certificates attesting to the ship's removal from its previous registry. The ship's name must be written on top of the details, and the department must issue a certificate to the ship that includes the ship's name, owner, nationality, and other information. The certificate must be maintained on the ship's back.
The sale of owned in common ships
When selling a ship with multiple owners in common, the majority of owners can appoint a director to oversee the ship's management, but certain actions, such as selling, mortgaging, or renting the ship for more than a year, require a majority permit. If a common owner sells his share to a third party, the buyer is required to notify the other owners, and any of the other in common owners will reclaim the sold share after paying the price and selling costs. Furthermore, the ship can only be sold with the agreement of the owners who own at least three-quarters of the shares.
In the event of a disagreement between the owners, the majority of the owners, defined as those who own 51 percent of the ship's shares, will make the decision, and any member of the minority will have 15 days to appeal the majority's decision to the court of first instance.
Each ship shall have the following records on its back:
  1. The port authority receives the ship's registration certificate, which determines the ship's title and nationality.
  2. On the back of the ship is a log of the names of the navigators at work, as well as a certificate of seaworthiness.
  3. Names of cargo and passengers are detected.
Author:
Marwan Fetteha
Legally Reviewed by:
Reham Kandile

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