Readers would recall Starboard’s report in July 2022 that the United Nations Commission on International Trade Law (UNCITRAL) approved a draft convention on the effects of judicial sales on 30 June 2022 (see here).

This report brings news of the United Nations General Assembly adopting the United Nations Convention on the International Effects of Judicial Sales of Ships (the Convention) on 7 December 2022. The signing ceremony for the Convention is expected to be held sometime in 2023 in Beijing and is recommended to be known thereafter as the “Beijing Convention on the Judicial Sale of Ships”.

The Convention will apply to the judicial sale of a ship if (a) the judicial sale is conducted in a State Party and (b) the ship was physically within the territory of the State of judicial sale at the time of the sale.

A key issue that the Convention addresses is the readiness of one country/jurisdiction to recognise the judicial sale of a ship conducted in another country because of concerns over differing procedures and standards between the two countries/jurisdictions. To address this issue, the Convention introduces a requirement that a “Certificate of Judicial Sale” is to be issued by the court or authority conducting the judicial sale to the purchaser of the ship, the effect of which confers on the buyer clean title to the ship. Under the Convention the “Certificate of Judicial Sale”, subject to a few limited exceptions, has the same legal effect in all State Parties.

The Convention is intended to pave the way toward achieving greater international harmonisation in the recognition of the judicial sale of ships and thereby greater commercial certainty for the party purchasing ships through judicial sale in one country/jurisdiction and seeking registration (or some other recognition of ownership) of that ship in another country/jurisdiction.

Starboard will continue to closely monitor the developments in relation to the Convention and bring the relevant updates to you.

(Background: Senior Partner Lawrence Teh was part of the International Working Group established by the CMI to discuss and work on the draft Convention, which eventually evolved into the Beijing Convention. The Singapore delegation to UNCITRAL was an early supporter of the Draft Convention in the UNCITRAL sessions through to final approval.)