Ship Sale & Purchase

AIM

  1. To ensure a thorough knowledge and understanding of the practice and etiquette of this specialist sector of shipbroking, dealing with newbuilding contracts, second-hand sales and purchases and demolition sales.
  2. To develop relevant communication skills

THE SHIP

  • All types of ships.
  • Terminology of measurements including dimensions, tonnages, cubic capacities, TEUs.
  • Types of machinery, cargo handling and any other specialised equipment.
  • Current and future development of vessels new and specialised designs including innovations.
  • The effects of recent legislation.

GEOGRAPHY

  • Geographical location of newbuilding yards, demolition buyers and areas where particular types of vessels are utilised. Cargoes and trading routes, physical or meteorological limitations on dimensions and ship types.

REGISTRATION AND CLASSIFICATION

  • The main and ancillary purposes of ship registration.
  • Requirements, advantages and disadvantages of various flags; dual flagging.
  • The role and function of classification societies and classification society registers.
  • When and how classification may be involved in a ship’s sale.

THE PARTIES INVOLVED

  • Shipowners – Development of differing types of owning groups e.g. individual entrepreneurial owners, corporate structure, conglomerates, investment groups, pools.
  • Other parties involved – brokers, charterers, ship breakers, bankers, other financiers, lawyers, notaries, consuls and registrars.

MARKETS

  • The markets for new building, second-hand and demolition sales and purchases and their inter-relationships.
  • Factors affecting the market including natural catastrophes, environmental, aid programmes, political crises. Tramps and liners. National traditions and weaknesses.
  • The production and interpretation of both statistical and written market reports.

CONTRACTS AND DOCUMENTATION

  • The necessary content of a contract for the sale and purchase of a ship whether for new building, second hand or demolition, including detailed understanding of fundamental clauses.
  • Drafting summaries of agreements and Memoranda of Agreement.
  • All standard forms currently in use as a base for a contract and necessary or desirable additional extra clauses or alterations.
  • Procedures, reasons for and form of documentation produced by buyers, sellers and other parties in connection with completion of a sale and delivery and legal transfer of a ship.
  • The different certificates and compliances that might be relevant the time of sale of a ship. Issuing authorities and validities including compliance with international and national authorities.

NEGOTIATION

  • The conduct, etiquette, ethics and procedures of a negotiation. Translating a principal’s requirements into suitable clauses.
  • Drafting offers with the correct sequence of clauses, counter offers, specific clauses, recapitulations, completion agenda and understanding their implications.
  • The importance of information given ‘without guarantee’.

FINANCE AND INSURANCE

  • The information needed by a financier when considering a project.
  • Providers and different methods of financing including mortgages, leasing and bareboats
  • Means of providing security for loan.
  • Currencies, interest and exchange rates.
  • The role and function of insurance in sale and purchase transactions inclulding P & I insurance.

VALUATIONS

  • Role and legal position of the valuer, liabilities and protection.
  • Reasons for and types of bodies requiring valuations. Salient facts needed to carry out valuations. Methods of assessing values.

LEGAL ASPECTS OF SALE AND PURCHASE

  • Law relating to sale and purchase. Areas of dispute including: Validity of agreement;
  • Entitlement to commission; Rejection of the vessel by buyer; Condition of the ship on delivery; Validity of Notice of Readiness; Description of vessel in the preamble; ramifications and significance; Brokers’ liability.
  • The effect of legislation on both existing vessels and new buildings or construction.

NB: No exemption is permitted from this subject.

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