Cayman Islands: Shipping

Last Updated: 13 December 2005

The strategic location of the Cayman Islands, at the center of the Caribbean Sea, make the Cayman Islands an ideal site for ship registration.

The Cayman Islands Shipping Registry is the Maritime Administration of the Cayman Islands. The Administration of the Cayman Islands Shipping Registry is conducted under power conveyed by the British Merchant Shipping Acts 1894 to 1988 as extended by Orders in Council to the Islands together with the Cayman Islands Merchant Shipping (Applicable Conventions) Law 1987. Regulations have also been introduced in the Cayman Islands which govern all aspects of maritime safety, prevention of pollution, certification and manning of ships.

In 1991 the United Kingdom granted the Cayman Islands a British Registry Category One, the highest possible category , which means they are equipped and qualified to register vessels of all sizes and classes.

The Conventions listed below are some of the conventions which have been extended to the Cayman Islands with the advent of its full shipping registry:-

(1) Those of the International Maritime Organisation;

(2) Those of the International Labour Organisation;

(3) SOLAS, (1974) and the 1978 Protocol with all later Amendments;

(4) Load Lines, (1966);

(5) Tonnage Measurement of Ships (1969);

(6) MARPOL, (1973) and the 1978 Protocol (including Annexes I, II, III, & V to 1991);

(7) COLREGS, (1972) and later Amendments;

(8) Intervention on the High Seas in cases of Oil Pollution Casualties, (1969) and the 1973 Protocol;

(9) Carriage of Passengers and their Luggage at Sea (1974) and the 1976 Protocol;

(10) Limitation of Liability for Marine Claims (1976);

(11) Civil Liability for Oil Pollution Damage (1969) with 1976 Protocol;

(12) Establishment of an International Fund for Compensation for Oil Pollution (1971) with the 1976 Protocol;

(13) Prevention of Marine Pollution by Dumping of Wastes and other Matter (1972) and 1978 Amendments; and

(14) Standards of Training and Certification of Watch-keepers (1978).

The Cayman Islands have made arrangements with the classification societies to conduct surveys and to issue convention certificates.

The Port of Registry for Cayman Islands is George Town. The flag flown by a Cayman-registered vessel may be either a straight British red ensign or a red ensign with the Cayman Islands crest in the fly.

Registration
In terms of registration, the following qualify to own a Cayman Islands ship:-

  • British subjects
  • Nationals of any European Union (EU) or European Economic Area (EEA) State, including their Overseas Territories
  • Bodies corporate and "shipping entities" established in and having a place of business in any of the above States or Territories. (The term, "shipping entity", includes partnerships, exempted limited partnerships and any other similar entities regardless of whether they have a legal personality separate and distinct from those of their members.
  • Foreign Companies registered in the Cayman islands under the relevant Cayman Islands law and having a place of business within the Islands.

Additionally, in 1999, amendments were made to the Merchant Shipping Law, they include the following:-

  • Ships under construction and mortgages thereon can be registered
  • Mortgages on provisionally registered or conditionally registered ships can be registered.
  • Fractional shares can be registered where the ship is owned by a shipping entity that does not have a separate and distinct legal personality.
  • Enhanced mortgage protection is afforded.


1.Requirements for First Registry
There are a number of prescribed forms which must be completed in order to effect registration. They can be
obtained from the Registry and must be filed with payment of appropriate fees. Steps to be taken on first registration are:-

(a)Appointment of an Authorised Agent
This may be done by letter or by Power of Attorney. The authorised agent is usually an attorney-at-law in the Islands.

(b) Approval of Name
This is done by the Registrar in the Cayman Islands.

(c) Application to Register

This must be made by the owner or his authorised agent; where the owner is a body corporate, application must
be made by instrument under its common seal or under the hand of the authorised agent.

(d)Title Documents

i.Evidence of First Registry.


(A) In the case of new ship it is necessary to produce a Builder's Certificate, containing the dimensions and estimated gross
and net tonnages, a description of the vessel and its machinery, the date on, and place at which it was built and the name of the
person on whose account it was built. In the case of an existing ship a Bill of Sale must be produced showing that a majority of
shares is vested in the applicant.

(B) In the case of a foreign-built ship similar evidence as in (A) is required unless the new owner is able to make a declaration
that the time and place of building are genuinely unknown to him. In that event, only the Bill of Sale is required showing the
majority of shares held in the ship.

(C) In the case of a ship condemned (sold) by a competent court, an official copy of the condemnation.

All documents which are in a foreign language must be accompanied by certified translations of them into English.

ii.On transfer of Registry from another British Port

The registry of any ship may be transferred from one United Kingdom, Dependent Territory or colony port to
another on application to the Registrar of the existing Port of Registry by making an appropriate declaration concerning ownership and mortgages. A transcript of the register is sent from the Registrar of the present port of registry to the new one. When the transfer is completed the Registrar of the original port of registry will delete the original registration at his port. The official number, however, remains the same.(See also below - "11 - Transfer of Registry")

iii. Re-registry.

If at any time during the lifetime of a vessel, it was registered at a British port before becoming foreign-owned,
re-registration requires an Official Transcript of the Register from the last British port, showing the closure of the registry with the vessel free from encumbrances.This is to avoid the possibility of dual registration.(See also below - "10 - Re-Registry")

(e)Certificate of Survey
All ships must be surveyed before registration by a surveyor of the Cayman Islands Marine Survey Department,
the United Kingdom Department of Transport, or one of the authorised classification societies.

A survey before registration can be conducted in any British port or any port in the world where there is a
Surveyor from any of the above organisations.The surveyor will forward the Certificate of Survey which gives a description of the ship and the appropriate Cayman Islands British Tonnage Certificate direct to the Registrar.

(f)Declaration of Ownership
The form of this declaration depends on whether the owner is an individual or body corporate. Joint ownership
forms are also available.

N.B.British subjects and bodies corporate established under the laws of Her Majesty's Dominions and which
have their principal place of business in one of Her Majesty's Dominions must own a majority of the shares in order to register a ship in the Islands. A Cayman corporation is qualified to own a ship.

(g)Official Number and Carving and Marking Note
Every ship registered in the Cayman Islands must be marked on a readily visible portion of a main traverse bulkhead or beam with the ship's official number and the net registered tonnage. The ship's name must also be painted on each side of the bow and the name and port of registry on the stern. These markings must be carried out at the time of registration in accordance with the Carving and Marking Note issued by the Registrar and the owner is required to make a statement to this effect on registration. The carving and markings must be inspected by an authorised surveyor and the Carving and Marking Note signed by him and returned to the owner. A twenty-one day grace period after the date of issue is allowed for
the owner to return the Note to the Registrar.

(h)Certificate of RegistrationWhen the Carving and Marking Note has been signed by the Surveyor and returned to the Registrar, the Registrar will issue a Certificate of Registration, which is officially known as the Certificate of British Registry and bears the particulars of the ship.

(i)Provisional Registration
If, while outside a British port of registry, a ship becomes the property of a qualified person, the British Consul (or British High Commissioner in a Commonwealth Country) in any port may grant a Provisional Certificate of Registration which is valid for a period of up to 3 months or until the ship arrives at the first port where there is a British Registrar of Ships. It is therefore possible to obtain provisional registry through a British Consulate or High Commission while the processes of registration are being completed. The owner must, however, obtain short term statutory load line, safety and anti-pollution certification before the vessel proceeds to sea.

2. Transfer of Ownership
Once registered, title to a ship can only be transferred by registration of a Bill of Sale in the statutory form, executed by the owner. This must be accompanied by a Declaration of Ownership in the prescribed form and the prescribed fee. Once accepted for registration, the Bill of Sale is endorsed by the Registrar and returned to the owner.

3.Mortgage
A ship's mortgage must be in the statutory form. After registration and endorsement, the mortgage deed is returned to the Mortgagee or the person acting on his behalf.

4.Transfer of Mortgage
Mortgages may be transferred to individuals, persons acting jointly or corporations by completing the appropriate endorsement printed on the reverse side of the mortgage deed. The holder of a ship's mortgage may be a national of any country.

5.Discharge of Mortgage
A ship's mortgage is discharged by a signed and attested receipt being endorsed on the reverse side of the mortgage deed. If, for some reason, the original deed cannot be produced, statutory declarations by the mortgagor and the mortgagee on standard forms provided by the Registrar are usually acceptable.

6.Transmission
On marriage or bankruptcy, the title of the registered owner or mortgagee can be registered on transmission. On the death of a joint owner or joint mortgagee, his interest passes on to the survivor by operation of law and may be registered on proof of death. When a single registered owner or mortgagee dies, his legal representative, after advancing evidence, (probate or letters of administration) and provided (in the case of ownership) that he is a person qualified to own a British ship, can be registered and deal with the property.

7.Liquidation and Change of Name of a Body Corporate
(a) Liquidation

Instruments executed by the liquidator are acceptable on production of evidence of his appointment.
(b) Change of Name

When a company changes its name after it has been registered as the owner or mortgagee of shares in a ship, a certificate of change of name issued by the Registrar of Companies of the country of the company's incorporation must be produced to the Registrar, along with a request by an authorised officer of the company for the change to be recorded.

8.Change of Name of a Registered Ship
The name of a ship may not be changed without the prior written consent of the Department of Trade in the United Kingdom. This is dealt with by the Registrar General's office in Cardiff. On application of the owners, supported by the documents mentioned above and Board of Trade approval, the Registrar issues a new Carving and Marking Note, and
after being certified by an approved surveyor, it is presented for registration. This is usually done at the port of registry but may be done at any British Port. No fees are payable for the recording of a change of name. Notice of the proposed change must be advertised in the prescribed form before registration.

9.Closing the Register
On closing the register, the Certificate of Registry must be delivered to the Registrar for cancellation, or if this is not possible, the reason should be stated - e.g. it was lost with a sunken vessel.

Events requiring closure of the register are:-

(a)Ship actually or constructively lost or burnt
On receipt of advice from the registered owner that a vessel has been sunk or so burnt or damaged as to have become a total loss, the register is closed. Advice by an owner (or one or more owners in the case of joint ownership) of any event giving rise to a closure should state the exact nature of the event and contain a request for the registry to be closed.

In the case of constructive loss, the Registrar in the Cayman Islands will not close the register without reference to the Chief Registrar in the United Kingdom unless it is stated by the owner that the underwriters have accepted a claim for total loss.

(b)Ship Broken Up
The register is closed when the ship breaker notifies the Registrar that the ship has been completely broken up, or that work has reached a stage that the ship is no longer capable of being used in navigation.

(c) Ship taken by the Enemy
This is a rare occurrence, but provision is made for it. The register will not be closed merely because a ship has been seized or arrested by a foreign power with whom Great Britain is not at war.

(d)Transfer to Person not Qualified to Own a British Ship
The register will be closed if unqualified persons own more than thirty-one shares in a ship and this will not be delayed in order to give notification to other owners or mortgagees, but the closure shows that it is applicable save in respect of outstanding mortgages.

(e)Registry Anew
The register is closed without notice from the owner if a vessel is registered anew. Registry anew is not required but may be done at the election of the new owner.

(f) Voluntary Closure
Application to close the register on the ground that it is no longer required will be refused, unless made in respect of a vessel which is not required to be registered.

(g) Acquisition by Government
The registry of vessels acquired from private owners by the British Government may be closed on the advice of the responsible Government Department.

If there are any outstanding mortgages, the closing entry is qualified to show that the closure does not affect any outstanding mortgages. The qualified closing entry is made final when deeds of discharge of all outstanding mortgages are produced. No fees are payable for closing the register.

10. Re-registry
Re-registry occurs when a vessel whose registry has been closed becomes the subject of a fresh registration application,
for example:-

(a) registry closed on sale of a ship to foreigners, and subsequently re-purchased by British Subjects;

(b) registry closed on abandonment of a ship as a wreck or constructive loss and ship subsequently recovered.

The requirements on re-registry are similar to those for first registry, with the following variations:-

i. Approval of Name

A ship returning to the British register may not be registered by any name other than its last British registered name without the approval of the Board of Trade. Where the previous name is to be retained, the applicant must complete the prescribed form showing that the ship was formerly on the British register quoting where possible the official number and Port of Registry. If the previous name has been taken, the Registrar will require the applicant to change the name before a ship is re-registered.

ii. Survey and Certificate of Seaworthiness

Where the register has been closed on abandonment of a ship as a wreck or constructive loss and the ship has been recovered, a Certificate of Seaworthiness as well as a Certificate of Survey must be obtained together with the necessary convention certificates.

iii. Copy of Previous British Register

This is obtained by the Registrar to establish whether or not a Certificate of Seaworthiness is necessary and whether there were any outstanding mortgages on the register.

iv. Encumbrances on the Old Register

Uncleared mortgages are brought forward as first encumbrances, save in the case of:-

(a) a vessel re-registered after condemnation by a competent Court;

(b) a vessel re-registered after sale by the mortgagee;

(c)a vessel re-registered on subsequent sale by Her Majesty after acquisition by Her Majesty (e.g. on purchase or forfeiture under operation of law).

v. Evidence of Title

Normally, a complete sequence of sale documents, not necessarily in statutory form, is required covering all transfers of ownership from the last registered owner to the new owner applying for re-registration. There are four exceptions to this general rule:-

(a) If the ship is purchased from a foreigner by a British applicant for re-registry, there having been no intermediate unregistered British owners, and title is founded on the foreign Bill of Sale which is acceptable (i.e. it must be dated, executed and in English).

(b) If the ship is purchased from a foreigner by a British applicant for re-registry, where there has been one or more intermediate unregistered British owners, title is founded on the foreign Bill of Sale and all previous transfers of ownership up to and including the most recent transfer to a British owner are produced. Transfer documents in this case need not be in statutory form.

(c) If the ship is condemned by a competent Court, when a copy of the Court order suffices.

(d) If the ship is purchased from a Government Department, when the document of sale issued by the vendor is acceptable.

vi. Declaration of Ownership

If the ship is to be re-registered in a name other than that in the title document, both the previous and the approved
name should be shown in the declaration of ownership.

11. Transfer of Registry
All persons interested in a ship (owners and mortgagees) may request, using the form generally in use (not prescribed by the Act), that the registry be transferred to another British Port.

This is simply a transfer of registration, not a closing of the register. The previous Certificate of Registry must be delivered up for cancellation and the Registrar of the new Port issues a fresh Certificate of Registration.

Registration of Ships Chartered by Demise

Demise charter is possible both into and out of the Cayman Islands. This is a process in which a demise charterer may register a ship under a flag which is different from where the ship was originally registered by the owner. Matters relating to title, mortgage and other propriety interests continue to be subject to the law of the owner's country of registration. However, the nationality of the ship is that of the flag state where the charterer registers it.

Typical advantages of demise chartering into the Cayman Islands are:-

  • Mortgages can be raised and registered in the chartering out country, thus allowing any fiscal advantages available in that country to be tapped.
  • Mortgage protection remains in that country.
  • A profit centre for the ship's commercial operation could be established in the Cayman Islands.
  • Access to any bi-lateral or multi-lateral trade concessions to which the UK/Cayman Islands is Party.
  • Flexibility of the operational register such as in employment of crew etc.

Demise charter registration is also a route through which a person can acquire a ship without purchasing, (i.e. by demise chartering it) and then have it registered in the Cayman Islands. There is also provision for sub-demise chartering.

Fees
Government registration fees and annual tonnage fees are very competitive. They are dependant on the services required and the tonnage of the vessel

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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