How is a mortgage of a mortgaged ship enforced?
To enforce such kind of mortgage, the mortgaged ship can be sold privately based on a mutual agreement between the mortgagor and the mortgagee. However, if the parties do not wish, or fail to reach an agreement, the mortgagee can bring an action in court applying for an enforced sale by public through the court.
Under Chinese law, the ship will come out free of maritime liens only by an enforced sale by public auction through the court. Private sale, whether auction or based on the parties' agreement will not discharge the maritime lien upon the ship.
In order to enforce a mortgaged ship, the court will usually require the following documents:
(a)main contract showing the debts/ obligation of the mortgage;
(b)mortgage contract which should be made in writing and registered with the ship registrar;
(c)documents evidencing mortgage registration.
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