The lagal issues of ship registration in vietnam in comparision with the requirement of international law

LUND UNIVERSITY
FACULTY OF LAW

HANOI LAW UNIVERSITY

THE LẴGAL ỈSSUES OF SHIP REGISTRATION lisr
VỈETNAM IN COMPARISON WITH
THE REQUIREMENT OF INTERNATIONAL LAW
SPECIALTY: INTERNATIONAL AND COMPARATIVE LAW
CODE: 60 38 60

MASTER OF LAW THESIS
STUDENT: NGUYEN CONG BANG
.

thư v iệ n

TRƯỜNG ĐA! HOC LUẬT HÀ NÔI
PHÓNG s v

ơJ

SUPERVISORS:
DR. BUI XUAN NHU

DR.PROF.LARS-G. MALMBERG

HA NOI - 2004

The ỉagal issues o f ship registratitìn in Vietnam in com parison m th the
requirem ent <)f in teriiation a/ /dtp —N guyên Cong lidiìịỊ

Contents
PREFACE
ABBREVIATIONS
INTRODUCTION

3

CHAPTER I: GENERAL INTRODUCTION OF REGISTRATION
0F SHIP

7

I, NATỈONALITY OF SHIPS

7

li. DEFINITION OF SHIP REGISTRATION

9

III. REGISTRATION OF RIGHTS ON SHIP

12

[V.REGISTRAR OF SHIP

16

CHAPTER II: CONDITỈONS AND LEGÍSLATIVE PROCEDURES FOR
REGISTRATION AND DEREGISTRATION OF SHIP

17

L INTERNATIONAL LAW OF REGISTRATION OF SHIPS

17

ỈI.CASES IN SOME COUNTRIES

25

BI. IN SOCIALIST REPUBLIC OF VIETNAM

37

CHAPTER III: THE CURRENT SITUATION OF REGIATRATỈON OF
SHIPS IN VIETNAM AND THE IMPROVING SOLUTION

45

L THE CURRENT SITUATION

45

8. IMPROVING SOLUTIONS

48

CONCLUTION

51

BIBLIOGRAPHY

Yaculty o f Law, University o f Lund

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The laga l issues o f sỉtip reghtration in Vietnam in com parison
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yviíh the

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Preíace
In this period, when Vietnamese Communist Party and Government plan to “mo
cua” and create all advantages for any economic sectors to make business aiming to
enhance

the

economic

structure

transition

towards

industrialization

and

modernization, attract foreign invertors into Vietnam, and help Vietnamese
enterprises to w iden the market to abroad. These things will accelerate Vietnam to
integrate into

international

economy.

Taking advantages o f our country’s

geographical conditions one o f which is leading national policy as đeveloping sca
economy and íleel, and then, building a legal ữam e o f maritime law in generally, law
o f registration o f ships in detail.
To d o ; above mention, an analytic and comparative methods between the
regulations o f International Conventions and the actual rules o f some National Laws
are very important. For a person who has a íĩrst and very short time to study
regulations o f International Conventions and the actual rules o f some National Laws
about ship registration like me, It is a great interesting to approach a new legal order,
that is the registration o f ship. Because this problem very narrovv, I dare not have any
ambition to make invention. The purpose o f this thesis as contributing to clear the
theorical and practical background o f the ship registration in Vietnam as well as in
some other countries in the world, it helps to find out the major problems in

registration activity as vvell as the legal problems related; practically contributing to
the progress o f building the basic legal framework for the ship registration in
Vietnam conveniently and well compliance with international general rule and law.
Shortcomings are inevitable due to my limited knowledge and time for doing it.
However, I hope to draw a general picture about the nature o f ship registration
concept and ship registration làw.
I am indebted to SIDA that gave me an invaluable chance to study about Swedish
law, American law,etc. and Swedish life during I study in Swiden at sumertime. I ’d
like to thanks to the Ha Noi Law ưniversity and the Faculty o f Law of Lund
University that help me so much during this Vietnam-Swedish Master Programe, and
to all o f Vietnamese, Swedish Professors. Especially, I’m very much grateíul to Doc.
Lar. Malmberg and Doc. Bui Xuan Nhu, my supervisor, 'Who was very patient to
o iĩer kind helps to m e to com plete this thesis.

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The lagal issues o f ship registraíion in Vietnam in com parison
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with the

Abbreviations
< Abbreviation text >

< Explanation >

DNV

Det Norske Veritas

FOC

Flag o f Convenience

GL

Germanischer Lloyd

ILO

International Labour Organisation

IMO

International Maritime Organisation

ITF

International Transportworkers Federation

LR

LloycTs Register

MARPOL

The International Convention for the Prevention of
pollution from ship 1973

NK

Nippon Kaiji Kyokai

SOLAS

International Convention for the Safety o f Life at Sea
1974

STCW

International Convention 011 Standard o f Training
Certification and W atchkeeping for Seafarers 1978

ƯNCLOS

United Nations Convention on the Law of the Sea, 1982

NIS

Norwegian International Ship Register.

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The la g a l issues o f sliip registration ỉn Vieínam in com parison
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with the

Introduction
1. The imperativc o f the subject:
The ocean which occupies 71% of the earth’s space and includes diverse varieties
o f resources, is the transport route playing the veiy important role to the exislence
and the development o f human being. One oí' thc choices oí' the human bciny, in the
21st century is going towards to sea, enhancing and extending the exploration and
usage o f the ocean sources. In practical, the most active cities in the world normally
are the Coastal cities or the ones having the ways to the sea. Two third of the world
population earn living from the sea trade. More than 90% o f the world trade cargoes
are transported by sea.
Being a Coastal country with 3,260 km coastline long and many bays as well as
river gates connecting to Pacifíc Ocean, Vietnam is one o f not many countries in the
world having the diverse potential o f maritime economy. Nearly half o f Vietnamese
provinces and 117 among 631 districts are Coastal ones and have the sea-well related
econoray. Realizing this advantage, Vietnamese Communist Party and State have
given out many policies focussing on the target o f the country to be strong at sea and
accelerate “building the strategy of developing sea and island economies”,
“developing shipbuilding and shipping; extending tourism; protecting environment;
going towards the sea and owning the sea zone”' .
It can be said that maritime activity is a vital one in developing the sea economies.
One o f the basic strategies of the Vietnamese Government is developing strongly the
domestic íleet in order to increase the shipping share o f Vietnamese íleet in the
world market. Up to August 2003, the Vietnamese íleet had had 880 vessels
registered in the national registry book with the total DW T 2.5 million. Within the
íĩrst 6 months o f 2003, 880 times o f vessel registry had been deleted, 215 times of
vessel mortage checking had been done, and 81 times o f vessel mortage checking
had been cancelled2. From these statistics, we can realize the importance of the
registration o f ship in Vietnam which is a State administration activity on maritime in
order to implement the right and duty o f the flag State for the registered íleet,

1 R esolution o f C o m m u n ist party C ongress IX.
2 T he R eport o f V ietnam N ational M aritim e Bureau about R egistration o f ship and crew.

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The lagal issues fìf ship registration in Vỉetnam in com parison
requ irem ent tìf ìnterniitỉonal !a\v N guyên Cong B an g

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—

contributing to the success o f the national fleet operation and creating the advantages
for the development of the sea economies o f the country.
As we know, shipping is a typical and international industry. When a ship .is keellaying and registered, it also creates many legal problems relating to its existence
until its registry is deleted from the registry book, such as: the operation of the ship
in the journey from this country to the other; or the case when the ship of which the
shipowner is Vietnamese is registered in Cambodia, but its crews are Philippinean
and its shipmanager is Singpapore; or the problems o f the vessel ownership, mortage.
The registration o f ship serves the purpose o f either public law or private Iaw, or both
in order to deal with the legal problems during the existing period o f the vessels. The
ship registration is very useful for the country, depends much on the country’s
regulations and has to comply with the international law. In order to implement the
ship registration effectively, the construction and completion o f the law system for
maritime inđustry in general, and particular o f ship registration shoulcl bc taken care
by the Government, because they not only determine the country’s sovereignty, but
also comply with the international relations in the integration trend novvaclays.
From the above mentioned reasons, I choose the subject namely ”The legal issues
o f the ship registration in Vietnam in comparison with the requircment of the

international law”.
2. The purposc of the thesis and researching method:
The researcìùng purpose: As contributing to clear the theorical and practical
background o f the ship registration in Vietnam as well as in some other counlries in
the world, it helps to find out the major problems in registration activity as well as
the legal problems related; practically contributing to the progress o f building the
basic legal framework for the ship registration in Vietnam conveniently and well
compliance with international general rule and law.
The researcìùng method: I use an analytic and comparative methods between the
regulations o f international Conventions and the actual rules o f some national Laws.
3. The limit of the thesis: The subject o f the thesis has a narrow scale which
relates mostly to the policies o f the states in registration o f ship and some
international Conventions. Thereíbre, in this thesis, I focus on the, basis of

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Tlie la g a l issues o f sh ip regislration in Vietnam in com parìson
requirem ent o f in íen u iíion al law Nguyên Cong Bang

with the

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registration o f ships, registration of the rights on ships as well as the implementing
the arbitration o f the flag State in the world and in Vietnam. Then, I shall make the
comparison betvveen íhem to fmd the coníbrmities and disconíbrmitics of thc
solutions in constructing Vietnamese law in registration o f ship.
4. The new contribution to Science of the thesis:
The thesis analyse clearly the concepts o f ships, nationality o f ships, registration

Ị

of ships basing on the regulations o f international Conventions and national Laws in
order to give out the basic concept o f ships and registration o f ships, and the
solutions to improve Vietnamese Law in registration o f ships, specially in
intergration conditions nowadays.
5. The mcaning of thc thesis:
By the researching result, I wish to contribute in studying an issue regulated in
Vietnamese law now in relation to international laws under the analysis view of the
concepts and comparison with the actual regulations o f the states. Thus, the thesis is
the premise o f more studies of detail aspects in constructing Vietnamese Law.
The thesis can be used as conference for Vietnamese as well as foreign lawyers,
legal experts, legal researchers in studying maritime Iaw. It is also useful for the
students wishing lo widen the knowledge o f comparison law and maritime law -

which are the very new subjects in training o f law in Vietnam.
6. The structure of thc thesis:
Beside the introduction, conclusion and conference, the thesis includes 3 chapters
as following:
Chapter 1: General introduction o f registration o f ships
Chapter

2:

Conditions

and

legislative

procedures

for

registration

and

deregistration o f ships
Chapter 3: The current situation o f registration o f ships in Vietnam and the
irr.proving solutions
In order to complete this thesis, the author has tried to find the useful related
dccuments and to access the issue logically and suitably. Hovvever the thesis can not

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The ỉagal issues o f sỉù p regỉstration in Victnam in com parison
requirem ent o f in íern ation al law - N guyen C ong B an g

ìuit/i the

avoid the shortcomings and restricts, thc author hopcs to rcccivc Ihc commcnls and
helps from the teachers, colleagues and readers concerning tliis subject.

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The Ingal issues <>f ship registraíion in Vietnam in com parison
reqiùrenient o f in tern ation al ỉa\v - N guyên Cong B ang

miílt the

Chapter I: General introduction of registration of ship

I. Nationality of ships
1.1.Deíìnition of nationality of ships
1.1.1.Definition o f ship
Each State has a separated deĩm ition o f ship which is suitable to its ship
management; while each Convention or Regulation has different definitions of ship
in order to limit thc type oí' ship that il reĩers. For instance Maritime Codc of China
states that ship is the mean running at sea and other moved means, excluding the
boats used for military purposes and the ship having tonnage less than 20 ton, etc
However, in basically, the defínitions o f ship in one region,or every member states of
Convention are quite the same. In Vietnam Maritime Code, the ship is deíìned as
following:

Ship is a íloatecỉ structure, with or without engine, specially used for running at
sea and sea related water region4.
Vietnamese ships are the ships owned by Vietnamese State, by Vietnamese
organizations with the head office in Vietnam and by Vietnamese residents, or the
ones owned by foreign sections registered in Vietnam5.
In some other countries, the concept o f ships is narrovver which is relatecl to the
ship operations. For instance, in the traditional maritime states, the concept of the
ships running domestic is often stated differently from the ships running abroad, even
the regulations o f registration o f ships’ nationality are devided into different parts.
1.1.2.Definition of nationality of ships
Naitonality assumes its importance because shipping is an international activity. It
is international in two ways. First, maritime transport will necessarily take place

3 See M aritim e C ode o f the PRC, pp 5-6.
4 See V ietnam ese M aritim e C ode, 1990, A rticle 1, pp 1 1
5See V ietnam ese M aritim e C ode, 1990, A rticle 8, pp 19

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The lagal issues o f sliip registration in Vietnam ỉn com parison
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between at least two countries. Second, it is often international in thc sensc thai
economic interests o f đifferent states are involved6.
Thus e.g. a tanker may be registered in Liberia, manned with a Polish crew,
manageđ by a Norwegian manager and be beneíicially owned by nationals of the
Pcderal Republic o f Germany. As can bc secn from this examplc, il is a conccpl thai
cannot easily be assimilated with that oí' nationality o f corporations, let alone
noationality o f natural persons. It is in fact a highly equivocal concept in economic
and political terms. Yet in legan terms it can be clearly deíineđ. The nationaiity of a
ship is its nexus with a particular country. This nexus is acknowledgcd by that
country and it is recognized as such by the international community. The nexus is
attributed by that particular country. As long as a ship is owned by an induviđual
citizen o f the country attributing nationality, the concept is unambiguous.
Nationality is the basic concept in international shipping. Nationality can be
vievved as a concept o f international law: the rights and duties o f a State regarding a
ship. It can also be viewed as a concept o f municipal law: their rights and duties for
an individual shipovvner or operator under national law. The latter are largely

determined by international law. We will be mainly concerned with the concept in
intcrnational law perspeelive. The coneept o f nationalily has madc il possìble to
allocate jurisdiction over merchant vessels.
There are two basic considerations to be taken into account when attributing
jurisdiction over merchant vessels. First, while each State has jurisdiction over its
territory, no State has territorial jurisdiction on the high seas. Without clearly
allocated and properly exercised jurisdiction, activities on the oceans would be left in
disorder7. Second, maritime transport usually takes place betvveen different sovereign
states and it involves ships concerned. It is thereíbre important to develop rules for
the attribution o f jurisdiction among interested States. The proper exercise of
jurisdiction enables States to safeguard their property and people in the course of
maritime transport.
The jurisdiction o f the flag State over a ship diminishes when it approaches a port.
In the Exclusive Economic Zone the littoral State has certain powers. The powers of

6 See Falkanger, Bull, Introduction to M aritim e Law, p. 60-63
7 See Cf. C afruny, R uling the W aves, U niversity o f C aliíb n ia Press, B erkeley 1987, C hapter I.

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the littoral State increase in the territorial waters. The port State has even further
reaching powers.
Notwithstanding the fact that the Coastal State and the port State have certain
powers over íoreign ships within their territorial scope, the ílag State is ultimately
responsible.
In ƯNLOS 1982, additional ílag State duties as a consequence of granting
nationality are laicl down on the subject o f assistance to, and rescue of, persons found
at sea; concerning the prevention o f and punishment for transportation o f slaves; on
regulations to prevent pollution by ships, on measures making the breaking or injury
of a submarine cable a punishable offence,etc.
Furthermore, many IMO8 Conventions, e.g. SOLAS9, M ARPOL10,and STCW n ,
as well as most o f the ILO12 Conventions, specify the rights and duties o f flag States
in respect o f their vesseỉs.
The responsibility o f the flag State takes effect already beíore a ship is put into
Service i.e. is registered. It continues to apply during its Service.

Nationality gives the ship, the crew, the shipowner, the shipoperator and the
cargo-ovvner righls and duties. Many of thesc arc containcđ in spccilìc maritimc
conventions such as SOLAS, MARPOL and COLREG13. Other rights and duties are
contained or devised from private maritime law conventions such as “the Hague
rules”, “the Hague-Visby rules”, the “York-Antwerp rules” and the Salvage
Convention, etc.
A fmal category o f rights and duties has been developed in international public
law.
The national shipping policy has problem in determining the conditions the ships
have to meet to get nationality. The States grant nationality to the ship only when

8 International M aritim e O rganization.

9 International C o n v en tio n for the Safety o f L ife at Sea 1974
" International C onvention for the prevention o f pollution from ships, 1973
1 International C onvention on Standarđs o f T raining, C ertiíícatio n and W atch k eep in g for the
Seafarers, 1978.
12 International L ab o u r O rganisation.
1 C onventio n on the International R egulations for P reventing C o llissions at Sea, UN R eg.N .A r
15824.
Singli, International M aritim e Law C onvention(1983), vol 1, page 3.

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The lagal issues o f sìtìp reỊỊÌsíraíỉon ỉn Vietnam in com parison
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mitli the

their certain requirements are met. When granting nationality, the situation in which
the ships have double nationalities should be avoided.

1.2.Acceptant of nationality
As above mentioned, nationality o f ship goes vvith the rights and duties o f each
State granting the nationality to the ship. Thereíbre, the State’s acceptant of
nationality o f ship is very important. It has international meaning when the ship runs
at sea or approaches the foreign ports.
The flag the ship ílies is the Symbol o f its nationality, and the term “flag State”
gencrally denotes thc State whose nationality a ship has. In international law, thc
concept o f flag State jurisdiction, is the basic jurisdiction (i.e. ships which are
registered as national ships and ships which othervvise explicitly or implicitly
recognized by national law as national ships). Only national ships shall fly the

national flag, and therelore whencver the nationality of ship is acceptcd, it also reícrs
the responsibility o f the flag State. The flag State shall issue to ships to which it has
granted the right to fly its flag documents proving the nationality o f the ship. Basing
on that, the nationality o f the ship is accepted.
The acceptance of ship nationality is in national maritime policy when the State
determines the conditions that the ship has to meet to be granted the nationality.
Hovvever, the important thing in granting the nationality to the ship is the situation in
which the ship has double nationality should be avoided.
Besides, the acceptance o f ship nationality also means the national acceptance of
the responsibility for implementing the safety test on the ship ílying the national flag.

1.3.Temporary nationality of ship
The legislation of some states provides for the granting o f nationality to ships on
the temporary basis. This may be done for a number o f reasons. For example, the
r.ationality o f a State may be temporarily given to a ship when a national charterer
vảshes to fly the national flag during the period o f the charter on a ship vvhich does
rot meet the requirements necessary to grant natinality under normal conditions.
A State may accord temporary nationality to some ships for commercial or related
ríasons, for example, where the State is faced with a shortage of tonnage under its

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compơristìn

U’itli llii’

flag and some tonnage is required for a particular purpose (e.g. in connection with
the application o f the United Nations Convention on a Code o f Conduct for Liner
Conferences).

II.Defmition of ship registration
Registration may also be discussed in economic terms. Thus it is a necessary
condition for trading. Only registered ships can engage in trading. It should be noted
that registration is not the same as licensing. Licensing always implies a quantitative
regulation o f market access. Registration may be viewed as regulating access to the
market in a qualitative sense. Every ship which has fulfilled the registration
requirements is allovved to trade.
Furthermore, registration can be viewed as an important cost factor to the owner.
Registration will only be eữected if the relevant construction and safety requiremetns
have been met. These will cost the shipovvner money. It is conceivable that countries
do not set their nationality requirements at the level o f the international conventions.
To the extent that this happens, shipowners registering in such countries will face
lower costs. It must be pointed out, hovverver, that such situations will be very rare.
The country o f registration will decide the actual operating costs. These costs
diíler substantially from one country to another. The main differences are due to
vatiations in manning scales and wage levels. There may be other dií'ferences such as
tax íacilities and subsidies, both for construction and for operating ships. Somc
countries provide cheap loans, others require that loans are acquired through State
banks at higher costs. Some countries secure cargo for ships o f their nationality by
way o f cargo reservation (usually for government cargo), cargo sharing, and long
term charters. Finally, actual registration feess may differ from One country to
another.
Registration may also be vievved from a macro-economic point o f view. The
registration conditions o f a particular countiy will iníluence its share in world

shipping. Countries like Panama and especially Liberia have deliberately set their
conditions for registration at such a level that they attracted a great deal o f foreign
tonnage. For both countries, the income derived from the registration of ships
constitutes an important source of income.

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The lagal issues o f sỉtip regìsíration in Vỉetnam in com parison
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ìvitli tlie

There is another concepl which is used in the contcxt o f registration o f ships, i.c.
the genuine link. There has been a lively debate on the question where international
law imposes or should impose a duty on the State registering a ship to secure that
there will be a clear nexus betvveen the ship and the country. Countries which are
regarded as being too permissive are known as ”open registxy” or ”genuine link”
issue has mainly been brought to the fore by labour unions in the traditional maritime
countries and by the dcveloping nations. The issue is hnportant to many in Ihe world
o f shipping. Developing nations feel that (he existence o f opcn rcgislrics has
dcprivcd Ihcm oĩoppolunitics to incrcasc thcir national merchant marinc. The labour
unions are concerned that ”flagging out” will cost them jobs. The traditional
maritime countries are concerned because o f the decline o f their íleets. Shipowners
in these countries have an ambiguous attitude. They do like the advantages that go
with the status thc ílag carries.
Registration is the administrative act by which the nationality and the collateral
rights and duties are conferred to a ship14. According to internatiorial law each State
may fix the conditions which govern the granting o f its nationality. Therefore, a ship
can be registered in any State if it can meet its conditions.

Rcgistration is cffcctcd by entering thc ship in the national ship’s rcgister. The
ship’s register o f a State lists the ships which are registered in that State and vvhich
thereíbre, come within the national jurisdiction o f that State. By placing a ship on its
shipping register a State assumes the authority o f exercise over the ship the power
inherent in the “jurisdiction o f the flag State” : and undertakes the national and
international responsibilities o f the ílag State (State o f nationality) in relation to that
ship.
Registration may be made conditional to the vessel being wholly or partly (e.g.
50% or more) owned by nationals, residents or corporations incorporated under
national law. If registration by the bareboat charterer is deemed convenient,
nationality may be granted on condition that the charterer is a national, resident or
Corporation incorporated under national law.

14 By contrast, see M eijers, H. T he nationality o f ships, page 139. M ey ers distinguishes tvvo system s:
1. nationality is autom atically conferred w hen certain con d itio n s are fulfĩlled;
2. nationality is conferred by an explicit act o f the adm inistration.

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The logal issues o f sltip regìstratìon in Vỉetnam in comparison wiíh the
requừcment ()f iníerna/ional la\v - Nguyên Cong Bang
It may also be required that the principal placc o f business o f thc Corporation

owning the vessel be locaed in the State. Likevvise it may be required that the head
office or the principal place o f business o f the chartering Corporation be locatecl in

the State. Requirements pertaining to ownership, and the head officeof the principal
place o f business determine the degree o f control that the State has over the owner
vessel.

Some states require that the vessel be manned totally or partially by nationals.
Requirements concerning the crew give the flag State a greater degree o f control over
the vessel in the event o f w ar... Such requirements can further national employment
policies.

III.Registration of rights on ship
1.Registration of the property
In basically, the property right is defined quite the same, it includes rights of
possession, rights o f use and rights o f distermine.
Vietnamese Civil Code 1995 states at Article 173 about property right as
following:
Property right includes rights o f possession, rights o f use and rights of distermine
o f the owner as being regulated by law 15.
The owner can be individual, legal organization with enough rights o f possession,
use and distermine.
In maritime activity, the property rights, e.g. title in and benefit of ships, and
security interests, e.g. registerable charges securing monies due by the owner (such
as mortgages and hypothecs) may be recorded in the ships register at the shipowner’s
State or íòreign State.

2.Registration of maritime mortgage and liens
Underhere the registration o f .maritime mortgage and liens will be viewed under
the international Conventions. And they will be viewed under national scale aữerall.

15 See V ietnam ese C ivil C ode, 1995, A rticle 173.

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requ iretoent o f in tern ation al law - N guyên Cong B ang

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Article 3 o f the International Convention for the Uniíĩcation of Certain Rules
Relating to Maritime Liens and M ortgages signed in Brussels at Brussels, 27 May
1967 proviđcs tlial no contracting State shall pcrmit thc dercgislrnlion of a vcsscl
without

the

written

consent

of

all

holders

of

registered

mortgages

and

“hypotheques”, and aims to avoid the double registration o f vessels. It is intended to

protect the mortgage.
Special provisions may be found in the 1967 Convention on Maritime Liens and
Mortgages in respcct o f deregistration in the event o f forced sale. Article 11 o f the
Convention states that upon production o f a certiíicate issued by the Court
conducting the sale o f that the vessel is sold free from all mortgages, liens and other
encumbrances the registrar shall delete all regisíered mortgages and register the
vessel in the name o f the purchaser or issue a certiíĩcate o f deregistration if this is
applied for16.
The Convention Relating to Registration o f Rights ofV essels Under Construction,
signed at Brussels 27 May 1967 provides in Article 10 that a vessel which is being or
has been constructed in a Contracting State unless a Cerliíicate has been issued by
the former State to the effect that the rights registered in the register have been or
will bc deregistercd. Although this is nol clearly slated, this implies Ihc removal oi'
the vessel from the former register.
Registration o f rights on ships under construction is the subject of uniform
regulation in the 1967 Brussels Convention on Registration o f Rights in Respect of
Vessels Under Construction. This Convention embodies substantive rules and private
international law rules. The former entails the obligation o f contracting States to
permit the registration in a public register o f mortgages and hypothecs. The latter
concern the law governing the effects o f registration, which is that o f the State where
the vessel is being constructed, the ranking between mortgages or hypothecs and
liens and rights o f retention, which is that applicable after completion o f the vessel
and the law governing the procedure o f enforcement, which is that o f the State where
eníòrcement takes place.

16 See T he International C onvention for the U n iíic atio n o f C ertain R ules R elating to M aritim e Liens
and M ortgages, B russel, 1967, page 9.

14

The ỉaga l issues tìf ship registraíion in Vietnam in com parison
requ ừ em en t o f in tern ation al law - N guyen Cong B ang

ìviíh the

Registration o f rights on completed ships is governed by the 1926 and the 1967
Brussels Conventions on Maritime Liens and Mortgages. Both these Conventions, of
vvhich only the former is in force, provide that mortgages and hypothecs are
governed by the law o f the State where registration and hypothecs duly effected in
accordance with such law under certain conditions. These conditions are more
specifically set out in thc 1967 Convention and consist in the fact that the register
and any instrument required to be deposited with the registrar or any instrument
required to be deposited specifies the name and address o f the person in whose
favour the mortgage, or hypothec has been effected, the amount secured and the datc
and other particulars which, according to Ihc law o f the State o f registration,
determine the rank as respects other registered mortgages or hypothecs.
All the above contents have been mentioned clearly and detailedly in thc
International Convention o f Maritime Liens and Mortgages (Geneva, 6 May 1993).
This Convention provides fully the acceptance, mortgages and liens, changing the
ovvnership/registration,...

3.Registraíion of vessels in bareboat charter
Is has become increasingly common, in recent years, to register vessels which
have been chartered on a long term basis, i.e. demise or bareboat charters, in the
country o the charterer. There are several sound commercial reasons for doing this.
In this way, shipowners may beneíìt ữom construction subsidies in one country and
from low manning costs in another. This would be possible if a vessel was originally
acquired in the Federal Republic o f Germany and subsequently chartered to a
Phillipine company. The mạịority o f the bareboat charters has been registered in the

Philipine. Thus, the charterer has access to cheap labour while at the same time
establishing an economic link between the vessel and the country o f registration.
The reasons for effecting the fìrst registration in another country are diffírent.
Construction or acquisition subsidies and better fmancial terms seel to be the most
important ones.
Article 12 o f the UN Convention on Conditions for Registration o f Ships lays
down rules for bareboat charters. This Article provides the jurisdiction o f the State to
the permitting bareboat charters, considering the charlerer as the shipowner,etc.

15


The lagal issues o f slùp registration in Victnam ỉn comparison ìvitli the
requirement o f intem ationaỉ law - Nguyên Cong Bung
It is importniil tu IIOÍC thai llic bnicboal chnrlerer hus to eomply tLilly vvilli llic
conditions o f the Convcntion. This takes away the objection that the practicc of
registering

bareboat

charters

would

circumvent

the

normal

conditions

íbr

registration.
The purpose o f registering a bareboat charter is usually to create a legal situation
whereby the vessel will remail in its original register while at the same time being
listed in the new register. This requires active cooperation between the two countries
involved. Article 12 is not very specific on this point. Paragraph 5 states that íhc
State where the bareboat chartered ship is registered shall ensure that the former flag
State is notiíĩed o f the deletion o f the registration of the ship. Presumably this refers

to the cancellalion o f tlic registration o f the barcboat charlered ship aíìer tho
expiration o f the charter. The provision cannot possibly refer to the cancellation of
the registration in the former flag State at the moment o f registration in the new flag
State. It would be most undesirable if the new flag State could achieve such a
cancellation.
This implies, however, that this Article is silent about the legal position during the
actual registration in the new flag State, i.e. the period o f the charter. in order to
protect thc rights o f thc mortgagce, i.c. thc creditor or the bank, il will be essenlial
that the original registration is maintained. However, the new flag State will exercise
full jurisdiction and control. The only way to reconcile these two is to leave the
original registration with an annotation that the vessel is temporarily registered in the
country vvhere the bareboat charterer resides. In that way the vessel is placed on an
inactive register in the íbrmer flag State. This can be effecteđ by notiíĩcation. Such
notifícation should be given by the new to the former flag State. As corollary the
íòrmer flag State should iníòrm the new flag State about mortgages and other
encumbrance on the vessel. This could either be done directly by notiíying the
prostective flag State or indirectly with a declaration given to the owner.

IV. Registrar of ship
4.1 Purpose of the register
The register may serve the purpose o f both public law and private lavv, or there
may be two registers, each devoted to one o f these íunctions. A clear provision as to

16


The /ngai issues o f slíip rcgisiraíion in Victnam ÌII compurixon H'ifỉi thí’
requirement <)J Inlenintioinil ỈIÍ\V - Nguyên Cong Bang
the function o f the register (registration of ships, o f rights on ships, or both) is
necessary 7.

4.2 Duties of the registrar
Such duties may include: Instructions concerning the entry and cancellatiọn of an
entry; Verílcation o f the documents; Rules as to the issue of a certiiìcate of
registration.

4.3 Information to be kept in the register
Such information may include:
Identity o f the sliip e.g., name, year and place where the ship was built,
tonnage, length, etc.;
Name(s), nationality, address(es) o f owner(s), operator and manager;
In the case of more than one owner, their respective shares in the ship;
In case o f an owner-corporation, the names, nationality and addresses o f the
major sharehoỉders and the directors and supervisory derectors as well as the place of
the head office o f the Corporation;

The seat o f the company managing the ship.
It is useful to include a provision for compulsory notification o f Ihe registrar of

any change in the above iníbrmation.

4.4 Place \vhere one can register
The fírst question to be resolved is vvhether to organize registration centrally or in
different ports.
If registration is centrally organized there may be only one Central vvhich may not
be inconvenient in a sm all State; there m ay be branch offíces o f the Central register to

keep it up to date. Central registration is practiced in Mexico, Liberia, Panama,
Argentina, Venezuela and the Neitherlands.

' T HƯ VIỆ

N-

ĨRƯONG Đ Ạ I H Ọ C L Ù Ặ T HA NỘi I

17 See E cono m ic R egulation on M aritim e T ransport, P.J.Slot, 1990, page 41.

17


The lagal issues o f sliip regisíratìon ìn Vietnam in com parison
requirem ent ()f in ten iíition al la\v N guy en Cong Iỉang

yvith the

-

In a system oí' decentralized registration, each port has its own register and only

through special procedures can transfer to another register take place. This system is
used in the United Kingdom.

18


The lagal issues o f ship registration in Vietnam in comparison with the
rcquircment o f internaiumal law - Nguyên Cong ỉiang

Chapter II: Conditions and legislative procedures for
registration and deregistration of ships
I. International law of registration of ships
1.The 1958 Geneva Convention on the High Seas
Purpose o f this convention is mainly to fix the rules on identiíication of the
nationality o f ships, and how to fly a flag in different type o f waters. In Article.5 and
10 are referring to the exercise o f jurisdiction and control in administrative, social
and technical matters o f the State over the ships ílying its ílag.
Ít is also the íìrst convention containing in it’s Article 5 the idea o f a genuinc link,
which was taken up by the United Nations convention on the Law o f the Sea from
1982. It says, that as a condition for granting nationality, and thereíore for
registraúon, Ihcre must cxist a gcnuinc link bctwccn the ship and Ihc Slatc of
registration.

2.The United Nations Convention on the Law of the Sea 1982
(UNCLOS 1982)
This convention íĩxes, that the íreedom o f the high seas is exercised by States
under the conditions laid down by the Convenlion and other rules o f internationai
law, especially “with due regard for the interests o f other states”.
The Convention mention the State to fix conditions for ship to get its nationality,
conditions o f registration o f ship vvithin its territory and necessary conditions o f ships

to fly its flag.
When a State allows a ship ílying is flag, the State has obligations on that ship. It
means that the State has to implement the jurisdiction and control on the ship in
adm inistrative, technological and social fields. The State should have maritime

registry book recording ali the ships with their own aspects ílying naúonal flag;
meantime it has to implement its jurisdiction in compliance with the national law on
the ship in administrative, technical and social íĩelds relating to the ship.

3.The United nations Convention on Conditions for Registration
of Ships 1986
19


The laga l issues o f sliip registration in Vietnam in com parison
requirem ent o f in íernaíional law N guyen Cong B ang

wỉth the

-

This convention ensures and strengthens thc rclations beíwccn a State and the
ships ílying its flag under the effective complimentation o f jurisdiction and control of
administration, technology and society,...
The Registration Convention was adopted on 8 February 198618. That this
happened with consensus is remarkable, considering the previous opposition of opcn
registry countries to a binding agrement. First, the agreement may be binding, but the
enforcement o f the Convention is left to the ílag State.
The text o f the Convention is of a compromise nature. This is evidenced by the
loose formulation o f the obligations of State parties and by the ửequent use of

undeĩined key expressions. It is put forward that the text of the Convention allows
States consiđerable, if not entire, freedom in implementing the Convention. To
support this Ihesis, the articles on registration conditions and on the exercisc of
ịurisdiction and brieíly analyzed.
The íirst basic rule o f the Convention is that contracting parties must ensure that
the ships which they register meet the registration conditions. These conditions relate
to the national participation in the equity o f a ship-owning company (Article 8), the
manning o f ships with nationals (Article 9) and the national participation in the
namagement o f the shipowning company (Articlc 10).
These three articles elaborate the concept o f the genuine link by laying down
principles to be observed by a State when setting registration conditions. These

principles relate to the national participation in the equity and management of a
shipowning company and the manning o f ships with nationals. These articles,
however, leave States considerable ữeedom in implementing the principles.
Article 8 requires a State to provide in its laws and regulations for the ownership
of ships ílying its ílags. Paragraph 2 adds that:
”In such laws and regulations the flag State shall include appropriate provisions
for participation by that State or its nationals as owners o f ships Aying its flag or in
the ownership o f such ships and for the level o f such participation”.

18 U nited N ations C onvention on C onditions for R cgistration o f Ships. T D /R ^ C O N P /^ o f 13 M arch
1986.

20


The laga l issues fíf ship registratioit in Vietnam in com parison
requirem ent tìf in íen ta íio n a ỉ ìaw - N guyên Cong B ang

with the

Therefore, while laying down the principle o f equity participation in shipowning
companies by nationals - an element o f the economic genuine link - the article
leaves it to each individual State to determine what is ”appropriate”. The only
provision, contained in the second sentence of paragraph 2, is that:
”These laws and regulations should be sufficient to permit the flag
exercise effectively its jurisdiction and control over ships ílying its

State to

flag” .

Again, the íbrmulation is so general that no substantial restriction o f astate’s
freedom to determine registration conditions results.
Article 10 provides Ihat either the shipowning company or a subsidiary has to be
established or to have its principle place o f business in the State of registration.

If

that is not the case, the company should have a representative or management person
who must be a national or resident o f that State and is authorized to act on the
com pany’s behalf.
This Article seems to limit a State’s íreedom in setting conditions, but it may be
questioned what the actual impact will be. If, for instance, a shell company
incorporated

in the State o f registration qualifíẹs as a subsidiary there will be no

limitation in practice. As the term ”subsidiary” has not been defmed, this may very

well be the case.
In addition, to the íreedom which the formulations o f the key provisions leave
States in setting conditions, Article 7 allows a contracting party to choose whether to
set ownership requiremetns as contained in Article 8 or manning conditions as
contained in Article 9. Furthermore,- Article 12 enables the registration o f ships
bareboat chartered-in, if the bareboat charterer meets the requirements o f Article 7 to
10 enstead o f the owner. This Article provides for the often occurring situation that a
company in a particular State wishes to bareboat charter a ship registered in another
State, provided that the ship can be registered in the State o f the bareboat charterer19.
The convention markes it possible that the original registration is maintained. This
will be particularly relevant in case a mortgage or other rights on the ship have been
registered. This is allowed if and when the original flag State suspends the ship’s

19 T he P hilipine fleet for instance, consists for a large part o f ships b areb o at chatered-in. Since
enab lin g legislation w as adopted in 1975, the P hilippine fleet has g row n from 8 7 8 ,000D W T to 9.9
m ilion D W T by the end o f 1985,

21


Tlìe ỉaga l issnes <)f sliip regislralion in Vietnam
requ ìrem ení o f ìnternationaỉ la\ị> - N guyen Cong B an g

ÌII

com parison

with thi'

right to fly the ílag. This is in line with the requirement o f Article 92 o f UNCLOS

which prohibits the double nationality o f a ship. Article 12 has been criticized for
allowing an owner to charter out his ship to a shell company incorporated in a State
which is not a party to the Convention, and thus evading any o f th requirements of
the convention. This does not seem to be a valid criticism, as the bareboat charterer
with

have ío comply with the same requirements as the owner. Bccausc

requirements, as indicated above, may not be very strict, it seems unlikely that the
owner will resort to Article 12 to evade those requirements20.
Article requires flag States to have a competent and adequate national maritime
a c l m i n i s l m l i o i i . T h n l s c c m s U) b o a n c c c N s u r y r e q u i r e m e n l i n tlŨN c o n l e x l . A l t h o u g h iu

practice one may hold different opinions on what is competent and adequate, Article
5 leaves it to each State to determine the practical implementation thereof. Article 5
also provides that a flag State shall implement ”applicable international rules and
standarts” concerning matters such as the safcty o f persons on board and thc
prevention o f pollution. The enforcement o f these and other rules is assigned to the
national maritime administration. Article 5 restricts the flag State’s obligations to
”applicable” rules - and a convention can only be said to apply to those states which

are a party to il.
Article 6 relates to the identiíication and accountability o f shipowners and
operators. The premise is that owners and operations have to be identiíiable to ensure
their fulỉ accountability.
Article 6 specifies which information on the owner and the operator a register
should contain. In addition it provides for availability o that iníòrmation to third
parties, including port States. The principle o f accountability is elaborated in Article
10, paragraph 3: owners and operators should be adequately insured against third
party liability. In addition, a State o f registration should enabỉe the crew to recover

wages and related rnonies ữom their employer. The Article suggests that this may be
achieved by giving the crew a lien on the ship to the amount o f the wages, or by

20 U N T A D sanctions open registry. In: A m erican S hipper, A pril 1986, p age 6 0 6 1 . T he retnark com es
from M r. G. M aitland, official o f the International T rust C om pany w h ich adm inisters the Liberian
ship registry. A t the request o f the International C ham ber o f C om rrerce, Mr. M aitland has later given
a m ore th orough evaluation o f the bareboatcharter provisions o f th e C onvention. T hese raise several
im portant questions o f priv ate m aritim e law such as the ap plicable law in case o f ranking o f
m o rtgages and o f m aritim e liens. ICC D ocum ent No. 321-324/1N T. 45 o f 9 O ctober, 1986

22