Selling and purchasing is the most important reason for acquiring ownership of ships, or floating marine installations designated for marine navigation.
What is meant by a ship?
A ship is any establishment that normally operates or is intended to work in maritime navigation, even if it isn’t aimed at profit.
The accessories of the ship necessary for its exploitation shall be considered as a part of it.
A ship is a marine navigational facility and its domicile is the port in which the procedures related to it are recorded and carried out. The domicile of the ship is crucial in determining jurisdiction over crimes committed on deck. If the ship is registered in one of the ports of Egypt and owned by an Egyptian natural or legal person. If the ship is jointly owned, it is stipulated that the majority of the shares are owned by Egyptians more than 51 percent, then, it acquires the Egyptian nationality. The flag of the Arab Republic of Egypt must be raised on it. The ship must also have a name licensed by the competent authority, which must be shown on the back of the ship alongside the registration number.
What is the applicable law?
All acts regarding to selling or purchasing ships is subjected to the rules of the Maritime Trade Act No.8 of 1990.
One of the basic conditions of the contract for the sale or purchase of the is that the general elements that must be satisfied in any contract such as legal capacity to contract, valid consent, reason, and subject matter of the contract must be fulfilled, the general legal rules for the validity and enforceability of the contract are applied. In addition to that in the contract of sale of ships, the necessity of the availability of special conditions mentioned in the marine technicians.
What is the competent court?
The Court of First Instance in whose jurisdiction the registration office of a ship flying the flag of the Arab Republic of Egypt is located, shall have jurisdiction to hear cases in rem related to it, unless the law stipulates otherwise.
Disposition of the ownership of the ship
- Dispositions whose subject matter is the creation, transfer or expiration of the right of ownership or other rights in rem on the ship shall take place with an official document, otherwise it is void.
- If these actions occurred in a foreign country, they must be written before the consul of the Arab Republic of Egypt in that country, and in his absence, before the competent local official.
- The actions referred to in the preceding paragraph shall not be effective in relation to third parties unless they are notified at the request of the concerned persons in the ship’s record kept in the relevant registry office, and the registration rank is according to the priority of entry in this record.
- It isn’t permissible to transfer the ownership of an Egyptian ship to a foreigner with or without consideration, nor may it be chartered to a foreigner for a period of more than two years, except after obtaining permission from the competent minister.
- Whoever violates this prohibition shall be punished by imprisonment for a period not exceeding one year and a fine not exceeding three thousand pounds, or by one of these two penalties.
Ship builder obligations
The ownership of the ship shall remain with the building contractor, and the ownership can’t be transferred to the building applicant unless it is accepted to receive it after its trial, unless there is an agreement to the contrary.
The building contractor guarantees that the ship is free from hidden defects, even if the building applicant accepts the delivery of the ship after testing it.
The lawsuit for guaranteeing hidden defects shall expire with the lapse of one year from the time of knowledge of the defect, and this lawsuit shall lapse with the lapse of two years from the time of receiving the ship, unless it is proven that the building contractor deliberately concealed the defect from him.
Statues of sale in common ownership of ships
The opinion of the majority shall be followed in every decision related to the exploitation of a commonly owned vessel, unless the law stipulates or agrees otherwise.
A majority is available with the consent of the owners of more than half of the shares in the ship more than 51 percent unless the law provides or the owners agree on another majority.
For each minority owner who didn’t agree to the decision may appeal against it within fifteen days from the date of its issuance before the Court of First Instance, where the ship’s registry is located, and the court may retain or annul the decision. The appeal doesn’t result in suspending the execution of the decision unless the court orders otherwise.
The manager may carry out all the actions and works required by the management of the commons, however, he can’t, except with the permission of the owners, issued by the necessary majority, sell the ship, mortgage it, arrange any other right in rem on it, or rent it for a period exceeding one year.
Any agreement to limit the manager’s authority other than what is mentioned in the previous paragraph can’t be invoked against third parties.
Conclusion
The Maritime Trade Act has regulated the movement of selling and purchasing ships in several cases, including cases of disposing of ownership, cases of disposing of ownership in common ownership, the duties of the shipbuilder in disposing of the ship, and specifying the competent court in the event of a dispute and how to register ships.
