Merchant Shipping Act (Cap. 234), article 40

40. (1) Upon the registration of any mortgage in the register the rights of any mortgag ee shall not be affected by: (a) the creation of any separate privilege or charge on any part, appurtenance or accessory of a ship which may attach in virtue of any law; or (b) the reservation of ownership rights by a seller of any part, appurtenance or acces sory sold to a shipowner under a contract of sale, hire purchase or any similar contract: Provided that provisions, fuel and other consumable goods shall not be consider ed as appurtenances: Provided further that the provi sion of this article shall in n o way prejudice or reduce the righ ts of any creditor enjoying a privilege or reserving ownershi p rights in relation to any cred itor other than the mortgagee. (2) At any time prior to the registration of a mortgage over a ship any creditor having a separate privilege or charge over an y part, appurtenance or accessory of a ship may register such privilege or charge in the register of the ship by means of an instrument executed by the owner in the presence of a witness i n the form specified by the Minister; and on the production of su ch instrument the registrar sha ll by memorandum under his hand notify on each charge that it has been recorded by him stating the day and hour of that record. (3) A seller reserving ownership rights in any part, appurtenance or accessory of a ship may also register his inter est in the register of the ship at any time prior to the registration of a mortgage. (4) The registration of such a charge or reservation of ownership rights prior to the registration of a mortgage shall preserve the creditor’s rights on that part, appurtenance or accessory in relation to any subsequent mortgagee. (5) A privilege or reservation of ownership rights registered over a ship under sub-article (2) shall be cancelled upon produ ction by the owner of a receipt for the price and other charges relat ive to the transfer of such part, appur tenance or accessory, and the registrar, upon production of suc h receipt duly signed and atte sted to his satisfaction, shall make an entry in the register to the effect that the privilege or reservation of ownership rights have been cancelled. M E R C H A N T S H I P P I N G [CAP. 234. 31 (6) The transfer of the interest of any creditor enjoying a privilege or reservation of ownership rights registered in term s of this article may on the producti on of proof to the satisfaction of the registrar be recorded by the registrar who shall enter in the r egister the name of the transferee and shall by memorandum under his hand notify on the instrument of transfer that it has been reco rded by him. Priority of mortgages. Amended by: XXXVII. 1988.4; 23; XXII. 2000. 29; XV . 2009.52.