The objective of this thesis is to provide an analysis of the current issues and conditions affecting shipping finance in Russia based on the development of the systems of ship and mortgage registration.
Particular economic reasons describing the situation on the shipping markets lie outside the scope of this thesis. However, a general overview of the situation of the shipping markets and results achieved by the leading banks will be provided in the first chapter. The reason is to demonstrate that in spite of a business recession in some areas, shipping companies continue to experience favourable market conditions such as the increased freight rates and the continuing demand for gross tonnage capacity. The latter has led to the companies expanding or upgrading existing vessels.
Another reason for choosing the above subject was the experience obtained working in the shipping finance group of a City of London law firm during the last 9 months. The author was involved as an assistant in a number of loan facility transactions for financing newbuildings for the Russian-controlled borrowers. Analysing the structure of the transactions it was noted that mortgage over the vessels and vessel registration in one of the open ship registries were prerequisites of the lending banks.
In this thesis the following issues are to be considered:
(i) the role of mortgage over the vessel as one of the securities in a shipping finance transaction;
(ii) the role of underlying vessel registration and advantages and/or disadvantages of the existing types of ship registries;
(iii) the procedures for ship and mortgage registration under Russian law and
(iv) an analysis of the relative advantages and disadvantages of the Russian mortgage.
In order to integrate the above issues, the following structure and terminology will be used in this thesis:
(a) overview of shipping finance based on the results of the shipping banks survey published (chapter 2);
(b) analysis of shipping finance characteristics, sources and main types of securitisation in shipping finance (chapter 2);
(c) current issues in relation to ship and mortgage registration (chapter 3);
(d) research on provisions of the ship and mortgage registration under Russian law (chapter 3); and
(e) comparison between requirements in connection with
(i) ship registration in the Russian International Ship Registry and Norwegian International Ship Registry.