Encyclopedia of Private International Law
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Encyclopedia of Private International Law

Edited by Jürgen Basedow, Giesela Rühl, Franco Ferrari and Pedro de Miguel Asensio

The role and character of Private International Law has changed tremendously over the past decades. With the steady increase of global and regional inter-connectedness the practical significance of the discipline has grown. Equally, so has the number of legislative activities on the national, international and, most importantly, the European level. With a world-class editor team, 500 content items and authorship from almost 200 of the world’s foremost scholars, the Encyclopedia of Private International Law is the definitive reference work in the field. 57 different countries are represented by authors who shed light on the current state of Private International Law around the globe, providing unique insights into the discipline and how it is affected by globalization and increased regional integration. The Encyclopedia consists of three inter-linked pillars, enhanced by sophisticated search and cross-linking functionality. The first pillar consists of A-Z coverage of the scope and substance of Private International Law in the form of 247 entries. The second pillar comprises detailed overviews of the Private International Law regimes of 80 countries. The third pillar presents valuable, and often unique, English language translations of the national codifications and Private International Law provisions of those countries. This invaluable combination represents a powerful research tool and an indispensable reference resource.
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Chapter P.14: Property and proprietary rights in vessels

Maria Elena De Maestri

I. Concept and function

1. Ownership of the vessel: acquisition

In order to define the owner’s rights with reference to the vessel it is necessary at the outset to clarify the notion of ‘vessel’ or ‘ship’ and that of ‘ownership’ as specifically related to vessels.

Absent a commonly accepted definition of ‘ship’, its meaning must be illustrated by reference to the relevant applicable law, at both the national and international levels. Thus, the Italian Codice della Navigazione (art 136 Regio decreto 30 March 1942, no 327, in Gazz.Uff. No 93 of 18-4-1942) defines a ship as every floating and movable construction to be used for transport on maritime or inner waters, even for towage, fishing, amusement or other purposes; the UK Merchant Shipping Act 1995 (c 21) defines a ‘ship’ as every description of vessel used in navigation, while in France a ‘ship’ is described as a vessel ordinarily exposed to the perils of the sea. At the international level, art 1 of the 1992 CLC (International Convention of 27 November 1992 on civil liability for oil pollution damage, 1956 UNTS 255) refers to any seagoing vessel and seaborne craft of any type whatsoever constructed or adapted for the carriage of oil in bulk as cargo, while art 1 of the 1989 Salvage Convention (International Convention of 28 April 1989 on Salvage, 1953 UNTS 165) defines the vessel as any ship or craft or any structure capable of navigation.

The feature common to all definitions, however, is that a ‘ship’ is a res uniquely composed of many constitutive parts (such as the engine, the hull) the propriety of which cannot be separated from the property as a whole.

On the meaning of ‘ownership’, much debate has arisen as to the content of the property rights, since each national legal order p. 1437provides for a different definition of ‘property’ (→Property and proprietary rights). However, it can be stated that property gives the owner the right to enjoy quiet and uninterrupted possession of the ship as well as the absolute right to sell it or to appoint a third party to operate it.

Regarding the specific ownership of a vessel, the relationship between the person that legally owns the vessel and the person who operates it ought to be analysed. The distinction between those two figures dates back to the Roman era, where the exercitor would perform his tasks with a vessel owned by another person, the dominus. After centuries of confusion between the two terms (see the 1808 Code Napoléon and the 1865 and 1886 Commercial Code) the Italian Codice della Marina Mercantile (1877) introduced once again the distinction between ownership and operation of the vessel. All the same, it cannot be maintained either that this differentiation became common to all national legal orders or that international instruments dealing with ships and shipowners incorporated such a distinction.

In fact, even if rights accorded to the owner are usually conceptually distinct from those granted to the person operating the ship, international conventions often either extend proprietary rights to both categories (1957 Limitation Convention (International Convention of 10 October 1957 relating to the limitation of the liability of owners of seagoing ships, 1412 UNTS)), or alternatively adopt a broad definition of ‘shipowner’ which includes also other subjects having no proprietary rights over the ship, such as charterers, managers and operators (Comité Maritime International, The Travaux Preparatoies of the LLMC Convention, 1976 and of the Protocol of 1996 (Comité Maritime International 1997)). An exception to this trend is represented by the 1992 CLC, which refers only to the person (or persons) registered as the owner of the ship.

Both approaches are followed at the national level, so that while some legal orders distinguish between the shipowner and other persons operating the ship (→Switzerland, →Italy), others adopt a broader definition of ownership, which also includes the rights of the person who runs the vessel (→France, →Germany, the →Netherlands, →United Kingdom). This latter position is usually justified in the light of the fact that the same responsibility regime is applicable to both subjects. This renders the distinction between them merely formal, with no substantive effects stemming from it.

Turning to the acquisition of the ownership of the vessel, this can be obtained following the set of rules applicable to the acquisition of property (either movable or immovable depending on the qualification given by each national legal order), which may vary, however, depending on national legislations. As a general rule, we can state that property can be acquired either (i) originally, meaning without any relationship among the owner and the previous owner, such as in cases of conclusion of a contract of construction of the ship, confiscation; usucaption (depending on national legal orders), or (ii) in a derivative manner, whereby the relationship between the old and the new proprietary is a requisite, such as in cases of conclusion of a sale contract of the vessel.

2. Proprietary rights and obligations: definition

The term ‘Proprietary Right’ has no unique or clear-cut meaning, but rather seems to be related to the rights that are part of a person’s estate, assets or property (ie the vessel), as opposed to a right arising from a person’s legal status.

Concomitant with proprietary rights stand proprietary duties, one of which is fundamental whenever the object of the right is the vessel: the owner is to register the ship within a national register, ie entering some information in the public records.

This duty has a dual function: on the one hand the purpose of demonstrating the ownership of the ship, as it is required under national rules, while on the other hand, registration creates a relevant link between a state and a ship, providing the vessel with the nationality of the state of registration.

In other words, the owner is usually responsible for registration of the ship within a national register, with national legal systems for certainty purposes requiring transcription in the register of all acts which constitute, transfer or extinguish the ownership of the vessel, while the record of the vessel created following the rules of the state where registration is sought has the aim of granting a nationality to the ship.

From another perspective, we can identify public law and private law functions of registration. Public law functions include (i) allocation p. 1438of a vessel to a specific state; (ii) conferment of the right to fly the national →flag, and (iii) publicity, while among the private functions we may cite (i) protection of the registered owner’s title, and (ii) protection of the title and the preservation and ranking of priorities between persons holding a security interest in the vessel.

In order to comply with this registration duty, and in accordance with the general principle of international law following which each state is free to determine the conditions for the concession of its →nationality to a ship, states have laid down rules allowing a shipowner to register his vessel within their national registers. There are neither uniform rules concerning the attribution of nationality of the ship, nor common principles stating that a certain degree of connection between the state and the ship must exist. Consequently, the nationality accorded by a state to a ship in compliance with its national law has to be recognized and given effect in other states without considering or contesting the basis upon which the nationality is accorded. According to this principle, the Permanent Court of Arbitration in the Muscat Dhows case of 1905 stated that a state conferring a →flag to a vessel ‘is only bound by its own legislation and administrative rules’.

Despite the debate that has arisen on the existence of an international rule imposing a qualified link between the state and the ship (or the shipowner), it is well established that the full freedom of states in this matter can only be limited by the operation of two other principles affirmed in international law: (i) the ship can only have one nationality (see art 92 of the UNCLOS (United Nations Convention of 10 December 1982 on the Law of the Sea, 1833 UNTS 396) ‘ships shall sail under the flag of one State only and, save in exceptional cases expressly provided for in international treaties or in this Convention, shall be subject to its exclusive jurisdiction on the high seas’ and art 4 of the United Nations Convention of 7 February 1986 on conditions for registration of ships (UN Doc. TD/RS/CONF/19/Add.1) ‘ships shall sail under the flag of the State only. No ship shall be entered in the registers of ships of two or more States at time’); and (ii) there should be a genuine link between the state and the ship flying its flag (art 91 of the UNCLOS ‘every State shall fix the conditions for the grant of its nationality to ships, for the registration of ships in its territory, and for the right to fly its flag. Ships have the nationality of the state whose flag they are entitled to fly. There must exist a genuine link between the state and the ship’ and arts 7, 8, 9 and 10 of the United Nations Convention of 7 February 1986 on conditions for registration of ships (UN Doc. TD/RS/CONF/19/Add.1), which make reference to the economic aspect of the genuine link, providing for the participation by nationals of the flag state in the ownership, manning and management of the vessel).

According to this principle, however, states are not required to follow precise and pre-established rules for the attribution of their nationality. The principle is rather a recommendation directed to states party to the Convention. In line with this interpretation, the United Nations Convention of 7 February 1986 on conditions for registration of ships acknowledges the freedom of states to give vessels their own nationality and only requires flag states to carry out proper controls aimed at verifying whether the ship complies with international standards (largely security standards).

In the same vein, international courts recognize the freedom of states to allow the registration of a ship in their national registers in accordance with their own proper rules and irrespective of the existence of a specific link between the ship and the national legal order: see the 1953 US Supreme Court Lauritzen v Larsen case – where it is stated that ‘each State under international law may determine for itself the conditions on which it will grant its nationality to a merchant ship’ (Lauritzen v Larsen 345 U.S. 571 (1953)); as well as the 1960 ICJ advice, following which the duty to ascertain the genuine link is not established in international law; and more recently the 1992 ECJ decision in case C-286/90 confirming that

under international law a vessel in principle has only one nationality, that of the State in which it is registered … the fact that the sole link between a vessel and the State of which it holds the nationality is the administrative formality of registration cannot prevent the application of that rule. It was for the State that conferred its nationality in the first place to determine at its absolute discretion the conditions on which it would grant its nationality (Case C-286/90 Anklagemyndigheden v Peter Michael Poulsen and Diva Navigation Corp [1992] ECR I-6019).

With reference to EU law and the recording of ships in national registers, a mention is p. 1439due to ECJ case-law on compatibility between national rules allowing the record of a vessel within a national register and EU law concerning freedom of establishment and freedom to provide services. In effect, since the 1991 Factortame I judgment (ECJ, Case C-221/89 The Queen v Secretary of State for Transport, ex parte Factortame [1991] ECR I-3905) the ECJ stated that it is contrary to the provisions of EU law, and in particular to art 52 TFEU (The Treaty on the Functioning of the European Union (consolidated version), [2012] OJ C 326/47), for a Member State to enact legislation stipulating as conditions for the registration of a vessel in its national register: (i) that the owners and the charterers, managers and operators of the vessel must be nationals of that Member State or →companies incorporated in that Member State; (ii) that the said owners, charterers, managers, operators, shareholders and directors, as the case may be, must be resident and domiciled in that Member State. However, this does not mean that it is contrary to EU law for a Member State to stipulate as a condition for the registration of a vessel in its national register that the vessel in question must be managed and its operations directed and controlled from within that Member State.

Moreover, it has to be noted that the registry in which record of the ship is kept is always a national or domestic one, as operated by most maritime nations, that in accordance with national law can require strict or weak conditions for access. This raises the problem of open registries and flags of convenience. However, in parallel with such a registration another record is requested whenever the vessel, owned and registered by the shipowner, is leased to a third party, the lessee, for a stipulated period during which that party has complete possession and control of the ship (bareboat charter party). In this case a secondary registration is required in the bareboat charter ship registries (BBC), also called dual registries, following the nationality of the lessee. But such a registration is limited in time, since it ends when the charter contract terminates. Once this happens the first registration again becomes effective, giving nationality and the flag to the vessel.

II. Current regulation

1. Survey

Given the lack of uniform private international law rules concerning property and proprietary rights (at both the international and the European level), it can be maintained that the law applicable to those issues is in principle the law of the state where the object is located – lex rei sitae or lex situs (→Property and proprietary rights).

If it is true that this principle has been codified and followed by most states of the international community, it is also true that all of them make an exception when it comes to vehicles, and in particular to ships and aircraft, whereby following many national private international law rules the law governing property is the law of the flag state.

Examples can be found in: art 45(1) of the Introductory Act to the German Civil Code (Einführungsgesetz zum Bürgerlichen Gesetzbuche of 21 September 1994, BGBl. I 2494, as amended), which appoints the law of the place of origin as the connecting factor in identifying the law applicable to property of vessels; the Spanish Civil Code (art 10(2) Código Civil of 24 July 1889, Geceta de Madrid No 206, 25 July 1889) which chooses the law of the state of the register where the ship is recorded in light of the stability characterizing this connection; section 22 of the Estonian Private International Law Act of 27 March 2002 (effective 1 July 2002, The State Gazette, ‘Riigi Teataja’ I 2002, 35, 217), art 22 of the Turkish Private International Law Code (Code on Private International and International Civil Procedure Law of 27 November 2007 (Act No 5718) (Milletlerarası Özel Hukuk ve Usul Hukuku Hakkında Kanun), Resmî Gazete No 26728 of 12 December 2007); and the Belgian Private International Law Act (art 89 Wet houdende het Wetboek von international privaatrecht/Code de droit international privé of 16 July 2004, BS 27 July 2004, pp 57344, 57366), which provides that the law of the state of registration applies to all means of transport for which a record in the public register is required.

In a similar vein, the Italian Codice della navigazione (art 6) stipulates that property (as well as other real rights to the vessel) is regulated by the national law of the vessel. Despite the wording of this rule, which seems to require a fixed private international law →connecting factor derogating from the general criterion established in arts 51 and 55 of the Italian Private International Law Act (Riforma del Sistema italiano di diritto internazionale private, Act No 218 of 31 May 1995 in Gazz.Uff, Supplemento Ordinario No 128 of 3 June l995, as amended) scholars have interpreted it as being applicable p. 1440only when the lex rei sitae criterion cannot be used because no state has jurisdiction over the area where the vessel is located.

The United Kingdom and France have also created a special conflict of laws rule related to ships, whose scope of application is limited to cases of impossibility of determining of a state where ‘the object is located’. In particular, the rule provides that if the ship is sailing the high seas, the law applicable is the law of the state of registration, while if the ship is located on any state’s territory or within its national waters, that state’s law will apply. The UK and France therefore combine the lex rei situs connecting factor with the country of origin criterion, which acquires a residual role in cases where no national law can be applied.

2. The law of the flag as a residual private international law rule

As far as private international law rules rely on the ship’s →nationality as a →connecting factor, they refer to a public international law concept (→Public International Law and private international law), that – as already mentioned – is connected to the registration in national territories as well as to the attribution of a →flag to the vessel.

During the first half of the 20th century, the nationality of a ship constituted a highly significant factor linked to the exercise of the states’ jurisdiction and sovereignty over the vessel, its owner or its operator.

The socio-economic evolution of maritime commerce and navigation has entailed a weakening of the necessary link between states and vessels flying their flags. Indeed, the ownership of the vessel often holds no connection with the state that has been chosen as a country for registration in the light of its (favourable) rules concerning controls and public authoritative powers over the ship. Since the second half of the last century, the phenomenon of the so-called ‘flags of convenience’ has developed, and as mentioned (see above) neither public international law instruments, including treaties suggesting the need for a ‘genuine link’ between the vessel and the state of registration, nor customary law have been able to limit the dissemination of this practice.

This phenomenon gave rise to a debate concerning the coordination between powers granted to flag states and those afforded to port and coastal states, which has led to the limitation of the powers of flag states in favour of states holding a closer connection with the ship.

Moving from the public international law level to that of private international law (→Public international law and private international law), the weakened role of the flag state has also impacted upon the potency of the ship’s nationality as a connecting factor. In national case-law we find decisions affirming that the connecting factor of the nationality of the vessel is a subsidiary one, meaning that it can be used only when other connecting factors cannot assess rights and obligations of the involved actors in a proper way (Italian Corte di Cassazione, Sezioni Unite, 18 October 1993, No 10293).

Nevertheless the judge may not be prevented from making use of the special connecting factor related to the nationality of the vessel also when either the criteria used by the state of nationality in order to allow registration within the national register are not the same as those used by the state of the forum, or when the state of the forum does not recognize the existence of a ‘genuine link’ between the state and the ship. Accordingly, the nationality of the vessel has to be determined by using the substantive laws of the foreign state that presumably granted its flag to the vessel.

Such an application of the private international law method of recognition of the competent legal order allows a uniform treatment of property rights in connection with the ship, giving relevance to a fixed substantive element that cannot be considered and evaluated by the legal order and legal institutions of the forum.

3. Scope of application of the law governing property

In order to limit the scope of application of the special rule laid down for property over vessels, and in connection with the tendency to interpret restrictively the exception to general private international law principles, a distinction must be drawn between the property right and acts or facts giving rise to the right. In other words, the ship’s nationality will govern property and proprietary rights but need not be used as a connecting factor with regard to elements falling outside the strict definition of property and proprietary rights.

p. 1441Accordingly, the law of the flag state will regulate all aspects that, according to general private international law principles, are subject to the lex rei sitae rule. This means that the following will fall within the scope of the special rule regulating the property of vessels: (i) the conditions for acquisition of property; (ii) the identification and protection of the person having the propriety right as well as the qualification of the vessel as such; and (iii) the evidence of the acts that constitute, transfer or extinguish the proprietary right.

Conversely, there are several aspects that are covered by a different law, in particular by the law applicable to the relationship which legitimates the entitlement of the right. More precisely, the effects and conditions of all acts transferring the ownership of the vessel to another subject are regulated by the law applicable pursuant to the conflict of laws rule connected with the specific act or relationship. This means that if the property is transferred by contract, the validity and the effects of the contract will be governed by the law applicable to the contractual obligation itself, while the remaining aspects related to the property in the ship will follow the law of the flag state.

In the leading case Lauritzen v Larsen, the Supreme Court of the US stated that

maritime law, like our municipal law, has attempted to avoid or resolve conflicts between competing laws by ascertaining and valuing points of contact between the transaction and the states or governments whose competing laws are involved. The criteria, in general, appear to be arrived at from weighing of the significance of one or more connecting factors between the shipping transaction regulated and the national interest served by the assertion of authority (Lauritzen v Larsen 345 U.S. 571 (1953)),

pointing out several connecting factors which, in the case specifically connected to tort claims, can create a valuable link between the case and a national law. The statement specifically describes seven ‘contacts’ for a tort case where two foreign nations were involved: →Denmark, because the ship and the seaman involved were Danish nationals; →Cuba, because the tortious conduct occurred and caused injury in Cuban waters; the →United States because the seaman had been hired in and was returned to the United States, which also is the state of the forum.

The seven connecting factors described by the court were, therefore, (i) the place of the wrongful act; (ii) the law of the →flag; (iii) the allegiance or domicile of the injured person; (iv) the allegiance of the defendant shipowner; (v) the place of the contract; (vi) the inaccessibility of the forum; (vii) the law of the forum.

In deciding the case, the US Supreme Court took into consideration all these →connecting factors, drawing a most relevant link within Danish law, since many of the factual elements recalled by the criteria are located in Denmark (the parties were both Danish subjects, the events took place on a Danish ship, not within US territorial waters).


  • Ademun Ademun-Odeke, ‘An Examination of Bareboat Charter Registries and Flag of Convenience Registries in International Law’ (2005) 36 Ocean Development & International Law 339;

  • Jürgen Basedow, ‘Billigflaggen, Zweitregister und Kollisionsrecht in der deutschen Schiffahrtspolitik’ in Ulrich Drobnig, Jürgen Basedow and Rüdiger Wolfrum (eds), Recht der Flagge und “billige Flaggen”. Neuere Entwicklungen im internationalen Privatrecht und Völkerrecht (Müller Juristischer Verlag 1990) 75;

  • Pierre Bonassies, ‘La loi du pavillon et les conflits de droit maritime’ (1979) 125 Rec. des Cours 505;

  • Sergio Maria Carbone, Conflits de lois en droit maritime (Martinus Nijhoff Publishers 2010);

  • Sergio Maria Carbone and Lorenzo Schiano di Pepe, Conflitti di sovranità e di leggi nei traffici marittimi tra diritto internazionale e diritto dell’Unione europea (Giappichelli 2010);

  • Richard Coles and Edward Watt, Ship Registration: Law and Practice (2nd edn, Informa 2009);

  • Ulrich Drobnig, ‘Billige Flaggen im Internationalen Privatrecht’ in Ulrich Drobnig, Jürgen Basedow and Rüdiger Wolfrum (eds), Recht der Flagge und “billige Flaggen”. Neuere Entwicklungen im internationalen Privatrecht und Völkerrecht (Müller Juristischer Verlag 1990) 31;

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  • James Fawcett and Janeen M Carruthers, Private International Law (OUP 2008);

  • Christopher Hill, Maritime Law (LLP 2003);

  • Eva-Maria Kieninger, ‘Property Law (International)’ in Jürgen Basedow and others (eds), The Max Planck Encyclopedia of European Private Law (OUP 2012);

  • Eva-Maria Kieninger, ‘Security Interests in Transport Vehicles’ in Jürgen Basedow and others (eds), p. 1442The Max Planck Encyclopedia of European Private Law (OUP 2012);

  • John NK Mansell, Flag State Responsibility. Historical Development and Contemporary Issues (Springer 2009);

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  • Lorenzo Schiano di Pepe, Inquinamento marino da navi e poteri dello Stato costiero. Diritto internazionale e disciplina comunitaria (Giappichelli 2007);

  • William Tetley, International Conflict of Laws (Common Civil and Maritime) (Blais 1994).