Title 47, Chapter 3 of the Marshall Islands Revised Code (“MIRC”) governs Marshall Islands ship mortgages and maritime liens. It is referred to as the Preferred Ship Mortgage and Maritime Liens Act (the “Act”).

A sale, conveyance, hypothecation, mortgage or assignment of mortgage of any vessel is not valid against any person other than the grantor or mortgagor, his heirs or devises and persons having actual notice unless the instrument evidencing such transaction is recorded with International Registries, Inc. (“IRI”). 47 MIRC 302. A valid mortgage, which at the time it is made includes the whole of any vessel, will have a preferred status as of the date of its recordation. 47 MIRC 303.

International Registries, Inc. (IRI), headquartered near Washington, DC, in Reston, Virginia, in the United States, is the “central office of the Maritime Administrator, in the United States of America” for purposes of the Act, and its 25 offices in major shipping and financial centers around the world are duly authorized agents having full authority to record ship mortgages, conveyances, bills of sale, and other maritime documentation. 47 MIRC 302.

IRI will record such instruments in the order they are received in appropriate indexes showing: (a) the name of the vessel; (b) the names of the parties; (c) the time and date of receipt of the instrument affected; (d) the interest in the vessel transferred or affected; and (e) the amount or amounts of the direct or contingent obligations, including advances and repayments, that are or may become secured by the mortgage. 47 MIRC 302.

IRI will not record a mortgage unless it states the interest of the mortgagor in the vessel and the interest so mortgaged. Further, a mortgage or instrument of release or discharge will not be recorded unless it bears an apostille issued by a competent authority of a State Party to the Hague Convention of 5 October 1961, as amended, or has been acknowledged or is submitted with such other proof of due execution. 47 MIRC 305.

IRI will record a mortgage or related instrument submitted to it in proper form and will, upon request, issue a Certified Extract of the Preferred Mortgage Index of the public register as evidence of recordation of a Preferred Ship Mortgage. Furthermore, upon request, IRI will issue a Certificate of Ownership and Encumbrance (“COE”) setting forth all recorded mortgages, encumbrances and related instruments with respect to a vessel registered in the Marshall Islands as of the time and date of its issuance. 47 MIRC 307.