Merchant Shipping (Demise Charter) Act 1994

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Merchant Shipping (Demise Charter) Act 1994
The Laws of Bermuda
Annual Volume of Public Acts 1994 : 2

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BERMUDA
1994 : 2

MERCHANT SHIPPING (DEMISE CHARTER) ACT 1994

[Date of Assent 10 March 1994]

[Operative Date 22 August 1994]

ARRANGEMENT OF CLAUSES

1 Citation and
commencement

2 Interpretation
3 Demise charter register
4 Eligibility for registration
5 Applications for

registration
6 Ascertainment of tonnage
7 Name of ship and official

number
8 Marking
9 Carving and Marking Note
10 Registration
11 Documents to be retained

by the Registrar
12 Certificate of demise

charter registry
13 Production of certificate of

registry to Registrar

14 Ownership of ship
15 Period of registration and

renewal of registration
16 Termination of

registration
17 Effect of termination of

registration
18 Registration in a foreign

registry
19 Consent of Registrar
20 Name of ship
21 Registration of a ship

registered in Bermuda in
a foreign registry

22 Obligations while ship is
in a foreign registry

23 Payment of fees while ship
is in foreign registry

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24 International convention
certificates of ship
registered in a foreign
registry

25 Titles, mortgages and
encumbrances of ship
registered in a foreign
registry

26 Termination of demise
charter registration in
foreign registry

27 Certification of documents
28 Fees
29 Application of laws
30 Offences
SCHEDULE

WHEREAS it is desirable to establish a demise charter register
and for matters connected therewith:

Be it enacted by The Queen's Most Excellent Majesty, by and
with the advice and consent of the Senate and the House of Assembly of
Bermuda, and by the authority of the same, as follows:—

Citation and commencement
1 This Act may be cited as the Merchant Shipping (Demise
Charter) Act 1994 and shall come into operation on a day to be
appointed by the Minister by notice published in the Gazette.

Interpretation
2 In this Act, unless the context otherwise requires—

"certificate of demise charter registration" means a certificate
issued by the Registrar under section 12;

"compatible registry" means a ship registry of a country, the law
of which permits demise charter registration in a manner
consistent with the provisions of this Act;

"demise charter register" means the register established and
maintained by the Registrar in accordance with section 3;

"Minister" means the Minister charged with responsibility for
merchant shipping;

"owner" means any person who holds a legal interest in a ship by
way of ownership thereof or of a share therein, except that a
mortgagor shall not by reason of the mortgage cease to be an
owner;

"Registrar" means the Registrar of Shipping;

"underlying registry" means the registry of the State in which the
owner of the ship is registered as owner and to which

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jurisdiction and control will revert upon termination of the
demise charter registration, and "underlying register",
"underlying registration" shall be construed accordingly.

Demise charter register
3 (1) The Registrar shall establish and maintain a register, which
may be in a documentary or non-documentary form, to be known as the
demise charter register.

(2) The port of Hamilton shall be deemed to be the port of
registry for ships registered in the demise charter register.

(3) Notwithstanding anything to the contrary in any statutory
provision, a ship registered in the demise charter register shall wear the
red ensign and not the ensign of the underlying registry.

Eligibility for registration
4 (1) A ship is only eligible to be entered in the demise charter
register if—

(a) the ship is not a fishing vessel or a ship of less than
twenty four metres in length;

(b) the ship is registered in a compatible register;

(c) the ship is chartered by demise to a person qualified to
be the owner of a ship registered in Bermuda; and

(d) the charterer is not resident in Bermuda, the charterer
appoints an individual or a body corporate satisfying the
requirement prescribed in subsection (2) to be the
representative person in relation to the ship.

(2) For the purposes of subsection (1)(d) the prescribed
requirement is that the representative person is either—

(i) an individual resident in Bermuda; or

(ii) a body corporate incorporated in Bermuda and
having a place of business in Bermuda.

Applications for registration
5 (1) An application for registration shall be made in writing by
the charterer or his agent (hereafter referred to as "the applicant") and if
the charterer is a body corporate the application shall be made by an
authorised officer appointed in writing by that body.

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(2) Every application shall specify such particulars relating to
the ship and its ownership as will show that the ship is one to which this
Act applies and the following details:

(a) a description of the ship;

(b) the name of the ship;

(c) the name and address of every owner of the ship; and

(d) the name and address of the charterer by demise of the
ship.

(3) The applicant for registration shall provide—

(a) a certified copy of the agreement under which the ship is
chartered by demise to the charterer;

(b) a certified copy of the entries in the underlying registry
including details of ownership and any mortgages,
charges or liens registered against the ship;

(c) the written consent of the appropriate maritime
authorities of the country of registry to demise charter
registration;

(d) the current international tonnage certificate relating to
the ship and the certificate of survey referred to in
section 6;

(e) the written consent of the mortgagees, if any, and the
written consent of every owner to demise charter
registration;

(f) the name and address of the individual or of the body
corporate appointed under section 4(1)(d); and

(g) such supplementary information and evidence relating
to the ship and the ownership thereof as the Registrar
may require to determine whether the ship may properly
be registered.

Ascertainment of tonnage
6 (1) Subject to subsection (3), the tonnage of a ship to be
registered in the demise charter register shall be ascertained in
accordance with the Merchant Shipping (Tonnage) Regulations 1982.

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(2) A certificate of survey shall be issued specifying the ship's
tonnage and build and such other particulars descriptive of the identity
of the ship as may for the time being be required by the Registrar.

(3) At the request of the charterer, the Registrar may accept the
tonnage of such ship to be that registered in the underlying registry if it
is satisfied the provisions of the International Convention on Tonnage
Measurement of Ships signed in London on 23rd June 1969, if
applicable to the ship and unless the ship has been exempted from
them, have been adhered to, and the certificate of survey referred to in
subsection (2) shall be that issued by the underlying registry.

(4) The certificate of survey shall be delivered to the Registrar
before registry.

Name of ship and official number
7 (1) A ship which is registered in the demise charter register
shall retain the name assigned to it under the underlying registry unless
that name is the same as the name of a ship which is—

(a) already registered on the demise charter register; or

(b) registered under Part I of the Merchant Shipping Act
1894.

(2) If on receipt of an application for registration, the Registrar
is satisfied that the ship in respect of which application has been made is
eligible to be registered in the demise charter register, the Registrar shall
allocate to the ship a registration number and shall issue to the owner a
Carving and Marking Note.

Marking
8 (1) The charterer shall cause the name of the ship to be
marked on each of her bows, and her name and the port of registry to be
marked on her stern and in both cases the markings shall comply with
the requirements of subsection (2).

(2) The markings shall be cut in or raised up, the colour of the
markings shall contrast with the colour of the ground on which they are
located and the letters shall not be less than 1 decimetre in height and
2.5 centimetres in breadth.

(3) The charterer shall cause the registration number of the
ship to be cut into the main beam of the vessel or otherwise marked or
fixed thereon to the satisfaction of the Registrar in such a way that it
cannot be readily effaced.

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Carving and Marking Note
9 An officer, duly authorised by the Registrar for the purpose, shall
satisfy himself that the ship has been marked and carved in the manner
required by section 8, certify the Carving and Marking Note to that effect
and return it to the Registrar.

Registration
10 (1) Upon receiving an application for registration in the demise
charter register and being satisfied that—

(a) the ship may properly be registered,

(b) the name does not appear to it to be undesirable, and

having received Carving and Marking Note certifying that the ship has
been marked and carved in accordance with section 8, the Registrar
shall register the ship and record the following details in the demise
charter register:

(c) the name and registration number of the ship;

(d) the date of registration;

(e) the date of expiration of registration determined in
accordance with section 15;

(f) the descriptive particulars and tonnage details of the
ship;

(g) the name and address of every owner of the ship;

(h) the name and address of the charterer of the ship;

(i) the name and address of the manager of the ship.

(2) After registering the ship, the Registrar shall inform the
appropriate authorities of the underlying registry of the registration of
the ship in the demise charter register.

Documents to be retained by the Registrar
11 On registering a vessel the Registrar shall retain the documents
produced to him under section 5(3).

Certificate of demise charter registry
12 (1) Upon registering a vessel, the Registrar shall issue and send
to the charterer a certificate of demise charter registry containing the
particulars set out in the Schedule.

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(2) If it is shown to the satisfaction of the Registrar that the
certificate of demise charter registry of a ship chartered by demise has
been lost, stolen or destroyed or has become illegible, he may issue to the
charterer or master of the ship a duplicate of that certificate and that
duplicate, which shall be marked as such, shall be of the same effect as
the original.

(3) Where a duplicate certificate is issued the original if then
available or if subsequently found shall be forthwith surrendered by the
owner of the vessel to the Registrar.

(4) Upon the issue of the certificate of demise charter registry
the charterer shall surrender to the appropriate authorities of the
underlying registry all documents issued to the ship by those authorities
and, within thirty days of the issue of the certificate of demise charter
registry, the charterer shall make and deliver to the Registrar a
declaration to that effect.

Production of certificate of registry to Registrar
13 The charterer of a ship recorded in the demise charter register
shall produce the certificate of demise charter registry of his ship to the
Registrar on demand.

Ownership of ship
14 (1) This Act shall not assert any ownership rights over a ship
registered on the demise charter register and it shall have no effect with
regards to title and transfer and transmission of the ship or shares
therein.

(2) The charterer shall report any transfer of ownership of the
ship or other changes or alterations respecting the ship or her
employment to the Registrar within seven days of the changes or
alterations taking place.

(3) The registration of the ship on the demise charter register
shall be closed unless the new owners, within seven days, have informed
the Registrar that they have no objection to the registration of the ship
on the demise charter register continuing, and, within thirty days of
having made such declaration, delivered to the Registrar their consent in
writing to the registration.

Period of registration and renewal of registration
15 (1) Subject to termination under this Act, the duration of the
registration of a ship in the demise charter register shall be for a period
not exceeding the duration of the demise charter agreement or the expiry

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date of the underlying registration, whichever is the shorter period, but
in no case for a period exceeding five years.

(2) Upon receipt of an application for renewal of registration by
the person registered as charterer of the ship during the period of six
months prior to the date of expiration, the Registrar may, if satisfied that
the registration of the ship has not terminated and may properly be
continued for a further period, and that it has been informed of any
change in address on the register and has not received any objections
from the appropriate authorities of the underlying registry, the owners or
the mortgagees, if any, renew the registration for a further period not
exceeding the duration of the demise charter agreement or the expiry of
the underlying registration, whichever is the shorter period, but in no
case for a period exceeding five years.

(3) Upon the grant of a renewal in terms of subsection (2), the
Registrar shall—

(a) enter the new date of expiry in the register of the ship;

(b) issue to the charterer of the ship a certificate of demise
charter registration which shall include the details
recorded in the register in accordance with section 10,
save that the date of registration shall be the date of
renewal of registration;

(c) inform the appropriate authorities of the underlying
registry.

Termination of registration
16 (1) The registration of a ship in the demise charter register
shall forthwith terminate in the following cases:

(a) where the appropriate authorities of the underlying
registry revoke their consent for the ship to be registered
in the register;

(b) if the registration in the underlying registry has for any
reason been terminated;

(c) if a voluntary closure of registry has been requested by
the charterer;

(d) where the charter lapses or is terminated by any of the
parties to it;

(e) at the end of the period referred to in section 15 unless
renewed;

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(f) where a ship registered in the register ceases to be a
ship to which this Act applies; or

(g) if the ship no longer complies with the requirements of
the laws applicable to ships registered in Bermuda;

(h) if the charterer assigns or otherwise transfers his
interest in the charter.

(2) Where it appears to the Registrar that there is any doubt as
to the right of any ship to be registered in the register, he may require
the person registered as owner to give evidence to his satisfaction that
the ship is entitled to be so registered and such evidence may include the
production of the ship for inspection at a place and under such
conditions as he requires; and if the evidence required is not given to his
satisfaction within three months of being so required, he may terminate
the registration of the ship.

(3) The Registrar may, wherever it appears necessary or
appropriate to do so for giving effect to this Act or for bringing up to date
or otherwise correcting particulars on the register, amend the register
and issue an amended certificate of demise charter registry.

Effect of termination of registration
17 Whenever the registration of a ship in the demise charter register
is terminated, the certificate of demise charter registry shall thereupon
cease to have effect and shall be surrendered by the person registered
prior to termination as owner or charterer of the ship to the Registrar
within one month.

Registration in a foreign registry
18 Notwithstanding any other provision of this Act, a ship registered
in Bermuda may be demise charter registered in a compatible registry if
the Registrar gives consent in writing thereto in terms of section 19.

Consent of Registrar
19 (1) The Registrar may, under such conditions as may be
deemed fit to impose, give consent referred to in section 18 if—

(a) the ship is registered in Bermuda under the laws
applicable to ships registered in Bermuda;

(b) the demise charter registry where the ship is to be
registered is a compatible registry; and

(c) the following documents are submitted to the Registrar:

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(i) an application for demise charter registration in
a foreign registry made by the owners containing
such information as may be required by the
Registrar;

(ii) the consent in writing to such registration of all
registered mortgagees, if any;

(iii) a written undertaking by the owners to
surrender the certificate of registry issued under
the laws applicable to ships registered in
Bermuda within thirty days from entry into the
foreign registry;

(iv) a written undertaking by the charterer that the
red ensign, with or without any defacement,
shall not be hoisted during the period of foreign
registration; and

(v) a copy of the demise charter.

(2) The owners shall produce to the Registrar any amendments
or modifications to the demise charter within thirty days of the
amendments or modifications being effected.

Name of ship
20 (1) Subject to subsection (2), a ship registered in Bermuda
shall be demise charter registered in a foreign registry by the name
under which it is registered under the laws applicable to ships registered
in Bermuda.

(2) The name of a ship registered in Bermuda demise charter
registered in a foreign registry may be changed in accordance with the
laws applicable to ships registered in Bermuda only if the change is
being effected also in the foreign registry.

Registration of a ship registered in Bermuda in a foreign registry
21 (1) Upon the demise charter registration of a ship registered in
Bermuda in a foreign registry—

(a) the owners shall immediately notify the Registrar of the
registration, and within thirty days surrender to the
Registrar the certificate of registry issued to the ship
under the laws applicable to ships registered in
Bermuda and deliver to the Registrar a transcript or an
extract of the foreign registration; and

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(b) the Registrar, if satisfied that the registration has been
effected according to the provisions of the law in force in
Bermuda, shall make an entry thereof in the register of
the said ship.

(2) The owners shall immediately notify the Registrar of the
closure or lapse of the demise charter registration in a foreign registry,
and shall within thirty days of the closure of the registry, deliver to the
Registrar a transcript or an extract of the foreign registration showing the
closure.

Obligations while ship is in a foreign registry
22 (1) Unless otherwise provided for in this Act, the owners of a
ship registered in Bermuda demise charter registered in a foreign registry
shall comply with the provisions of the laws applicable to ships registered
in that foreign registry.

(2) During the time a ship registered in Bermuda is demise
charter registered in a foreign registry in terms of the provisions of this
Act—

(a) notwithstanding the provisions of the law in force in
Bermuda concerning the hoisting of the red ensign, the
ship shall not hoist the red ensign, defaced or
undefaced; and

(b) notwithstanding the provisions of the law in force in
Bermuda concerning the port of registry of a ship, the
home port of the ship shall be that of the foreign
registry.

(3) The owners shall, within fifteen days from the entry into the
foreign registry, make and deliver to the Registrar a declaration to the
effect that the name of the foreign home port has been marked on the
stern of the ship in lieu of the name of the Bermuda port of registry.

Payment of fees while ship is in foreign registry
23 A ship registered in Bermuda demise charter registered in a
foreign registry shall, notwithstanding the demise charter registration,
continue to be subject to the payment of all the fees set out in the law in
force in Bermuda in respect of a ship registered in Bermuda

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International convention certificates of ship registered in a foreign
registry
24 (1) Subject to subsection (2), a ship registered in Bermuda
demise charter registered in a foreign registry required to be issued with
international convention certificates in terms of an international
convention to which Bermuda is a party shall be issued with such
certificates under the authority of the Government of the foreign registry.

(2) The Government of the foreign registry is recognised as
being the competent authority to exercise exclusive jurisdiction and
control over the vessel in accordance with applicable international
conventions.

Titles, mortgages and encumbrances of ship registered in a foreign
registry
25 No law which relates to—

(a) title to a ship or any interest in a ship; or

(b) ship mortgages, liens and other encumbrances,

shall be affected by this Act or by the demise charter registration of a
ship registered in Bermuda in a compatible registry.

Termination of demise charter registration in foreign registry
26 (1) The Registrar may withdraw the consent referred to in
section 18, if any of the applicable provisions of section 19, are not
complied with; however, the Registrar shall withdraw the consent, if—

(a) the Registrar in the national interest or in the interest of
Bermuda shipping and after giving the owners and the
charterers of the ship a reasonable opportunity to make
representations, is satisfied that it is appropriate so to
do;

(b) any of the conditions required to be fulfilled in terms of
section 19 is not so fulfilled;

(c) the charter terminates or is terminated by any of the
parties to it; or

(d) the registration in a foreign registry of a ship registered
in Bermuda is not made in accordance with this Act.

(2) Upon the withdrawal of the consent of the Registrar under
subsection (1)—

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(a) the Registrar shall inform the appropriate authorities of
the foreign registry, the owners, the charterers, and the
mortgagees, if any, of the withdrawal; and

(b) the foreign registration shall be terminated.

(3) Upon the termination of the foreign registration—

(a) the Registrar shall make an entry thereof in the register;

(b) the owners shall, within thirty days from the termination
of the registration, make and deliver a declaration to the
Registrar that the certificate of demise charter registry
has been surrendered to the foreign demise charter
registry, and thereupon the Registrar, unless the registry
of the ship under the law in force in Bermuda is also
being closed, shall again deliver to the owners the
certificate of registry which had been surrendered to him
under section 21(1)(a); and

(c) the owners shall, within thirty days from the termination
of the registration, deliver to the Registrar a transcript
or an extract of register showing that the foreign
registration has been terminated.

Certification of documents
27 All documents required by the Registrar for the purposes of this
Act shall be certified as required by the Registrar.

Fees
28 (1) The Minister may make regulations prescribing fees payable
in respect of registration under this Act and otherwise in respect of
anything incidental to, or connected with, such registration.

(2) Regulations made under subsection (1) shall be subject to
the affirmative resolution procedure.

Application of laws
29 It is hereby directed that the laws applicable to ships registered
in Bermuda—

(a) apply to ships which are entered in the demise charter
register;

(b) cease to have effect in relation to ships registered in
Bermuda which are demise charter registered in a
foreign registry except the applicable laws that apply

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from time to time in respect of the registration or
mortgage or both of ships.

Offences
30 (1) Any person who, with intent to deceive, uses, or lends to or
allows to be used by another, a certificate of demise charter registry
under section 5 which has ceased to have effect, is guilty of an offence
and liable on summary conviction to a fine of two thousand dollars.

(2) Any person who, for the purposes of registration in the
demise charter register, makes a statement which he knows to be false in
a material particular, or recklessly makes a statement which is false in a
material particular, is guilty of an offence and is liable on summary
conviction to a fine of two thousand dollars.

(3) Any person who, being required by section 8 to ensure that
any requirement of that section as to the marking of a ship is met fails
to notify the Registrar or to ensure that that requirement is met, is guilty
of an offence and is liable on summary conviction to a fine of five
hundred dollars; save that it is a defence for such a person to prove that
he took all reasonable precautions and exercised all due diligence to
avoid the commission of the offence.

(4) Any person who, being required by this Act to surrender
any certificate, fails without reasonable excuse to surrender that
certificate is guilty of an offence and is liable on summary conviction to a
fine of five hundred dollars.

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SCHEDULE Sections 2 and 12

PARTICULARS TO BE RECORDED ON A CERTIFICATE OF
DEMISE CHARTER REGISTRY

1 Ship's Registration number.

2 Name of ship.

3 Number, year and port of demise charter registry.

4 Number, year and port of underlying registry (if any).

5 Whether a sailing, steam or motor ship and how propelled.

6 Place of build.

7 Year of build.

8 Name and address of builders.

9 Descriptive particulars of the ship.

10 Measurement of length, depth and breadth.

11 Particulars of engines (including boilers if fitted) and engine
power in kilowatts or BHP.

12 Particulars of gross and register tonnages.

13 Number of seamen for whom accommodation is certified.

14 Name and address of each owner who is an individual.

15 Name and registered office of each owner which is a company.

16 The number of sixty-fourth shares held by each owner.

17 Name and address of the charterer.

18 Date of issue of the certificate of registry.

19 Date of termination of the certificate of registry.

20 Whether an original or duplicate certificate.

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