Appendix 2
Views from HKSOA on Mortgages
There are many advantages in retaining the simple forms of statutory mortgage currently in use under the British Registry. However, a mortgagee should be permitted to register whatever further information it requires in connection with its mortgage. It would be appropriate therefore the legislation should specify certain essential matters which must be included in the mortgage (such as the names and addresses of the mortgagor and mortgagee, and particulars of the vessel).
It should also be possible to register agreements regulating the rights of several mortgages of one vessel and amendments and supplements to any mortgage. Revolving credits, multi-currency facilities, overdrafts and like facilities should be capable of being secured by a mortgage, and thus the flexible concept of the account current" mortgage should be retained, although it could be refined and brought up-to-date.
What is absolutely essential is that banks should have the utmost confidence in the mortgage arrangements. It is not envisaged that the Deputy Registrars abroad should have the power to record mortgages; mortgages should only be recorded in Hong Kong but, with simultaneous closing procedures, banks would have the comfort of knowing that the mortgage can be recorded simultaneously with the delivery of the vessel to their customer.
Registration of the mortgage with the Registrar should constitute sufficient notice of the existence of the mortgage and it should not also be necessary to record the mortgage at the Companies Registry.
Immediately upon registration, a mortgagee should be given a certificate of ownership and encumbrance confirming the recording of the mortgage. It is totally unsatisfactory to have to wait for several days before receiving written notification of registration as happens at the present time.
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