Course Description

In today’s world Management in shipping companies are faced with increasingly complex responsibilities. In order to meet this challenge they must be continually sharpening their management skills. This programme will focus on the ship sale and purchase skills necessary for success in today’s fast changing business environment. This course provides participants with practical guidance in relation to the negotiation, preparation and completion of ship sale (purchase) contracts and will provide them with a unique and detailed analysis of this important area of maritime law.

Course Goal

To enhance participants’ knowledge, skills, and abilities necessary to effectively manage ship sale and purchase activities.

Course Objectives

By the end of this course, the participant will be able to:

1. Understand the practice and etiquette of this specialist sector of ship broking
2. Understand the differences and interrelationships between the markets for new-buildings, second hand tonnage and demolition
3. Deal with new building contracts
4. Deal with second hand sales and purchases

Course Outline

• The Ship

1. Ship Design and Construction and Sale & Purchase Broker.
2. Differences between Dry Bulk Cargo Ships, General-Purpose Ships, Liners and Tankers.
3. Tankers’ Sub-Divisions.
4. The Purpose, Basic Design and Construction Features of Decks, Holds, Hatches, Derricks, Winches, Cranes and Other Cargo Handling Gear.
5. Ballasting and Ballast Systems.
6. The Importance of Displacement and Tonnage in Ship Sales for Demolition.
7. General Arrangement Plans.
8. Basic Characteristics of a Ship’s Propulsion Machinery.
9. Trends in Ship Development and Perceptions of Future Developments Which May Affect a Purchaser’s Thinking.

• Geography

1. The Location of Main Areas of Current Shipbuilding
2. The Size, Capabilities and Specialization of the Major Yards.
3. The Location of the Major Buyers of Tonnage for Demolition.

• Registration

1. The Need for a Ship to Be Registered.
2. Registration in the Owner’s Own Country and Registration in another Country.
3. Classification
4. The Need for a Ship to be Classified and What Classification Entails.
5. The Role and Function of Classification Societies and the Names of the Principle Societies.
6. Membership of the International Association of Classification Societies (IACS).
7. S & P Broker Involvement in Changing a Ship’s Classification.

• The Parties Involved

1. How An S & P Broker Must be Able to Differentiate among Different Types of Shipowners and How Their Attitude in S & P Negotiations May Differ.
2. The Role and Function of Other Major Players in the S & P Market.
3. The Role and Function of Those Who May Become Involved at the Time of Completion of a Sale.
4. Structure of a Typical S & P Broker’s Office and the Importance of Record-

• Markets

1. The Differences and Interrelationships between the Markets for New-Buildings, Second Hand Tonnage and Demolition.
2. What Factors Influence the State of the S & P Market?
3. What Factors Influence the Chartering Market?
4. The Influence on Markets of External Factors.
5. Markets for Tramps, Liners and Tankers and How Different Countries May React to Different Factors.
6. Market Reporting.

• Contracts and Documentation

1. Anatomy of an Agreement to Sell a Ship.
2. The Existence of All the Standard Memorandums of Agreement in Current Use.
3. How to Compile Additional Clauses When These are Desirable to Supplement or Replace Those in the Printed Form.
4. The Role and Function of All Other Documentation Which Buyers and Sellers Normally Must Produce at the Time of Completing the Sale and the Legal Transfer of the Ship.

• Negotiation

1. Basics of Firm Offer And Counter Offer in the Negotiating Process And the Manner in Which it is Customary for the Two Parties Each to Have Their Respective Brokers.
2. The Importance of Time Limits in Offers.
3. How to Draft an Opening Offer Encompassing All the Principal’s Requirements.
4. How the Negotiating Process Leads to a Conclusion Necessitating a Recapitulation Together with a Completion Agenda.
5. The Manner in Which a Ship’s Particulars are Usually Compiled When Placing a Ship on the Market for Sale.
6. The Etiquette and Ethics Customary Among S & P Brokers.

• Finance and Insurance

1. Different Ways for Raising Funds to Finance the Purchase.
2. The Role and Function of A Mortgage When Used as Security For A Loan to Finance the Purchase.
3. The Procedures of Leasing and Bareboat Chartering as Methods of Acquiring Tonnage.
4. The Manner in Which the Seller’s and Buyer’s Insurable Risk Changes as The Negotiations Progress and the Importance of Ensuring Cover is obtained at the Correct Time.
5. The Providers of Insurance.

• Valuations

1. The Duties of a Valuer in Ship Sale and Purchase, and the Reasons for and Types of Bodies Requiring Valuations.
2. Legal Liabilities Upon and Protection Needed by Valuers.
3. How a Valuation is presented with Particular Attention to Appropriate Caveats.
4. Information Needed for Valuation and the Method of Assessing A Value.

• Legal Aspects of Sale and Purchase

1. The Legal Position of the Broker In S & P and the Relationship With the Principal.
2. What is involved in Breach of Warranty of Authority both With and Without Negligence.
3. What is implied with the Words ’Free of All Encumbrances And Maritime Liens’.
4. The Importance of a Valid Notice of Readiness and of the Ship Arriving Within her Canceling Date.
5. The Principle Areas of Dispute.
6. The Buyer is not obliged to Give Any Reason for Declining a Ship on Inspection.
7. The Broker’s Right to a Commission and the Manner of Ensuring this Right is protected.
8. The Effect of International Conventions and Legislation on Existing and New Ships.