Registration of Statutory Mortgages
The registration of a ship mortgage is essential to have legal effects, though failure to register does not render the mortgage void: under Merchant Shipping Acts, any unregistered mortgagee cannot enjoy any benefits available.
Even with the protection clause to the buyer in Norwegian Sales Form 1993 when "the Sellers warrant that the Vessel, at the time of delivery, is free from all charters, encumbrances, mortgages and maritime liens or any other debts whatsoever." For buyers, registration of ships with mortgages is particularly important to avoid future litigation after sales due to claims related to unregistered mortgages.
Read more about this topic: Ship Mortgage