University of Malta

Study-Unit Description
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TITLE Asset Finance Law (Ships and Aircraft)

LEVEL 05 - Postgraduate Modular Diploma or Degree Course


DEPARTMENT Commercial Law

DESCRIPTION This study-unit is accordingly broadly divided into two parts, the first part covering the legal framework for Aircraft Registration and Finance, a relatively new subject to University teaching whereas the second part covers in detail Ship Registration and Finance which has long been taught as an integral part of the Commercial Law range of subjects offered to students.

The legislative landscape in the aviation finance sector is now a panoply of local as well as international legislative instruments that require careful analysis, also because they challenge traditional notions of asset finance. The study-unit will therefore give a clear understanding of the context within which the legislative action has been taken, its objectives, and how the courts will have to deal with issues that arise.

The specific topics covered will include:
(a) introduction to the subject, including the legislative and international convention landscape;
(b) the development of asset finance in general;
(c) aircraft: definition, private, commercial and corporate;
(d) ownership, operation and the Air operators certificate;
(e) the Air Navigation Order and safety related issues;
(f) nationality and eligibility for registration;
(g) registration procedures;
(h) principles of modern security and asset finance in general;
(i) aircraft leasing;
(j) aircraft mortgages;
(k) the Cape Town Convention and international interests.

The second part of this study-unit concentrates on detailed examinations of Ship Registration and Finance.

Different aspects of the following list of topics will be covered:

1. Ship Registration in the international context (5)
- Nationality, Documentation, Flag and Registration. MSA, ss.72 - 76
- Historical Background of Ship Registration
- Functions and purpose of registration
- What is a ship?
- The need for attribution of Nationality and the Law of the Sea
- The need for Genuine Link in the attribution of Nationality
- The Different Systems of ship registration
- 1986 UN Convention on Conditions for Registration of Ships
- The development of FOCs, the ITF and modern developments
- Issues concerning safety and the environment
- Factors governing choice of flag
- EU membership and repercussions.

2. Ship Registration under the Maltese Merchant Shipping Act (5)
- Ships eligible for registration under the Merchant Shipping Act ss.3, 4; 79
ownership, minimum tonnage, age
- Procedure for registration under the MSA, ss. 10 - 16
- Measurement of ship and tonnage, 81 - 84
- The Register, MSA ss.17 -18, 67, 68; 57 - 65
- Certificate of Registry, ss. 19 - 27
- Closure and deletion, ss. 28 - 30; 79
- Forfeiture, s.77
- Bareboat charterparty registration, 84A - 84Y
- The concept of the shipping organization
- The 2004 regulations, MSA

3. Ship Sale and Purchase (1)
- Concept of Title
- Joint ownership and co-ownership
- Corporate ownership
- Modes of acquiring ships
- MSA, ss. 32 - 37; 47
- Norwegian Saleform
- Shipbuilding contracts
- The special remedy in Art. 37, MSA

4. Ships as security for debts, Mortgages and Maritime Privileges (3)
- Financing and security
- Ships as security for debts in general, MSA ss 37A - 37D
- Mortgages
- Nature of a mortgage
- Importance of registration and effects thereof
- Priority of mortgages
- Rights of mortgagee
- Transfer, transmission, discharge, loss, amendment, etc
- Recognition of foreign mortgages
- Special Privileges

Study-unit Aims:

The aims of this part of the study-unit are to explore and deepen the appreciation of the legislative and legal dimensions surrounding the development of the aircraft finance sector of the Maltese economy.

This part is designed to give students a clear understanding on the peculiar features of asset finance as applied to aircraft, and the international context within which the modern law is conceived and articulated.

Learning Outcomes:

1. Knowledge & Understanding:
By the end of the study-unit the student will be able to:

- appreciate the context within which the law of aircraft finance has developed internationally and in Malta;
- gain familiarity with the law of aircraft leasing and aircraft mortgages in detail;
- appreciate the role, status and implication of the Cape Town convention and the manner in which it provides for the international treatment of international security interests in aircraft;
- comprehend how Maltese law makes a fundamental break with traditional notions of taking security for the satisfaction of obligations, when it comes to placing security on particular assets, with particular emphasis on the particular manner in which placing security on aircraft has been treated;
- learn the procedures for registration of aircraft, and the legal notions that have had to be developed to have a viable registration system.

2. Skills:
By the end of the study-unit the student will be able to:

- apply the Maltese rules on aircraft registration, including the manner in which passenger and public safety concerns have been addressed;
- apply International rules that govern this subject and which of increasing importance to students interested in this growing sector;
- master the detailed framework that has developed for the regulation of Ship Registration and Finance in Malta;
- develop skills that should facilitate their future participation in this largely important Industry and will equip them to address difficulties and opportunities both from an academic and from a practical perspective.

Main Text/s and any supplementary readings:

- I.H.Ph. Diederiks-Verschoor, An Introduction to Air Law, Seventh Revised Edition (2001), Kluwer Law International, Hardbound, 244 pp., October 2001, ISBN 90-411-1599-4.
- Laurence E. Gesell, Aviation And the Law, 4th ed, Hardcover: 1014 pages, Coast Aire Publications, L.L.C.; 4 edition (June 30, 2005), ISBN-10: 1890938084; ISBN-13: 978-1890938086.

ADDITIONAL NOTES Students taking this study-unit need to have a background in law.


Assessment Component/s Resit Availability Weighting
Examination (2 Hours) Yes 100%

LECTURER/S Geraldine Ann Baldacchino
Jonathan De Giovanni
Christian Farrugia
Anthony T. Fenech (Co-ord.)
Max Ganado
Joseph Ghio
Nadia Giordimaina
Michelle Grima
Ivan Sammut
Nicholas Valenzia

The University makes every effort to ensure that the published Courses Plans, Programmes of Study and Study-Unit information are complete and up-to-date at the time of publication. The University reserves the right to make changes in case errors are detected after publication.
The availability of optional units may be subject to timetabling constraints.
Units not attracting a sufficient number of registrations may be withdrawn without notice.
It should be noted that all the information in the study-unit description above applies to the academic year 2017/8, if study-unit is available during this academic year, and may be subject to change in subsequent years.

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