SALE AND TRANSFER OF VESSEL IN NIGERIA
ACQUISITION OF SHIP IN NIGERIA
A Ship or Vessel can be sold and ownership of title to a ship can be transferred to another in accordance with the Merchant and Shipping Act. The Merchant Shipping Act 2007 provides for the transfer and sale of a ship in Nigeria.
Section 77 of the Merchant Shipping Act provides that “where a ship or any share in a ship registered is disposed off to persons qualified to own the registered Nigerian ship, they shall be transferred by a Bill of Sale”.
A Bill of Sale is a legal document that transfers ownership of ship from one person to the other. It is mostly used where there is a transfer of possession. The Bill of Sale contains the description of the ship as contained in the surveyor tonnage certificate or any description sufficient to identify the ship.
For a Ship to be sold, the grant of consent to sell a Ship in Nigeria must be first had and obtained from the Director-General and Registrar of Ships.
Transfer of ownership of Ship/vessel
Where the new owner has acquired the vessel after a sale, he must show evidence that the consent of the Director-General was obtained before the sale.
Where a ship is transferred, the transferee shall not be registered as the owner of the ship until the transferee or the person authorized to act on behalf of a company makes a Declaration of Transfer in a form approved by the Minister.
Procedure for the transfer and change of ownership of a Nigerian vessel
- Make a formal application for transfer and change of ownership by the new owner or its representative.
- The following documents should be submitted with the application:
- Copy of the certificate of incorporation
- Memorandum and articles of association of the new owner
- CAC Incorporation documents such as CAC2 & CAC7 or CAC Form 1.1
- Current Tax Clearance Certificate of the new company from the First Inland Revenue Service.
- Completed declaration of ownership form with the passport photograph attached.
- Completed application for registration of ship form
- Bank statement of the new owner
- Bill of sale
- Evidence of registration as a shipping company with the NIMASA
- Return certificate of registry in respect of the former owner
- Consent letter
- NIMASA official receipt for payment of change of ownership
- The Director-General forwards the application for transfer to the Registrar of Ships/vessel
- The Registrar of Ship, in turn, receives the application and directs it for appraisal with the supporting documents submitted.
- The Registrar of ship assigns an officer for the appraisal of the transfer of ownership.
- The officer assigned is in charge of verifying the eligibility of the applicant to be the registered owner of the ship in line with the Merchant Shipping Act 2007.
- The applicant will be invited to make the requisite payment of transfer of ownership fees, which is determined by the number of the gross tonnage of the vessel.
- The officer submits the recommendation back to the Registrar of Ships, who seeks the approval of the Director-General for the transfer of ownership
- When approved, the Registrar of Ships issues a certificate of flag registry to the new owners or convey disapproval and its reasons to the applicant.
- Where the consent to the application is denied, the applicants will liaise with the Nigerian Ship Registration Office for resolution of issues hindering the change of ownership of the vessel.
Transfer of ownership in a ship upon death or bankruptcy of the previous owner
According to Section 79 of the Merchant Shipping Act, when propriety in a ship is transferred to another person or entity that is qualified to own a registered ship on bankruptcy or the death of the registered owner or by any lawful means other than a transfer, the transferee shall do the following;
- The person shall authenticate the transmission by making in a form approved by the Minister and signing a declaration statement for the share required to be contained in the declaration of transfer, and a statement in the manner the ship was transmitted.
- If the transmission is consequent upon death, the declaration of transmission will be accompanied with the grant of probate or letters of administration in the estate of the deceased owner and also prove survivorship to the satisfaction of the Registrar.
- Where the transmission is as a result of bankruptcy, the declaration of transmission is to be accompanied by evidence being received in court as proof of title of persons claimed under a bankruptcy.
- The registrar upon receipt of the transmission will enter into the register the name (s) or person(s) entitled as the owner of the ship which has been transmitted.
In conclusion, every Bill of transfer of a ship registered in Nigeria, or a share in the ship when duly executed shall be produced to the Registrar of Ship in the Port registry with the declaration of the transfer. The Registrar shall upon the production, enter in the Register the name of the transferee as the owner of the ship and shall endorse the bill of sale the date and time the entry was made.
By Shipping & Maritime Law Department at Resolution Law Firm.