Cayman Islands Merchant Shipping Act 2024

• The 2024 Act updates Cayman maritime laws to meet international standards
  
  
• There are new rules for ship registration, mortgages and liability, aligning with major international conventions
  
  
• Act implements stronger protections under the Maritime Labour and STCW Conventions

The Merchant Shipping Act, 2024 (the "2024 Act") came into force on 11 March 2024 and replaced the previous legislation, the Merchant Shipping Act (as amended) (the "Old Act"). The 2024 Act has updated the Old Act to bring the Cayman Islands maritime legislative framework in line with current international standards and requirements and ensures that the jurisdiction remains a leading jurisdiction for the global shipping industry, once again being recognised by the International Chamber of Shipping in the shipping industry flag state performance table 2023/2024.

Whilst there have been significant changes to the Old Act as a whole, many of the key provisions, including in relation to the registration of ships and mortgages over ships, remain largely unchanged.

Key proposed changes to parts of the Old Act

Part 1 – Preliminary

Under the Old Act the Governor was able to appoint a "Director" who would, for example, provide relevant approvals or potentially direct the Registrar of Shipping not to register a ship. Under the 2024 Act, a Chief Executive Officer is appointed under the Maritime Authority Act (2013 Revision).

Part 2 – Registration of Ships

Whilst there have been no significant changes to Part 2 of the Old Act (which relates to the registration of ships, including the procedure for registering a ship, restrictions on the naming convention for ships and the process of changing the name of a ship), some minor amendments are worth noting:

1. following the issuance of a duplicate certificate, if an original is subsequently found, the original will need to be surrendered to the Cayman Islands Shipping Registry ("CISR")
2. provisions permitting provisional certificates of registration to be issued in ports outside the Cayman Islands have been removed, although we note that no changes have been made to the provisions relating to the process for registration itself
3. the provisions for registration of a vessel anew on change of ownership have been removed, although no changes have been made to the more general applications for registration or the transfer of registrations into the Cayman Islands from any other British Overseas Territory
4. the tonnage regulations have been updated to give The International Convention on Tonnage Measurement of Ships 1969 (as amended) the force of law in the Cayman Islands and to also allow the Cabinet to make regulations there under.

Part 4 – Proprietary Interests in Registered Ships

This part deals with proprietary interests in registered ships and provides for the rights of owners and mortgagees, for the transfer and transmission of interests in ships and for other matters related to the mortgage of a ship, or of a share in a ship. It is therefore a crucial section in relation to financing and security arrangements over Cayman Islands registered ships.

There are some minor proposed changes to this section which include:

1. reordering the provisions, such that the provisions relating to "Priority of mortgage" (currently section 80 of the Act) are now cited as section 75 of the 2024 Act. The provisions themselves are unchanged, but this will result in consequential edits to the reference to section 80 of the Old Act in our current form of legal opinion
2. section 79(7) and 79(8) of the Old Act are provisions dealing with the registration of mortgages for ships subject to the provisional registration regime. The 2024 Act removes these provisions which is a consequence of the changes proposed to Part 2 (i.e. the deletion of the provisional registration regime itself).

Part 14 – Liability and Compensations

Part 14 relating to liability for matters such as pollution and wreckages and the ultimate limits of liability and compensation has been amended so as to streamline the framework set out in the Old Act and instead cross refer to those Conventions and Protocols that have the force of law in the Cayman Islands.

These Conventions and Protocols include:

• Athens Convention
• Bunkers Convention
• Fund Convention
• Limitation of Liability Convention
• Liability Convention
• Wreck Removal Convention

Part 18 – Legal Proceedings

This part deals with legal proceedings and related matters, including the prosecution of offences, matters related to jurisdiction, the enforcement of the detention of a ship and special evidentiary provisions. Under the 2024 Act, enforcement of offences committed by Cayman Islands seafarers and other persons on board a Cayman Islands ship are aligned with the provisions set out in the Penal Code (as amended).

Other significant changes to the Old Act

Part 5 – Master and Seafarers

Subject to relevant provisions of this Part, the Maritime Labour Convention and the STCW Convention will have the force of law in the Cayman Islands and in relation to Cayman Islands ships. The 2024 Act also includes more protections to seafarers such as food and catering provisions and heath protection, medical care, welfare and social security protection.

Part 9 – Load Lines

Section 205 of the 2024 Act states that the International Convention on Load Lines 1966 and annexes as modified by the 1988 Protocol have force of law in the Cayman Islands and their applicability to: (a) Cayman Islands ships engaged on international voyages; and (b) non-Cayman Islands ships while

they are within Cayman Islands waters and engaged on international voyages.

Part 12 – Wreck and Salvage

The provisions at section 292 of the Old Act, which set out the powers granted to the Port Authority in relation to stranded, abandoned or sunken ships, have been deleted. That being said, the general powers of the Governor to appoint the Port Director as the Receiver of Wrecks for the Islands (and to exercise general direction and supervision over all matters relating to wreck and salvage) generally remain unchanged.

Part 19 – Supplemental

There is now a clear provision relating to the Chief Executive Officer's discretion under section 458 and a provision for shipping notices and amendments to international agreements under section 459 of the 2024 Act.

Sections 458 and 459 of the 2024 Act empowers the Chief Executive Officer, with the approval of the Minister, to make Cayman Islands shipping notices in relation to or arising out of matters to give effect to any provisions of an international agreement relating to merchant shipping or seafarers adopted by the United Kingdom and extended to the Islands which are not otherwise prescribed by this legislation.