Maritime commerce constitutes one of the most beneficial forms of human activity for the international community and plays a major role in the international trading system, as it represents one of the most significant means of maritime transport that dominates the greater share of global trade. As a result, various States have been keen to give due attention to legislation regulating maritime commerce, or what is commonly referred to as maritime navigation. Since maritime commerce, like any human activity, gives rise to numerous legal issues, it has become necessary to subject it to a legal framework governing the relationships arising therefrom. Accordingly, the Saudi Commercial Maritime Law was promulgated by Royal Decree No. (M/33) dated 5/4/1440H, comprising ten chapters containing (391) articles that address all legal aspects of maritime commerce. (1)
While the international community has made significant progress in harmonizing rules relating to the arrest of ships, it has also achieved notable advancement in establishing unified rules concerning the effects of judicial sale of ships through the adoption by the United Nations General Assembly (United Nations Commission on International Trade Law) on 7 December 2022 of the United Nations Convention on the International Effects of Judicial Sale of Ships (2), also known as the “Beijing Convention on the Judicial Sale of Ships.” The Kingdom of Saudi Arabia was among the first States to take the initiative to sign and accede to this Convention on 5/9/2022. (3)
Saudi Arabia’s accession to this Convention falls within the framework of its consistent commitment to keeping pace with international legislative developments, particularly as the Convention contains a modern set of unified rules relating to the effects of judicial sale of ships, which are capable of removing obstacles and promoting the development of international trade. These rules are also consistent with the objectives of Saudi Vision 2030.
The objective of the Convention is to establish a coordinated regime for conferring international effect on judicial sales, without prejudice to the domestic law governing judicial sale procedures and the circumstances under which a judicial sale gives rise to a clean title of ownership. It also aims to affirm the ownership right acquired by the purchaser of a ship during its international navigation, thereby maximizing the ship’s market value, to the benefit of shipowners and creditors alike, and consequently contributing to the enhancement of international trade development. (4)
Definitions of Certain Terms of the Convention
Article (2) of the Convention sets out definitions of certain key terms used therein. It begins by defining the term “judicial sale of a ship,” dividing the definition into two parts, and defines judicial sale as: “Any sale of a ship ordered by, approved by, or confirmed by a court or other public authority, whether conducted by public auction or by private treaty under the supervision of, or with the approval of, a court, in which the proceeds of sale are made available to creditors.”
This definition is distinguished by the fact that judicial sale is conducted in accordance with procedures that vary from one legal system to another, with the involvement of a court, and it emphasizes that judicial sale is fundamentally an instrument for strengthening the enforcement of private rights. (5)
The Convention defines a “ship” as: “Any ship or other vessel registered in a registry that is accessible to the public, which may be subject to arrest or a similar measure that may lead to a judicial sale under the law of the State of judicial sale.”
It is observed that this definition of a ship is broad in scope, as it is not limited to seagoing vessels but also includes inland vessels, and it is not confined to commercial navigation ships but also encompasses pleasure craft. It suffices for the judge that the vessel be “registered” and that the registry be “accessible to the public.” (6)
The Convention also defines “clean title” as: “Title to a ship free and clear of any mortgage or non-possessory security right and of any encumbrance.”
It further defines “mortgage or non-possessory security right” as: “Any mortgage or non-possessory security right over a ship registered in the State in which the ship is registered in a ship registry or in a similar registry.”
It refers to “encumbrance” as: “Any right, regardless of its nature or the manner of its creation, that may be asserted against a ship, whether by arrest, provisional arrest, or otherwise, including maritime liens, non-maritime liens, real rights, usufruct, and rights of retention of possession, but excluding mortgages and non-possessory security rights.”
The Convention defines a “registered encumbrance” as: “Any encumbrance registered in a ship registry or similar registry in which the ship is registered, or in any other registry in which mortgages or non-possessory security rights are registered.”
It defines a “maritime lien” as: “Any encumbrance recognized as a maritime lien on a ship under the applicable law.”
It also defines a “shipowner” as: “Any person registered as the owner of a ship in a ship registry or similar registry in which the ship is registered.”
The term “purchaser” is defined as: “Any person to whom a ship is sold through a judicial sale.”
The “subsequent purchaser” is defined as: “The person who purchases the ship from the purchaser referred to in the certificate of judicial sale mentioned in Article (5).”
The “State of judicial sale” is defined as: “The State in which the judicial sale of the ship takes place.”
Scope of Application of the Convention
At the outset, the Convention is concerned solely with the effects of judicial sale and therefore does not address the conduct of the judicial sale process itself, nor does it deal with the effects of judicial judgments issued in relation to the judicial sale. (7)
The scope of application of the Convention is determined by a geographical criterion, as the Convention constitutes a “closed” regime that applies only between States Parties. (8) A judicial sale of a ship does not fall outside the scope of application merely because the ship is registered in a State that is not a party to the Convention. Rather, the judicial sale produces its effects provided that a certificate of judicial sale is presented in accordance with Article (5) of the Convention; otherwise, the protection afforded by the Convention to the sale would be diminished. (9)
Its scope of application is also subject to the requirement that the ship be physically present within the territory of the State of judicial sale at the time of sale. (10)
In practice, a judicial sale is usually preceded by the arrest of the ship, which can only take place within the territory of the State in which judicial authorization for the arrest is granted. The requirement of physical presence applies only at the time of sale, and its purpose is to ensure the existence of a jurisdictional link between the court under whose authority the judicial sale is conducted and the ship. (11)
The Convention excludes from its scope of application warships, naval auxiliaries, and other ships owned or operated by a State and used, immediately prior to the time of judicial sale, in non-commercial governmental service. (12)
Notice of Judicial Sale and Its Requirements
There is no doubt that notice of judicial sale is of significant importance, as a certificate of judicial sale may not be issued unless notice of the judicial sale has been given to the entities specified in paragraph (3) of Article (4) of the Convention. These include the ship registry authority, all holders of mortgages and non-possessory security rights, any registered encumbrances, all holders of maritime liens, and the shipowner, among others. Such notice must be given in accordance with the law of the State of judicial sale and must contain the information set out in Annex I, as provided in Article (4) of the Convention. (13)
Certificate of Judicial Sale
The certificate embodies the international effects of the judicial sale as follows:
(A) Its issuance activates the primary effect of granting the purchaser clean title to the ship.
(B) Its presentation directly obliges the registry authority or the competent authority of the State Party to do the following:
- Delete from the registry any mortgage, non-possessory security right, or registered encumbrance affecting the ship that was registered prior to completion of the judicial sale.
- Delete the ship from the registry and issue a certificate of deletion for the purpose of new registration.
- Register the ship in the name of the purchaser or subsequent purchaser, subject to the additional condition that the ship and the person in whose name the ship is to be registered satisfy the requirements of the law of the State of registration.
- Complete the registry records by entering any other relevant details contained in the certificate of judicial sale.
Article (5) of the Convention addresses the manner of issuance of the certificate, its form and content, its evidentiary value, and the conditions for its issuance, which are as follows:
- The judicial sale must have been completed.
- The judicial sale must have conferred clean title to the ship under the law of the State of judicial sale.
- The sale must have been conducted in accordance with the requirements of the law of the State of judicial sale.
- The sale must have been conducted in accordance with the requirements of the Convention.
International Effects of the Judicial Sale
A judicial sale produces a fundamental effect whereby the purchaser is granted clean title to the ship, and such effect shall be recognized in all other States Parties. Its enforcement does not require the adoption of any special measures, such as obtaining confirmation from the competent court of the State in which effect is sought. Rather, the judicial sale produces its effects automatically. (14)
In order to achieve the foregoing effect, the registry authority or competent authority of the State Party shall:
- Delete from the registry any mortgage, non-possessory security right, or registered encumbrance affecting the ship that was registered prior to completion of the judicial sale.
- Delete the ship from the registry and issue a certificate of deletion for the purpose of new registration.
- Register the ship in the name of the purchaser or subsequent purchaser, subject to the requirement that the ship and the person in whose name it is to be registered satisfy the requirements of the law of the State of registration.
- Complete the registry records by entering any other relevant details contained in the certificate of judicial sale.
Among the effects arising from a judicial sale is that a ship may not be arrested on the basis of a maritime claim unless the person who owns the ship at the time of arrest is the same person who owned it at the time the claim arose, unless the maritime claim is secured by a maritime lien or is based on a mortgage, non-possessory security right, or an encumbrance of a similar nature. Where the judicial sale grants the purchaser not merely ownership of the ship, but ownership free and clear of any mortgages, non-possessory security rights, or encumbrances (including maritime liens and registered encumbrances), the ship should not be subject to arrest in respect of any maritime claim or maritime lien that arose prior to the judicial sale. Paragraphs (1) and (2) of Article (8) give effect to this principle. (15)
Furthermore, where a ship has been arrested or a similar measure has been taken against it by order of a court or other judicial authority in a State Party on the basis of a claim that arose prior to a judicial sale of the ship, the court or judicial authority shall order the release of the ship upon presentation of the certificate of judicial sale referred to in Article (5). (16)
What is the “Beijing Convention,” and when was it adopted?
The Beijing Convention is the informal name for the United Nations Convention on the International Effects of Judicial Sale of Ships. It was adopted by the United Nations General Assembly on 7 December 2022,.
The Convention was established to create a coordinated regime for conferring international effect on judicial sales, ensuring that a purchaser acquires a clean title of ownership that is recognized in other States Parties,. By providing this legal certainty, the Convention aims to maximize the market value of ships and remove obstacles to international trade, which benefits both shipowners and creditor
What is the primary objective of the Convention?
The primary objective of the Beijing Convention is to establish a coordinated regime for conferring international effect on judicial sales of ships.
According to the sources, the Convention specifically aims to achieve the following:
Affirm Ownership Rights: It seeks to ensure that the ownership right acquired by a purchaser during a judicial sale is recognized globally as the ship engages in international navigation.
Maximize Market Value: By providing legal certainty that a purchaser will receive a clean title, the Convention aims to maximize the ship’s market value, which ultimately benefits both shipowners and creditors.
Promote International Trade: The Convention is designed to remove obstacles to the development of international trade by creating a modern set of unified rules.
Preserve Domestic Law: Importantly, this international regime operates without prejudice to domestic laws that govern the specific procedures of a judicial sale or the specific circumstances under which those sales grant a clean titl
How does the Convention align with Saudi Vision 2030?
Saudi Arabia’s accession to the Beijing Convention aligns with Saudi Vision 2030 as part of the Kingdom’s consistent commitment to keeping pace with international legislative developments. The Convention provides a modern set of unified rules regarding the international effects of judicial sales, which are specifically designed to remove obstacles and promote the development of international trade—objectives that are central to Vision 2030.
The alignment is further demonstrated through several key outcomes of the Convention:
Enhancing Market Value: By establishing a coordinated regime that ensures a purchaser acquires a clean title, the Convention aims to maximize the ship’s market value. This benefits both shipowners and creditors and contributes to a more robust maritime commerce environment.
Legal Certainty and Efficiency: The Convention’s rules provide the legal framework necessary for ownership rights to be affirmed during international navigation, which supports the growth of the international trading system that Saudi Arabia is actively modernizing.
Proactive Global Leadership: The Kingdom demonstrated its commitment to these international standards by being among the first States to sign and accede to the Convention on September 5, 2023.
Overview of The Effects of Judicial Sale of Ships in Light of the United Nations Convention
The text examines the United Nations Convention on the International Effects of Judicial Sale of Ships, also known as the Beijing Convention, and its significance within the legal framework of Saudi Arabia. By establishing a unified international regime, the Convention ensures that a judicial sale conducted in one state is recognized globally, granting the buyer a clean title free of prior debts or encumbrances. This legal certainty is designed to protect purchasers, maximize the market value of vessels, and streamline maritime trade by preventing wrongful arrests for old claims. The document details key definitions, the scope of application, and the essential role of the certificate of judicial sale in updating national registries. Ultimately, Saudi Arabia’s early adoption of these rules reflects its commitment to Saudi Vision 2030 by modernizing maritime commerce and aligning with global legislative standards.
Sources:
1- In discussing this, see Dr. Mahmoud Samir Al-Sharqawi, Maritime Law, Dar Al-Nahda Al-Arabiya, 1987 edition, p. 3; and Dr. Fahd bin Hamoud Al-Nayef Al-Haqbani, Precautionary and Enforcement Seizure of Ships in the Saudi Commercial Maritime System: A Comparative Study with Egyptian Law and International Treaties and Agreements, published in the Journal of Law and Economics, Volume 96, Issue 2, No. 2, October 2023, pp. 699-700.
2- United Nations General Assembly Resolution 77/100, issued on December 7, 2022. 3. The agreement was signed by the Deputy Minister of Commerce of the Kingdom of Saudi Arabia, pursuant to the authorization issued by the Council of Ministers to the Minister of Commerce or his designee to sign the agreement, during its session held on 13/2/1445 AH, corresponding to 29/8/2023 AD. The signing took place on 5/9/2023.
- Please see the explanatory memorandum to the agreement, pages 21 and 22, on the website of the United Nations Convention on the International Effects of the Judicial Sale of Ships: with an explanatory memorandum prepared by the UNCITRAL Secretariat. Accessed 7/8/2025 at 6:00 PM.
- Please see the explanatory memorandum to the aforementioned agreement, page 30 et seq.
- Please see the explanatory memorandum to the aforementioned agreement, page 33.
- Article 1 of the aforementioned agreement and the explanatory memorandum, pages 27 and 28. 8. Article 3, paragraph 1/a of the aforementioned signed agreement.
- Please see the explanatory memorandum to the aforementioned signed agreement, p. 43.
- Article 3, paragraph 1/b of the aforementioned signed agreement.
- Please see the explanatory memorandum to the aforementioned signed agreement, p. 44.
- Article 3, paragraph 2 of the aforementioned signed agreement.
- Article 4, paragraph 4 of the aforementioned signed agreement.
- Please see the explanatory memorandum to the aforementioned signed agreement, p. 70.
- Please see the explanatory memorandum to the aforementioned signed agreement, p. 79.
- Article 8 of the aforementioned signed agreement.
