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The Singapore Sale Form And The Asian Ship Resale Market
April 2011 | Maritime | Multidisciplinary Practices | Maritime | Litigation & Arbitration | Maritime | Finance | Starboard

One thousand four hundred used ships were sold in 2010, a fourfold increase from 2009. Chinese owners were second highest spenders to the Greeks in the global secondhand market, acquiring 175 ships for almost US$12 billion and €3 billion.

The Maritime and Port Authority and the Singapore Maritime Foundation, recognised this growth in ship sale transactions with an Asian nexus. They also saw an opportunity to offer greater choice in the provision of regional legal, arbitration and finance services. This would be in tandem with plans to transform Singapore's transhipment port business into a competitive international maritime centre. It was thought that the Asia-based shipping community would seek regional service providers who understand modern ship sale transactions and maritime, finance and regulatory practices.

The Singapore Maritime Foundation commissioned the Centre of Maritime Studies at the National University of Singapore to draft a new ship sale form (click here to read our earlier article on this). The new Singapore Ship Sale Form (SSF) was developed in partnership and consultation with maritime lawyers, bankers, shipbrokers and ship managers and owners. The Singapore Maritime Foundation also worked closely with the Singapore Shipping Association and the Asian Shipowners' Forum and held consultation sessions in Hong Kong, Shanghai, Tokyo and Taipei.

The SSF was launched in January 2011. It is a form that seeks to overcome many if not all of the issues and difficulties encountered in BIMCO's Norwegian Sale Form 1993 (NSF 1993) and also provides for Singapore as the default venue for arbitration with a choice of either Singapore or English law as the governing law. Parties, though, can choose some other venue or governing law in the form. The SSF is distributed free at www.singforms.com.

Since the launch, the Singapore Maritime Foundation has conducted briefing and explanatory sessions on the SSF in Seoul and Mumbai, and intends to continue these familiarisation efforts at gatherings of the international maritime community, such as the Sea Asia conference, to be held on 12 April 2011 in Singapore.

Additionally, Chinese and Japanese translated guides for the SSF were released in on 3 March 2011. According to David Chin, executive director of the Singapore Maritime Foundation, these guides will further encourage use of the SSF by maritime companies in China and Japan. Although these companies frequently enter into sale and purchase contracts in English, the Singapore Maritime Foundation understands that it is common practice for these contracts to be translated for their native Chinese and Japanese speaking management.

As a result of these marketing efforts, there has been a notable uptake of the SSF. According to recent reports, the SSF is endorsed by the Federation of ASEAN Shipowners' Association, and it has been used in more than with 40 used-ship transactions since it was launched.

It is interesting to note that after the launch of the SSF, BIMCO has announced plans to complete revising and updating the NSF 1993 and has requested Singapore's participation towards a launch in October 2011.