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The University of Southampton
Courses

LAWS6156 Ship Finance

Module Overview

The construction and sale of ships is dependent upon finance. Either the costs of construction or the price at which ships are bought and sold (as appropriate) require large sums to be raised from a financier, usually a major bank or groups of banks. As such ship finance is a form of project finance where the project is the building or purchase of the ship and its associated income earning potential. A significant factor dictating the availability and the terms governing the provision of ship finance is the ability of the ship owner to provide security to the financier(s) for the repayment of sums advance. This module will examine the common loan and security structures employed in ship finance as such it will draw upon foundation principles of contract and property and demonstrate how they are utilised within ship finance

Aims and Objectives

Learning Outcomes

Knowledge and Understanding

Having successfully completed this module, you will be able to demonstrate knowledge and understanding of:

  • A1. Explain the international institutional framework of the law relating to ship finance and its relevance to the international maritime commerce.
  • A2. The core principles, concepts and doctrines of business finance law and their relevance to and impact upon ship finance transactions.
  • A3. Common issues in loan agreements to finance to purchase or constructions of a ship.
  • A4. Common forms of real security and personal security and their role in the structuring the financing of ship construction and ship purchase.
  • A5. The role of personal security in the form of guarantees and performance bonds.
  • A6. Powers and remedies of the lender in the event of the borrower’s default and/or insolvency.
  • A7. Common issues affecting the financing of ship purchase and ship construction.
Subject Specific Intellectual and Research Skills

Having successfully completed this module you will be able to:

  • B1. Analyse and critique core principles and doctrines of business finance law and their application to ship finance.
  • B2. Analyse the structure and functions of security for the repayment of credit and their employment within ship finance.
  • B3. Evaluate the implications of the international environment of the maritime industry upon effective financing and security vehicles.
Transferable and Generic Skills

Having successfully completed this module you will be able to:

  • C1. Undertake independent research and access primary and secondary sources effectively.
  • C2. Analyse complex written texts and evaluate different types of argument
  • C3. Construct arguments based on premises drawn from various sources.
  • C4. Effectively communicate arguments in writing in the English language reference sources appropriately.

Syllabus

The syllabus will focus upon loan financing for the purchase of an existing ship and the construction of a new ship. - The core principles, concepts and doctrines of business finance law and their relevance to and impact upon ship finance transactions. - Common issues in loan agreements to finance to purchase or constructions of a ship. - Common forms of real security and personal security and their role in the structuring the financing of ship construction and ship purchase. - The role of personal security in the form of guarantees and performance bonds. - Powers and remedies of the lender in the event of the borrower’s default and/or insolvency. - Common issues affecting the financing of ship purchase and ship construction.

Learning and Teaching

Teaching and learning methods

Teaching methods include - Weekly 2 hour seminars, incorporating tutor led discussion and opportunities for group and individual student presentations (the balance between individual and group presentations will depend on the number of students in the module). Learning activities include - Essential and additional directed reading, as per distributed reading lists provided on Blackboard ; - Attendance at weekly seminars; - Engagement with current legal or commercial developments to promote an understanding of contemporary issues affecting ship financing.

TypeHours
Teaching20
Independent Study130
Total study time150

Resources & Reading list

Osbourne, Bowtle & Buss. The Law of Ship Mortgages. 

Taking Security:Law and Practice. 

Assessment

Formative

Assessment

Summative

MethodPercentage contribution
Written exam  (2 hours) 100%

Repeat

MethodPercentage contribution
Written exam  (2 hours) 100%

Referral

MethodPercentage contribution
Written exam  (2 hours) 100%
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