CGL BULLETIN AUGUST 2023

ISSUE #2

YOUR SOURCE FOR TIMELY LEGAL INSIGHTS

INSIDE
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Landmark Legal News

In-depth analysis of recent
landmark legal news and
regulatory shifts shaping
today’s legal landscape.
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Expert Opinion
Insightful Perspectives
from experts, offering
nuanced opinions on
crucial legal matters and
emerging trends.
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The Case Column

Analysis and summary of
important and relevant
cases to help the readers
be updated with important
legal judgements.

NEW FIND THIS MONTH

-By Kashmeera Nousheer

NEW BILL ON INDIAN PENAL CODE, CODE OF CRIMINAL

PROCEDURE AND INDIAN EVIDENCE ACT INTRODUCED

Three new bills to replace and repeal IPC, CrPC and Indian evidence act were
introduced in Lok Sabha by the central government.

Amit Shah, Home minister for the Union of India introduced the following
bills-

(1) The Bharatiya Nyaya Sanhita, 2023 (to consolidate and amend the laws
relating to punitive offenses and matters laid down therewith)
(2) The Bharatiya Nagarik Suraksha Sanhita, 2023(to consolidate and amend
the laws relating to the criminal procedure of the nation and matters
thereunder)

(3) The Bharatiya Sakshya Bill, 2023 (thereby to adhere general rules and
principles of evidence and impose a fair trial.)

The bill was referred to the standing committee of home affairs after been
introduced in Parliament. The bills were framed with respect to expertise
opinions of various personalities including judges of Supreme court and High
court, experts from law universities, Chief ministers, Governors, etc. The bill
has also included suggestions of various committees in the matter
respectively. “The aim will not be to punish; it will be to provide
justice. Punishment will be given to create a sentiment of stopping crime,"
Shah added.
The Review

Expansion of
BRICS
-By Zimam Misbah

Given the current geopolitical

uncertainty, the enlargement of
BRICS to include four West Asian
states as well as two additional
influential countries - one African
and the other South American -
has raised a few eyebrows.

Saudi Arabia, Iran, the United

Arab Emirates, and Egypt will join
Case Law BRICS, along with Ethiopia and
Argentina, on January 1, 2024.
-By Adv. Shabana V.M
The BRICS now includes five of
Amrish Rajnikant Kilachand V Secretary General SCI, WPC(C)Diary the top ten oil-producing
No.18497/2023 countries, bolstering its financial
and economic clout. Saudi
Arabia, Russia, and Brazil are the
On 11th of august 2023, Supreme court of India disposed a public second, third, and eighth largest
interest litigation (PIL). The supreme court said concern of the petition oil production countries,
was laudable and also it is difficult for the court to frame one size fit all respectively (the United States
direction. A bench comprising of Chief Justice of India D.Y. being first), with the UAE and Iran
Chandrachud, Justices J.B. Pardiwala and Manoj Misra passed the ranking seventh and ninth. The
following order: “While the concern of the petitioner on the need for three West Asian countries are
page limits on petitions in Court is laudable, it might be difficult for the essential OPEC members.
Court to frame a ‘one size fits all’ direction. If the petitioner has any
The West Asian involvement in
concrete suggestion on the administrative side to facilitate expedition
BRICS puts OPEC's highest-
in the disposal of cases, he will be at liberty to place a representation
ranking members in the same
before the Secretary General. This will however not give rise to any
room as major oil customers.
fresh cause of action.”
Despite the world's concerted
push to replace fossil fuels with
renewables, hastened by Russia's
war in Ukraine, and despite
China's slowing economy, China
and India will continue to be
among the world's major oil
consumers for the foreseeable
future.
LEGAL GUIDE
“SHIP FINANCE AND REGISTRATION OF MORTGAGES”

-By Adv. Amritapriya V

The financial effort necessary to build or purchase new tonnage is so great that very few if any
companies can afford to immobilize their liquid assets in ship without support of highly specialised
lenders providing tailor made ship-finance products under very complex agreements the details of
which are well beyond the scope of work.

❖ The Basic structure of a Ship Finance Agreement

Ship finance agreement are usually individually negotiated from a standard structure on
which terms the lender is prepared to make funds available to the borrower. Negotiations
will depend on a variety of factors including the parties involved, the market, the general
availability of credit and the direct and indirect guarantees offered by the owner. The
result of these negotiations will be contained in the so called Term Sheet drafted by the
lender; essentially an offer which details the maximum amount the lender is prepared to
loan, the validity period of the offer, the type of asset the borrower is authorised to buy
and specific conditions upon which the amount will be made available.

Once the tonnage is identified the actual Loan Agreement is drafted containing
the main terms of the agreement between the lender and the borrower and all the
collateral guarantees the borrower will make available to the lender, as condition
precedent to the drawdown. The most basic Loan Agreement will be structured around
five main securities:

1. A mortgage over the ship;

2. An assignment of the earnings of the ship;
3. An assignment of the benefit insurance on the ship;
4. An assignment of the earning account; and
5. A guarantee from the holding company of the subsidiary which name the ship is
to be registered.

❖ The registration of mortgages

The basic principles of the registration systems have been dealt with already but one of
the most crucial of its features is certainly that of the possibility and effects of registering
ship mortgages as special entries in the Register. This affords lenders involved in ship
finance transactions invaluable security against the default of the borrower.

The term mortgage is defined for the purpose of Sch-1 as the instrument
creating “a security for the repayment of a loan or the discharge of any other obligation”.
The mortgage produced for registration, as well as the transfer and the discharge of
registered mortgages needs to be executed in a form approved by the Register. However
 , a double approval requirement seems to affect the transfer of a registered mortgage
which execution further needs the acceptance of the Secretary of the state.

❖ Registered mortgagee’s power of sale

This provides the registered mortgagee with a statutory right against the mortgagor and
its subsequent buyers to sell the ship or share in respect of which he is registered, if the
mortgage money or any part of its due. This legal effect constitutes as exception to the
principle that the mortgagor is treated “as not having ceased owner of the ship or share”.
By contrast, an unregistered mortgage in respect of a registered ship will amount to
equitable mortgage and hence will not be enforceable as against an unaware bona fide
purchaser for value without actual or constructive notice for the mortgage.

❖ Priorities among mortgagees

In case of two or more competing registered mortgagees, a system of priorities favours

the first mortgage over any other. However, this rule is not without exception as an
intending mortgagee can notify the Registrar of its prospective interest under a proposed
mortgage on a registered ship or a share therein. Provided the notification is made on a
standard form approved by Secretary of State, the Registrar will then record the said
interest. The effect of this so called priority notice is that, kif the mortgage is subsequently
executed and registered, it will take priority over any mortgage registered after the notice
was recorded. This benefit is extended even to cases where the ship is not yet registered
at the time of notification by the intended mortgage. In such a case the Registrar shall
record the interest under the intended mortgage, and if the ship is later registered, the
Registrar shall enter the ship subject to that interest. If, however the mortgage has by
then executed pursuant to reg.57 and duly produced to the Registrar by time the ship is
registered, the ship shall be registered subject to that mortgage.