Ship Sale & Purchase Documents

Ship Sale & Purchase Documents are the legal, technical, financial, registry, class, and delivery papers required to complete the transfer of a ship from seller to buyer. In ship sale and purchase, the agreement itself is only one part of the transaction. The transaction is completed through a carefully managed documentary closing in which ownership, risk, title, payment, registry status, class records, insurance, and possession must be coordinated at the same time.

After the ship sale and purchase process reaches the delivery stage, the transaction is usually finalized by execution and delivery of a Bill of Sale. Under English law and many market practices, the Bill of Sale is a central transfer document and may need to be executed under seal, notarized, legalized, or otherwise completed according to the requirements of the seller’s registry, buyer’s registry, governing law, and financing banks.

A ship sale is not completed merely because the parties agree on price. The seller must deliver the ship in the condition required by the Memorandum of Agreement (MOA), free from mortgages, maritime liens, encumbrances, and debts where agreed. The buyer must pay the balance of the purchase price in the agreed manner. The parties must exchange closing documents in a sequence that protects both sides. The shipbroker often plays an important coordinating role, particularly in circulating documents, tracking delivery requirements, assisting communications, and ensuring that both sides understand what must be delivered.

In a typical documentary closing, the Bill of Sale is exchanged against the release of the deposit and payment of the balance of the purchase price. If bunkers, lubricating oils, unused stores, spare parts, or other items are to be paid for separately, those payments are usually settled at the same time. Delivery is often arranged around noon because marine insurance, charter coverage, and operational arrangements frequently run from noon to noon, although the actual timing depends on the agreement and closing logistics.

Before delivery, the shipbroker should confirm that the buyer has arranged insurance and that the buyer’s registry, managers, flag state, class, P&I club, financing bank, and technical team are ready to accept the ship. A failure to coordinate these matters can cause delay, extra costs, disputes, or even failure of closing.

The Bill of Sale

The Bill of Sale is one of the most important documents in a ship sale and purchase transaction. It is the document by which the seller transfers ownership, title, and interest in the ship to the buyer. It functions as evidence that the seller has sold the ship and that the buyer has acquired ownership, subject to the exact wording, governing law, and registration requirements.

The Bill of Sale is normally delivered against payment of the balance of the purchase price and release of the deposit. If the transaction involves a deposit holder, escrow arrangement, financing bank, mortgage discharge, or remote closing, the timing of release and delivery must be carefully coordinated. Both buyer and seller usually want simultaneous performance: the seller wants to receive the purchase money, and the buyer wants clean title and delivery of the ship free from encumbrances.

The shipbroker must ensure, as far as their role permits, that the new owner has secured insurance and that the following documents are transferred either on board, ashore, electronically, or through an agreed closing mechanism:

Certificate of Registry
Load Line Certificate
Deratization Certificate
Safety Construction Certificate
Safety Radio Certificate
Safety Equipment Certificate
Classification Certificates
Plans

Depending on the ship type, flag, class, age, and trade, additional certificates may also be required, such as Safety Management Certificate, International Ship Security Certificate, International Oil Pollution Prevention Certificate, International Air Pollution Prevention Certificate, Ballast Water Management Certificate, Maritime Labour Certificate, Minimum Safe Manning Document, International Tonnage Certificate, Continuous Synopsis Record, and Inventory of Hazardous Materials (IHM).

Sometimes a shipbroker is asked to assist with the registration of the ship in the new shipowner’s name. This may require a visit to the registrar, submission through registry agents, or remote electronic filing depending on the flag state. The core documents may include:

Bill of Sale
Declaration of Ownership
Appointment of Managing Owner or Ship's Husband

If the buyer has not previously owned a ship, the registry may also require corporate and authority documents, including:

Articles of Association
Certificates of Incorporation
Appointment of Public Officer

The Bill of Sale may need to be signed before a Notary Public and may require the visa, legalization, apostille, or acknowledgment of the buyer’s consul or relevant authority. Requirements differ by jurisdiction, and they should be confirmed early because notarization and legalization can delay closing if left until the final day.

Ship Sales for Demolition

Ship Sales for Demolition are usually simpler than ordinary second-hand ship sale and purchase transactions because the ship is sold for recycling rather than continued trading. Registration, class transfer, dry-docking, future charter employment, and long-term technical documents may be less complicated. However, demolition sales still require careful documentation, payment security, delivery arrangements, recycling compliance, and responsibility for the final voyage.

In demolition sales, the buyer may be a cash buyer, recycling yard, or intermediary buyer. The price may be calculated on light displacement tonnage, with adjustments for bunkers, stores, remaining cargo, or delivery location. The transaction may require documents such as Bill of Sale, protocol of delivery and acceptance, corporate authority documents, deletion or registry documents, certificate of ownership, confirmation of no encumbrances, and recycling-related documentation.

Demolition sales may also require towage arrangements or a final cargo voyage to the delivery or recycling destination. If the ship is not fit to proceed under her own power, a towage contract may be necessary. If the ship is still trading before demolition delivery, the sale agreement must clearly define who bears operational risk, insurance, port costs, crew cost, bunkers, and delay.

Ship Sale & Purchase Documents

The sale and purchase of a ship involves a wide range of documents. Some documents create the legal sale contract. Some prove ownership and title. Some relate to registry and flag. Some confirm class and technical condition. Some protect payment and deposit arrangements. Others support insurance, financing, delivery, and post-closing operations.

The actual documents required depend on the governing law, flag state, buyer’s registry, seller’s registry, financing structure, class society, ship type, age, trading history, sanctions position, and commercial terms of the transaction. The following are among the most common documents involved in a ship sale and purchase transaction:

Memorandum of Agreement (MOA): The Memorandum of Agreement is the principal contract for the ship sale. It records the buyer, seller, ship description, price, deposit, inspection rights, delivery range, delivery date, documents, notices, default remedies, governing law, arbitration, and other sale terms.
Bill of Sale: The Bill of Sale transfers ownership from seller to buyer. It is normally exchanged at delivery against payment of the purchase price and is often required for registration under the buyer’s chosen flag.
Certificate of Ownership: This proves that the seller is the registered owner of the ship and has title to sell the ship, subject to any mortgages or encumbrances shown by the registry.
Deletion Certificate: The Deletion Certificate confirms that the ship has been deleted from the seller’s registry. It is often required before registration under the buyer’s new flag.
Class Certificate: Class documents confirm the ship’s class status and whether she meets the technical standards of the classification society. Buyers study class records carefully before closing.
Certificate of Registry: The Certificate of Registry proves the ship’s nationality, registered ownership, official number, port of registry, and registry details.
Commercial Invoice: The commercial invoice records the sale price and transaction details and may be required for customs, import, accounting, or tax purposes.
Ship's Logbook: Logbooks may record operational history, navigation, machinery events, maintenance activities, incidents, and other matters relevant to the ship’s past performance.
Insurance Documents: Insurance documents confirm cover for the ship before and after delivery. The seller’s cover normally remains until delivery, while the buyer’s cover should attach from the moment of delivery.
Certificates for Safety Management System (SMS) and International Safety Management (ISM): These certificates show compliance with the ISM Code and confirm that the ship and management company meet safety management requirements.
Dry Docking Reports: Dry docking records provide information on hull condition, underwater parts, repairs, class work, coatings, propeller, rudder, sea valves, and other technical matters.
Seaworthiness Certificate: Where required, this document confirms that the ship is fit to navigate and operate safely.
International Load Line Certificate: This confirms that the ship complies with load line rules and freeboard requirements.
Certificates of Inspection: These may be issued by flag state, class, port authorities, or other regulatory bodies confirming compliance with safety, environmental, technical, or operational standards.
Inventory of Hazardous Materials (IHM): The Inventory of Hazardous Materials identifies hazardous materials on board and is increasingly important for ship recycling, European trading, and regulatory compliance.
Technical Management Agreement: If a technical manager will manage the ship after purchase, the buyer may need a technical management agreement defining services, authority, reporting, fees, and responsibilities.
Crew Management Agreement: If crew management is outsourced, the buyer may need a crew management agreement covering recruitment, employment, payroll, certification, training, and crew logistics.
Shipbuilding Contracts (If Applicable): For a ship recently built or subject to warranty matters, shipbuilding contracts and warranty documents may provide important technical and legal information.
Previous Charter Party Agreements: Previous charterparty agreements can reveal trading history, earnings potential, cargo experience, performance issues, and operational restrictions.
Maritime Lien Search: A lien search helps determine whether there are unpaid claims, mortgages, arrest risks, crew wage claims, bunker debts, port dues, collision claims, or other encumbrances affecting the ship.

This list is not exhaustive. A financed transaction may also require mortgage discharge documents, board resolutions, powers of attorney, legal opinions, compliance certificates, sanctions confirmations, know-your-customer documents, escrow documents, and lender release instructions. A transaction involving a ship under charter may require charter assignment, charterer consent, novation documents, or notice to charterers.

Because each ship sale is different, buyers and sellers should work with experienced maritime lawyers, sale and purchase shipbrokers, registry agents, class representatives, and financing banks to confirm the exact documentary package required.

Bill of Sale in Ship Sale & Purchase

The Bill of Sale is a central legal document in the sale and purchase of a ship. It confirms the transfer of ownership and title from seller to buyer and is used to support registration of the ship under the buyer’s chosen flag. In many jurisdictions, the Bill of Sale must follow a prescribed form or include specific statutory wording.

A Bill of Sale commonly includes the following information:

Identifying Information: The names, addresses, registration numbers, and corporate details of the seller and buyer are identified. If either party signs through an attorney or authorized representative, the authority must be documented.
Description of the Ship: The Bill of Sale should describe the ship accurately, including name, official number, IMO number, flag, port of registry, shipyard, year of build, gross tonnage, net tonnage, dimensions, class, and other identifying particulars.
Sale Price: The purchase price and currency may be stated, although some registry forms may use nominal consideration or statutory wording depending on local requirements.
Warranties: The Bill of Sale may include seller warranties that the seller has the right to transfer the ship and that the ship is sold free from mortgages, liens, encumbrances, debts, and maritime claims, except as otherwise disclosed or agreed.
Signature of Parties: The seller normally signs the Bill of Sale, and in some jurisdictions the buyer also signs or acknowledges acceptance.
Date: The date of execution and the effective delivery date are important because they affect title, risk, insurance, registry, and closing sequence.
Witnesses: Witness signatures may be required by law, registry practice, or contract.
Conveyance: The conveyance wording confirms that the seller transfers all rights, title, and interest in the ship to the buyer.
Jurisdiction: The Bill of Sale may state governing law or be linked to the governing law of the MOA, depending on drafting and registry requirements.
Severability: Some legal forms include severability language, although registry-prescribed Bills of Sale may be shorter and more formal.
Acknowledgment and Notarization: The Bill of Sale may need notarization, legalization, apostille, consular approval, or registry-specific certification.

Once completed and executed, the Bill of Sale becomes binding evidence of the ownership transfer. It is normally submitted with the deletion certificate from the seller’s registry, corporate authority documents, mortgage discharge evidence, and other papers required by the buyer’s registry.

After satisfactory submission, the new registry may issue a provisional certificate of registry so the ship can trade under the new ownership and flag. A permanent certificate of registry may follow once all documents and formalities are completed.

The Bill of Sale should be prepared carefully. Errors in ship name, official number, corporate name, signature authority, notarization, or legal wording can delay registration and create serious closing problems. Legal advice is strongly recommended in every substantial ship sale transaction.

BIMCO SHIPSALE 22 FORM

BIMCO SHIPSALE 22 FORM is a modern standard form for ship sale and purchase transactions. It was developed to reflect contemporary market practice, improve structure, and provide a clearer contractual framework for second-hand ship sale and purchase. It is designed to sit alongside existing market forms such as SALEFORM 2012, while offering updated provisions for modern closing practice, electronic signatures, subjects, sanctions, anti-corruption, guarantees, and documentary closing.

Format

Unlike SALEFORM 2012, but similar to many other BIMCO standard contracts, SHIPSALE 22 uses a Part I box layout. This format allows parties to enter key commercial information in an organized way, including party details, ship particulars, purchase price, deposit amount, delivery range, inspection arrangements, notices, law and arbitration, and other transaction data. This reduces the need to heavily amend the main clauses and makes the agreement easier to review.

The substantive contractual provisions appear in Part II. SHIPSALE 22 also includes annexes dealing with delivery documents and excluded items. These annexes are practical because delivery documents and excluded items often cause negotiation and closing issues. By including them in the form, BIMCO gives parties a structured starting point.

The clauses are arranged to follow the normal chronology of a ship sale and purchase transaction. This makes the document easier to use from negotiation through signing, deposit, inspection, delivery, payment, and post-closing matters.

Subjects

SHIPSALE 22 includes a dedicated subjects clause. In ship sale negotiations, parties often agree a deal “subject to” board approval, management approval, finance, inspection, class record review, or other conditions. If subjects are not clearly handled, disputes may arise over whether the agreement is binding.

The subjects clause allows parties to identify conditions that must be fulfilled before the agreement becomes effective. If the conditions are not satisfied by the agreed date, the agreement becomes null and void. When subjects are included, the parties should state clearly who must satisfy them, by when, how satisfaction is confirmed, and what happens if they are not lifted.

Performance Guarantees

Ship sale transactions often involve single-purpose companies. A buyer may be a newly formed company created to acquire the ship. A seller may also be a single-ship-owning company. For this reason, performance guarantees are sometimes required from a parent company, affiliated company, or other guarantor.

SHIPSALE 22 includes space and wording for performance guarantees. This allows a guarantor to confirm support for the obligations of the buyer or seller within the transaction documentation. This can reduce the need for separate guarantee documents, although parties may still require more detailed guarantees in financed or high-value transactions.

Deposit and Remittance

The deposit provisions in SHIPSALE 22 reflect modern practice by referring to a separate deposit holding agreement. In many ship sale transactions, the deposit is held by a deposit holder, escrow agent, bank, law firm, or other agreed party rather than by the seller directly. The deposit holding agreement governs how the deposit is received, held, released, or returned.

SHIPSALE 22 also addresses disruptive banking events. These may include delays caused by bank compliance review, sanctions checks, anti-money laundering controls, correspondent bank delays, or other banking disruptions outside the buyer’s control. In such cases, the buyer may receive a short grace period if the deposit holder’s receipt of funds is delayed by an event covered by the clause.

The form also includes a gross-up concept. If a payment is subject to deduction or withholding under applicable law, the paying party may need to increase the payment so the receiving party obtains the full amount due. This is important where tax, banking, or cross-border payment issues arise.

Inspection

SALEFORM 2012 traditionally allowed two main inspection alternatives: either the buyer had inspected and accepted the ship and class records before signing, or the sale was subject to a pre-delivery inspection. SHIPSALE 22 adds a third option: an outright sale where the buyer waives the right to inspect the ship and class records.

This waiver option may be used in strong seller’s markets, sale and leaseback transactions, distressed sales, internal group sales, or deals where the buyer already knows the ship well. However, a buyer waiving inspection accepts significant risk and should do so only after careful legal, technical, and commercial review.

Where the buyer retains inspection rights, SHIPSALE 22 defines the scope of inspection more precisely. The form refers to examination of engines, machinery, equipment, and systems “without testing,” which is narrower than some older formulations. Buyers should make sure the inspection option chosen in Part I matches the commercial understanding. Unlike some earlier forms, failing to select the correct box may create uncertainty.

We kindly suggest that you visit the web page of BIMCO (Baltic and International Maritime Council) to learn more about the Ship Sale & Purchase Standard Forms and to obtain the original BIMCO SHIPSALE 22 Form and other documents. www.bimco.org

Furthermore, please check BIMCO Standard Deposit Escrow Agreement for Ship Sale and Purchase. The Standard Deposit Escrow Agreement for Ship Sale and Purchase is a contract used for depositing money in connection with ship sale and purchase transactions. The latest edition of this contract is the Standard Deposit Escrow Agreement for Ship Sale and Purchase, issued in 2017. www.bimco.org

What is the difference between Norwegian Saleform 1993 and Norwegian Saleform 2012?

A ship sale agreement records the main terms and conditions agreed between buyer and seller for the sale of a ship. In the market, the agreement is usually called a Memorandum of Agreement. Several standard forms are used internationally, including:

Norwegian Sale Form (Saleform 1993 and Saleform 2012)
Nipponsale
Singapore Ship Sale Form
Baltic and International Maritime Council (BIMCO) Shipsale 22

The Norwegian Saleform has historically been one of the most widely used forms for second-hand ship sale and purchase. Nipponsale is more closely associated with the Japanese market, while the Singapore Ship Sale Form is sometimes used in Asian transactions. BIMCO SHIPSALE 22 is a more recent form that reflects modern documentary closing, electronic signature practice, and contemporary compliance concerns.

No standard form is suitable for every transaction without review. Each sale may require amendments depending on ship type, financing, flag change, inspection rights, sanctions position, delivery location, escrow structure, and closing method.

Important differences between Saleform 1993 and Saleform 2012 include:

Deposit:
- Saleform 1993 provides for a fixed deposit of 10% of the purchase price. Saleform 2012 gives the parties more flexibility to agree the deposit amount.
Notice of Readiness:
- Saleform 1993 required the ship to be “in every respect” physically ready for delivery before the seller could tender Notice of Readiness. Saleform 2012 removed the phrase “in every respect,” which may affect interpretation of delivery readiness.
Payment:
- Saleform 1993 used separate clauses for deposit and purchase price. Saleform 2012 consolidated deposit and balance payment into a single payment clause structure.
Underwater Inspection and Drydocking:
- Saleform 2012 introduced an option for underwater inspection, provided the buyer declares the choice within the agreed time before the intended delivery date.
- If drydocking is chosen and class-affecting damage is found in underwater parts, Saleform 2012 contains provisions dealing with repair costs and drydock expenses. These provisions were not present in the same form in Saleform 1993.
Cancelling Date:
- Under Saleform 2012, if buyers are informed that the ship will not be ready by the cancelling date, the time for buyers to accept or reject a new cancelling date is reduced from 7 running days under Saleform 1993 to 3 banking days.

Understanding these differences is important for shipbrokers, lawyers, buyers, sellers, banks, and managers involved in drafting or negotiating ship sale agreements. A small change in standard wording can affect deposit risk, delivery obligations, inspection rights, and cancellation strategy.

What is the difference between Norwegian Saleform 2012 and BIMCO Shipsale 22?

BIMCO SHIPSALE 22 differs from Norwegian Saleform 2012 in several practical and structural ways. It was designed to modernize ship sale and purchase documentation and to reflect current market practice more clearly.

One major development is the option for a virtual documentary closing. Remote closings became more common after the COVID-19 pandemic and are now widely used where parties, banks, lawyers, notaries, registry agents, and brokers are located in different countries. SHIPSALE 22 expressly recognizes this reality.

Another difference is the acceptance of electronic signatures. SHIPSALE 22 incorporates modern electronic signature wording, allowing parties to sign the agreement and related documents electronically where legally recognized and accepted by the relevant authorities. However, parties must still confirm whether wet-ink signatures, notarization, legalization, or apostille are required for registry documents, mortgage discharges, or Bills of Sale.

SHIPSALE 22 also includes more developed sanctions and anti-corruption wording. Saleform 2012 does not contain the same built-in framework. In modern ship transactions, sanctions screening, beneficial ownership checks, anti-bribery compliance, and bank due diligence are essential, especially where financing banks or international payment systems are involved.

Confidentiality is another area where SHIPSALE 22 is more developed. Parties often amend Saleform 2012 to include confidentiality wording, whereas SHIPSALE 22 already contains a more comprehensive confidentiality approach.

SHIPSALE 22 also contains a subjects clause, performance guarantee provisions, delivery document annexes, excluded item annexes, and more structured deposit mechanics. These additions make the form longer, but they also reduce the need for repeated amendments that parties often added to older forms.

For parties familiar with Saleform 2012, SHIPSALE 22 may feel more detailed, but it is designed to support modern transaction practice. The best form depends on the ship, jurisdiction, financing, parties, and commercial objectives.

What are the stages in buying and selling of ship?

Buying and selling a ship is a structured commercial process. It involves market search, negotiation, inspection, contract signing, deposit payment, documentary preparation, delivery, payment, and post-closing registration. A simplified process includes:

Requirement Analysis: The buyer identifies the required ship type, age, size, class, trading history, cargo suitability, fuel performance, price range, financing needs, and intended employment. The seller decides the asking price, sale strategy, delivery range, excluded items, and negotiation position.
Research and Listings: Buyers search the market through sale and purchase shipbrokers, owners, direct contacts, market reports, and online databases. Sellers circulate sale candidates through brokers or confidential market channels.
Preliminary Inspection: The buyer reviews ship details, class records, certificates, photographs, trading history, and technical information. A preliminary physical inspection may also be arranged.
Valuation: The buyer or seller may obtain a valuation from an S&P shipbroker, surveyor, bank, or valuation specialist. Valuation considers age, size, class, yard, condition, market cycle, earnings potential, scrap value, and recent comparable sales.
Negotiation and Agreement: The parties negotiate price, deposit, delivery range, inspection rights, subjects, documents, law, arbitration, excluded items, bunkers, spares, and closing mechanics. When agreed, the terms are recorded in an MOA.
Detailed Inspection and Sea Trial: The buyer may inspect the ship, class records, machinery, deck equipment, certificates, maintenance records, and sometimes conduct a sea trial or underwater inspection depending on the agreement.
Purchase Agreement: The MOA becomes the binding contract once signed and once any subjects are lifted. The buyer usually lodges the deposit within the agreed time.
Financing and Payment: The buyer arranges financing, opens payment channels, satisfies bank requirements, prepares insurance, and coordinates with the deposit holder and seller’s bank.
Transfer of Ownership: At delivery, the buyer pays the balance, the seller delivers the Bill of Sale and other documents, mortgages are released, and title passes according to the MOA.
Delivery: Physical delivery is recorded in a Protocol of Delivery and Acceptance. The ship, documents, keys, certificates, class records, and operational control are handed over according to the agreement.
Post-Sale Service: After delivery, the buyer completes registration, class transfer, insurance confirmation, management takeover, crew arrangements, and operational preparations. In some transactions, the seller may assist with transition matters.

This process involves brokers, lawyers, surveyors, financiers, class, flag state, managers, insurers, and registry agents. Each stage must be coordinated because delay in one area can affect the entire closing.

What is Norwegian Saleform?

Norwegian Saleform, also known as the Norwegian Sales Form for Ships, is a standard contract used for the sale and purchase of second-hand ships. Versions such as Saleform 1993 and Saleform 2012 have been widely used in international shipping. The form was developed by the Norwegian Shipbrokers’ Association and has become a familiar market standard for S&P transactions.

The Norwegian Saleform is valued because it provides a recognized structure for buyer and seller obligations. It deals with the ship description, price, deposit, payment, inspection, delivery, documents, encumbrances, default, brokers’ commission, and arbitration. Although balanced in many respects, the form is often amended to reflect the particular transaction.

Common sections include:

Description of the Ship: The ship’s name, flag, class, year built, yard, technical characteristics, tonnage, dimensions, and other particulars are identified.
Deposit: The deposit amount and time for payment are stated.
Payment: The balance of the purchase price and payment place, method, and timing are defined.
Delivery and Acceptance: The delivery range, delivery time, notices, and acceptance mechanism are set out.
Inspection and Drydocking: The form deals with whether the buyer has inspected the ship, has a right to inspect, or may require underwater inspection or drydocking depending on the version and amendments.
Default: The consequences of buyer or seller default are described.
Arbitration: The dispute resolution mechanism is stated.
Encumbrances: The seller normally undertakes to deliver the ship free from mortgages, liens, debts, and encumbrances.
Commissions: Brokerage commission and responsibility for payment are addressed.
Documentation: The documents to be delivered by the seller are listed or incorporated.
Passing of Title and Risk: The form explains when ownership, title, and risk pass from seller to buyer.
Classification Society: Class status, class records, and class-related obligations are addressed.
Jurisdiction and Law: Governing law and arbitration seat are included.
Notices: The method for giving notices, requests, and communications is defined.
War Cancellation: Some forms include provisions allowing cancellation in case of war or hostilities.

Although Norwegian Saleform is comprehensive, it should not be used mechanically. Every ship sale is different. Parties should review and amend the form according to financing, flag, class, delivery place, inspection rights, sanctions, escrow arrangements, tax, and local law.

What constitutes a Ship Purchase Agreement?

A ship purchase agreement is the binding contract between seller and buyer for the sale of a ship. In commercial shipping, the agreement is usually called a Memorandum of Agreement. It defines the rights, obligations, timing, payment structure, inspection rights, delivery conditions, and consequences of default.

A ship purchase agreement must clearly identify what is being sold, who is selling it, who is buying it, how much is being paid, when delivery will occur, what documents are required, and what happens if either party fails to perform. Because ships are high-value assets, unclear drafting can create serious financial exposure.

Some agreements include conditions precedent. For example, the buyer may need board approval, financing approval, class record review, or inspection satisfaction before the agreement becomes unconditional. The seller may require proof of funds or corporate approval. If a condition is not satisfied by the agreed date, the parties may have the right to cancel or the agreement may become null and void depending on the wording.

Ship purchase agreements may also deal with reimbursement of expenses, cancellation if delivery is delayed, treatment of bunkers and stores, class maintenance, drydock costs, underwater inspection, trading restrictions, delivery notices, and closing place.

Prominent Sections in Ship Purchase Agreements

Common sections in ship purchase agreements include:

Sale And Purchase Of The Ship
Representations And Warranties Of Seller
Representations And Warranties Of The Buyer
Termination
Miscellaneous

Additional sections may include deposit, payment, inspection, delivery, documents, encumbrances, taxes, confidentiality, sanctions, anti-corruption, notices, dispute resolution, commissions, excluded items, and governing law.

What is new in BIMCO SHIPSALE 22?

Baltic and International Maritime Council (BIMCO) introduced SHIPSALE 22 as a modern standardized ship sale and purchase contract. It was designed to improve upon market practice reflected in SALEFORM 2012 and to provide a more organized structure for contemporary S&P transactions.

SHIPSALE 22 was not simply drafted as a response to one court case or legal development. It was prepared after market consultation and reflects practical experience in sale and purchase transactions. Its purpose is to make the form clearer, more accessible, more chronological, and better aligned with current documentary closing, compliance, and electronic execution practice.

Format of BIMCO SHIPSALE 22

Part I of SHIPSALE 22 uses the familiar BIMCO box layout. This allows the parties to insert essential commercial information in a concise format. The main contractual clauses appear in Part II. Annexes cover delivery documents and excluded items. This structure makes it easier to identify transaction details without rewriting the main body of the contract.

New “Subjects” Clause in BIMCO SHIPSALE 22

SHIPSALE 22 includes a subjects clause that allows parties to state conditions that must be satisfied before the agreement becomes effective. If conditions are not satisfied by the agreed date, the agreement becomes null and void. This clause is useful because ship sale negotiations often proceed subject to board approval, inspection, finance, class record review, or management approval.

Deposit and Purchase Price of a Ship in BIMCO SHIPSALE 22

SHIPSALE 22 develops the deposit mechanism by referring to a separate deposit holding agreement. This is consistent with modern practice, where deposits are often held by a deposit holder or escrow agent rather than directly by the seller. The form also recognizes disruptive banking events, such as delays caused by bank reviews, sanctions checks, or anti-money laundering procedures. This is practical because banking compliance reviews can delay international payments even when the buyer has acted promptly.

The payment of the balance of the purchase price at delivery remains a practical closing issue. Sellers usually want funds before releasing the ship and mortgage discharge documents. Buyers and financing banks want confirmation that the ship is delivered free of encumbrances before releasing funds. The exact release mechanism is often negotiated case by case.

Inspection Clause in BIMCO SHIPSALE 22

SHIPSALE 22 adds an inspection option allowing the buyer to waive inspection of the ship and class records and accept the ship “as-is.” This may be useful in certain seller-friendly markets, distressed sales, sale and leaseback transactions, or related-party sales. However, buyers should treat waiver of inspection as a serious risk.

SHIPSALE 22 also contains more detailed wording on underwater inspection and drydocking. These provisions help clarify responsibilities where underwater damage is found or class-affecting repairs are required.

On-board Representatives in BIMCO SHIPSALE 22

SHIPSALE 22 gives buyers an automatic right to place representatives on board after payment of the deposit. This can assist transition, familiarization, and delivery preparation. However, sellers may wish to amend this provision if there is a long period between deposit payment and delivery, or if trading conditions make representatives on board impractical.

Dispute Resolution in BIMCO SHIPSALE 22

SALEFORM 2012 offered options such as English law with London arbitration, New York law with Society of Maritime Arbitrators arbitration, or another agreed forum. SHIPSALE 22 provides a more neutral approach, allowing parties to choose the procedure that fits their transaction. This is useful where parties come from different legal backgrounds or where financing banks require specific dispute resolution wording.

Sanctions and Anti-corruption in BIMCO SHIPSALE 22

SHIPSALE 22 includes BIMCO’s standard sanctions and anti-corruption wording. This reflects the importance of compliance in modern ship sale transactions. Banks, insurers, buyers, sellers, and brokers increasingly require clear sanctions and anti-corruption language before proceeding.

Electronic Signatures in BIMCO SHIPSALE 22

SHIPSALE 22 incorporates electronic signature wording, reflecting the wider acceptance of electronic signing in commercial transactions. The clause confirms the validity of electronic signatures for the agreement and related documents where permitted. However, wet-ink signatures may still be required for documents that need notarization, legalization, apostille, registry filing, or consular approval.

SHIPSALE 22 also recognizes remote closing, which has become common in international transactions. Documentary closing may now involve parties, lawyers, banks, brokers, registries, and notaries in several jurisdictions working through electronic document exchange and coordinated release instructions.

BIMCO SHIPSALE 22 primarily reorganizes SALEFORM 2012, with several practical updates to better reflect modern market practices. Although the form is longer, its additional clauses may reduce the need for repeated bespoke amendments and may save time during negotiation.

What is BIMCO Standard Deposit Escrow Agreement for Ship Sale and Purchase?

BIMCO Standard Deposit Escrow Agreement for Ship Sale and Purchase is a contract used for holding a deposit in connection with a ship sale and purchase transaction. The deposit is usually paid by the buyer after signing the MOA and is held by an agreed deposit holder or escrow agent until it is released according to the contract terms.

The escrow agreement defines who holds the deposit, how the funds are received, how interest is handled, when funds may be released, what happens in default, and how disputes over the deposit are managed. It is particularly important where buyer and seller are in different jurisdictions, where financing banks are involved, or where the parties want a neutral holding arrangement.

We kindly suggest that you visit the web page of BIMCO (Baltic and International Maritime Council) to learn more about the BIMCO Standard Deposit Escrow Agreement for Ship Sale and Purchase and other documents. www.bimco.org

Delivery Documents in Ship Sale and Purchase

Delivery documents are the papers exchanged at closing to confirm that the seller has delivered the ship and the buyer has paid for it. The exact list varies, but the seller’s delivery documents often include:

Bill of Sale;
Protocol of Delivery and Acceptance;
certificate of ownership;
certificate of registry;
deletion certificate or undertaking to provide deletion certificate;
mortgage discharge or transcript showing no registered mortgage;
class confirmation;
corporate authority documents;
power of attorney where relevant;
board resolutions;
commercial invoice;
confirmation that the ship is free from encumbrances;
certificate of no liens or seller’s undertaking;
class records and technical files;
crew and operational handover documents;
insurance termination or delivery confirmation where applicable.

The buyer’s documents may include:

payment confirmation;
corporate authority documents;
board resolutions;
power of attorney;
new insurance confirmation;
new flag registration documents;
appointment of managers;
crew arrangements;
financing bank documents;
mortgage registration documents where applicable.

The closing checklist should be agreed well before delivery. Last-minute uncertainty over documents can delay payment and delivery.

Protocol of Delivery and Acceptance

The Protocol of Delivery and Acceptance is the document signed at closing to confirm the exact date, time, and place of delivery. It records that the seller has delivered and the buyer has accepted the ship under the MOA. It is often signed immediately after payment and exchange of closing documents.

The protocol is important because it fixes the moment when title, risk, possession, insurance responsibility, and operational control pass from seller to buyer. It may also record the quantities of bunkers, lubricating oils, stores, and spare parts remaining on board, depending on the agreement.

Because delivery time can affect insurance, charter employment, port costs, crew wages, and financial settlement, the protocol should be accurate and signed by duly authorized representatives.

Deletion Certificate and New Registration

The deletion certificate confirms that the ship has been removed from the seller’s registry. The buyer’s new registry usually requires deletion evidence before issuing permanent registration. In some cases, the seller’s registry may issue an undertaking or transcript first, with the formal deletion certificate following later.

New registration requires coordination with the buyer’s flag state. The buyer may need to provide corporate documents, ownership declarations, carving and marking notes, tonnage documents, class confirmations, manager appointments, radio license applications, and insurance certificates.

If the ship is financed, the buyer’s bank may register a mortgage at the same time as the buyer registers ownership. This makes closing more complex because delivery, deletion, payment, new registration, and mortgage registration must be synchronized.

Encumbrances, Mortgages, and Maritime Liens

One of the buyer’s main concerns is receiving the ship free from encumbrances. A ship may be affected by registered mortgages, maritime liens, unpaid crew wages, bunker claims, port dues, collision claims, repair yard claims, tax claims, or other debts. Some claims may follow the ship even after sale, depending on applicable law.

The MOA usually requires the seller to deliver the ship free from all charters, encumbrances, mortgages, maritime liens, and debts, unless otherwise agreed. The buyer should conduct registry searches, class record review, lien searches, litigation checks, sanctions screening, and commercial due diligence before closing.

If the seller’s bank has a mortgage over the ship, mortgage discharge must be coordinated with payment. The seller’s bank will usually release the mortgage only when it receives the agreed payoff amount. The buyer and buyer’s bank will usually require confirmation that the mortgage is discharged before or simultaneously with delivery.

Excluded Items and On-board Inventory

Ship sale agreements should identify excluded items. A ship is normally sold with everything belonging to her on board and ashore, but sellers may exclude leased equipment, personal effects, hired equipment, charterer’s equipment, special tools, software, fuel testing equipment, spare parts, or items not owned by the seller.

An excluded items list helps avoid disputes at delivery. Buyers should also check the inventory of spares, stores, certificates, plans, manuals, safety equipment, navigation equipment, and communication equipment. Missing or removed items can lead to claims if they were expected to be included in the sale.

Ship Sale and Purchase Closing Checklist

A practical ship sale and purchase closing checklist may include:

confirm MOA is signed and all subjects are lifted;
confirm deposit has been paid and received by the deposit holder;
complete buyer inspection and class record review;
agree delivery date, time, and place;
prepare draft Bill of Sale;
prepare Protocol of Delivery and Acceptance;
confirm seller corporate authorities;
confirm buyer corporate authorities;
obtain mortgage discharge instructions;
confirm deletion certificate process;
confirm new flag registration process;
arrange buyer insurance from delivery moment;
arrange seller insurance termination after delivery;
calculate bunkers, lubricants, stores, and other adjustments;
prepare payment instructions and escrow release instructions;
confirm sanctions, compliance, and banking checks;
confirm class transfer or continuation;
prepare delivery documents list;
confirm excluded items;
sign closing documents;
exchange payment and title documents;
sign Protocol of Delivery and Acceptance;
complete registry and class notifications.

A well-managed checklist reduces closing risk and helps all parties understand what remains outstanding.

Conclusion: Ship Sale & Purchase Documents

Ship Sale & Purchase Documents are the foundation of a successful ship transfer. The commercial agreement may begin with negotiation and a signed MOA, but the transaction is completed through accurate documents, timely payment, registry coordination, class confirmation, mortgage release, and delivery protocol.

The Bill of Sale, Protocol of Delivery and Acceptance, MOA, deletion certificate, registry documents, class certificates, corporate authorities, escrow documents, and insurance confirmations all serve different but connected functions. Missing or incorrect documents can delay closing, create legal uncertainty, or expose buyer and seller to financial loss.

Modern forms such as BIMCO SHIPSALE 22 and established forms such as Norwegian Saleform help organize the transaction, but they must still be adapted to the specific ship and commercial circumstances. Buyers, sellers, shipbrokers, lawyers, banks, registries, class societies, and managers should coordinate early so that delivery can proceed smoothly.

In ship sale and purchase, documentary precision is not a formality. It is the mechanism by which title, money, risk, and control of the ship pass safely from one owner to the next.