Chapter II：The Ship
Section I: Ownership Of The Ship
The ships, unless otherwise specially provided in this Code, shall apply to the provisions laid out in the Civil Code relating to movable property.
Save for the ship’ supplies, all equipment and any other appurtenances necessary for navigation or operation are deemed to be part of the ship.
No transfer of the ownership or a share of the ownership of the ship shall be valid unless done in writing and in conformity with the following conditions:
1. here the transfer makes in the Republic of China, Taiwan, shall apply to the local shipping administrative authority of the said transfer or the ship is situated for their certification and seal.
2. Where the transfer makes in a country other than the Republic of China, Taiwan, shall apply to the consular or representative office of the Republic of China, Taiwan, or any other institute empowered by the Ministry of Foreign Affairs located in that country for their certification and seal.
No transfer of the ownership of a ship can be set up against a third person, unless such transfer has been registered.
In case the shipbuilding undertaker is declared bankrupt during the construction of the ship and the liquidator does not undertake to complete the construction of the ship, the proprietor of the ship may retake possession of the ship and all other materials delivered to or ordered for the construction by paying for the assessed value of the ship deducting all monies already paid by him, and may undertake to complete the construction of the ship, provided that he shall pay the costs for the use of the dockyard.
The disposal of a co-owned ship and any other matters relating to the common interests of the co-owners can only be carried out with the consent of over half of the co-owners and the majority of votes based on the value of the interest of each co-owner.
Where there is a co-owner intends to sell his shares, other co-owners may purchase such shares at the same price.
Where a ship would lose her R.O.C. Taiwan nationality by reason of the transfer of any shares of a co-owner, shall be made with the consent of all the co-owners.
Where there is a creation of mortgage over the shares of a co-owner of ship, can only be carried out with the consent of over half of the co-owners.
The co-owners of ship are bound to perform any obligations which have arisen in connection with the use of the ship in proportion to the value of their interest
The co-owner, who has ever refused to consent on the decision in managing the ship which gives rise to the obligation, may abandon his shares to the other co-owners and be exempted from the said obligation.
When a co-owner is also the shipmaster of the ship but has been discharged or relieved of his position as a shipmaster, he may withdraw from the co-owner relationship and claim a refund the price of his shares.
The sum of refund referred to in the preceding paragraph shall be mutually agreed by the co-owners or subject to the Court’s determination in case no such agreement is reached.
The right to withdraw from the co-owner relationship as mentioned in the paragraph 1 shall be lapsed if not exercised after one month calculated from the date of discharge.
The co-ownership in a ship shall not be relinquished by reason of by death, bankruptcy , commencement of guardianship or under assistance.
The co-owners of a ship shall be required to appoint a ship’s husband for managing the business. The appointment of the ship’s husband can only be carried out with the consent of over half of the co-owners and the majority of votes based on the value of the interest of each co-owner.
The ship’s husband shall have authority to do on behalf of the co-owners all judicial and extra-judicial acts relating to the use of the ship.
No mortgage or sale of the ship shall be effected by the co-owned ship’s husband unless he has been authorized by co-owners in written in accordance with Article 11.
No restriction imposed by co-owners upon such delegated authority of a ship’s husband can be set up against a bona fide third person.
At the end of each voyage the ship's husband shall without delay render an account relating to the voyage and submit it to each co-owner, and the co-owners may inspect from time to time all records logs and books relating to the management, business and accounts of the ship.
The liability of the shipowner is limited to an amount equal to the value of the ship, the freight and other accessories of the particular voyage in respect of the following:
1. claims in respect of the loss of life, personal injury or loss of or damage to property, occurring on board or with the operation of the ship or salvage operations directly resulting therefrom.
2. claims in respect of losses resulting from infringement of interests or rights occurring during the operation of the ship or salvage operations; but the damages resulted from any contractual relationship shall be excluded.
3. claims in respect of the removal or destruction of a sunk ship or property lost overboard; but however that any reward or payment made under a contractual obligation shall be excluded.
4. claims for the obligations incurred for taking any measures to avert or minimize the liabilities set out in the preceding 2 sub-paragraphs.
The term “Shipowner” referred to in the preceding paragraph 1 shall mean the registered owner, charterer, manager and operator of the ship.
The term “this particular voyage” referred to in the preceding paragraph 1 shall mean the voyage covered by the ship from one port to the next port; the term “freight” shall not include such freight or ticket fares not collectible under the relevant laws or regulation or contract; the term “other accessories” shall refer to compensation made to the loss or damage to ships, but not including payments on insurance policies.
If the sum of limitation of liability under the preceding paragraph 1 is less than the following, the shipowner shall be liable for the deficit:
1. where the occurrence has given rise to property claims, an aggregate amount of 54 Special Drawing Rights(SDR) as defined by the International Monetary Fund for each ton of the ship's registered gross tonnage(GRT).
2. where the occurrence has given rise to loss of life or personal injury claims, an aggregate amount of 162 SDR for each GRT.
3. Where the occurrence has given rise both claims in the preceding two paragraphs, an aggregate amount of 162 SDR for each GRT, of which a first portion amounting to 108 SDR for each GRT shall be exclusively appropriated to the payment of personal claims in respect of loss of life or personal injury, and of which a second portion amounting to 54 SDR for each GRT shall be appropriated to the payment of property claims: Provided however that in cases where the first portion is insufficient to pay the personal claims in full, the unpaid balance of such claims shall rank rateably with the property claims for payment against the second portion of the fund.
4. The GRT of a ship of less than 300 tons shall be deemed to be 300 tons.
The limitation of liability set forth in the forgoing Article does not apply to:
1. obligations arising out of an intentional act or negligence of the shipowner.
2. obligations arising from the contract of employment with the shipmaster, seafarers or any other personal serving on board the ship.
3. reward for salvage or contribution in general average.
4. damages arising out of carrying toxic chemical substances or oil pollution.
5. damages arising out of nuclear incidents caused by nuclear substances or nuclear waste being carried on ships.
6. claims for unclear damages caused by unclear ships.
The shipowner who avails himself of the limitation of his liability under Article 21 shall prove the value of the ship on that particular voyage.
The valuation of the ship shall be based upon the condition of the ship at the points of time hereinafter set out:
1. For general average claims arising out of collision or other accidents, or for any claims arising after the said accident up to the time of the arrival of the ship at her first port of call, the valuation shall be in accordance to the condition of the ship at the time of her arrival at that first port.
2. For claims arising out of accidents occurring during the sojourn of a ship in port, the valuation shall be in accordance to the condition of the ship in that port of sojourn after the accident.
3. For claims relating to the cargo carried or for claims arising on a bill of lading, not being claims provided for in the preceding two sub-paragraphs, the valuation shall be in accordance with the condition of the vessel at the port of destination of the cargo, or at the place where the voyage is broken. If the cargo is destined to more than one port and the damage is connected with one and the same cause the valuation shall be in accordance with the condition the vessel at the first of those ports.
4. In all the other claims referred to in Article 21, the valuation shall be according to the condition of the ship at the end of the voyage.
Section II: Maritime Liens
The claims listed hereunder may be secured by maritime liens and are entitled to a preferential right of compensation:
1. Claims of the shipmaster, seafarer and other members of the ship’s complement which have arisen from their contracts of employment.
2. Claims against the shipowner in respect of loss of life or personal injury directly arising from the operation of the vessel.
3. Claims for salvage rewards, expenses for wreck removal and ships’ contribution on general average.
4. Claims against the shipowner, based on tort in respect of damage to or loss of property occurring, whether on land or on water, in direct connection with the operation of the vessel.
5. Harbor charges, canal and other waterway dues and pilotage dues.
The maritime liens listed in the preceding paragraph shall have priority over ship mortgages.
In the event that right of retention is granted in respect of a ship in possession of a creditor for securing claims for ship-building or repair of the ship, such right of retention shall be postponed to all maritime liens, but shall have priority over ship mortgages.
The provisions in respect of maritime liens in this Code shall not apply to the claims stipulated in sub-paragraph (iv), (v) and (vi) of paragraph 1 in Article 22.
Pursuant to Article 24 of this Code, the objects are entitled to a preferential right of compensation are as follows:
1. The ship, all her equipment and appurtenances, and any other residual materials.
2. The freight to be earned for the voyage the maritime lien has occurred.
3. Compensation due to the shipowner for material damage sustained by the ship, or for loss of freight during that particular voyage.
4. Compensation due to the shipowner in respect of general average.
5. Remuneration due to the shipowner for salvage rendered at any time before the end of the voyage.
Notwithstanding anything in paragraph 1(2) of the preceding Article 27, the claim arising under paragraph 1(1) of Article 24 would have priority over the total amount of freight due for all voyages made during the subsistence of the same contract of engagement.
Claims secured by a maritime lien and relating to the same voyage rank in the order in which they are set out in Article 24.
Claims included under any one of the sub-paragraphs in Article 24 share concurrently and rateably.
The claims mentioned under paragraph 1(3) of Article 24, in that article rank, in each of the two categories, in the inverse order of the dates on which they came into existence. Claim for salvage remunerations shall subject to have occurred on the time of which the salvage operation was completed.
Claims for general average contribution shall subject to the time of the general average act being made.
Claims arising from one and the same occurrence under sub-paragraph of the preceding paragraph 1 of Article 24 are deemed to have come into existence at the same time.
Claims secured by a maritime lien and relating not to the same voyage, the maritime lien attaching to the latter voyage have priority over those attaching to previous voyage.
Claims secured by a maritime lien follow the vessel into whatever hands it may pass.
The maritime liens set forth in paragraph 1 of Article 24 shall be extinguished upon the lapse of one year from the time when the claim has arisen. However, regarding to the compensation mentioned in sub-paragraph 1 of Article 24(1), the time will commence from the day of resignation.
Section III: Ship Mortgages
The creation of a mortgage upon a ship shall be made in writing.
A ship mortgage may be created upon a ship under construction.
Unless otherwise provided by law, a ship mortgage may be created only by the shipowner or by any other person specially authorized to do so by the shipowner.
No creation of ship mortgage can be set up against a third person unless registered.
When one or more co-owner(s) create(s) a ship mortgage by encumbering his (their) share(s) such a mortgage shall not be affected by a sale of the ship or a partition of the shares in the ownership of the ship.