Ship financing: the assignment of insurance claims

Genoa – It is known that in naval financing the fundamental guarantee of the financier's credit is constituted by the ship-good. This is true both in the case of a loan, through a naval mortgage, and in the case of financial leasing, through the registration of the ownership of the ship in the "lessor" and the contractual instruments specific to the leasing contract, such as the "forfeiture" of the asset in the event of default by the "lessee". But it is equally known that the so-called "real" guarantee, constituted, as mentioned, by the value of the ship-good, is accompanied by other guarantees of a "personal" nature, essentially through the institution of the assignment of credit ("assignment of rights").

And so it is constant practice for the financier to obtain the assignment of the rights that the financed party will claim against his insurer, against the charterer of the ship and, in the case of "newbuilding", against the shipyard or the shipyard's bank that issued the "refund guarantee". Well, in each of the cases listed above (assignment of insurance credits, credits towards the charterer and credits towards the shipyard and/or its bank), the attention of scholars and jurisprudence is constantly focused on the protection of the assignee creditor, i.e. the financier, be it a bank or a leasing company.

This is confirmed by the third updated edition of “Law of Ship Mortgages”, by Osborne, Buss and Champkins, recently published in London (2024), which contains a detailed analysis of the individual guarantee instruments and the risks that the assignee creditor may face in individual cases (it should be noted, with some regret, that our last publication on the subject dates back to the historical monograph by Francesco Berlingieri from 1965, entitled “Diritti di garanzia sulla nave, l’aeromobile e le cose caricate”).

It could therefore constitute an interesting reversal of perspective to consider the topic from the point of view of the assigned debtor, that is, the insurer, the charterer, or the ship's builder and its bank that issued the refund guarantee, which are, ultimately, the subjects that provide the economic and financial resources necessary for the shipping company, also for the repayment of its financial debts.

From this perspective, we can ask ourselves whether it is really the same for each of these subjects (insurer, charterer or builder and related bank) to have to pay their debt to the original creditor (i.e. the shipowner) or to a transferee (i.e. the financier).

The analysis of individual cases shows that very often the assignment of the credit exposes the debtor to risks that were not contemplated at the time of the conclusion of the respective contracts, that is, at the time of the insurance coverage, or of the stipulation of the charter contract or the construction contract.

It is no coincidence that more attentive entrepreneurs (and obviously with the relative bargaining power) sometimes insist on the inclusion of clauses that prohibit the assignment of credit.

Here it will be enough to think of the case of the insurer who, required to pay the insurance compensation, takes advantage of the accident to recover the outstanding insurance premiums by offsetting his debt (for payment of the compensation) with the credit for premiums.

Is it really certain that this offset can also be enforced against the bank assigning the credit (which is not a debtor of the premiums and which has actually chosen the formula of the assignment of the credit, rather than becoming Joint-assured, precisely to avoid having to shoulder the obligation to pay the premiums)? These are certainly fascinating questions, and to be resolved on a case-by-case basis, also taking into account the fact that sometimes the law governing the financing and that of the contractual relationship from which the assigned credit arises may be different, and that even the "assignment" itself could have its own governing law.

*Dardani Studio Legale