In 2022, the United Nations Commission on International Trade Law (UNCITRAL) adopted the United Nations Convention on the International Effects of Judicial Sales of Ships, known as the Beijing Convention. This instrument represents a significant development in international maritime law and an important boost to maritime trade by establishing a harmonized framework designed to provide greater certainty, transparency, and efficiency in the judicial sale of ships and their cross-border effects.

The Convention establishes specific requirements concerning the legal effects of judicial sales and complements the existing rules applicable to the ship registries of States Parties.

In maritime trade, the enforcement of claims through the judicial sale of ships is a common tool. However, the effects of such sales were not always recognized beyond the country in which they took place, creating uncertainty for buyers and making it difficult to register the ship in other jurisdictions.

Central Objective: Facilitating Judicial Sales Among States Parties

The purpose of the Beijing Convention is to establish clear and uniform rules enabling States Parties to internationally recognize the legal effects of judicial sales of ships, provided that such sales confer clean title on the buyer. In other words, the ship is transferred free and clear of mortgages, liens, or other encumbrances. This protects the buyer and enhances the transparency of the process.

The Convention applies only where the sale takes place in a State Party and the ship is physically located within that territory at the time of the sale. Warships and ships used exclusively for non-commercial public purposes are excluded from its scope.

Key Benefits

• Legal certainty for buyers: It ensures that buyers acquire clean title, free from mortgages, liens, and prior debts, thereby reducing legal risks and increasing investor confidence.
• International recognition: The legal effects of a judicial sale conducted in one State Party are recognized in other countries, facilitating the registration and operation of the ship worldwide.
• Boost to maritime trade: By reducing legal uncertainty and expediting the transfer of ownership, the Convention encourages investment and competitiveness in the shipping market.
• Protection of creditors’ rights: It ensures transparent notification procedures, strengthening the position of creditors and ship financiers.
• Reduction of litigation risk: By establishing clear rules regarding the validity of title to the ship, the Convention reduces legal disputes among the parties involved in judicial sales.
• Issuance of the Certificate of Judicial Sale: This internationally recognized document simplifies the registration of the ship in another country and serves as prima facie evidence of ownership. Its content essentially follows the model set out in Annex II to the Convention, thereby ensuring uniformity, transparency, and acceptance among States Parties.
• International information repository: The International Maritime Organization (IMO) will administer an accessible database that centralizes information on judicial sales, increasing transparency and traceability.

A New Scenario for International Maritime Trade

As highlighted above, this Convention strengthens global maritime trade. By eliminating the uncertainty that previously affected buyers with respect to legal certainty, it encourages investment in the sector and facilitates the recovery of claims in situations involving insolvency or disputes.

Furthermore, by allowing clean title issued by a judicial authority of one State Party to be recognized in other countries, the Convention reduces operational risk in international transactions—a key factor for shipping companies, financial institutions, and insurers.

The Beijing Convention entered into force internationally on February 17, 2026, following the attainment of the required number of instruments. As of August 2026, it has five contracting States, in addition to the approval of the European Union.

Panama Enters a New Stage

It is worth highlighting that Panama signed the Beijing Convention on March 4, 2025, at the United Nations Headquarters in New York, becoming the 32nd State to join this international instrument. Panama subsequently deposited its instrument of ratification on March 19, 2026. As a result, the Convention will enter into force for Panama on September 15, 2026.

This accession represents an opportunity to strengthen legal certainty in transactions involving ships registered, or intended to be registered, in Panama. Its application will be particularly relevant to international buyers, mortgage creditors, financial institutions, insurers, shipping companies, and legal practitioners involved in proceedings concerning the enforcement and transfer of ships.

It also demonstrates Panama’s commitment to strengthening global maritime law and promoting a more transparent and attractive environment for investment in the shipping sector.