About Nationality of ships

A vessel may be considered as possessing the nationality of a State even though she
is unregistered, possesses no documents evidencing that nationality, nor even flies
the flag of that State. Historically, a vessel’s nationality was determined by reference
to so-called connecting factors: as we have seen, the Navigation Acts required
every British ship to be of British build; the French Acte de Navigation of 1793 contained
similar provisions in respect of French ships. In much the same way as the
Jones Act in the United States, the purpose of these laws was protectionist. The UK
Merchant Shipping Act 1894, prior to its amendment by the Merchant Shipping
Act 1988, defined a British ship purely in terms of ownership, regardless of whether
or not she had been registered as the Act required. The relevant provisions of the
1894 Act are as follows:
Section 1 (Qualification for owning British ship)
A ship shall not be deemed to be a British ship unless owned wholly by persons of
the following description€. . .; namely,
(a) Natural-born British subjects;
. . .
(d) Bodies corporate established under and subject to the laws of some part of
Her Majesty’s dominions, and having their principal place of business in those
dominions,€. . .
Section 2╇ (Obligation to register British ships)
(1) Every British ship shall, unless exempted from registry, be registered under
this Act.
The effect of these provisions was to make compulsory the registration of all
British-owned ships in the register of British ships provided that, in the case of
bodies corporate, they did not have their principal place of business outside Her
Majesty’s dominions. Concealment of the British character of such a ship as,
for example, by sailing her under a foreign register and flag, rendered the vessel
liable to forfeiture.
In Chartered Mercantile Bank of India v Netherland Steam Navigation Co. Ltdâ•›—a
collision case concerning a Dutch registered ship owned and controlled by British
subjects through a Dutch subsidiary of an English company—it was considered
‘absurd to suppose that the mere fact of carrying the Dutch flag makes her [i.e. the
defendant’s ship] a Dutch ship. Pirates carried the flag of every nation, but they
were hanged by every nation notwithstanding’.
The requirement for ownership by nationals as a precondition for registration in a
particular flag State remains widespread. According to a 1982 report by the United
Nations Conference on Trade and Development (UNCTAD) Secretariat on conditions
for registration of ships, twenty-eight countries required their vessels to be
manned entirely by nationals and requirements with regard to the nationality of
management personnel or the location of the seat of management were applied by
at least fifty-two countries. In the case of bodies corporate, national legislation
may simply require that the ship be owned by a legal entity incorporated in the
relevant jurisdiction without regard to the nationality of the shareholders or the
effective seat of management. In other cases, legislation may stipulate that shares
be owned wholly or in a stated percentage by national citizens.
Under current UK legislation, British character can only be assumed by registration.
British individuals and companies are free to register their vessels anywhere
in the world, subject only to the requirements of the intended flag State and, evidently,
applicable international sanctions.
Nowadays, it may in fact be said that the only universally applicable test for determining
a vessel’s nationality is the fact of her registration in a particular State or, in a limited
range of cases, documentation not accompanied by registration. In 1998, in an English
case, it was held that the yacht Battlestar owned by American citizens and holding a
Certificate of American Ownership obtained from the US consul in Amsterdam, although
entitled to fly the US flag, was a ship not registered in any country or territory for
the purposes of the 1988 Vienna Convention against Illicit Traffic in Narcotic Drugs
and Psychotropic Substances and the Criminal Justice (International Cooperation)
Act 1990. The owners had taken no steps to document the vessel in the United States
itself and, for the purposes of the Convention, ‘registration’ denoted a central repository
of information publicly available of the federal or State type.