International secondhand vessel trading is complex and highly professional, requiring coordination across multiple departments.
A set of customary practices has been formed in long-term transactions, with the general process as follows:
The buyer selects a vessel by reviewing offers from ship brokers according to their needs.
The buyer and seller negotiate and sign a Memorandum of Agreement (MOA) for ship sale and purchase under the broker’s coordination.
The widely used Norwegian Standard Form 2012 (NSF2012) consists of 16 major clauses, specifying basic ship information, sale price, delivery place and date, ship inspection, delivery documents, delivery condition, liability for breach of contract, etc. Although it balances the interests of both parties, transaction risks remain high, especially for inexperienced buyers unfamiliar with rules and unwritten practices.
Both parties open a joint bank account, and the buyer pays a 10% deposit of the ship price into the joint account.
The buyer arranges professionals or appoints surveyors to inspect the ship and issue a survey report. Information from the inspection serves as critical evidence for the buyer to renegotiate the price, raise requirements, or even withdraw from the contract.
The buyer issues an acceptance notice to the seller within the time limit and signs a memorandum if necessary.
The buyer sends personnel to accompany the ship to get familiar with its condition.
After preparing all sale documents, the seller subm a Notice of Readiness (NOR).
Both parties hand over the ship at the agreed time and place, which is divided into legal handover and on-site handover:
Legal handover: Mainly signing and exchanging sale documents and bank settlement.
On-site handover: Mainly physical and technical handover of the ship.
Marine engineers (including ship machinery management companies and personnel) provide technical support throughout the entire process.
As direct executors, they bear major technical responsibilities in ship inspection and on-site handover, playing a vital role in the success of the transaction.Buyer’s marine engineers shall fully understand the legal liabilities and rights of both parties, fully utilize the buyer's rights granted by the MOA (focusing on Clauses 4–8), and be familiar with specific terms such as delivery place and time, ship superficial inspection, underwater inspection, fuel oil, and handover documents.
This paper discusses the practical work of the buyer's marine engineers from three stages: pre-delivery preparation, on-site handover, and post-delivery work, with legal and practical suggestions.
Check the ship’s class records (contact the classification society).
Conduct an on-board superficial inspection.
Unless otherwise specified, the MOA includes a clean class clause, meaning no remarks on the class records. If remarks are found, the buyer shall immediately negotiate with the seller to require repairs and re-inspection to remove the remarks.
This is the buyer's first opportunity to board the ship and check its condition in person.The international secondhand ship market is currently seller-dominated. Many sellers refuse superficial inspection and demand an “as-is delivery” clause in Clause 4 of the MOA, or require inspection before signing the MOA instead of after.
Some buyers rush to purchase ships only by reviewing partial classification society records or roughly estimating the condition based on recent operation without superficial inspection, which is highly risky like gambling, especially common among small domestic companies.
Key points for superficial inspection:
Choose the discharging port for inspection: Ship cranes are likely in use to observe loading/unloading, and more time is available to check cargo holds after unloading.
The MOA usually includes a “no opening or trial operation” clause. Check past records, surface conditions of equipment, and unusual entries in logbooks to identify potential defects.
Focus on items less concerned by classification societies: Cargo hold condition, deck rust, maintenance status, PSC records, etc. Defects in class-focused items should have been found in class record reviews.
Verify the actual ship age: Ship age affects price and operational risks. Unscrupulous sellers may falsify ship age; check cable labels and production dates as sellers rarely replace all cables to forge age.
Check spare parts inventory: Surveyors have the right to count spares per Clause 7 of the MOA, a step often overlooked.
Take extensive photos/videos as intuitive evidence for decision-making.
Prepare a checklist referring to classification society annual inspection items to avoid omissions.
Pursuant to Clause 15 of the MOA, the buyer may send 1–2 crew members (ship escorts) to accompany the ship before delivery to familiarize themselves with operations.This is the second chance to understand the ship and an effective supplement to superficial inspection.
Escorts shall both master operations and detect hidden dangers. Ideal candidates are an experienced Captain (or Chief Officer) and Chief Engineer with comprehensive professional skills and strong communication.Sellers usually instruct their crew to restrict escorts’ activities. Friendly communication and small gifts may ease crew wariness to obtain in-depth information.
Ship registration for the purchased vessel usually requires pre-registration.The registration authority issues a provisional registration certificate upon application, followed by permanent registration after delivery.Simultaneously, apply for the Minimum Safe Manning Certificate, Ship Radio Station Certificate, etc., and arrange provisional/classification survey, SMC audit, ISSP, SOPEP, etc., for the new classification society after flag change.
Of course, for engineering vessels—especially non-self-propelled dredgers, pile drivers, floating cranes, or nearshore/coastal construction barges and deck barges—certain certificates may not exist or are simply not applicable.
Suggestion: Retain the original class and flag if valid, only applying for a provisional survey for owner change to reduce inspection items and speed up operation.
After confirming the delivery port and approximate time, marine engineers shall arrange:
Appoint and contact a shipping agent.
Appoint an underwater inspection team.
Arrange a shipyard for name/logo painting and temporary repairs.
Arrange suppliers for fuel, provisions, and stores.
Coordinate radio inspection and code change, etc.
The NOR submitted by the seller confirms the delivery date.Authorized on-site representatives of the buyer, carrying handover documents and original certificates mentioned in 1.3, lead the relieving crew to the delivery port.
Before legal handover is finalized, the seller often restricts the buyer's on-site representatives and crew from boarding. The buyer's on-site representatives shall coordinate with ship escorts to advance work.
Underwater inspection is conducted before handover, the buyer's third and final inspection right.It covers the hull bottom, bow thruster, rudder, propeller, tail shaft, etc.Docking inspection is rarely feasible due to schedule constraints, so diver underwater inspection (arranged by the buyer) is preferred.
If a classification society surveyor is required: The surveyor has legal decision-making power; disputes are settled by the surveyor's judgment. On-site personnel shall communicate with the surveyor as much as possible.
If no surveyor is required: The buyer’s marine engineers shall closely monitor the diver’s live video, instruct detailed checks for doubts, and record the entire process as evidence.
Fuel Oil
Verify oil quality and price: Check seller’s documents, take joint samples for testing if needed.
Verify volume: Check oil level, water content, draft difference, and oil temperature.
Verify weight: Calculate with corrections for draft and temperature.
Lubricating Oil
Only accept unopened barrels; reject opened barrels and bulk lube oil.
Verify oil type, marks, volume, and quantity of barrels.
Cancelled certificates (nationality, DOC, etc.) are returned to the seller; the buyer keeps copies.
Original other certificates and technical documents remain on board.
IMO circulars and nautical publications must be complete; request the seller to supplement if missing.
The original Continuous Synopsis Record (CSR) stays on board; the seller may keep copies.
The seller retains deck/engine logbooks, bell books, GMDSS logs, oil record books, and shall copy at least two sets of the latest two voyages—one on board, one for the buyer’s record.
Paint, oxygen, and acetylene cylinders are seller’s assets but usually sold to the buyer at a discount; count and confirm varieties and quantities.
Crew wage claims have maritime liens, which remain enforceable for one year even after ship transfer, allowing creditors to arrest the ship.To avoid disputes, the buyer shall obtain and keep the original Certificate of Full Wage Payment signed by the seller's master.
After completing handover and crew shift, both parties sign the PODA in multiple copies.Ship ownership and all risks/expenses transfer to the buyer upon signing.The buyer shall promptly request the seller to cancel registrations for INM-C, SSAS, and AIS.
The MOA is the legal standard. Unless for as-is delivery, Clause 11 of NSF93 sets four quality guarantees the seller must fulfill:
Ship condition is the same as inspection except for normal wear and tear.
Maintains clean class with no remarks (except as stated in MOA).
No maritime damage affecting class.
All class, flag state, and equipment certificates are valid and not extended.
Additional common guarantees:
Hull and machinery cyclic survey periods valid until delivery.
All equipment, cranes, navigational instruments, and radio stations in good condition (except as stated), etc.
Timely communication: Notify legal representatives immediately of any objections; do not act without authorization.
Legal handover priority: Legal handover is core for payment, document exchange, and ownership transfer. Technical work shall serve legal decisions.
Evidence first: Collect photos, videos, crew testimonies for any defects to support claims.
Class guarantee priority: Resolve defects affecting class by requiring the seller to arrange original classification society inspection.
Apply for a classification society surveyor to conduct on-site inspection and issue:
Class certificate.
Statutory certificates (International Load Line, Cargo Ship Construction Safety, etc.) issued by the flag state via the classification society.
Provisional registration, minimum manning, radio station certificates, and DOC copy shall have been obtained in pre-registration.The following manuals/drawings require surveyor verification and endorsement:
Grain Loading Manual, Damage Stability Calculation Manual, Securing Manual (cover replacement).
SOPEP, ISSP, Garbage Management Plan, Ballast Water Management Plan.
Fire control plans (ship name change).
INM-C (canceled by original owner in advance).
SSAS (canceled by original owner in advance).
EPIRB, MF/HF, VHF.
AIS (canceled by original owner in advance).
Sellers usually halt routine maintenance once deciding to sell, only painting the surface to hide hidden dangers.Comprehensive equipment inspection and familiarization are critical post-delivery.Negligence may cause accidents (e.g., main engine failure due to clogged lube oil filter, leading to hull damage and huge losses).
After confirming the delivery port and approximate time, marine engineers shall arrange:
Appoint and contact a shipping agent.
Appoint an underwater inspection unit.
Arrange a shipyard for name/logo painting and temporary repairs.
Arrange suppliers for fuel, provisions, and stores.
Coordinate radio inspection and code change, etc.
Arrange ship name/logo painting and temporary repairs.
Supply fuel, provisions, and stores.
Complete hull insurance and P&I coverage procedures, notify insurers of the handover time, etc.
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