Shipping 2026 Comparisons

The main domestic laws establishing the authorities of the maritime and shipping courts in The Bahamas include:

• the Supreme Court Act, 1996, which confers admiralty jurisdiction on the Supreme Court;
• the Merchant Shipping Act, 1976, which governs ship registration, maritime obligations and seafarers’ rights; and
• the Supreme Court Civil Procedure Rules, 2022, which regulate the procedure for admiralty proceedings, including actions in rem and the arrest of vessels.

The Supreme Court of the Commonwealth of The Bahamas is the principal court exercising admiralty jurisdiction in maritime and shipping matters. Appeals from the Supreme Court lie to the Court of Appeal, with a final right of appeal (with leave) to the Judicial Committee of the Privy Council in London, England.

Maritime and shipping claims commonly filed in The Bahamas include:

• disputes relating to possession and ownership of vessels;
• enforcement of ship mortgages;
• unpaid bunkers and crew wages;
• cargo loss or damage;
• groundings;
• collisions; and
• other claims for damage done by a ship.

These claims are typically brought in the Supreme Court as admiralty proceedings by way of actions in rem against the vessel.

The Bahamas Maritime Authority (BMA) acts as the technical regulator and competent authority for both flag state and port state control throughout The Bahamas, which is exercised in accordance with the Caribbean Memorandum of Understanding on Port State Control (CMOU). The BMA was established in 1995 by the Bahamas Maritime Authority Act, with the objective of promoting safer ships and cleaner seas as well as eliminating the operation of sub-standard ships in the Caribbean region through a harmonised system of port state control.

The BMA works in co-ordination with the Bahamas Port Department, a government agency under the Ministry of Energy and Transport that serves as the operational and territorial maritime authority, ensuring harbour safety, compliance with local regulations, and management of port infrastructure, with both the BMA and Port Department operating under overall policy direction from the Minister responsible for Maritime Affairs (the “Minister”).

In the event of a marine casualty involving serious injury or loss of life, the Minister may initiate a preliminary review or direct that a formal marine investigation be conducted, to be supported or administered by the BMA. A formal investigation under these circumstances is carried out by a Wreck Commissioner, who may be a judge, chief magistrate, or an attorney of at least ten years’ standing, assisted by one or more maritime assessors appointed for their technical expertise.

In instances of groundings, as with all marine casualties, the BMA must be notified. The procedure outlined above may also be utilised. See Sections 240A through 248 of the Merchant Shipping Act for further guidance on shipping casualties, inquiries and investigations.

With respect to marine pollution, the Minister is empowered to give effect to international maritime pollution conventions ratified by The Bahamas, including:

• the United Nations Convention on the Law of the Sea, 1982;
• the International Convention Relating to Intervention on the High Seas in Cases of Oil Pollution Casualties, 1969;
• the International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001;
• the Ballast Water Management Convention, 2004;
• the Anti-Fouling Systems Convention; and
• other international instruments addressing ship-source pollution and liability.

The Minister’s powers in relation to pollution also include directing preventative or remedial measures, detaining vessels, and enforcing compliance and liability regimes where pollution occurs or is threatened.

Regarding wreck removal, the relevant port authority is empowered to:

• designate approved disposal or scuttling locations for wrecks and condemned vessels;
• order the removal, destruction or sinking of wrecks that constitute a hazard to navigation or the environment;
• carry out such removal at the owner’s expense where the owner fails to comply; and
• notify the Minister of actions taken and co-ordinate further enforcement where required.

The primary domestic legislation governing registration of commercial and ocean-going vessels is the Merchant Shipping Act. Registration of smaller recreational vessels is governed by the Water Skiing and Motor Boat Control Act and the Boat Registration Act. The Port Department handles domestic registration of private pleasure craft; the BMA, as the responsible public authority for regulation and control of all matters related to shipping within The Bahamas, oversees registration of large commercial vessels and yachts.

Vessels registered in The Bahamas are not required to be owned by Bahamian citizens. Foreign ownership is permitted, and ships of any nationality may be registered as Bahamian vessels provided they meet the applicable registration criteria.

In particular, ships of 1,600 gross tons or more engaged in international voyages may register as Bahamian regardless of the owner’s nationality or place of incorporation. The Minister also has discretion to approve the registration of smaller seagoing vessels or yachts engaged in commercial or non-commercial activities (other than under a charter for the carriage of persons for pleasure) that would not otherwise meet the tonnage threshold. The requirements for ownership of vessels registered in The Bahamas are set out under Section 9 of the Merchant Shipping Act.

Pursuant to Section 3(5) if the Merchant Shipping Act, a ship that is under construction and whose keel has been laid may be registered in The Bahamas at that stage if it is wholly owned by Bahamian citizens or by Bahamian companies that are beneficially owned by Bahamian citizens, or if, regardless of the owner’s nationality or place of incorporation, the completed ship will be 1,600 net tons or more. In such cases, the vessel may only be temporarily registered as a “ship being built”, and the statutory requirements relating to survey, measurement and marking do not apply during the construction period.

The laws of The Bahamas permit the temporary registration of vessels under specific conditions. As stated in 1.4 Requirements for Ownership of Vessels, ships under construction may be temporarily registered as ships being built, provided they meet the requirements of Section 3(5) of the Merchant Shipping Act.

Provisional registration is also available during a flag-transfer procedure under Section 26 of the Merchant Shipping Act, which allows for provisional registration of up to six months (or for a longer period as a registrar or the director thinks fit) while the owner completes all documentary and survey requirements.

Dual registration is also possible under the Merchant Shipping Act Section 25 (and where the laws of the other flag allow it) for either of the following:

• Bahamian registered vessels to be bareboat chartered to another country’s registry, where the bareboat charter is entered into with any citizen of a foreign country or with any corporate body established under the laws of a foreign country, whereby the Bahamian registration is deemed temporarily suspended; or
• a vessel registered in another country may be bareboat registered on the Bahamian register where the bareboat charter is entered into with any citizen of The Bahamas or with any corporate body established under the laws of The Bahamas.

The BMA is the official authority responsible for maintaining the Bahamian Register of Ships, including the registration of ship mortgages, discharges and transfers. Ship mortgages may be registered at any of the BMA’s offices, including Nassau, London, New York, Greece, Hong Kong and Tokyo.

The documentary requirements for registration of a mortgage in The Bahamas are as follows:

• mortgage registration form (Form R208), duly completed and notarised;
• written consent from all existing mortgagees to the registration of the new or additional mortgage (if applicable);
• registration fees, payable in accordance with BMA Bulletin No 81;
• attestation by an authorised witness (eg, notary public) confirming the identity, capacity and authority of the signatory; and
• supporting authority documents, where required (such as a notarised power of attorney or corporate constitutional documents).

The shipping register (including mortgage details) in The Bahamas is treated as public record and may be inspected by members of the public at the registry office during normal business hours, usually for a prescribed fee.

Bahamian ship financing typically uses standard international loan or equity documents, secured by a first-ranking Bahamian statutory ship mortgage. Debt financing is protected by the mortgage plus assignments of earnings/insurances and share pledges, while equity investors rely mainly on contractual control and economic rights rather than vessel security. Ship mortgages under Bahamian law are simple, registration-based, ranked by time of registration (subject to maritime liens) and give the lender strong sale and enforcement rights.

The most common Bahamian ship finance transactions are secured loan financings, where international lenders provide acquisition or refinancing debt to Bahamian SPVs secured by first-ranking Bahamian ship mortgages and related assignments. Also frequently seen are refinancings, sale-and-leaseback structures, fleet financings and (increasingly) equity or hybrid investments, all leveraging The Bahamas’ established ship registry and lender-friendly legal and tax regime.

In addition to a Bahamian ship mortgage, lenders almost always require a broader security package, typically including assignments of earnings and insurances, share pledges over the ship-owning SPV, guarantees, and charges over bank accounts, to secure income streams and enhance recovery prospects.

Ship leasing transactions in The Bahamas have been increasing in recent years, particularly sale-and-leaseback and bareboat charter structures, as ship-owners seek alternatives to traditional bank financing. There has been a noticeable shift away from traditional bank lending towards Chinese leasing houses, private equity investors and other alternative credit providers.

In a lessor/lessee relationship, ownership remains with the lessor while the lessee holds only possession and use rights, whereas in a lender/borrower relationship, ownership stays with the borrower and the lender holds only a security interest. Enforcement also differs as lease defaults are typically resolved through arbitration, given their contractual nature, while ship mortgages are enforced through the Bahamian courts under the Merchant Shipping Act, a process that is often slower and may involve vessel liquidation. Sale-and-leaseback transactions are common and provide a faster, cleaner alternative to traditional mortgage enforcement.

The Bahamas is a signatory to a number of international conventions concerning pollution and wreck removal; these conventions are given force in Bahamian law through implementing statutes and regulations.

Pollution

The following conventions (and others) were given effect in The Bahamas by the Merchant Shipping (Oil Pollution) Act 1976 (as amended) and the subsidiary legislation made thereunder:

• the International Convention for the Prevention of Pollution from Ships (MARPOL), 1973, as modified by the Protocols of 1978 and 1997 (Annexes I, II, III, IV, V and VI);
• the International Convention on Civil Liability for Oil Pollution Damage 1969 (CLC), and the Protocols of 1976 and 1992;
• the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage 1971 (FUND), and the Protocols of 1976 and 1992;
• the International Convention on Civil Liability for Bunker Oil Pollution Damage 2001 (the “Bunker Convention”); and
• the International Convention relating to Intervention on the High Seas in cases of Oil Pollution Casualties (INTERVENTION), 1969 and the Protocol of 1973.

Wreck Removal

The Nairobi International Convention on the Removal of Wrecks, 2007 was given effect in The Bahamas by the Merchant Shipping (Wreck Removal Convention) Regulations, 2015. The Merchant Shipping Act 1976 also applies to the removal of wrecks.

The Bahamas is a signatory to several international conventions that impact on the liability of owners and interested parties in events of collision and salvage.

Collision

The Bahamas is a party to the Convention on the International Regulations for Preventing Collisions at Sea (COLREGs), 1972, which is implemented in Bahamian law by the Merchant Shipping Act 1976 and its subsidiary legislation.

Salvage

The Bahamas is not a party to the International Convention on Salvage, 1989. Domestically, salvage provisions are included in the Merchant Shipping Act 1976 and its regulations, and the practice follows general international salvage principles.

The 1996 Protocol amending the 1976 Convention on Limitation of Liability for Maritime Claims is not applicable in The Bahamas, nor has the 2012 amendment been accepted.

The 1976 Convention on Limitation of Liability for Maritime Claims was brought into force in The Bahamas by virtue of the Merchant Shipping (Maritime Claims Limitation of Liability) Act, 1989, as amended, and its subsidiary legislation.

The Bahamas is not a signatory to the Vienna Convention on the Law of Treaties. However, because certain general principles contained in the Vienna Convention are reflective of customary international law, they will likely influence how such other treaties as the Convention on Limitation of Liability for Maritime Claims (so far as it is adopted into domestic law by the Merchant Shipping (Maritime Claims Limitation of Liability) Act, 1989, as amended, and its subsidiary legislation) are interpreted.

A limitation fund may be constituted by:

• ship-owners (which means the owner, charterer, manager or operator of a seagoing ship);
• salvors; and
• their insurers.

The claims that may be limited are for death, personal injury, property loss or damage, etc.

A limitation fund may be constituted either before or after any legal proceedings are instituted in respect of claims subject to limitation in the Supreme Court.

The claim to establish the fund is brought by statement of claim in the Supreme Court, which must be served on at least one potential claimant. The action is in personam and service may therefore be effected out of the jurisdiction if necessary.

The fund must be constituted in a sum equal to the total maximum liability permitted for that casualty, calculated according to:

• the ship’s gross tonnage; and
• the formulae for special drawing rights limits for damage to property and persons, (which is then converted into dollars by reference to the conversion rate set by the International Monetary Fund, and the Bahamas Central Bank may provide a certificate proving the relevant rate as a matter of conclusive evidence); plus
• interest at 6% calculated from the date of the casualty to the date of constituting the fund.

The fund may be constituted either by depositing the sum in the Supreme Court, or by producing a suitable guarantee.

Within seven days after a defendant acknowledges service, or within seven days after the time limited for acknowledging service, the claimant must issue an interlocutory application before a Supreme Court registrar asking for a decree limiting the claimant’s liability, or for directions as to the further proceedings in the action. Defendants may dispute the limit sought by the claimant, which would be determined by a Supreme Court judge.

The Maritime Labour Convention, 2006 (MLC) is in force throughout The Bahamas and has been implemented into domestic law through the Merchant Shipping (Maritime Labour Convention) Regulations. The MLC establishes minimum international standards for the working and living conditions of seafarers on Bahamian-flagged vessels, including:

• employment terms and conditions, including contracts, wages and hours of work/rest;
• accommodation, recreational facilities, and food and catering standards;
• medical care and health protection, including access to onboard medical facilities and shore-based medical services;
• training, certification and qualifications of seafarers; and
• welfare and social security protections, including repatriation rights and financial security for abandonment or injury.

In addition to the MLC regulations, the Merchant Shipping Act (which governs crew agreements, discharge procedures, and enforcement of seafarer contracts laws) also provides protections for seafarers.

The Hague Rules apply to bills of lading and cargo carriage from any port in The Bahamas to any other port (whether in The Bahamas or not), as enacted by the Carriage of Goods by Sea Act 1926.

Title to sue on a bill of lading in The Bahamas follows common law principles. There is no Bahamian equivalent of the UK Carriage of Goods by Sea Act 1992.

Shippers, consignees and lawful holders may sue, depending on the facts.

Assignments of rights are recognised, but must be proved – they are not automatic.

Whether the ship-owner is sued as carrier or actual carrier, its liability for cargo damages turns on breach of the following non-delegable duties.

• Seaworthiness (before and at the beginning of the voyage):
1. properly manning, equipping and supplying the ship; and
2. making holds, refrigerating chambers and cargo spaces fit and safe.
• Care of cargo:
1. properly and carefully loading, handling, stowing, carrying, keeping, caring for and discharging the goods.

A breach of these duties would result in prima facie liability, but a ship-owner may avoid liability by proving that the loss resulted from, for example:

• act, neglect or default of the Master or crew in navigation or management of the ship;
• perils of the sea;
• fire (unless caused by actual fault or privity of the carrier); and
• act of God, act of war, inherent vice, insufficiency of packing, etc.

Under Article IV Rule 5 of the Hague Rules, liability is limited to GBP100 per package or unit, unless the nature and value of the goods were declared before shipment and inserted into the bill of lading.

The ship-owner may also invoke global limitation as mentioned in 3.5 Procedure and Requirements for Establishing a Limitation Fund.

Under Bahamian law (specifically, Section 5 of the Carriage of Goods by Sea Act 1926), a carrier can establish a claim against a shipper for misdeclaration of cargo, and the statutory regime provides the legal basis for it. However, there is very limited reported Bahamian case law directly on this specific point.

Paragraph 6 of Article III of the Hague Rules provides as follows:

“Written notice should be given of any loss or damage to cargo at the time of delivery, unless the loss or damage is not apparent, in which case the notice should be given within three days of delivery, failing which the receipt without such notice would be prima facie evidence of the goods being in the condition described in the bill of lading.”

The written notice need not be given if the state of the goods has at the time of receipt been the subject of a joint survey or inspection.

In any case the carrier and ship would be discharged from all liability for loss or damage unless proceedings are brought within one year after delivery of the goods (or the date when the goods should have been delivered).

The Bahamas is a party to the International Convention for the Unification of Certain Rules Relating to the Arrest of Sea-Going Ships, 1952.

Ship arrests in The Bahamas are covered by the following domestic laws:

• the Supreme Court Civil Procedure Rules 2022; 
• the Supreme Court Act 1996;
• the Merchant Shipping Act 1976 (the Merchant Shipping Act 2021 has not yet come into force); and
• case law (the common law) derived from The Bahamas’ own courts, as well as the UK and other common law jurisdictions.

The Bahamas recognises the following maritime liens by way of statute:

• wages and other sums due to the Master, officers and other members of the ship’s complement in respect of their employment on the ship;
• port, canal and other waterway dues and pilotage dues, and any outstanding fees payable under the Merchant Shipping Act 1976 in respect of the ship;
• claims against the owner in respect of loss of life or personal injury occurring, whether on land or on water, in direct connection with the operation of the ship;
• claims against the owner, based on tort and not capable of being based on contract, in respect of loss of or damage to property occurring, whether on land or on water, in direct connection with the operation of the ship; and
• claims for salvage, wreck removal and contribution in general average.

There is some overlap between statutory maritime liens and common law maritime liens. All of the statutory maritime liens except for the second category above are also maritime liens at common law. Other maritime liens that arise solely by virtue of the common law (bottomry and respondentia) are now largely obsolete.

Not all maritime claims attract a maritime lien. The maritime claims that do not attract a maritime lien include claims for necessaries (including bunkers) and contractual claims (including claims for breach of charterparty).

The following maritime claims may give rise to an arrest of a ship (all ships are subject to arrest, whether Bahamian or not, and whether registered or not, wherever the residence or domicile of their owners may be, and in relation to all claims wheresoever arising):

• any claim to the possession or ownership of a ship or to the ownership of any share therein;
• any question arising between the co-owners of a ship as to possession, employment or earnings of that ship;
• any claim in respect of a mortgage of or a charge (whether legal or equitable, including mortgages and charges created under foreign law) on a ship or any share therein;       
• any claim for the forfeiture or condemnation of a ship or of goods which are being or have been carried or have been attempted to be carried in a ship or for the restoration of a ship or any such goods after seizure or for droits of Admiralty; and
• in any case in which there is a maritime lien or other charge on any ship, aircraft or other property.

The following claims may give rise to the arrest of the relevant ship or a sister ship (see also 5.7 Sister-Ship Arrest):

• any claim for damage done by a ship;
• any claim for damage received by a ship;
• any claim for loss of life or personal injury sustained in consequence of any defect in a ship or in its apparel or equipment or of the wrongful act, neglect or default of the owners, charterers or persons in possession or control of a ship or of the Master or crew thereof or of any other person for whose wrongful acts, neglects or defaults the owners, charterers or persons in possession or control of a ship are responsible, being an act, neglect or default in the navigation or management of the ship, in the loading, carriage or discharge of goods on, in or from the ship or in the embarkation, carriage or disembarkation of persons on, in or from the ship;
• any claim for loss of or damage to goods carried in a ship;
• any claim arising out of any agreement relating to the carriage of goods in a ship or to the use or hire of a ship;
• any claim in the nature of salvage;
• any claim in the nature of towage in respect of a ship or an aircraft;
• any claim in the nature of pilotage in respect of a ship or an aircraft;
• any claim in respect of goods or materials supplied to a ship for its operation or maintenance;
• any claim in respect of the construction, repair or equipment of a ship or dock charges or dues;
• any claim by a Master or member of the crew of a ship for wages and any claim by or in respect of a Master or member of the crew of a ship for any money or property which, under any of the provisions of the Merchant Shipping Act, is recoverable as wages in the court and in the manner in which wages may be recovered;
• any claim by a Master, shipper, charterer or agent in respect of disbursements made on account of a ship;
• any claim arising out of an act which is or is claimed to be a general average act; and
• any claim arising out of bottomry.

Time bars for maritime claims and liens (the same approach generally applies to both) are generally the same as for regular civil claims (ie, six years for claims in contract and tort and three years for claims including personal injury or death), although certain claims have a shorter time bar as follows:

• claims for oil pollution (ie, three years from the date of damage or six years from the date of the incident which caused the damage);
• claims for salvage (ie, two years);
• claims for damage or loss caused by another vessel or to its cargo, freight or property on board, or for loss of life or personal injuries suffered by any person on board another vessel caused by the vessel sought to be enforced against (ie, two years, unless the claimant can show that there was no reasonable opportunity of arresting the vessel within the jurisdiction of The Bahamas or the territorial waters of the ship’s flag, or in which the claimant resides or has their principal place of business sooner);
• claims for personal injury or death to a passenger or for the loss of or damage to luggage, where the ship is flying the flag of or is registered in a state party to the Athens Convention 1974 (the Bahamas is a “state party”), or where the contract of carriage has been made in a state party or the place of departure or destination is a state party (ie, two years);
• claims to enforce any contribution in respect of any overpaid proportion of any damages for loss of life or personal injuries (ie, one year);
• cargo claims against the carrying ship (ie, one year); and
• in rare cases, an arrest may be refused where by reason of delay such arrest would be unjust (ie, laches).

Under Bahamian law, a vessel can be arrested regardless of its owner’s personal liability on the merits constituting a recognised maritime lien. Maritime liens attach to the vessel itself rather than the owner, and they survive changes in ownership, even if the transfer is for value and without notice of the claim.

A bunker supplier can generally arrest a vessel in connection with unpaid bunkers.

Physical suppliers of bunkers (in contrast to contractual suppliers) are not in contractual privity with the ship-owner, and have faced challenges in asserting their rights to arrest vessels.

If bunkers are ordered by a charterer and not the owner, the ability to arrest the vessel may be limited.

A charterer is generally not considered to have the authority to bind the vessel by ordering necessaries unless expressly authorised by the owner.

In order to procure the arrest of property, the claimant has to:

• issue a statement of claim;
• make a search of the caveat book (though the caveat book is not available in electronic form and has fallen out of use) to confirm that there are no caveats against arrest;
• file a praecipe requesting the issuance of the warrant of arrest;
• file an affidavit to lead the application containing specified particulars (including the nature of the claim, though the court has discretion to order the issuance of the warrant even if all the particulars are not included);
• in the case of applications in respect to foreign ships with a flag state having a consulate in New Providence where the action is for possession or for wages, notice must be given to that consulate (except with leave of the court); and
• typically, the application is made by ex parte notice of application. 

The affidavit may be sworn or affirmed by on the basis of instructions due to time constraints, but there is no longer any requirement for original affidavits to be filed, or for them to be apostilled, even if they are sworn or affirmed in non-Commonwealth countries. The affidavit must be notarised, and then a scanned copy can be filed electronically. There is no requirement for a power of attorney. Documents in a foreign language should be translated and the translation certified.

Once the court orders the issuance of an arrest warrant, the attorneys for the party that has procured this must make a formal request to the Admiralty Marshal for service – this request must include an undertaking by the attorneys to be responsible for the reasonable costs and expenses involved in the service and subsequent custody of the vessel. Attorneys therefore generally require from their clients either the deposit of a sum of money to cover the estimated costs of the arrest (or for a certain timeframe under arrest) and/or, in the case of instructions from a reputable firm of solicitors, a back-to-back undertaking.

The warrant must be served by the Admiralty Marshal or their agent on the vessel, and the statement of claim is typically served at the same time.

It is not possible to arrest bunkers by themselves, although they might be subject to a freezing injunction – a more onerous process. Bunkers belonging to the vessel owners would be considered under arrest along with the vessel itself.

A warrant for the arrest of freight can be executed by serving it on the cargo itself. If cargo is on board a vessel that is arrested (and generally in such case the cargo itself would not be under arrest), it may be discharged by application to the court for an appropriate order, which would be at the cost of the cargo owners.

A sister-ship arrest is possible in The Bahamas. Under Sections 8 and 9 of the Supreme Court Act, the court may order the arrest of a vessel other than the one directly involved in the dispute, provided that the “sister-ship” is beneficially owned by the same person who would be liable in personam in an action against the original vessel (such as the owner, charterer, or person in possession or control). This type of arrest is used to secure maritime claims when the claimant cannot immediately arrest the vessel directly involved in the dispute.

Sister-ship arrests apply only to recognised maritime claims, as outlined under 5.2 Maritime Liens, and the court will require evidence of common beneficial ownership and the existence of a qualifying claim. Sister-ship arrest can be an effective tool in The Bahamas, particularly given the jurisdiction’s active ports and anchorage points, making it attractive for claimants seeking maritime security.

Apart from ship arrests, a claimant can also apply to obtain a freezing (“Mareva”) order, but must satisfy several conditions, including showing a “good arguable case” and a risk of non-satisfaction of judgment, and providing an undertaking in damages.       

Assuming that the vessel is not sold by court order, it may be released in the following ways.

• By consent with the arresting party and any other interested party, either by way of settlement and/or provision of security acceptable to the claimant. The amount of security should be sufficient to cover the amount of the claim plus interest and legal costs. The form of security could be a bank or insurance company guarantee or P&I club letter of undertaking. Although it would be possible to open a joint account with attorneys on both sides and deposit the agreed amount there, practical delays are involved in opening such accounts. Another method the authors have used successfully is to deposit the agreed amount in the authors’ trust account subject to the terms of a letter of undertaking given by the firm to the arresting party. A form of consent is then filed with the court signed by the parties.
• By the provision of a bail bond to the court or payment into court. If there is a dispute as to the amount of the security, the court may determine the amount, though this is usually best done by way of adjustment after release in order to avoid delays.
• By application to the court where the arrest is, for example, improper or wrongful.

The procedure for the judicial sale of an arrested ship is that the arresting party files an application to the court supported by an affidavit. Such application may be made either after judgment or before (ie, “pendente lite”).

In the case of a sale pendente lite, the court must be satisfied that the vessel is a diminishing asset (ie, on the basis of evidence that the costs and expenses of the arrest are eroding its value) – if there is evidence that the equity in the vessel has already been extinguished by well-founded claims, this would make for an even stronger case. Such an order may be made in the face of an attempt by a defendant to defend the claim on its merits.

Usually (but not always) an appraisement is obtained by the Admiralty Marshal prior to the sale being advertised for sale in an international shipping publication. The bidding process is usually by sealed tender, though private sales have taken place as recently as 2015, albeit in special circumstances.

The Admiralty Marshal is liable for maintaining the vessel from arrest until sale, although the office of the Admiralty Marshal has no budget for such activities and the arresting party’s attorneys are therefore usually asked to pay such costs on an interim basis pursuant to their undertaking. Those expenses will be reimbursed to the service providers and/or the arresting party from the proceeds of sale as a priority.

In terms of priorities, a general framework (in order) is as follows:

• the Admiralty Marshal’s costs and expenses of the arrest and sale;
• the arresting party’s legal costs of the arrest and sale;
• the maritime liens in the order in which they are set out in 5.2 Maritime Liens;
• mortgages, with Bahamian registered mortgages being afforded priority over other mortgages; and
• claims for necessaries and contractual claims are usually ranked pari passu with each other.

There are many scenarios that can affect the ranking of priorities.

The closest Bahamian analogue to Chapter 11 of the United States Bankruptcy Code is found in Sections 160–167 of the Companies Act, whereby a scheme of arrangement can be proposed between a company and its creditors or shareholders.

With court approval and majority creditor consent (75% in value and majority in number), the scheme can restructure debts, reorganise ownership or effect other arrangements. Once sanctioned by the court, the scheme becomes binding on all creditors or the relevant class.

The Supreme Court can order the arrest and judicial sale of a vessel owned by owners that are under either “Chapter 11” proceedings or a scheme of arrangement pursuant to Sections 160–167 of the Companies Act, as there is no automatic moratorium under the Companies Act and the automatic stay under Chapter 11 does not apply in The Bahamas. However, the Supreme Court, upon application, could order the stay of sale proceedings if a compelling equitable reason is put forward. There is no automatic recognition of the US Chapter 11 insolvency proceeding.

The arresting party is only liable to the vessel owner for damages arising from wrongful arrest if the arrest was obtained maliciously or with gross negligence, amounting to mala fides (bad faith) or crassa negligentia (gross negligence). This is a very high burden. However, costs may be awarded against the arresting party if their claim against the vessel ultimately fails.

The Bahamas is a contracting state to the Athens Convention Relating to the Carriage of Passengers and their Luggage by Sea 1974 and its 1976 Protocol, which applies to the resolution of maritime passenger claims. As mentioned, the Bahamas is also a signatory to the 1976 Convention on Limitation of Liability for Maritime Claims, which also applies to claims for damage to property, including passenger luggage, in connection with a voyage. Both conventions were incorporated into Bahamian law by the Merchant Shipping (Maritime Claims Limitation of Liability) Act 1989, as amended.

As set out in 5.2 Maritime Liens, the time limit for filing maritime passenger claims under the Athens Convention is two years calculated from either the date of disembarkation or the date when disembarkation should have occurred. 

Owners/carriers may limit liability where the loss resulted from a shipping incident or other onboard occurrence, unless the passenger proves that either:

• the damage resulted from the carrier’s fault or neglect; or
• the carrier acted recklessly and with knowledge that such damage would probably result.

Separate limits apply for:

• cabin luggage;
• vehicles and luggage carried in or on vehicles; and
• other luggage.

Owners may rely on these limits unless the passenger proves intentional or reckless conduct with knowledge of probable damage.

Although claims for personal injury would likely be recognised as a maritime lien (as mentioned in 5.2 Maritime Liens, so long as they are in direct connection with the operation of the ship), the same would not be the case for claims for indemnities for personal injuries.

Bahamian courts generally recognise and enforce law and jurisdiction clauses stated in bills of lading and treat them as binding contractual agreements under the common law principle of freedom of contract. Instances where the court may not uphold a law and jurisdiction clause stated in a bill of lading include where:

• the clause is ambiguous or invalid;
• enforcement would contravene Bahamian public policy; or
• it conflicts with statutory protections under the Carriage of Goods by Sea Act or other applicable laws affecting cargo owners or third parties.

However, in the absence of the foregoing concerns, the Supreme Court will usually give effect to the parties’ choice of governing law and forum.

The Bahamian Supreme Court will enforce law and arbitration clauses of a charterparty only if they are clearly and expressly incorporated into the relevant bill of lading. If incorporation is unclear or ambiguous, the clause will not bind the bill of lading holder. Once properly incorporated, the Court will generally treat such clauses like any other contractual term, enforcing law and arbitration provisions in accordance with English common law principles subject to public policy and any statutory protections.

The 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards is applicable in The Bahamas, having been incorporated into domestic law through the Arbitration (Foreign Arbitral Awards) Act, which came into effect in 2010.

While the Bahamian Supreme Court has the power to order the arrest of a vessel even where the underlying claim is subject to a foreign arbitration or jurisdiction clause, if an application is made to stay the proceedings the court will carefully consider the effect of such clauses and may stay the underlying proceedings if it would be inconsistent with a valid agreement to arbitrate or exclusive foreign jurisdiction, although the vessel would probably remain under arrest.

Claimants may therefore use a Bahamian ship arrest to preserve security while pursuing arbitration abroad, and the Supreme Court will generally support this, provided that the arrest does not unfairly prejudice the ship-owner. The Court will generally try to balance the claimant’s right to security against the parties’ agreement on forum/arbitration, sometimes allowing an arrest to preserve security while deferring the substantive dispute to the agreed forum. 

If arbitration is commenced in a foreign country after a vessel has been arrested in The Bahamas, the Court will generally maintain the arrest as security for the claimant’s potential award, unless the parties apply for its release. The Supreme Court in those instances recognises that the arrest is a conservatory remedy and separate from the merits of the dispute. If a valid foreign arbitration is under way, the courts may allow the arrest to continue or require the claimant to provide alternative security depending on the circumstances.

Despite not having a dedicated arbitration institute for maritime claims, The Bahamas is a viable seat for international commercial arbitration, including disputes involving shipping and maritime matters. Based on the UNCITRAL Model Law, arbitration in The Bahamas is governed primarily by the Arbitration Act, 2009, and for international disputes also relies on the International Commercial Arbitration Act, 2023. These statutes provide for the conduct of arbitration in The Bahamas, including the recognition and enforcement of arbitral agreements, the appointment of arbitrators, procedural rules and the enforcement of arbitral awards.

A defendant served with proceedings in breach of a foreign jurisdiction or arbitration clause would typically apply (upon notice to the other parties to the proceedings) for a stay of proceedings pursuant to Section 9 of the Arbitration Act, 2009. The application must demonstrate the existence and validity of any foreign jurisdiction or arbitration clause, and that the dispute falls within its scope. Furthermore, an application under this rule may not be made unless and until the person served with the proceedings takes the appropriate procedural steps to acknowledge the proceedings against them.

For arbitration clauses, the defendant relies on the Arbitration Act, 2009 or the International Commercial Arbitration Act, 2023, requesting the court to compel arbitration. If proceedings have already been initiated in breach of a foreign court clause, the defendant may also seek an anti-suit injunction to restrain the claimant from continuing in the wrong forum. Where appropriate, the defendant can additionally request costs for defending proceedings improperly commenced in breach of the agreement. The court will grant relief unless satisfied that the arbitration agreement or clause is null and void, inoperative, or incapable of being performed.

The Bahamas is a tax-neutral jurisdiction that specifically does not impose income, capital gains or corporate taxes (among others, which are irrelevant in the context of shipping). As a result, both Bahamian-incorporated and foreign-incorporated shipping companies enjoy full exemption from corporate income tax on vessel income without the need for a formal tonnage tax or accelerated depreciation system.

Non-performance of a shipping contract in The Bahamas may be considered as force majeure, but only where the contract expressly includes a force majeure clause and the event qualifies, which will depend on the facts of each case and the precise wording of the clause.

Typical force majeure events such as acts of God, labour strikes, war, pandemics and so forth may qualify; however, mere difficulty in performance, expense or delay will not automatically constitute force majeure. The party relying on force majeure bears the burden of proof to demonstrate that the event occurred, that it directly caused the non-performance, and that no reasonable steps could have been taken to avoid or mitigate its effects. Prompt notification to the other party is also usually required, and failure to provide timely notice may preclude reliance on the clause.

A shipping contract will be considered frustrated only where performance is rendered objectively impossible by an unforeseen, supervening event beyond the control of the parties, and where the risk of that event has not been contemplated by the contract. Bahamian courts will not find frustration where non-performance arises from foreseeable circumstances including self-induced difficulties or ordinary commercial hardship, which might include late delivery, slow loading or unloading, or non-arrival of a chartered vessel due to operational inefficiencies.

Typical events that may give rise to frustration include the loss or total unavailability of a vessel, closure of a port by unforeseen government action or natural disaster, sudden regulatory or legal prohibition making a shipment illegal, etc. It is important to note, however, that standard contractual provisions will generally preclude a finding of frustration in The Bahamas.

The Bahamas implements the IMO 2020 sulphur cap through its status as a state party to MARPOL Annex VI, which regulates emissions from ships and applies to vessels of 400 gross tonnage and above on international voyages, as well as to any ship operating in Bahamian territorial waters or calling at Bahamian ports. The sulphur content of fuel oil must not exceed 0.50% m/m, except where a vessel uses an IMO‑approved equivalent compliance method (such as an exhaust gas cleaning system) or where a stricter limit applies within designated emission control areas (0.10% m/m).

Compliance with these requirements in The Bahamas is enforced by the BMA in its capacity as both flag state and port state authority, principally through port state control inspections and flag state oversight, including verification of bunker delivery notes, fuel sampling, record-keeping and certification. While the regulatory framework clearly empowers inspection, detention and sanction for non-compliance, there are no widely reported or publicly documented enforcement proceedings or sanctions in The Bahamas to date that are specifically attributable to breaches of the IMO 2020 sulphur content limitation.

The International Obligations (Economic and Ancillary Measures) Act, 1993 (as amended) (IOEAMA) provides for the imposition of economic sanctions and for taking ancillary measures to give effect to the international obligations of The Bahamas, such as UN international trade sanctions. The IOEAMA provides that, when the UN Security Council adopts a sanctions resolution, the text of that resolution (including annexes, schedules, amendments) has full force and effect as domestic law in The Bahamas from the date that the UN adopts it, without the need for separate enabling legislation for each resolution. As a result, UN-mandated sanctions are legally binding and enforceable in The Bahamas.

Section 3A of the IOEAMA is regularly referenced in public notices issued by the Central Bank and the Securities Commission of The Bahamas as the legal basis for implementing updated UN sanctions lists and measures. The IOEAMA works alongside the Anti-Terrorism Act, 2018 and the Anti-Terrorism Regulations, 2019, which also provide legal authority for the automatic domestic implementation of UN Security Council sanctions related to terrorism and terrorism financing.

While The Bahamas does not automatically adopt foreign sanctions by default (such as those imposed by the EU, UK or USA on a specific country or company), such foreign sanctions carry legitimate commercial and regulatory weight in The Bahamas. Bahamian authorities and businesses take foreign sanctions seriously and will often take such measures into account in practice, particularly (for example) where correspondent banking or international insurers are concerned.

In relation to the war in Ukraine, The Bahamas has implemented the relevant UN sanctions regimes arising from the conflict, and the principal impact within the jurisdiction has been felt at a compliance and risk-management level, particularly within the financial services, shipping and trade finance sectors, rather than through widespread trade disruption or litigation. There are no widely reported public cases of Bahamian-incorporated entities being sanctioned under Ukraine-related regimes or of domestic court proceedings arising directly from breaches of such sanctions.

As a common law jurisdiction whose maritime and commercial law is closely aligned with English law, The Bahamas recognises that international conflicts and related disruptions to global shipping routes (including the war in Ukraine, attacks on vessels in or near the Red Sea, or loss of access to the Suez Canal) may give rise to significant legal and commercial implications, notwithstanding that such events occur outside Bahamian waters. While The Bahamas is not directly affected geographically by such conflicts, Bahamian courts and arbitral tribunals would address these issues by applying established principles of contract, insurance and maritime law, with close regard to common law English authorities.

The Merchant Shipping Act 2021, which is intended to repeal and replace the Merchant Shipping Act 1976, is expected to be brought into force this year (2026) along with a raft of new subsidiary legislation.

It is beyond the scope of this article to analyse the anticipated changes in detail, but suffice to say that it represents a substantial modernisation of the maritime legislation that has governed Bahamian shipping under the Merchant Shipping Act 1976. The 1976 Act was based heavily on the UK Merchant Shipping Act 1894 (together with certain later UK amending statutes – between 1906 and 1958), whereas the 2021 Act is modelled after the UK Merchant Shipping Act 1995 and brings The Bahamas into alignment with contemporary international maritime standards and the country’s obligations under major IMO conventions.