18.1 Background and Introduction

18.1.1 The quotation about ship mortgages at the beginning of this book1 applies to pre-delivery security with equal if not greater force. For different reasons, pre-delivery security requires at least the same if not more circumspection than the security granted by a ship mortgage. A ship mortgage is security over an asset registered in one jurisdiction which can, and generally does, physically move from one jurisdiction to another. Pre-delivery security, in contrast, frequently involves the assignment of a contract governed by the laws of one jurisdiction in respect of a building project taking place in another jurisdiction, together with an assignment of any related refund guarantee. The point made in Chapter 16 that an assignment is not strictly a form of security under English law applies equally to this chapter.2 Despite that, for convenience, reference is made to security, including in the title of this chapter.