4.1 Introduction

4.1.1 This chapter addresses primarily the question of the law which, by application of English conflict of laws principles, governs the proprietary aspects of a registered ship mortgage.1 The answer which most lawyers would give is that a transfer of a proprietary interest in a registered ship, whether by way of sale or security, is governed by the law of the ship's register and not by the law of the physical location of the ship (the lex situs). However, it is not possible to state this unquestioningly.2 The issue arose in relation to ships, albeit not in relation to mortgages, in a case which was decided in two phases (The WD Fairway).3 Shortly afterwards the issue arose in a case relating to mortgages of aircraft, again in a case decided in two phases (Blue Sky).4 The result of Blue Sky was that a mortgage expressed to be governed by English law executed and registered over a UK-registered aircraft when it was physically located in the Netherlands was held to be invalid as a security interest because it did not satisfy the requirements of Dutch domestic law for the creation of security over an aircraft. The focus of this chapter is specifically