On December 7, 2022, the 77th session of the United Nations General Assembly adopted, by consensus, the United Nations Convention on the International Effects of Judicial Sales of Ships, and authorized the signing ceremony to be held in Beijing on September 5, 2023. This international maritime convention, named after a city in mainland China, marks a milestone breakthrough in the global shipping rule-of-law system. It fills a legal gap in the area of the international effects of judicial sales of ships and provides a unified set of rules for resolving property rights disputes arising from cross-border ship transactions.

The legal dilemma in international shipping has spurred the creation of conventions.

As the cornerstone of international trade transportation, ships are subject to complex property rights and creditor-debtor relationships in judicial proceedings. According to statistics from the International Maritime Organization, approximately 3,000 ships worldwide enter judicial auction procedures each year due to debt disputes. However, legal differences among countries have long posed two major challenges for cross-border transactions: First, whether the buyer can obtain internationally recognized clear title—that is, whether the ship might be subject to a second seizure abroad due to its original debts; and second, whether the new buyer can successfully complete the ship’s cancellation and re-registration in the country where it was originally registered. For example, in 2018, a liquefied natural gas carrier valued at 120 million U.S. dollars belonging to an international shipping company was held by courts in multiple countries even after the buyer had completed the judicial auction, owing to outstanding debts in three different countries, ultimately resulting in losses exceeding 40 million U.S. dollars.

As the world’s largest ship-owning nation and a leading player in the shipbuilding industry, China’s maritime courts auctioned off a total of 2,876 vessels between 2019 and 2024, among which foreign-flagged vessels accounted for as much as 15%. However, due to the lack of internationally harmonized rules, foreign-flagged vessels auctioned off by Chinese courts often encounter obstacles in being re-registered overseas. In 2021, after a Greek shipowner acquired a vessel auctioned off in China, the vessel was stranded at the port for nine months because the vessel’s original registry refused to cancel the mortgage lien. This legal uncertainty severely hampers the market liquidity of ship assets and also undermines the healthy development of the international shipping industry.

Core Mechanisms of the Convention: Clean Property Rights and Cross-Border Recognition

The Beijing Convention establishes a comprehensive effectiveness guarantee system through three major institutional innovations:

First, the judicial sale certificate system. The Convention requires courts or public authorities conducting judicial sales to issue standardized certificates that include basic vessel information, confirmation of the legality of the sale procedure, and a declaration of clear title. Such certificates enjoy automatic recognition among contracting states, enabling purchasers to directly register or de-register vessels upon presentation of the certificate. At the signing ceremony held in Malta in June 2024, Malta’s Minister of Transport Chris Bonett pointed out: “The judicial sale certificate is equivalent to an ‘international passport’ for vessels, completely resolving the trust crisis in cross-border transactions.”

Second, the online information repository. The Convention requires countries to upload notices and certificates of judicial sales to the International Maritime Organization’s (IMO) GISIS system, thereby enabling global information sharing. The electronic proposal put forward by China’s Maritime Courts during the negotiation phase of the Convention was adopted. This system supports multilingual search and blockchain-based evidence preservation, allowing potential buyers to verify the ownership status of vessels in real time. According to estimates, this measure can shorten the vessel transaction cycle by 40% and reduce transaction costs by approximately 25%.

Third, the rule on exclusive jurisdiction. The Convention grants the courts of the country where the judicial sale takes place sole jurisdiction over challenges to the sale procedure; courts in other contracting states may not seize vessels that have already been certified solely on the basis of the original debt. This design effectively balances creditor protection with transactional certainty. In the first case applying the Convention before the Singapore Maritime Court in 2025, a South Korean bank attempted to seize a bulk carrier that had already obtained a Chinese judicial sale certificate. The court dismissed the bank’s request pursuant to Article 9 of the Convention.

Chinese wisdom is guiding the formulation of international rules.

The birth of the Convention embodies the practical wisdom of China’s maritime judicial system. Since the China Maritime Law Association first raised this issue at the International Maritime Committee (CMI) in 2007, the Chinese working group has organized 37 expert consultations and submitted 12 legislative proposals. Among these, provisions such as the criteria for determining “non-public agreement sales” and special rules for “bareboat charter registration” have been fully adopted. In Article 2 of the Convention, concerning the definition of “judicial sale,” China’s proposal to “take into account both auction and private sale methods” has broadened the scope of application of the Convention to cover more practical scenarios.

The China Council for the Promotion of International Trade participated fully in the drafting of the convention, and the Secretariat of the China Maritime Law Association—under its administration—played a crucial coordinating role. At the sixth working group meeting of UNCITRAL in 2018, the “tiered notification mechanism”—proposing differentiated delivery of judicial sale notices based on the type of rights holder—put forward by the Chinese delegation was incorporated into Article 4 of the convention. This mechanism not only safeguards creditors’ right to be informed but also enhances procedural efficiency. The export of this “Chinese solution” and “Chinese standard” underscores China’s transformation from a follower of international rules to a rule-maker.

Entry into Force of the Convention and Future Prospects

As of December 2025, 28 countries have signed the convention, of which 12 have completed the ratification process. According to Article 21 of the convention, it will officially come into force in March 2026. As one of the first signatory countries, China has already initiated efforts to align its domestic legislation with the convention. It plans to amend the "Special Procedures Law on Maritime Litigation," adding a dedicated chapter on "the international effect of judicial sales," and establishing a data interface with the IMO’s system.

The far-reaching impact of the convention extends far beyond the shipping sector. According to a World Bank research report, once the convention is fully implemented, global ship asset liquidity will increase by 30%, and the shipping industry could save approximately US$1.8 billion annually in transaction costs. Even more noteworthy is that the “clean title + electronic certificates + online evidence preservation” model pioneered by the convention provides a replicable rule-of-law template for cross-border asset transactions. The United Nations Commission on International Trade Law has already launched a study to extend this model to sectors such as aircraft and railway vehicles.

From the initial proposal in 2007 to the adoption of the convention in 2022, the 15-year journey of painstaking preparation underscores China’s firm commitment to participating in global governance. As for 2026...