Bottomry


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Bottomry

 

in the civil law of bourgeois states, a loan agreement on pledge of a vessel and its cargo. The captain of a ship obtains a loan on bottomry at the shipowner’s expense. In the event that the ship is destroyed, the creditor loses the right of compensation for the sum he has granted; thus, there are higher interest rates on this type of loan than on the usual type. Bottomry is rarely utilized in contemporary practice.

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However, isolated uses of bottomry bonds may remain, and some reference was made to bottomry in the context of the Scottish fishing industry in the consultations which led to the Arrest Convention 1999.
A fact intensive and thorough study of a slightly more contemporary application of bottomry can be found in George Steckley, Bottomry Bonds in Seventeenth Century Admiralty Court, 45 AM.
In a bottomry contract, the lender extended a loan to finance a voyage.
And declared to have received on their behalf and that of their heirs and assigns from Seignior Abrham Cohen, hundred and twenty-five guilders of xx stivers apiece and that bottomry and marine risk surcharge [premium?