Qualifying a vessel purchase as an acquisition of business assets

The Messina Court of Appeal recently issued an interesting judgment in which it addressed the qualification of a vessel's sale and purchase as a 'transfer of business assets'. The decision was issued in regards to a claim by the Italian social security agency against the purchaser of a vessel for the payment of crew members' social contributions, which the former shipowner had failed to pay.

The issue raised by the case is significant, since the qualification of a vessel as a business asset pursuant to Article 2555 of the Italian Civil Code implies that the entire regime governing business asset acquisition also applies to the sale and purchase of ships – in particular, the rules which provide that the purchaser is, in any case, jointly liable (with the seller) to the seller's creditors for the payment of all debts and liabilities that are registered in the seller's corporate books and relate to that business.

The decision confirmed that the sale and purchase of a vessel is considered a transfer of business assets. Therefore, the rules on liability also apply to ships, even if the sale and purchase agreement regards only the vessel and not the relevant contracts for its exercise.

However, the validity of the judgment is debatable, as a close analysis of the definition and scope of the provisions on business assets seems to preclude the court's conclusion. Indeed, the definition of 'business asset' in Article 2555 of the Italian Civil Code explicitly refers to "the aggregate of goods organised for the exercise of the business activity". Any type of business goods may fall within this definition, provided that:

• there are multiple goods; and
• they are linked insofar as they are all allocated and intended for the exercise of business activity.

Italian case law has extended the above definition by considering business assets not only as the aggregate of goods, but also as the aggregate of goods and contracts. Therefore, with particular reference to vessels and pursuant to the above guidelines, the regime governing the transfer of business assets applies where the purchase agreement involves the acquisition of a vessel in exercise (ie, all set for navigation, with the master and crew onboard), whenever all of the relevant contracts for its exercise are also acquired.

The courts have previously confirmed that for this particular type of acquisition, vessels can qualify as business assets since the concept of a 'vessel in exercise' encompasses not only the vessel itself, but also other goods and especially other contracts in force for the exercise of the vessel's navigation (including for the enrolment of the master and crew).

However, where the vessel is not in exercise and the sale and purchase agreement regards only the vessel itself (thus excluding the contracts for its exercise), the rules on the transfer of business assets should not apply. In such a case, there is no plurality of goods (nor of contracts) – one of the requirements under the definition of 'business assets'. In these circumstances, the vessel is merely a single good, rather than an aggregate of goods, and the sale and purchase of the vessel thus falls outside the scope of the rules on the transfer of business assets.

For further information on this topic please contact Brian Dardani at Dardani Studio Legale by telephone (+39 010 576 1816), fax (+39 010 595 7705) or email (brian.dardani@genoachambers.it). The Dardani Studio Legale website can be accessed at www.dardani.it.