Article 577 Of Italian Navigation Code: Interpretation Issues Involved With The Limitation Period Of Naval Mortgages

Interest and criticism have arisen from among legal commentators and courts in relation to article 577 of the Italian Navigation Code, due to its poor wording: "The rights arising from the grant of a mortgage shall lapse after two years have passed since maturity of the obligation". We will try to clarify the interpretation issues involved with such wording.

Before analysing that, it is worth clarifying the difference between the provisions of article 577 of the Italian Navigation Code on naval mortgages and the general rules on mortgages set out in Italian law. Indeed, according to the general discipline of the Italian Civil Code on the limitation period applying to mortgage (Articles 2847 and 2878 of the Italian Civil Code), "the registration of a mortgage shall remain effective for twenty years" and "the mortgage shall lapse if registration is not renewed within 20 years".