ISRAEL Law and Practice Contributed by: Charles Gottlieb and Osnat Issan, Gottlieb Gera & Co Advocates
3.3 Liens 3.3.1 Third-Party Liens
ness days of the receipt by the Companies Registrar of the request to discharge. 3.3.3 Register of Mortgages and Charges Mortgage interests may be registered: • in the Companies Registrar, where they shall take the form of a charge, if the chargor is an Israeli company; or • in the Pledges Registrar, where they shall take the form of a pledge, if the pledgor is a foreign entity or an Israeli individual or partnership. Upon the registration of a charge or pledge over an air - craft, the interests of the mortgagee or security trustee may be noted in the Aircraft Register and endorsed upon the aircraft’s certificate of registration. If a pledge or charge is registered over an aircraft in the Aircraft Register, the Registrar will not permit any changes to the registration of the aircraft without one of the following: • the consent of the holder of the charge or pledge; • proof of the removal of the charge or pledge; or • an order of the court or the registrar of the execu - tion office expressly transferring or cancelling the charge or pledge. The holder of a fixed charge or pledge will generally have priority over other creditors; however, certain lim - ited creditors (eg, holders of possessory liens such as mechanics’ liens) may be granted priority over a secured creditor. Upon the commencement of insol - vency proceedings, the above-mentioned priority may further vary in accordance with the Insolvency Law and the rulings of the courts from time to time. 3.3.4 Statutory Rights of Detention or Non- Consensual Preferential Liens See 2.4.6 Priority of Third Parties’ Rights and 3.3.1 Third-Party Liens . 3.3.5 Verification of an Aircraft’s Freedom From Encumbrances To verify that an aircraft is free of encumbrances, it would be recommended that a potential purchaser search the Israeli Registrar of Aircraft, together with
Israeli law provides certain third parties with the right to take a lien over an asset, such as a contractor that was given possession of an asset pursuant to the Contract for Services Law 1974 and an injured party pursuant to the Contract (Remedies for Breach of Contract) Law 1970. According to the applicable Israeli law, repairer’s costs and liens of a similar nature apply to the specific asset in possession of the contractor that was the provider to the contractor for the performance of the servic - es and is limited to cover debt due and payable for the contracting transaction. The determination as to whether a contracting transaction covers only a spe - cific work actually performed on the asset or series of transactions performed by the contractor is depend - ent upon the facts and circumstances of each case. Fleet-wide liens are generally not recognised in Israel. Pursuant to Israeli law, a lien expires once the asset is released from the possession of the applicable third- party creditor. Thus, where a third party wishes to enforce a lien, it should hold on to the detained asset until the full repayment of its debt. A holder of a pos - sessory lien is deemed to be a secured creditor. If the debtor has entered into insolvency proceedings, how - ever, the Insolvency Law provides that the court may instruct the holder of the lien to transfer the detained asset to the insolvency trustee and the secured debt shall be deemed to be an expense of the insolvency proceedings, which is granted priority over secured creditors. 3.3.2 Timeframe to Discharge a Lien or Mortgage A pledge over an aircraft registered in the Pledges Registrar may be discharged on the day on which the request to discharge the pledge is submitted, if submitted physically at the offices of the Pledges Registrar or submitted electronically by the debtor. Otherwise, it will be discharged within three business days from the receipt of such a request. A charge registered over an aircraft with the Compa - nies Registrar is generally discharged within 14 busi -
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