ARMENIA Law and Practice Contributed by: Narine Beglaryan, Arianna Adamyan and Anahit Aloyan, Concern Dialog
3.2.16 Form and Perfection of Security Over Bank Accounts The typical form of security over a bank account is a pledge. This pledge can be perfected by notaris - ing the pledge agreement, which enables some additional mode of extrajudicial enforcement of the pledged asset, including by notifying the bank holding the debtor’s account about the pledge. Additionally, the pledge may be registered in the online register of secured property rights. 3.3 Liens 3.3.1 Third-Party Liens Under Armenian law, a lien may be imposed on the debtor’s property in the following situations: Pledge: as a security measure to secure the perfor - mance of an obligation, whether monetary or non- monetary. It is the primary contractual mechanism that allows for the enforcement of rights against a secured asset. A pledge agreement may provide for both judi - cial and extrajudicial procedures for the realisation of the subject of the pledge. Retention: by virtue of law, the creditor has the right to retain (ie, not return) the debtor’s property in his possession until the debt is repaid, under threat of satisfying the claims at the expense of the value of the retained property. Proper performance of the obligation secured by retention terminates the right of retention. In the event of non-performance by the debtor of the obli - gation secured by retention, the creditor may satisfy its claim from the value of the property by enforcing the retention and selling it. In this case, the value of the property, the procedure for enforcing the claim at the creditor’s request, and the procedure for sale are determined in accordance with the rules established for satisfying the claims of the pledgee at the expense of the pledged property. The arrest may be imposed on the property of the debtor within the framework of enforcement proceed - ings to ensure the enforcement of acts subject to compulsory enforcement (court acts, arbitration court decisions, public legal monetary claims, etc).
Armenia has not ratified the Cape Town Convention. 3.2.9 Domestic Registration of Security Assignments Governed by Foreign Laws Under Armenian law, only the rights arising from a pledge agreement on an aircraft registered in Armenia may be subject to registration in the Armenian aircraft registry. 3.2.10 Transfer of Security Interests Over Aircraft/ Engines The transfer of security interests over an aircraft is recognised in Armenia. 3.2.11 Effect of Changes in the Identity of Secured Parties If the identity of the secured parties changes after a security assignment is executed, the security interests may be at risk in cases where the consent of the per - son providing the security was not obtained. 3.2.12 “Parallel Debt” Structures “Parallel debt” structures are not used domestically. 3.2.13 Effect of Security Assignments on Residence of Secured Parties A secured party under a security assignment is gener - ally not considered to be resident, domiciled, carrying on business, or subject to taxation in Armenia merely by virtue of being a party to, or enforcing, such secu - rity assignment. 3.2.14 Perfection of Domestic Law Mortgages The pledge can be perfected by notarising the pledge agreement, thereby allowing for extrajudicial enforce - ment of the pledged asset. Additional recommenda - tions may apply depending on the transaction’s struc - ture. 3.2.15 Differences Between Security Over Aircraft and Spare Engines There is no difference between the form of security (or perfection) taken over an aircraft and that taken over spare engines, except that the pledge of the aircraft is subject to registration in the aircraft registry, while the pledge of the spare engine may be registered in the online register of secured rights to movable property.
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