MALTA Law and Practice Contributed by: Joseph Ghio, Fenech & Fenech Advocates
2.9.3 Co-Ordination, Recognition or Relief in Connection With Overseas Proceedings Article 24 of the First Schedule to the Act, which sub - stantively reproduces the text of the Convention and the Protocol, provides that where the aircraft object is situated in Malta and Malta is not the primary insol - vency jurisdiction, the Maltese courts shall, in accord - ance with the laws of Malta, co-operate to the maxi - mum extent possible with foreign courts and foreign insolvency administrators in carrying out the provi - sions of Article 23 of the First Schedule to the Act providing for remedies on insolvency. As an EU member state, Malta is required to imple - ment the provisions of Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings. The Regula - tion, which also covers pre-insolvency proceedings such as rescue, adjustment of debt, reorganisation or liquidation, sets out EU-wide rules to establish: • which court has jurisdiction over an insolvency case; • the applicable national law; and • recognition by all other EU countries of a judgment opening insolvency proceedings in one EU country. Malta has not adopted the UNCITRAL Model Law on Cross-Border Insolvency. 2.9.4 Effect of Lessee’s Insolvency on a Deregistration Power of Attorney A PoA or an IDERA will survive the liquidation of the lessee in that it will continue to be binding on the liq - uidator. 2.9.5 Other Effects of a Lessee’s Insolvency With regard to whether the lease will be set aside and whether the lessor will be prevented or delayed from repossessing the aircraft on termination of the lease, see 2.9.7 Imposition of Moratoria in Connection With Insolvency Proceedings . The aircraft will not be deemed to be part of the les - see’s property and the liquidator will be obliged to pay the lessor out of the assets of the company, if any, in accordance with the rules relating to ranking of credi - tors. See also 2.4.6 Priority of Third Parties’ Rights .
A pre-insolvency process and restructuring mecha - nism is now also possible under the PIA implementing the EU Restructuring Directive. The provisions of the PIA do not apply in so far as these may be inconsist - ent with, or in so far as these may be construed as limiting or restricting, the application of the Conven - tion and the Protocol or the Act, among others. Insolvencies and Receivership If a company is no longer viable, the CA provides for the following types of insolvency procedures: • creditors’ voluntary winding-up; or • dissolution and winding up by the court. With regards to the creditors’ voluntary winding-up, the shareholders of a company decide to dissolve the company in instances where the directors thereof do not certify that the company is solvent. Thus, the winding-up happens under the control of a liquidator appointed by the creditors. In the case of dissolution and consequential winding up by order of the court, such order may be made if, inter alia, the relevant company is unable to pay its debts. Dissolution and winding up in this case take place under the control of the court. In the case of the winding-up of a company by the court, the CA provides for the appointment of an offi - cial receiver. The official receiver is appointed, primar - ily, for the purpose of carrying out such investigations as deemed appropriate and submitting to the court, if they think fit, a preliminary report as to, inter alia, the causes of the failure of the company and whether further enquiry is desirable as to any matter relating thereto. The official receiver may also be appointed as the provisional administrator of the company before the winding-up order is made, and will assume the role of liquidator after a winding-up order is made until a liquidator is officially appointed and whenever there is a vacancy in this role.
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