MALTA Law and Practice Contributed by: Joseph Ghio, Fenech & Fenech Advocates
the transferor and the creditor enter into an agreement in writing designating the following: • the property being transferred; • the secured obligations, which may be existing or future obligations; and • the rights of the transferee in the event of default as stipulated in the agreement. A transfer by way of security operates as a transfer with regard to third parties: • in the case of debts and rights against an obligor, when the obliger is notified of or acknowledges the assignment; or • in the case where the rights consist of property, there is no obligor and the title to the property is registered in a public registry, when the transfer is registered in the relevant register. Failure to comply with the above-mentioned formali - ties would result in an invalid and unenforceable secu - rity assignment. If executed outside Malta, it is advisable for a secu - rity assignment to be translated, certified, notarised or legalised to be enforceable against a domestic party. 3.2.8 Domestic Law Security Instruments Where a security assignment governed by English or New York law is taken in respect of an aircraft regis - tered in Malta, no Maltese law security instrument is required. To make Cape Town filings, it is not manda - tory to have a domestic law security instrument and/ or to make local law filings. The costs for executing a domestic law security instrument and to complete local law filings depend on the type of security in question. Security assignment agreements do not need to be registered. If the security assignment has been reg - istered on the International Registry, such must be recorded in the Register. Where copies of agreements are submitted to the Director General, a certified true copy of the original will suffice if the document was 3.2.9 Domestic Registration of Security Assignments Governed by Foreign Laws
signed in Europe. Otherwise, the copy must be certi - fied, notarised and apostilled. 3.2.10 Transfer of Security Interests Over Aircraft/ Engines The transfer of security interests over an aircraft and/ or engines is recognised. 3.2.11 Effect of Changes in the Identity of Secured Parties A change in the underlying beneficiaries of the secu - rity trust held by the trustee will not jeopardise the security assignment. 3.2.12 “Parallel Debt” Structures Under Maltese law, the security trustee has an inde - pendent right to the secured debt. 3.2.13 Effect of Security Assignments on Residence of Secured Parties A secured party under a security assignment would not be deemed to be resident, domiciled, carrying on business or subject to any taxes by reason of its being a party to, or of its enforcement of, such security assignment. 3.2.14 Perfection of Domestic Law Mortgages A mortgage over an aircraft or a share therein is pro - vided on a statutory form and must be executed by the owner of the aircraft or its duly authorised rep - resentatives (mortgagor) in favour of its creditor or security trustee (mortgagee) in the presence of, and attested by, a witness or witnesses. Subsequently, the mortgage must be submitted to the Director General for registration. The Director General must record such mortgage in the order of time (day and hour) in which it is produced to him for that pur - pose as well as any other relevant details or instruc - tions. 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 mortgages cannot be registered with regard to the latter alone.
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