MALTA Law and Practice Contributed by: Joseph Ghio, Fenech & Fenech Advocates
3.2.16 Form and Perfection of Security Over Bank Accounts Security over a bank account (such as a lease receiva - bles account) is created through a contract of pledge which is perfected once notice has been given by a judicial act served on the bank or once the bank has acknowledged the pledge in writing. 3.3 Liens 3.3.1 Third-Party Liens Certain third-party debts are secured by a special privilege over the aircraft or engine in terms of and subject to the conditions of Article 42 of the Act. Such third-party debts include: • wages due to crew in respect of their employment on the aircraft; • any debt due to the holder of a possessory lien for the repair and preservation of the aircraft to the extent of the service performed on and value added to the aircraft; • the expenses incurred for the repair and preser - vation of the aircraft to the extent of the service performed on and value added to the aircraft; and • taxes, duties and/or levies due to the government of Malta in respect of the aircraft. A fleet lien is not recognised under Maltese law. Generally, a special privilege grants the person, in whose favour it may arise, priority over other credi - tors. Without prejudice to the rights of a holder of a possessory lien, it does not entitle such person to take possession of the aircraft or engine but may constitute the basis for an action in rem against the aircraft or engine. A claimant having an action in rem against an aircraft or engine may also procure the issue of a precautionary warrant (or an executive warrant, fol - lowing judicial determination of the claim) of arrest against the aircraft or engine in accordance with the provisions of the COCP. A privilege is capable of registration in terms of Article 31 of the Act. 3.3.2 Timeframe to Discharge a Lien or Mortgage A possessory lien is extinguished once the aircraft is voluntarily released from the custody of the creditor.
With regard to mortgages, the Director General shall, on production of a duly signed and attested mortgage deed together with a receipt for the secured money, make an entry in the Register to the effect that the mortgage has been discharged. 3.3.3 Register of Mortgages and Charges There is no separate register of mortgages and charg - es. Mortgages are registered in the Register in the name of the mortgagee or security trustee. The day and hour in which mortgages are produced for reg - istration are also recorded with the result that if there is more than one mortgage registered in respect of the same aircraft or share, the mortgagees shall be entitled in priority, one over the other, according to the date and the time at which each mortgage is recorded in the Register. A registered mortgage shall attach to the aircraft or share therein in respect of which it is registered until it is discharged and, inter alia, enti - tles the mortgagee or security trustee to exercise the rights reserved for mortgagees by virtue of the Act. 3.3.4 Statutory Rights of Detention or Non- Consensual Preferential Liens Statutory rights of detention or non-consensual pref - erential liens can arise over an aircraft. However, these do not extend to the fleet. 3.3.5 Verification of an Aircraft’s Freedom From Encumbrances A potential purchaser of an aircraft can search the Register to verify whether that aircraft is free of regis - tered encumbrances. 3.4 Enforcement 3.4.1 Differences Between Enforcing Security Assignments, Loans and Guarantees Given that in the event of a security by title transfer the creditor is already in possession and the legal owner of the security, on enforcement, they will have the right, by notice in writing to the debtor, to realise the property held by selling the property or (if so agreed) by setting off or netting its value and applying such value in discharge of the secured obligations.
422 CHAMBERS.COM
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