POLAND Law and Practice Contributed by: Karol Tatara, Paweł Kuglarz, Anna Czarnota and Mateusz Kaliński, Tatara & Partners Restructuring & Insolvency Law Firm
Registration in the Land and Mortgage Register or the Register of Pledges A mortgage and registered pledge become effective provided that a competent court makes a relevant entry in the Land and Mortgage Register or the Reg - ister of Pledges, respectively. If the application for entering a mortgage or registered pledge into the respective register does not comply with the formal requirements set out in Polish law, depending on the degree and type of defect (in par - ticular errors and omissions), the court will request the applicant to rectify the errors or omissions by returning the application to the party concerned, or it will dismiss the application if the defect cannot be rectified. Enforcement of a Security A security will most often be enforced in judicial pro - ceedings, hence the biggest practical issue related thereto is the necessity to involve the court. This means that enforcing a security may take a long time. Moreover, after obtaining the enforcement title in judi - cial proceedings, it is also usually necessary to initiate enforcement proceedings with the involvement of a court bailiff (enforcement officer). In most situations, enforcing a security requires the creditor to take a number of actions, which extends the duration of the proceedings. Furthermore, the initiation of legal pro - ceedings also entails the payment of court fees. In some cases, it is possible to reduce the number of actions that need to be taken in judicial proceedings (eg, in the case of a notarial deed in which the debtors submit themselves to enforcement), as well as within extra-judicial proceedings, such as, in the case of tak - ing over ownership of the pledged property or by sale of an asset encumbered with a registered pledge in a public tender conducted by a notary or court bailiff (enforcement officer). The above-mentioned rights can also be exercised in restructuring situations, but they cannot legally block or disrupt restructuring proceedings. Of course, the enforcement of a security may practically make restructuring impossible, therefore it is important to communicate with the secured creditors.
arrangement) may be secured on the components of the arrangement estate or remedial estate with a mort - gage, pledge, registered pledge or maritime mortgage – subject to the consent of the creditors’ committee. 2.3 Secured Creditors Under Polish law, secured creditors enjoy special treatment, because their secured receivables are sub - ject to satisfaction from the sum obtained by liquida - tion of the encumbered object. There are several possibilities with regard to securi - ties. Registered Pledge A registered pledge can be established on movable property and transferable property rights. It is gov - erned by the Act on Registered Pledge and Registry of Pledges. Signing the pledge agreement and sub - sequently entering the pledge into the Register of Pledges are required in order to successfully establish a registered pledge. The pledge agreement should be made in writing. Mortgage A mortgage may be established on immovable prop - erty. It is governed by the Act on Land and Mortgage Registers and Mortgage. There are two main types of mortgages regulated under the Act on Land and Mort - gage Registers and Mortgage: a contractual mortgage and a compulsory mortgage. The mortgage will be established provided that the relevant entry has been made in the Land and Mortgage Register. It is also necessary to comply with requirements regarding the document that constitutes the basis for entering a mortgage into the Land and Mortgage Register (eg, a notarial deed or court’s decision in the case of a com - pulsory mortgage), as well as requirements regarding the form of the document (drawn up in writing with a signature certified by a notary, or in the form of a notarial deed). There are also less popular securities in the Polish legal system, such as, an ordinary pledge, a treasury pledge or a maritime mortgage.
378 CHAMBERS.COM
Powered by FlippingBook