NORWAY Law and Practice Contributed by: Ida Marie Windrup, Magnus Tønseth, Markus Nilssen and Daniel Jovanovic, BAHR
Collateral Act are excluded, however. In addition, the financing and costs related to the reconstruction may be granted a lien over machinery and plant ( driftstil- behør ), inventory ( varelager ) and trade receivables ( utestående fordringer ) of the company with priority over all other liens or security interests in the relevant asset. The debtor must prove that such secured loan is needed, and security may only be granted with the consent of the restructuring committee. Affected hold- ers of security rights may petition the court for the reconstruction committee’s consent to be reversed. The court may reverse the consent if the position of the existing security rights is significantly impaired, or if the court finds that there is not a sufficient need for the loan. Finally, maritime liens will also prime a mortgage over a vessel. Maritime liens will be statutorily preferred, even if the obligation giving rise to the maritime lien arose after perfection of the vessel mortgage. 6. Enforcement 6.1 Enforcement of Collateral by Secured Lenders The enforcement route under Norwegian law varies based on the asset type. The Enforcement Act sets out the mandatory pro- visions for the individual enforcement of security interests over assets such as real estate, vessels, aircrafts and operating assets. Agreements made pre- enforcement which stipulate alternative enforcement procedures and relate to non-financial collateral (see below) are prohibited, including private repossession or any kind of self-help remedy. However, following an enforcement situation, the security agent and the security provider may agree on alternative enforce- ment procedures. The main enforcement measures are forced sale through a third party appointed by the court or by public auction. In order to enforce a claim, the claimant must have sufficient legal grounds for enforcement and perfect- ed (registered) security would in practice constitute grounds for enforcement. Additionally, the following conditions must be met:
• the relevant claim must be due, payable and in default; • the claimant must be entitled to file the petition for enforcement and the claim must be directed at the security provider; and • in relation to perfected security, a written notice must have been served on the security provider two weeks prior to filing a petition for enforcement. However, the provisions of the Enforcement Act do not apply to security established in accordance with the Financial Collateral Act over assets which may be charged as financial collateral, including security over financial instruments (including shares) and bank deposits. Instead, security interests over financial col- lateral may be enforced through such enforcement procedures and in such manner as agreed upon by the parties in the relevant security document, which may include forced sale, appropriation and transfer of the relevant asset(s) by the security agent. Further, security established under the Financial Collateral Act may be enforced notwithstanding the opening of reconstruction or bankruptcy proceedings against the security provider. In light of the foregoing, security cre- ated over financial collateral is effective security. How- ever, both the enforcement and valuation of financial collateral in connection thereto need to be made on the basis of “commercially reasonable terms”. 6.2 Foreign Law and Jurisdiction A Norwegian company may enter into contracts gov- erned by foreign law, and subject to foreign jurisdic- tion, with the exception that it will usually not be able to circumvent statutory provisions of Norwegian law by choosing foreign law as the governing law. 6.3 Foreign Court Judgments The courts of Norway will enforce final and conclusive judgments of states party to the Lugano Convention of 2007 and/or obtained in any UK jurisdiction (sub- ject to the terms of the convention of 12 June 1961 between the United Kingdom and Norway providing for the reciprocal recognition and enforcement of judgments in civil matters). A judgment of a foreign court or tribunal of a state not party to the Lugano Convention can be directly enforceable in Norway subject to fulfilling certain requirements.
458 CHAMBERS.COM
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