Cap. 503 Art. 27Priority of claims on aircraft over all other debts of owner.

(1) All registered mortgages, any special privileges and all actions and claims to which an aircraft may be subject shall not be affected by the bankruptcy and, or insolvency of the mortgagor or owner, happening after the date on which the mortgage was created, or the special privilege, action or claim arose, notwithstanding that the owner at the commencement of the bankruptcy and, or insolvency had the aircraft in his possession, order or disposition, or was the reputed owner thereof, and such mortgage, privilege, action or claim shall have preference, on the said aircraft, over all other debts, claims or interests of any other creditor of the bankrupt or of any curator, liquidator, receiver or trustee, acting on behalf of any other creditors: Provided that such mortgagee or claimant shall contribute to the costs of winding up, including the liquidator’s fees and expenses in the event that he participates in the liquidation proceedings and either:

(a) is ordered to do so by the court, which shall determine the extent of his liability, or

(b) he expressly agrees to do so in writing.

(2) All owners, lessors, lessees, creditors, mortgagees, holders of security interests and any other persons having an interest in or in relation to an aircraft may enter into an inter-creditor agreement which shall govern the relevant relationship and shall be binding and effective in accordance with its terms. Article 1996A of the Civil Code shall apply to such agreements.

(3) Any judicial sale proceedings instituted and any other enforcement actions initiated by any registered mortgagee or creditor enjoying a special privilege under article 42(1), shall not be interrupted or in any way hindered by any curator in bankruptcy and, or insolvency, whether voluntary or compulsory, or any liquidator, receiver or trustee of the owner for any cause other than a cause that could be set up by the owner of an aircraft.

(4) The provisions of the preceding sub-article shall apply mutatis mutandis to proceedings for the termination of any agreement or the taking of possession or control of an aircraft by the holder of a security interest instituted against a conditional buyer or lessee.

(5) This article shall also apply to any international interest and, or to any security interest registered in the International Registry.

(6) The provisions of article 329B of the Companies Act shall not apply to a Maltese company whose main object or function is to own, hold, operate, charter, manage or lease any aircraft or aircraft engine.