Cap. 503 Art. 33Rights of mortgagee.

(1) Without prejudice to any default remedies as may be applicable by virtue of the First Schedule, the mortgagee shall, in the event of default of any term or condition of a registered mortgage or of any document or agreement referred to therein, and upon giving notice in writing to the debtor -

(a) be entitled to take possession of the aircraft or share therein in respect of which he is registered; but except so far as may be necessary for making a secured aircraft or share available as a security for the secured debt, the mortgagee shall not, by reason of the mortgage, be deemed to be the owner of the aircraft or share, nor shall the mortgagor be deemed to have ceased to be the owner thereof;

(b) have power absolutely to sell the aircraft or share in respect of which he is registered; but where there are more persons than one registered as mortgagees of the same aircraft or share, a subsequent mortgagee shall not, except under the order of a court of competent jurisdiction, sell the aircraft or share without the concurrence of every prior mortgagee; and if the proceeds of sale, after discharging the secured debt, show a surplus in his hands, the mortgagee shall hold under trust or deposit the same for the benefit of other creditors and of the mortgagor debtor;

(c) have power to apply for any extensions, pay fees, receive certificates, and generally do all such things in the name of the owner or registrant as may be required in order to maintain the status and validity of the registration of the aircraft;

(d) have the power to lease the aircraft so as to generate income therefrom; and

(e) have the power to receive any payment of the price, lease payments, and any other income which may be generated from the management of the aircraft. For the purposes of this sub-article, the requirement to give notice in writing to the debtor shall be considered to have been satisfied if the mortgagee or holder of any security interest gives the notice to the debtor by means of an electronic communication in accordance with the Electronic Commerce Act, or in such other manner as agreed between the parties, or if such notice is served at the registered office of the debtor, if the registered address of the owner is in Malta, or on a curator appointed by the court to represent the debtor and the aircraft, and in the case of an international registrant, on the resident agent in accordance with article 23(1)(g).

(2) The powers referred to in sub-article (1) may be exercised by the mortgagee without the need of the leave of any court and to the extent that any mortgagee seeks the support of the court due to any hindrance of any person to the exercise of his rights, the court shall render full support to the mortgagee as expeditiously as possible.

(3) The said powers shall be exercisable in accordance with the terms of any agreement governing the mortgage.

(4) The mortgagee may alternatively apply to the court for an order authorising or directing any of the acts referred to in sub-article (1) and may apply to the court for the judicial sale of the aircraft or engine in which case sub-articles (5) to (8) shall apply.

(5) A registered mortgage shall be an executive title for the purposes of article 253 of the Code of Organization and Civil Procedure:

(a) where the obligation it secures is a debt certain, liquidated and due; or

(b) where a maximum sum secured thereby is expressly stated in the instrument creating the security and such figure is recorded in the register for public notice.

(6) The provisions of this article shall also apply to all registered mortgages which secure debts resulting from any account current or overdraft or other credit facility as well as mortgages which secure future obligations.

(7) In connection with the enforcement of any mortgage, for the purpose of determining -

(a) the amount certain, liquidated and due, or

(b) the mortgage secures a future obligation within an expressly stated maximum, in connection with the enforcement of the security involving the sale of an aircraft, the creditor shall specify the sum due at the time of enforcement by means of a sworn affidavit notified or served on the debtor. This shall be without prejudice to the right of the debtor to pay such sum in settlement of the amount due to the secured creditor, or the right of any interested party to contest such amount according to law, even after payment of the sum claimed, but no person shall have the right to hinder the exercise of the rights of the secured creditor in any manner.

(8) Any judicial proceedings to enforce a mortgage shall be carried out in accordance with the procedure described in article 187(4), (5) and (6) of the Code of Organization and Civil

Procedure, provided that in the case of an international registrant registered under Part III, service on the debtor shall be carried out by serving a copy of the proceedings on the resident agent in accordance with article 22(1)(c).

(9) Subject to article 43, the debtor and the person in possession of the aircraft shall be obliged to co-operate fully with the mortgagee enforcing his rights under this article including, but not limited to, surrendering and submitting all data, manuals, technical records, parts, accessories and appurtenances belonging to the aircraft.