Cap. 503 Art. 44Ranking of creditors.

(1) The debts specified in article 42(1) shall rank in the order therein set out and in preference to all other claims; provided that the person in possession of the aircraft enjoying a possessory lien shall not be constrained to release the aircraft until the sums due to him are unconditionally discharged or otherwise secured to his satisfaction and in any such case shall rank first on such security as may be granted.

(2) Any debt secured by a mortgage registered in the Malta Aircraft Register or a charge in the International Registry or secured by a foreign mortgage recognised under this Act shall rank after the debts secured by possessory liens and, subject to sub-article (5), special privileges on aircraft in terms of article 42(1) and in preference to other hypothecary and privileged claims.

(3) The debts secured by special privileges referred to in article 42(2) shall, on registration in the International Registry, and subject to sub-article (5), rank after the debts referred to in article 42(1) but after all debts secured by mortgages and charges in the International Registry registered prior to the date of the registration of the relevant privilege, and thereafter shall rank:

(a) other overriding non-consensual rights and interests arising under foreign law which do not have priority under Chapter X of the First Schedule;

(b) any security interest governed by a foreign law and recognised in accordance with article 41 which shall rank after the claims referred to in the preceding articles; and

(c) general hypothecs and privileges, whether general or over particular movables, which shall rank after the debts referred to in the preceding articles.

(4) Where the fund is insufficient -

(a) competing creditors under the same heading of privileges in article 42(1) shall rank equally and shall share in such fund to the amount of their pro rata claim;

(b) registered special privileges referred to in article 42(2) and mortgages shall rank in order of date and time in accordance with article 32(1), subject to the specific exceptions laid down in sub-articles (2) and (3) of the same article;

(c) rights referred to in sub-article (3)(a) and (b) shall rank among themselves equally and shall share in such fund up to the amount of their claim and rights pro rata referred to in sub-article (3)(c) shall rank among themselves according to the provisions of the Civil

Code.

(5) The preference and rights of privileges listed in article 42(2) shall arise only in relation to the particular title of an operator of an aircraft, whether being the owner or a person under a temporary title, and shall not bind any other party or encumber his assets.