Cap. 16 Art. 1996ARight of creditor to modify own rights.

(1) It shall be lawful for a creditor to subordinate, postpone, waive or otherwise modify his existing or future rights of payment, enforcement, ranking and other similar existing or future rights in favour of another person.

Such subordinatation, postponement, waiver, modification or similar action may be made by agreement with or by unilateral declaration to any person, including another creditor, whether determined or yet to be determined at the time of the entry of such agreement or the making of such declaration. The words "creditor" and "person" as used in this article shall include a class of creditors or a class of persons, as the case may be, whether the members of either such class are determinate or yet to be determined.

(2) Notwithstanding that the right may arise from a public deed, be registered in a public register or be subject to any other formality, an agreement or declaration as contemplated by this article shall be valid and enforceable between the relevant parties if made in writing without the need of any other formality or registration: Provided that such agreement or declaration may be registered by any party to such agreement and by any maker of such declaration -

(a) at the ship registry by means of an annotation,

(b) at the aircraft registry by means of an annotation,

(c) in all other cases, at the Public Registry by means of a note, and in such case it shall have effect in relation to third parties.

(3) Such subordination, postponement, waiver, modification or other similar action in respect of any existing or future rights may be governed by a trust instrument in terms of which rights of any persons, including creditors or debtors, present or future, are regulated.

(4) Any agreement or declaration as referred to in sub-article

(1) hereof shall be valid and enforceable in accordance with its terms, and shall not be affected by the insolvency of any person bound by or entitled under such agreement or unilateral declaration or of the relevant debtor.