Cap. 16 Art. 2095GEnforcement of rights.

(1) The terms of the agreement relating to the transfer of property by way of security shall regulate all matters between the debtor, the transferor and the creditor, including the rights of the creditor to enforce the security in case of default.

(2) Subject to the terms of the agreement between the parties, in the event of a default, the creditor shall, upon giving notice in writing to the debtor and the transferor of property by way of security, if different, be entitled to realise the property transferred in one of the following ways:

(a) by sale; or

(b) by setting off or netting their value, and applying their value in discharge of the secured obligations.

(3) Set-off or netting shall only be possible if it has been expressly agreed to in the agreement between the parties.

(4) Where a creditor exercises his rights as aforesaid, he must exercise such rights in a commercially reasonable manner, shall be bound by fiduciary obligations in that regard and shall be bound to account to the debtor as to the value used for such enforcement.

(5) Without prejudice to the title vested in the creditor, the creditor shall be entitled, in any case, to demand the sale by judicial auction of the property transferred by way of security and the provisions of Sub-title II of Title VII of Part I of Book Second of Code of Organization and Civil Procedure on Judicial Sales by

Auction shall apply with such variation as is required due to the context.

(6) Where the property transferred by way of security is in the possession of the debtor, the Court shall afford such support to the creditor as may be necessary to take possession of the property for the purposes of any mode of enforcement as aforesaid.

(7) Any enforcement pursuant to the preceding sub-articles shall be without prejudice to the rights of any third party who may have acquired any personal or real rights over the property from the debtor prior to the transfer by way of security, or, if after, with the prior written consent and participation of the creditor; provided that when the security arrangement is not binding with regard to third parties or otherwise publicly known through -

(a) registration of the transfer in a public registry; or

(b) notice to or acknowledgement by the debtor of a debt in accordance with article 1471 (as modified by sub-article (7) of article 2095F), or

(c) transfer of possession of the property to the creditor or a security trustee, any person acquiring rights over the said property in good faith for value shall also be protected.

(8) It shall be lawful for the parties to enter into a close out netting agreement in accordance with the Set-Off and Netting on Insolvency Act to be applied when a default takes place.