Enforcement over an aircraft and over the vessel – same rules before and some new ones after initiation of a bankruptcy procedure
Author: Ana Vrsaljko Metelko
Key words: Claim, enforcement over an aircraft and over a vessel, Maritime Code, Enforcement Act, bankruptcy, bankruptcy creditors, creditors with a separate collection right, creditors with an exclusion right, enforcement execution in the bankruptcy procedure, Bankruptcy Act
In addition to 9 articles (Articles 167 – 175) of the Act on Obligatory and Proprietary Rights in the Air Traffic the majority of the provisions of the Maritime Code on the enforcement and the procedure of securing the claim over a vessel, precisely the provisions of the Articles 854, 857, 863, 864, 867 – 988, apply on the on the procedures of enforcement and of securing the claims over an aircraft.
Provisions of the general piece of legislation regulating the area of enforcement and securing the claims, the Enforcement Act apply to a lesser extent on the enforcement over a vessel and over an aircraft i.e. the application of that regulation is alternative.
Maritime Code with respect to the enforcement over a vessel and over an aircraft provides 2 types of procedure:
- monetary claim enforcement
- enforcement for a delivery of a vessel/aircraft
and with respect to these procedures it provides detailed rules on the content of the enforcement proposal and the enforcement decision, jurisdiction (competence) for deciding on the proposal, exemption from the enforcement, enforcement actions, determination of the value of the vessel/aircraft, method and terms of sale, creditors’ settlement, termination of the procedure.
Both types of the procedure have experienced certain changes provided under the provisions of the Bankruptcy Act. That regulation is in force as of 1 September 2015 and it has introduced significant changes into Croatian bankruptcy legislation – in some parts the legislator has kept previous legislation solutions so certain rules related to the enforcement procedures have not been changed whilst for some it has introduced new solutions. One of such rules is the status of enforcement procedures over a vessel and over an aircraft initiated by the creditors with separate collection right (creditors entitled to a separate collection i.e. the ones entitled to a pledge or collection right over an asset or a right which is registered with the public registers).
Under the provisions of the previous Bankruptcy Act the position of the bankruptcy creditors in the context of the enforcement creditor’s powers in the enforcement proceedings was different from the one that was granted to the creditors with separate collection right and to the creditors with an exclusion right (creditors that, on the basis of theirs some proprietary or personal right, can prove that some asset does not belong to the insolvency estate). It was regulated that the bankruptcy creditors are not entitled to initiate the enforcement nor the procedure of securing the claim on the parts of the debtor’s assets belonging to the insolvency estate nor on the other debtor’s assets after commencement of the bankruptcy procedure and the enforcement procedures pending at the time of the commencement of the bankruptcy procedures shall be suspended and finally terminated by the enforcement court. With respect to the creditors with separate collection right and the creditors with an exclusion right it was regulated that they are entitled to initiate the enforcement or the procedure of securing the claim pursuant to the general rules of the enforcement procedure and the suspended enforcement and the procedures of securing the claim initiated by those creditors before commencement of the bankruptcy shall be continued and conducted by the enforcement court pursuant to the general rules of the enforcement procedure.
With respect to the encashment of a vessel and an aircraft that piece of legislation has regulated different rules depending on the fact whether the creditor with separate collection right has initiated enforcement procedure or not so it provided (i) the sale executed by the bankruptcy judge on the basis of the proposal of the bankruptcy administrator or (ii) the sale in the enforcement procedure initiated by the creditor with separate collection right.
Under the provisions of the new Bankruptcy Act the status of the bankruptcy creditors and the creditors with an exclusion right remained whilst the rules on the powers of the creditors with separate collection right have been amended in a manner that they are no longer entitled to initiate a separate enforcement nor procedure of securing the claims and the procedures pending at the moment of commencement of the bankruptcy shall be suspended and then continued and conducted by the bankruptcy court in the bankruptcy procedure applying the rules on encashment of the assets over which a separate collection right exists.
Additionally, the rules on values under which the vessel/aircraft cannot be sold which rules differ from the ones proscribed by the Maritime Code have been introduced in the rules on encashment of the vessels and aircrafts.
Subject matter of this article is the analysis of the relations and the potential collision of the said regulations in the context of the enforcement over a vessel and over an aircraft before and after the initiation of the bankruptcy procedure.
