The President approves measures to enhance the legal protection of creditors

Tashkent, Uzbekistan (UzDaily.com) -- President of Uzbekistan Shavkat Mirziyoyev signed a resolution “On measures to strengthen the legal protection of creditors and improve financing mechanisms for entrepreneurial activities”.

According to the document, from January 1, 2019, the claims of creditors, secured by a pledge, are satisfied from the value of the pledged property in calendar order of the date of making an entry in the pledge register of their rights to the debtor’s property in the event of default or improper performance by the debtor.

At the same time, this procedure does not apply to the sequence of debiting funds from the debtor’s account if they are insufficient to meet all the demands made on it.

The pledgee lenders who have made entries in the pledge register of their rights to the debtor’s property have a preferential right to satisfy their claims before the pledgee lenders who have not made the corresponding entry in the pledge register.

The lender who financed the purchase of property under its security has a preferential right to satisfy his claims at the expense of this property, provided that he makes an appropriate entry in the pledge register.

Subsequent pledge is allowed provided that an appropriate entry is made in the pledge register without obtaining the consent of the previous pledgee.

The lease of the pledged property by the pledger is permitted without obtaining the consent of the pledgee, subject to the entry in the pledge register of the relevant entry and notification of the pledgee.

The head of Uzbekistan expanded:

• preemptive right of the creditor also to the fruits and incomes (proceeds) received from the use or sale of the property of the debtor, provided as a security for the fulfillment of obligations, unless otherwise provided by the contract;
• established for pledge the procedure for repossession of property (property right), which is the object of leasing, purchase and sale with the installment plan of payment, hiring and other transactions where this property acts as a security for the performance of obligations;
• institution of a court order in case of foreclosure of movable property acting as a subject of pledge or a subject of securing the performance of a creditor’s obligations, if there is a written transaction.

The President authorized the identification of the secured obligation by specifying the maximum amount of the obligation that can be repaid from the value of this property.

Transactions involving property security for the fulfillment of obligations, including a pledge agreement, may be concluded by a general description, including a separate category, of the subject property security for the performance of an obligation without specification.

Property levied on the claims of mortgagees or other creditors whose claims are secured by this property can be sold on credit, by installments, leasing or through other transactions not prohibited by law, leased, except in cases of forced sale of property in accordance with the legislation on the execution of judicial acts and acts of other bodies.