Law & Regulation
Law No. 16 of 2021 on the Mortgage of Movable Assets
Creates a modern framework for granting and publicising security over qualifying movable assets without necessarily transferring possession: the security agreement, collateral description, registry notice, priority and enforcement, subject to exclusions and special regimes.
Legal Significance
What This Instrument Does
Creates a modern framework for granting and publicising security over qualifying movable assets without necessarily transferring possession. It addresses the security agreement, collateral description, registry notice, priority and enforcement, subject to exclusions and special regimes.
Why It Matters
Infrastructure borrowers own receivables, bank-account rights, equipment, inventory and other movable value that may not fit a traditional possessory pledge. The law can support a broader collateral package, but asset eligibility, priority and enforcement must be tested asset by asset.
Key Provisions
- Scope and excluded/specially regulated assets
Sets out which assets fall within or outside the regime.
- Grantor, secured creditor and secured obligation
Defines the core parties and the obligation being secured.
- Creation and minimum content of the security agreement
Sets the required elements for a valid security agreement.
- Present and future movable assets and adequate description
Covers present and future assets, subject to adequate description.
- Proceeds, substitutions and after-acquired value
Extends coverage to proceeds and substitutions where covered.
- Third-party effectiveness through registry notice
Governs how security becomes effective against third parties.
- Registry content, amendment, renewal and discharge
Governs the registry record and its lifecycle.
- Priority among competing secured and other claimants
Sets priority rules among competing claimants.
- Transfers of collateral and ordinary-course issues
Addresses transfers of collateral and ordinary-course dealings.
- Debtor use, preservation and information duties
Sets duties on the debtor regarding use, preservation and information.
- Default and enforcement routes
Sets out the routes available on default.
- Notices, sale/disposition and distribution of proceeds
Governs enforcement notices, disposition and distribution of proceeds.
- Cross-border, conflict and special-asset sensitivities
Flags cross-border and special-asset considerations.
- Court, regulatory and public-order safeguards
Preserves court, regulatory and public-order safeguards.
When You Would Use This
Project-finance collateral mapping
Mapping which project assets can be secured under the regime.
Receivables security
Structuring security over receivables.
Equipment and inventory finance
Structuring security over equipment and inventory.
Refinancing
Reviewing collateral continuity in a refinancing.
Intercreditor diligence
Assessing priority as part of intercreditor diligence.
Registry searches
Conducting registry searches before a transaction.
Perfection opinions
Supporting perfection opinions.
Amendments/releases
Structuring amendments or releases of security.
Enforcement planning
Planning enforcement strategy on default.
InfraLex Relevance
The record should distinguish three questions: was security validly created between the parties, was it made effective against third parties, and where does it rank? A registry filing alone does not answer every creation, ownership, authorization or enforcement issue.
Legal Framework Position
- Security / CollateralPrimary / Framework Instrument
- Banking & FinanceSupporting / Related Instrument
Instrument Overview
- Official Citation
- Law No. 16 of 2021
- Instrument Type
- Law / Act
- Source Language
- Arabic
- Enactment Date
- 1 September 2021