Subject matter of the right of security - Law on right of security...

By the LAW ON RIGHT OF SECURITY UPON MOVABLE OBJECTS FILED IN REGISTRY (“Official Herald of the Republic of Serbia”, Nos. 57/2003, 61/2005, 64/2006 – correction, 99/2011 – other laws and 31/2019) shall be regulated the pledge, without delivering in possession, of movable objects and rights to secure a claim of a creditor, the contract of security, the rights and obligations of contracting parties, the filing of the right of security in the Registry, the settling of a creditor secured by pledge, and the termination of the right of security.

Movable objects and rights shall be pledged by filing in the Register of Pledges on Movable Property and Rights instituted in the Serbian Business Registers Agency.

Legal relations that are not regulated by the LAW ON RIGHT OF SECURITY UPON MOVABLE OBJECTS FILED IN REGISTRY (“Official Herald of the Republic of Serbia”, Nos. 57/2003, 61/2005, 64/2006 – correction, 99/2011 – other laws and 31/2019) shall be subject to regulations covering obligations (contract and torts) and property law relations, and to additional rules.

The subject matter of the right to security

The subject matter of the right of security shall be regulated by the provisions of Articles from 9 to 14 of the LAW ON RIGHT OF SECURITY UPON MOVABLE OBJECTS FILED IN REGISTRY (“Official Herald of the Republic of Serbia”, Nos. 57/2003, 61/2005, 64/2006 – correction, 99/2011 – other laws and 31/2019).

Following the provisions of the law as mentioned above, the subject matter of the right of security may be movable objects, funds on a particular bank account, right of claims and other rights, co-ownership share, future objects and rights.

Provisions of the LAW ON RIGHT OF SECURITY UPON MOVABLE OBJECTS FILED IN REGISTRY (“Official Herald of the Republic of Serbia”, Nos. 57/2003, 61/2005, 64/2006 correction, 99/2011 – other laws and 31/2019) shall not apply to security upon:

ships and aircraft, for which registries are instituted according to special regulations, securities for which a registry is instituted according to special regulations for filing third-party rights upon securities
securities for which a registry is instituted according to special regulations for filing third party rights upon securities and
intellectual property rights, while the pledge upon these rights shall be filed in the Registry of the institution in charge of intellectual property, i.e., brand registry, patent registry, small patents registry, Registry of models, sample registry, point of origin marks registry and topographies registry.

Movable Objects

The subject matter of the right of security may be an individually specified object that the pledger may freely dispose of. It is also possible to pledge movables set in kind if the quantity or number and how they can be distinguished from other properties of the same type are stipulated by the contract.

The subject matter of the right of security may also be a collection of movables located at a certain place, including inventory which, in terms of the LAW ON RIGHT OF SECURITY UPON MOVABLE OBJECTS FILED IN REGISTRY ( “Official Herald of the Republic of Serbia”, Nos. 57/2003, 61/2005, 64/2006 – correction, 99/2011 – other laws and 31/2019), is made of movables that are intended for sale or lease, as well as raw materials and materials used for the performance of commercial activity.

In this case, the right of security is spread, by operation of law, to all movables that become an integral part of the collection of movables after the establishment of the right of security if the pledger owns them.

Pledging Funds on a Special Bank Account

The subject of a right of security may also be the claims of a pledger, which, following the contracts from which they originate, are paid into a particular bank account of the pledger (pledging funds on one specific bank account). In this case, the subject of the right of security are the pledger’s claims under the contracts in question, and the data on the particular bank account of the pledger to which those receivables are paid are entered in the Security Registry.

Right of Claim and Other Rights

The subject matter of the right of security may be the pledger’s right to claim against a debtor also if the pledgee is a debtor to the pledger, except for those claims whose transfer is prohibited by law and those that are connected to a specific person or may not be transferred to another.

Right of security upon a claim is acquired by registration in the Security Registry based on a contract on pledging the claim, regardless of whether the debtor was previously informed of the pledging.

The subject of a right of security may also be shares and other property rights that are at the free disposal of their owner.

Unless otherwise prescribed, the provisions relating to the pledge upon objects shall also apply to the pledging of claims and other rights.

Effect of Pledging a Claim

Until being notified in writing on the take the place of the right of security, a debtor of the pledged claim may fulfil his obligation to the pledger. The debtor may be notified of a pledge upon a claim by the pledger or the pledgee.

Beginning with the day of notifying of the existence of the right of security, the debtor of the pledged claim may settle the debt only to the pledgee and not to the pledger unless the pledgee has instructed him otherwise.

A certificate from the Registry confirming that the creditor has security right upon a claim shall be proof for the debtor of the pledged claim that he is to pay the claim to the pledgee.

Co-ownership Share

A co-ownership share of a movable object or a collection of movables may be a subject of a pledge. Also, an ideal part of property rights may be pledged.

Future Objects and Rights

A subject of the right of security may be the objects or rights the pledger will acquire. The right of security shall occur when the pledger acquires the right of ownership over the object and/or the right to claim or some other property right.

The creditor is entitled to request to file in the Security Registry the right of pledge on the future object.

Last update: 23. 08. 2023.