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Priority Among Creditors

In relation to the issue of priority generally Polish law relies on a Latin rule of prior tempore, potior iure. Accordingly, who files for the registration earlier entertains priority. Precisely, the day of filling an application for registration at the court decides upon the priority among the registered interests. When two applications are filled at a court at the same day it is assumed they were filed simultaneously (art. 16 of the Act on Registered Pledge and the Registry of Pledges,[1] hereinafter ‘the Registered Pledge Act’). Moreover, the creditor secured by the registered pledge entertains priority before any creditors with personal security, with exception of those enumerated in special provisions (among them f. ex. the enforcement costs or maintenance charges). Knowledge of any previous secured creditors does not influence the creditor’s priority. Thus, Polish law is not different from the Convention’s solution in that respect. The same principle of priority concerns also continental hypothecation since its priority is defined by the day of filling application for registration (art. 12 and 29 of the Real-State Register and Hypothecation Act[2]). Additionally, all limited proprietary rights are governed by the above priority rule. Thus, a limited proprietary right which has been established earlier entertains priority (art. 249 of the Polish Civil Code[3]). An exception is made to a regular pledge (a proprietary security, which allows a creditor - pledgee to secure his interest in a movable object which possession is transferred to him), which has priority over any other limited proprietary right, even if the latter was established earlier, unless the pledgee has acted in bad faith (art. 310 of the Polish Civil Code).

  • [1] J. of L. 2016, item 297.
  • [2] J. of L. 2013, item 707.
  • [3] J. of L. 2016, item 380.
 
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