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Effects of Registration Under Portuguese Law

I. In Portuguese law, both the mortgage and the pledge give the creditor the right to be paid before any other creditor (Articles 686(1) and 666(1) CC).

However, mortgage must be registered. In Portuguese law, the registration of a mortgage has a constitutive nature: if the mortgage is not registered, it is not effective even between the parties (Article 687 CC and Article 4(2) of the Registry Code on Immovable Property - Codigo do Registo Predial, hereafter CRPred).[1]

According to the general rule (Article 5(1) CRPred), the facts subject to registration only have effect against third parties[2] after the date of registration.

Article 6 of this Code sets up some basic priority rules:

  • - the right registered in the first place prevails over the subsequent for the same property, following the order of the date of registration and, within the same date, following the order of the corresponding application (paragraph 1);
  • - the definitive registration maintains the priority of the provisional registration (paragraph 3).

Article 7 CRPred deals with the presumption effect of the registration: the definitive registration creates the presumption that the right exists and that it belongs to the registered owner, in accordance with the terms defined in the registration.

Moreover, the judicial appeal contesting the registration act makes it possible to presume the application for discharge of the registration (Article 8(1) CRPred).

So, in Portuguese law, as between registered interests priority goes to the first to be registered and a registered interest has priority over an unregistered interest. A registered interest has priority over an earlier unregistered interest even if this was known to the holder of the registered interest at the date of registration.

Nevertheless, we must stress that, in Portuguese law, security interests over tangible goods are not subject to registration.

II. Under Portuguese law all kinds of vehicles covered by the three Protocols to the Cape Town Convention are able to be mortgaged or subject to other forms of security interests.

Indeed, as mentioned, the mortgage must pertain to immovable property and also to similar property, i.e., some kinds of movable property subject to registration - that is the case, for present purposes, of aircrafts. In turn, railway rolling stocks and space assets may be the object of pledge.

There is a special law and a special registration system concerning aircrafts. The registration system regarding aircrafts remains ruled in ancient and outdated Decreto 20.062 (25.10.1930); the competence for the registration belongs to the National Institute of Civil Aviation (“Instituto National de Aviagao Civil”, in short, INAC).[3]

That Aircraft Registration System (“Registo Aeronautico National”) includes the license number of the aircraft, the name and domicile of the constructor and of the owner (what is consistent with Annex 7 of Chicago Convention on International Civil Aviation[4]), the transfer of property, and other acts related to the aircraft or to aircraft objects (such as assignment, leasing, mortgage).

  • [1] About the constitutive nature of the registration of the mortgage in Portuguese law:L.C. Fernandes, Ligoes de direitos reals, 6th ed., Lisboa, 2009, p. 133 f; L.M. Leitao, Direitosreals, Coimbra, 2009, p. 467 f.
  • [2] Although the differences in the opinion of the Authors and in Court decisions about the notion of“third parties” for the purposes of registration rules, Portuguese Supreme Court, in a non-unanimous “uniformity ruling” (No. 3/99, 18.05.1999), adopted the traditional meaning: “«third parties» for the purposes of Article 5 CRPred are the acquirers, in good faith, from the same commontransferor, of incompatible rights over the same asset”. So, Article 5 CRPred was modified byDecreto-Lei 533/99, 11.12.1999, by means of the addition of paragraph 4, as follows: “«third parties», for the purposes of registration rules, are the acquirers, from the same common transferor, ofincompatible rights among them”. See an overview on this question in STJ, 30.06.2011.
  • [3] INAC was established by Decreto-Lei 133/98, 15.05.1998, and is now ruled in Decreto-Lei145/2007, 27.04.2007. Its Regulation was approved by Portaria 543/2007, 30.04.2007.
  • [4] The Convention on International Civil Aviation, signed in Chicago on 7.12.1944, entered intoforce on 4.04.1947. Portugal is bound by this Convention from the beginning.
 
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