Part 2Security over Moveable Property

Chapter 1Pledge

Property encumbered by statutory pledge: effect of transfer by provider

51Property encumbered by statutory pledge: transfer by provider

(1)

If the provider of a statutory pledge transfers the encumbered property (or any part of it) to a third party, the transferred property remains encumbered by the pledge unless—

(a)

the consent mentioned in subsection (2) is obtained,

(b)

the third party acquires the property unencumbered under any of sections 53 to 55, or

(c)

the pledge is otherwise extinguished by the transfer, in whole or in relation to the transferred property, under section 52, 93 or 108.

(2)

The consent referred to in subsection (1)(a)—

(a)

is the prior written consent of the secured creditor—

(i)

to the particular transfer, and

(ii)

to the property in question being transferred unencumbered by the pledge, and

(b)

does not include consent granted more than 14 days before the day of the particular transfer.

(3)

Whether to grant or withhold the consent mentioned in subsection (2) must remain at the discretion of the secured creditor (that is, the secured creditor may not agree in advance how that discretion will be exercised).

(4)

The Scottish Ministers may by regulations—

(a)

modify subsection (2) (including by specifying further descriptions of consent by reference to which subsection (1) is to apply),

(b)

modify this section so as to specify further matters relevant to the granting or withholding of consent.