Article 314. Replacement and Restitution of a Pledged Item

1. The replacement of a pledged item shall be allowed with the consent of the pledge holder, unless legislative acts or the agreement stipulate otherwise.

2. When a pledged item is destroyed or damaged, or the right to own or the right of business authority of it ceased on the bases established by legislative acts, the pledger shall have the right within a reasonable period to restore the pledged item or replace it with any other equally valued asset.

Article 315. Use and Disposal of Pledged Items

1. A pledger shall have the right, unless it is otherwise stipulated in the agreement and does not ensue from the essence of the pledge, to use the pledged item in accordance with its designation, in particular, to derive fruit and income from it.

2. Unless it is otherwise stipulated in legislative acts or the agreement, and does not ensue from the essence of the pledge, the pledger shall have the right to alienate pledged items into ownership, business authority or operational management, to transfer it into lease or charge-free use to another person, or in any other way dispose of it, only with the approval of the pledge holder.

An agreement which restricts the right of a pledger to bequest pledged property shall be invalid.

3. A pledge holder shall have the right to use the pledged item entrusted to him, only in the cases which are stipulated by the agreement, and regularly present to the pledger reports on its use. In accordance with the agreement, the pledge holder may be entrusted with the duty to derive fruit and income from the pledged item for the purpose of repaying the principal obligation or in the interests of the pledger.

Article 316. Protection by a Pledge Holder of His Rights to Pledged Items

1. A pledge holder who held or should have held pledged property, shall have the right to claim it from anybody else's illegal possession including from the pledger himself.

2. In the cases where, in accordance with the agreement, the pledge holder is granted the right to use the pledged item entrusted to him, he may claim from other persons, including from the pledger the elimination of any violations of his right, even though those violations are not related to deprivation of possession.

Article 317. The Bases of the Imposition of Claims on Pledged Property

1. Claims on pledged property for the satisfaction of claims of the pledge holder (creditor) may be imposed in the case of a failure to execute or improper execution by the debtor of the obligation secured with the pledge for which he is liable.

2. The imposition of a claim on pledged property maybe denied when the violation committed by the debtor of the obligation which is secured with the pledge, is extremely insignificant, and the amount of the claim of the pledge holder as a result of that is clearly disproportionate with the value of the pledged property.

Article 318. The Procedure for the Imposition of Claims on Pledged

Items

1. Satisfaction of a claim of a pledger out of the value of pledged property shall be carried out in accordance with the judicial procedure, unless it is otherwise stipulated in this Code or other legislative acts or the agreement.

2. In the cases stipulated in the pledge agreement and also in this Code and other legislative acts, the pledger shall have the right to independently sell pledged assets in a compulsory non-judicial procedure by way of holding a tender sales (auction). A bank which is a pledge holder shall have the same right to sell pledged items which secure monetary loans.