Aviation Finance & Leasing
Aviation Finance & Leasingin 25 jurisdictions worldwide2014Contributing editor: Mark BissetPublished byGetting the Deal Throughin association with:Advokatfirman VingeǼLEXAl Busaidy, Mansoor Jamal & CoAlegre, Calderón y Márquez AbogadosArnecke Siebold RechtsanwälteAZB & PartnersBasch & RamehBeijing Run Ming Law OfficeBlake, Cassels & Graydon LLPCamilleri PreziosiClifford Chance CIS LimitedClyde & Co LLPConyers Dill & Pearman (Cayman) LimitedCuatrecasas, Gonçalves PereiraDe Brauw Blackstone Westbroek NVHerbst Kinsky RechtsanwälteKim & ChangMaciel, Norman & AsociadosMcCann FitzGeraldMeyer AvocatsPatton, Moreno & AsvatPillsbury Winthrop Shaw Pittman LLPRussin Vecchi & Heredia BonettiStephenson Harwood AARPIVerhaegen Walravens
CONTENTSAviation Finance & Leasing 2014Global Overview 3Mark BissetClyde & Co LLPContributing editor:Mark BissetClyde & Co LLPFrance 636Thomas A Zimmer and Dominic PearsonPillsbury Winthrop Shaw Pittman LLPFollowing the format adopted throughoutthe series, the same key questions areanswered by leading practitioners in each ofthe 25 jurisdictions featured.Every effort has been made to ensure thatmatters of concern to readers are covered.However, specific legal advice should alwaysbe sought from experienced local advisers.Getting the Deal Through publications areupdated annually in print. Please ensureyou are always referring to the latest printedition or to the online version atwww.GettingTheDealThrough.com.Getting the Deal Through gratefullyacknowledges the efforts of all thecontributors to this volume, who werechosen for their recognised expertise.Getting the Deal Through would also liketo extend special thanks to contributingeditor Mark Bisset of Clyde & Co LLP forhis assistance in devising and editing thisvolume.Getting the Deal ThroughMaría Laura Maciel and Rogelio N MacielMaciel, Norman & AsociadosChristoph WildmoserHerbst Kinsky RechtsanwälteBelgium 18Dan ough.comAshwin Ramanathan, Nithya Narayanan,Aayush Misra and Manish JhaAZB & PartnersIreland 83Giulia MauriVerhaegen WalravensHilary Marren and Joe FayMcCann FitzGeraldBrazil 24Korea 90Kenneth BaschBasch & RamehYoung Kyun Cho, Young Min Kimand Robert L GilbertKim & ChangCanada 30Malta 95Donald G Gray and Jason MacIntyreBlake, Cassels & Graydon LLPCayman Islands 37Matthew StockerConyers Dill & Pearman (Cayman) LimitedMalcolm Falzon, Steven Decesareand Tara Cann-NavarroCamilleri PreziosiMexico 102China 42Liu YiBeijing Run Ming Law OfficeJavier Alegre and Carlos CampilloAlegre, Calderón y Márquez AbogadosNetherlands 10749Berend Crans and Thijs ElsemanDe Brauw Blackstone Westbroek NVMaria Esther Fernandez A de Pouand Raul E Rodríguez PereyraRussin Vecchi & Heredia BonettiSubscriptionsRachel Nursesubscriptions@gettingthedealthrough.comAlan Leealan.lee@lbresearch.comUlrich Steppler and Katja Helen BreckeArnecke Siebold RechtsanwälteIndia 77Austria 14PublisherGideon Robertongideon.roberton@lbresearch.comBusiness development managersGeorge Ingledewgeorge.ingledew@lbresearch.comEdward CampbellStephenson Harwood AARPIGermany 70Argentina 8Dominican Republic LondonJune 201458Mark BissetClyde & Co LLPAircraft Mortgages - English Lawor New York Law? Getting the Deal Through is delighted topublish the first edition of Aviation Finance &Leasing 2014, a new volume in our series ofannual reports, which provide internationalanalysis in key areas of law and policy.England & Wales Published byLaw Business Research Ltd87 Lancaster RoadLondon, W11 1QQ, UKTel: 44 20 7908 1188Fax: 44 20 7229 6910 Law Business Research Ltd 2014No photocopying: copyright licences do not apply.First published 2014ISSN 2055-7256The information provided in this publication isgeneral and may not apply in a specific situation.Legal advice should always be sought beforetaking any legal action based on the informationprovided. This information is not intended tocreate, nor does receipt of it constitute, a lawyer–client relationship. The publishers and authorsaccept no responsibility for any acts or omissionscontained herein. Although the informationprovided is accurate as of June 2014, be advisedthat this is a developing area.Printed and distributed byEncompass Print SolutionsTel: 0844 2480 112 1
CONTENTS Nigeria 114Portugal L Fubara Anga and Chinanu OsujiǼLEXLuís Soares de SousaCuatrecasas, Gonçalves PereiraOman 119Russia 142Mansoor Malik and Nathaniel ArmstrongAl Busaidy, Mansoor Jamal & CoVictoria Bortkevichaand Evgeniya ArmstrongClifford Chance CIS LimitedPanama Maria de Lourdes MarengoPatton, Moreno & Asvat2 134Switzerland 154Frédéric Meyer, Raphaël Baeriswyl,Philippe Renz and Antoine LabaumeMeyer AvocatsUnited States 160Thomas A ZimmerPillsbury Winthrop Shaw Pittman LLP128Sweden 148Fredrik Wilkens, Emma Stuart-Beckand Malin SundAdvokatfirman VingeGetting the Deal Through – Aviation Finance & Leasing 2014
UNITED STATESPillsbury Winthrop Shaw Pittman LLPUnited StatesThomas A ZimmerPillsbury Winthrop Shaw Pittman LLPOverview1To which major air law treaties is your state a party? Is your statea party to the New York Convention of 1958?The US is a party to the following major conventions affecting aviation finance and leasing: the 1944 Convention on International Civil Aviation, effectiveApril 1947; the 1948 Convention on the International Recognition of Rightsin Aircraft (Geneva Convention), effective 17 September 1953; the 2001 Convention on International Interests in MobileEquipment (Convention) and the 2001 Protocol to theConvention on International Interests in Mobile Equipmenton Matters Specific to Aircraft Equipment (Protocol), effective1 March 2006 (collectively, the Cape Town Convention); and the 1958 Convention on the Recognition and Enforcement ofForeign Arbitral Awards.The US is not a party to the 1933 Convention for the Unification ofCertain Rules relating to the Precautionary Attachment of Aircraft.2What is the principal domestic legislation applicable to aviationfinance and leasing?The legal framework applicable to the regulation of aviation financeand leasing transactions in the US is both the law of the state applicable to such transaction and, to the extent they pre-empt state law,US federal laws, regulations and treaties applicable to such transactions. In the US, the Federal Aviation Administration (FAA), tothe exclusion of the states, regulates the registration of civil aircraft,airworthiness, safety and maintenance issues involving civil aviation,the issuance of operating certificates and licences for civil aviationand the recording of agreements and instruments conveying interests in aircraft registered with the FAA and certain aircraft engines,components and parts.Many of the responses in this chapter concern issues involvingconveyancing agreements or instruments (aircraft conveyancingagreements) for civil aircraft and their airframes and engines (aircraft items) that provide for one of the following: the transfer of title to an aircraft item (an aircraft transferagreement); the lease of an aircraft item (aircraft lease); or the grant of a security interest in an aircraft item (an aircraftsecurity agreement).As used herein, the term ‘grantor’ means the seller, transferor orgrantor under an aircraft transfer agreement, the lessee under anaircraft lease or the grantor under an aircraft security agreement.The term ‘grantee’ means the buyer, transferee or grantee under anaircraft transfer agreement, the lessor under an aircraft lease or thegrantee under an aircraft security agreement.160The State of New York law is commonly chosen by the partiesas the governing law for aircraft conveyancing agreements involvingcommercial aircraft. Unless otherwise noted, the responses in thischapter will assume that the parties to a relevant aircraft conveyancing agreement have chosen New York law, and that the relevantaircraft item is a civil aircraft registered with the FAA.The principal domestic legislation applicable to aviation financeand leasing in the US are: the Uniform Commercial Code (UCC) as adopted by the relevant states, particularly article 2 (governing sales of personalproperty), article 2A (governing leases of personal property) andarticle 9 (governing security interests in personal property). All50 states have adopted a version of article 9, and all states otherthan Louisiana have adopted a version of article 2 and article2A, although there are some variations from state to state; Title 49 of the US Code (Transportation Code) and Title 49 ofthe Code of Federal Regulations (CFRs). The TransportationCode pre-empts state law, including the UCC, as to certain matters relevant to aviation finance and leasing transaction; and Title 11 of the United States Code (Bankruptcy Code).The Cape Town Convention and the Geneva Convention andother aviation treaties to which the US is a party preempt theTransportation Code and state law as to certain matters relevant toaviation finance and leasing transactions.3Are there any restrictions on choice-of-law clauses in contracts tothe transfer of interests in or creation of security over aircraft? Ifparties are not free to specify the applicable law, is the law of theplace where the aircraft is located or where it is registered therelevant applicable law?General ruleGenerally, aircraft transfer agreements are governed by article 2 ofthe UCC, aircraft leases are governed by article 2A of the UCC andaircraft security agreements are governed by article 9 of the UCC, ineffect in the applicable state, except as preempted in respect to certain matters by the Transportation Code, the Cape Town Conventionand the Geneva Convention. With certain exceptions, the parties toa contract that is subject to the UCC are free to choose, subject topreemption, the governing law for their contractual relationship solong as the transaction bears a reasonable relationship to the chosen jurisdiction and subject to any preemption. However, there arevariations in choice of law rules from state to state. Therefore, it isimportant to examine the state law chosen to govern a transaction.The New York UCC allows the parties to a contract subject tothe UCC to choose the governing law without regard to whether areasonable relationship exists to the State of New York. New Yorkhas another statute that allows the parties to a non-consumer contract involving over US 250,000 to choose New York law to governGetting the Deal Through – Aviation Finance & Leasing 2014 Law Business Research Ltd 2014
Pillsbury Winthrop Shaw Pittman LLPUNITED STATEStheir contractual relationship. Most aircraft finance and leasingtransactions would fall within this statute.Preemption of state choice-of-law rule as to ‘validity’If a particular state’s law governs an aircraft conveyancing agreement, that law will apply to both the ‘validity’ of the agreementand the contractual rights and obligations of the parties thereunder,except to the extent preempted by US federal law or treaties adoptedby the US. State law is preempted as to the validity of an aircraftconveyancing agreement in respect to certain aircraft items, depending upon various factors. For this purpose, it is useful to differentiateamong aircraft and aircraft engines as follows: ‘FAA aircraft’ means a US civil airframe that is registered withthe FAA; ‘CTC airframe’ means an airframe that: qualifies as an ‘aircraft object’ under the Cape TownConvention; and is either registered in a country that has adopted the CapeTown Convention (a CTC country) or is the subject of anaircraft conveyancing agreement under which the grantor issituated in a CTC country. To qualify as an aircraft objectunder the Cape Town Convention, an aircraft must either:(i) have an airframe that, when appropriate engines areinstalled, is type certified to transport at least eight personsincluding crew or goods in excess of 2,750 kilograms; or (ii)be a helicopter that is type certified to transport at least fivepersons including crew or goods in excess of 450 kilograms; ‘FAA/CTC airframe’ means an FAA aircraft that has a CTCairframe; ‘FAA engine’ means: a specifically identified aircraft engine having at least 500rated takeoff horsepower or its equivalent; or an aircraft engine maintained for installation or use in anaircraft by a US-certified air carrier; ‘CTC engine ‘ means an aircraft engine that (a) qualifies as an‘aircraft object’ under the Cape Town Convention and (b) is thesubject of an Aircraft Conveyancing Agreement under whichthe grantor is situated in a CTC country. To qualify as an aircraft object, the Cape Town Convention requires that an aircraft engine be powered by either: (i) jet propulsion technology,having at least 1,750 pounds of thrust or its equivalent; or (ii)turbine or piston technology, having at least 550 rated take-offshaft horsepower or its equivalent; ‘FAA/CTC engine’ means an FAA engine that qualifies as a CTCengine; and ‘Geneva Convention aircraft’ means a civil aircraft that is registered with a country that has adopted the Geneva Convention.FAA aircraft and FAA enginesThe Transportation Code provides that the ‘validity’ of a conveyance, lease or instrument that may be recorded in respect to an FAAaircraft or FAA engine is subject to the laws of the state at which theconveyance, lease or instrument is delivered, regardless of the placeat which the subject of the conveyance or other instrument is locatedor delivered. If the conveyance lease, lease or instrument specifies theplace at which delivery is intended, it is presumed that the conveyance, lease or instrument was delivered at the specified place. Theapplicable governing law in respect to the validity of an aircraftconveyancing agreement for an FAA aircraft or an aircraft lease oraircraft security agreement in respect to an FAA engine is the lawof the state where the aircraft conveyancing agreement is delivered.The Transportation Code does not address the applicable governing law with respect to the contractual rights and duties of theparties to an aircraft conveyancing agreement, which is left to statelaw, as preempted by the Cape Town Convention. In the case of FAA/CTC airframes and FAA/CTC engines, the Cape Town Conventionallows the parties to an aircraft conveyancing agreement to agree onthe law to govern their contractual rights and duties whether or nota reasonable relationship exists to that jurisdiction (thus preempting any such requirement under state law). However, it does notaddress the choice of law as to its validity which, pursuant to theTransportation Code, would be determined pursuant to the lawwhere the agreement was delivered.For FAA aircraft and FAA engines that are not subject to theCape Town Convention, the choice of law as to the contractual rightsand duties of the parties under an aircraft conveyancing agreementwould be determined under the general rule first described above.CTC airframes and CTC engines not registered in the USAs noted above, the Cape Town Convention allows the parties to anaircraft conveyancing agreement for a CTC aircraft or CTC engineto choose the law that governs their contractual rights and obligations. However, it is silent on the choice of law applicable to thevalidity of the transfer of an interest in or the creation of a securityinterest in a CTC airframe or CTC engine.For a CTC airframe that is registered in a country that hasadopted the Geneva Convention (a Geneva Convention country)other than the US, the US would recognise and enforce a conveyance under an aircraft conveyancing agreement affecting the CTCairframe if the aircraft conveyancing agreement: was ‘constituted’ in accordance with the law of the countrywhere the CTC airframe is registered (the country of registry);and was regularly recorded in a public record in the country ofregistry.This would require an examination of the laws of the country ofregistry to determine: whether those laws would recognise the aircraft conveyancingagreement as a valid conveyancing agreement; and whether the aircraft conveyancing agreement is regularlyrecorded in a public record.The Geneva Convention is silent on the choice of law governingthe contractual rights and obligations of the parties. Therefore, thechoice of law governing the contractual rights and obligations ofthe parties would be determined without reference to the GenevaConvention under the general rule first described above.For a CTC airframe that is not registered in the US or any otherGeneva Convention Country, or for a CTC engine that is not alsoan FAA engine, the law chosen by the parties should govern theircontractual rights and obligations under an aircraft conveyancingagreement pursuant to the Cape Town Convention. However, thelaw governing the validity of the transfer of interest or the grant ofa security interest would be determined under the general rule firstdescribed above.Geneva Convention aircraft without CTC airframesFor a civil aircraft that is registered in a Geneva Convention countryother than the US but does not have a CTC airframe, as is the casefor such an aircraft with a CTC airframe, the US would recogniseand enforce a conveyance under an aircraft conveyancing agreementaffecting such aircraft if the aircraft conveyancing agreement wasconstituted in accordance with the law of the country of registry, andwas regularly recorded in a public record in the country of registry.However, the choice of law governing the contractual rights andobligations of the parties would be determined by the general rulefirst described above.Non-Geneva Convention aircraft with non-CTC airframes andnon-FAA and non-CTC enginesFor a civil aircraft that is not registered with the FAA or anotherGeneva Convention country, and that does not have a CTC airframe,and aircraft engines that are not FAA engines or CTC engines, the161www.gettingthedealthrough.com Law Business Research Ltd 2014
UNITED STATESPillsbury Winthrop Shaw Pittman LLPchoice of law as to both validity and the contractual rights and dutiesof the parties under an aircraft conveyancing agreement would bedetermined under the general rule first described above. Title transfer4How is title in an aircraft transferred?Transfer of title to an aircraft in the US is governed by applicablestate law. Pursuant to article 2 of the UCC, which has been adoptedin all states other than Louisiana (subject to certain exceptions), titleto goods passes from the seller to the buyer in any manner and onany conditions agreed on by the parties. However, title to goodscannot pass under a contract of sale prior to the time the goods areidentified to the contract; that is, the goods must be existing andidentifiable at the time title is transferred. Further, any reservationof title by the seller in goods delivered to the buyer is limited ineffect to a reservation of a security interest. Typically in the US,aircraft transfer agreements provide that the transfer of title to theaircraft is evidenced by the delivery of a bill of sale from seller tothe buyer. However, under article 2 of the UCC, once the aircraft isphysically delivered by the seller, title transfers whether or not a billof sale or other written conveyance document is delivered.As described in question 3, the applicable law governing thevalidity of an instrument for the sale and transfer of an FAA aircraft is the law of the state where the instrument is delivered. Underthe Transportation Code, in order to be valid against third partieswithout notice, an instrument for the transfer of title to an FAAaircraft must be filed for recording with the FAA. Under the CapeTown Convention, in order to have priority over subsequently registered interests or unregistered interests, an interest in respect toa CTC airframe transferred pursuant to a ‘contract of sale’ mustbe registered with the International Registry established pursuantto the Cape Town Convention (an aircraft transfer agreement fora CTC airframe is a contract of sale). The practice for
The principal domestic legislation applicable to aviation finance and leasing in the US are: the Uniform Commercial Code (UCC) as adopted by the rel-evant states, particularly article 2 (governing sales of personal property), article 2A (governing leases of personal property) and article 9 (governing security interests in personal property).
make up the GSA Fleet vehicle leasing program Summarizes the laws and regulations that establishes GSA's vehicle leasing authority, funding source, cost recovery requirements, and leasing agreement FY17 Updates -Clarified that leasing agreements are not required for standard operating agreements with GSA Fleet Leasing
ORIX Leasing (LOLC), the first specialized leasing company in Sri Lanka, expressed interest in obtaining ADB financial assistance. In March 2007, ADB's Board of Directors approved the South Asian SME Leasing Facility, which provided direct loans to LOLC and Maldives Finance Leasing Company.2 B. Key Project Features 4.
As mentioned, GSA has identified three levels for the Leasing Certification Program designed to facilitate the successful management of GSA's leasing actions. Level I certification is tailored with foundational knowledge and skills necessary to prepare Leasing Contracting Officers to execute leasing actions at the Basic or Simplified
f automobile leasing ntirely without legal protection, ieme often proves insufficient. utomobile leasing is regulated r Leasing Act or Truth in Leas-76 as chapter 5 of the Truth in purposes of the Truth in Leasing ingful disclosure of the terms of y for personal, family, or house-able the lessee to compare more erms available to him, limit bal-
Participant Guide National Apartment Leasing Professional. 4. Message to Apartment Leasing Professionals. This education program was developed by Leasing, Operations, Marketing and Training . Professionals working in the multifamily housing industry across the nation. It was developed and revised at the request of Leasing Professionals and .
Leasing: Estructura y Beneficios Generales El Arrendamiento Financiero o Leasing es una alternativa de financiamiento que permite la optimización de la gestión financiera y tributaria de una empresa. En un Leasing, el Arrendador (BCP) compra los bienes que el Arrendatario (Cliente) quiere adquirir para dárselos en Leasing.
aviation industry with particular emphasis on leasing and financing activities. 2. Have an appreciation of the aviation industry and the unique financial, risk and operational factors which influence the performance of Aviation companies. 3. Have the ability to make a meaningful contribution to the Key Performance Indicators of the firm.
Small Ticket Equipment Leasing and Finance . 13 Sumitomo Mitsui Finance and Leasing Co., Inc. 701 Foreign non-bank 14 Hitachi Capital America 615 Foreign non-bank 15 ENGS Commercial Finance 505 Private equity 16 Marlin Business Services 438 Public 17 Navitas Credit 296 Domestic bank .
