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The Cape Town Convention and aircraft leasing : a summary view by Flieger Law Office Part 1 The Cape Town Convention and its Aircraft Protocol have significant implications for the leasing and financing of aircraft. Here’s an in-depth look at how they impact aircraft leasing: ### Overview of the Cape Town Convention 1. **Purpose**: To standardize transactions involving movable property and to provide a secure legal framework for international interests in mobile equipment. 2. **Scope**: Covers aircraft objects, railway rolling stock, and space assets, with the Aircraft Protocol specifically addressing aircraft objects such as airframes, aircraft engines, and helicopters. ### Key Provisions 1. **International Interests**: The Convention establishes the concept of international interests in mobile equipment, which are registrable and enforceable worldwide. 2. **Registration**: Interests are registered in an International Registry, giving priority to registered interests over unregistered or subsequently registered interests. 3. **Remedies**: Offers default remedies for creditors, including repossession, sale, lease, and application for a court order to obtain income from the use of the equipment. 4. **Rights of Lessees**: Recognizes lease agreements and allows for the registration of leases as international interests. 5. **Insolvency Provisions**: Protects creditors in insolvency situations, ensuring they can recover their assets or enforce their interests. ### Aircraft Leasing under the Cape Town Convention 1. **Registration of Aircraft**: Airframes, aircraft engines, and helicopters can be registered under the Aircraft Protocol. This ensures the lessor’s interest in the aircraft is recognized internationally. 2. **Priority of Claims**: Registered interests in aircraft have priority over unregistered interests and subsequent registrations, providing security to lessors and financiers. 3. **Repossession and Enforcement**: In case of default, lessors can enforce their rights to repossess the aircraft regardless of its location, provided the jurisdiction is a signatory to the Convention. 4. **Cross-Border Transactions**: The Convention facilitates cross-border leasing and financing by providing a uniform legal framework, reducing the risk and complexity involved in international transactions. 5. **Protection in Insolvency**: The Convention’s insolvency provisions protect the lessor’s interest in the aircraft, allowing them to reclaim or retain the aircraft even if the lessee goes bankrupt.

Aircraft lease and financing update July 12, 2024 NCLT Orders Go First to Release Four ELF Aircraft Engines The National Company Law Tribunal (NCLT) has directed Go First to release four aircraft engines belonging to Engine Lease Finance (ELF) BV. This decision follows the submission by Go First’s resolution professional, indicating that the process of returning one engine to ELF BV has already commenced. The tribunal’s order is part of the ongoing corporate insolvency resolution process for Go First, which has faced significant financial challenges. This development highlights the complexities and legal challenges in the aircraft leasing and financing sector, particularly in cases of financial distress. The decision by NCLT underscores the importance of clear regulatory frameworks to protect the interests of lessors and financiers. As the aircraft leasing market continues to grow, such legal precedents will play a crucial role in shaping the industry’s future. https://lnkd.in/gq-YR8jn

Aircraft lease and financing update Tuesday, 8th October'2024 India amends insolvency rules in wake of jet leasing dispute India recently amended its insolvency laws to exclude leased aircraft from the moratorium provisions under the Insolvency and Bankruptcy Code (IBC). This change specifically benefits lessors of aircraft, allowing them to repossess their planes when an airline undergoes insolvency, bypassing the general moratorium on asset recovery that comes into effect during the insolvency resolution process. This amendment aligns India's laws with the Cape Town Convention, an international treaty that protects the rights of lessors, particularly in the aviation industry. Previously, the lack of such provisions had caused disputes, most notably with the bankruptcy of Go First airline, where lessors were blocked from recovering their planes due to the moratorium. This change is expected to restore lessors' confidence in leasing aircraft to Indian airlines, which should also help reduce leasing and financing costs for airlines in the country For the regulatory framework, this amendment resolves conflicts between the IBC and global aviation leasing standards, thereby reducing legal disputes and improving India’s reputation as a compliant and stable jurisdiction for leasing transactions. The change also makes it easier for airlines to access leasing markets at competitive rates, as lessors will now perceive the Indian market as lower risk. This, in turn, is expected to reduce the cost of financing and leasing aircraft, benefiting the aviation sector as it expands rapidly to meet increasing demand. https://lnkd.in/gK4cGgZm Source: Reuters

Unraveling the Jet Airways Ownership Dispute: A Continuing Saga Jet Airways, once a stalwart in the Indian aviation industry, finds itself embroiled in a protracted ownership dispute that has left its revival efforts grounded. As the saga unfolds, it underscores the complexities and challenges inherent in corporate insolvency proceedings. The National Company Law Tribunal's (NCLT) decision to permit the transfer of Jet Airways' ownership to the Jalan-Kalrock Consortium (JKC) in January 2023 was expected to pave the way for the airline's revival. However, the subsequent legal battles have cast a shadow of uncertainty over its fate. The latest development, set to be heard by the Supreme Court on March 7, revolves around the sale of aircraft belonging to Jet Airways. This follows a series of legal maneuvers, including the apex court's directive for JKC to deposit Rs 150 crore as part of its fund infusion into the airline. The dispute between JKC and the lenders of Jet Airways hinges on the transfer of ownership and the infusion of funds into the airline. While JKC asserts its readiness to revive the airline, the lenders argue for a more stringent approach to recover their dues. The intricacies of the case extend beyond legal proceedings, delving into the intricacies of financial restructuring and operational revival. Amidst the legal wrangling, the fate of Jet Airways hangs in the balance, with stakeholders eagerly awaiting a resolution. As the Supreme Court deliberates on the matter, the broader implications of the case come to the fore. The outcome will not only shape the future of Jet Airways but also set precedents for corporate insolvency proceedings in India. The Jet Airways ownership dispute serves as a cautionary tale, highlighting the importance of transparency, accountability, and effective resolution mechanisms in corporate restructuring. It underscores the need for a holistic approach that balances the interests of all stakeholders while ensuring the viability of distressed enterprises. In navigating the complexities of corporate insolvency, collaboration between stakeholders, regulatory bodies, and judicial authorities is paramount. By fostering a conducive environment for resolution and recovery, India's insolvency framework can facilitate the revival of struggling businesses and uphold investor confidence. As the Jet Airways saga unfolds, it offers valuable lessons for the corporate sector and underscores the imperative of fostering a robust and resilient business ecosystem. The journey towards resolution may be fraught with challenges, but with perseverance and collaboration, a brighter future awaits. #JetAirways #CorporateInsolvency #LegalDispute #SupremeCourt #StakeholderEngagement #BusinessRevival ✈️💼🔍

Aircraft lease and financing update July 12, 2024 NCLT Orders Go First to Release Four ELF Aircraft Engines The National Company Law Tribunal (NCLT) has directed Go First to release four aircraft engines belonging to Engine Lease Finance (ELF) BV. This decision follows the submission by Go First’s resolution professional, indicating that the process of returning one engine to ELF BV has already commenced. The tribunal’s order is part of the ongoing corporate insolvency resolution process for Go First, which has faced significant financial challenges. This development highlights the complexities and legal challenges in the aircraft leasing and financing sector, particularly in cases of financial distress. The decision by NCLT underscores the importance of clear regulatory frameworks to protect the interests of lessors and financiers. As the aircraft leasing market continues to grow, such legal precedents will play a crucial role in shaping the industry’s future. https://lnkd.in/gjTVxjFi

Photo:FILE Go First had stopped operating flights on May 3 last year. The National Company Law Tribunal (NCLT) has given an additional 60 days to the defunct airline company Go First to complete the bankruptcy process. This is the fourth extension given to Go First to complete the Corporate Insolvency Resolution Process (CIRP). According to Bhasha news, the company is struggling to find a buyer. Earlier, the bankruptcy tribunal had given an extension of 60 days on April 8, which expired on June 3, 2024. <!-- /8323530/Khabar_Desktop_VDO_1X1 --> Extension till 3 August 2024 According to the news, Go First has now been given time till August 3, 2024. While granting the extension, the Delhi-based NCLT bench said that this is the last extension. The two-member bench also reprimanded the resolution professional for seeking an extension. The lawyer appearing on behalf of the ‘Resolution Professional’ (RP) informed the tribunal that they are seeking this extension due to the extraordinary situation created after the Delhi High Court’s decision, in which the DGCA was asked to cancel the registration of all its 54 aircraft. CIRP must be completed within 330 days According to the RP, those who have shown interest in buying the airline have revised their offers and the lenders are yet to consider them. Therefore, an extension of 60 days is necessary. According to the Insolvency and Bankruptcy Code (IBC), CIRP is mandatory to be completed within 330 days. This also includes the time taken during litigation. According to Section 12(1) of the Code, CIRP should be completed within 180 days. Go First stopped operating flights on May 3 last year. The airline company has been waiting for a buyer for a long time and has not got any success so far. Latest Business News function loadFacebookScript(){ !function (f, b, e, v, n, t, s) { if (f.fbq) return; n = f.fbq = function () { n.callMethod ? n.callMethod.apply(n, arguments) : n.queue.push(arguments); }; if (!f._fbq) f._fbq = n; n.push = n; n.loaded = !0; n.version = '2.0'; n.queue = []; t = b.createElement(e); t.async = !0; t.src = v; s = b.getElementsByTagName(e)[0]; s.parentNode.insertBefore(t, s); }(window, document, 'script', '//https://lnkd.in/dNCd7S6K'); fbq('init', '1684841475119151'); fbq('track', "PageView"); } window.addEventListener('load', (event) => { setTimeout(function(){ loadFacebookScript(); }, 7000); });

INDIA TODAY 8TH APRIL 2024 GO FIRST AIRLINE GIVEN EXTENSION FOR RESOULTION PLAN BY NCLT UPTO 3RD JUNE 2024 WHICH DOWN SHUTTER LAST YEAR ON 2ND MAY 2023 The National Company Law Tribunal (NCLT) on Monday approved another 60-day extension to the bankrupt Go First airline to complete its corporate insolvency resolution process (CIRP). The extension will be effective till 3 June, and has been allowed keeping in mind the interest of stakeholders, as per the NCLT. India's insolvency laws mandate completion of a corporate resolution process in 180 days, extendable by another 90 days. However, it must be completed in no more than 330 days in total. A previous extension, from 4 February to 4 April, exhausted the 330-day deadline to complete the resolution process. However, under exceptional circumstances, the NCLT agreed to give Go First another 60 days, as the resolution plans were nearing completion. https://lnkd.in/grBZFnJ3

DAILY UPDATES   ALTERNA AIRCRAFT WITHDRAWS INSOLVENCY PLEA AGAINST SPICEJET IN NCLT Alterna Aircraft BV Limited, an Ireland-based aircraft lessor on March 18 withdrew its insolvency plea against low-cost airline SpiceJet at the National Company Law Tribunal (NCLT).  READ MORE https://lnkd.in/gPnBf4gs   FAILING RESOLUTIONS, FALTERING RECOVERY: UNCHECKED VIKAS OF CORPORATE DEFAULTERS Amidst the pursuit of debt recovery, the banking sector is witnessing an erosion of public money. READ MORE https://lnkd.in/gAC8Nmii   INGREDIENTS OF FRAUDULENT, UNDERVALUED & PREFERENTIAL TRANSACTIONS TO BE CHECKED SEPARATELY: NCLAT The National Company Law Appellate Tribunal has recently observed that the National Company Law Tribunal (NCLT) must consider the ingredients of Fraudulent, Undervalued, and Preferential Transactions separately and refrain from making general observations. READ MORE https://lnkd.in/gQB7zbKx   TATA SONS TO SELL 23.4 MILLION TCS SHARES WORTH ₹9,000 CRORE IN BLOCK DEAL Tata Sons, the parent company of India's leading software services exporter, is looking to sell 23.4 million shares of Tata Consultancy Services Ltd, in block deals at a price of ₹4,001 per share, amounting to approximately ₹9,300 crore. READ MORE https://lnkd.in/gqzcUZuD   ODISHA EYES ₹10,000 CRORE INVESTMENT IN TEXTILES Odisha has set an ambitious target of attracting an investment of ₹10,000 crore for its textiles sector over the next five years, with the aim to bolster the state's economy by creating more than 100,000 job opportunities. READ MORE https://lnkd.in/gK3J8exd   CA BOOKED FOR CHEATING PEOPLE THROUGH RS 54.4 CR PONZI SCHEME READ MORE https://lnkd.in/gbKtky4p   GOVT PROPOSES EXEMPTING CERTAIN M&A DEALS FROM COMPETITION COMMISSION APPROVAL REQUIREMENT The government has proposed exempting intra-group transactions and certain other mergers and acquisitions from the requirement of Competition Commission approval, a move that is likely to help in reducing the regulatory burden on the watchdog. READ MORE https://lnkd.in/g5zSDjxZ     Happy Reading!!

INDIA NEVER ENDING EXTENSION AND NOW AGAIN 60 DAYS EXTENSION GRANTED TO GO FIRST AIRLINE LTD BY NCLT WHICH DOWN SHUTTER LAST YEAR ON 2ND MAY 2023 The National Company Law Tribunal on Tuesday extended the deadline for another 60 days to complete the resolution process of grounded airline Go First. A two-member bench of the Delhi-based NCLT admitted the plea filed by the resolution professional (RP) of Go First seeking an extension of the timeline to complete the corporate insolvency resolution process (CIRP). Diwakar Maheshwari, appearing for RP, argued that so far three parties have submitted their expression of interest for Go First and deposited the earnest money. These firms are expected to submit resolution plans for Go First which has been undergoing CIRP since May 10, 2023. This is the second such extension granted by the NCLT. The tribunal had on November 23 last year granted an extension of 90 days, which ended on February 4. The three firms, including budget carrier Spicejet, Sharjah-based Sky One, and African continent-focused firm Safrik Investments, have shown interest in buying Go First. The Insolvency & Bankruptcy Code (IBC) mandates completion of CIRP within 330 days, which includes the time taken during litigations. As per Section 12(1) of the Code, CIRP should be completed within 180 days. However, the maximum time within which CIRP must be mandatorily completed, including any extension or litigation period, is 330 days, failing which the corporate debtor is sent for liquidation. https://lnkd.in/gv3H9_fd

Aircraft lease and financing update Tuesday, 15th October'2024 SpiceJet hit with fresh insolvency claim from aircraft lessor SpiceJet is facing new insolvency proceedings initiated by the aircraft lessor Aviator ML 29641 Ltd, which claims unpaid rental dues of approximately ₹58 crore. The dispute relates to a Boeing 737 aircraft leased to SpiceJet under an agreement signed in June 2017. The case has been filed in the National Company Law Tribunal (NCLT), which has scheduled the next hearing for November 11, 2024. This comes despite SpiceJet’s efforts to negotiate a settlement, which did not materialize. The airline has faced multiple financial challenges recently, with several insolvency petitions from various lessors and vendors. Although some of these petitions were withdrawn or dismissed after settlements, the financial strain persists. SpiceJet has been working to resolve these issues, including a recent settlement with Babcock & Brown Aircraft Management, which reduced a $131.85 million claim to $22.5 million. https://lnkd.in/gEXHyF8K Source: Mint