Recent developments on the implementation of Protocol of the Cape Town Convention: Enforcement of IDERA in Spain

Recent developments on the implementation of Protocol of the Cape Town Convention: Enforcement of IDERA in Spain

Alfonso López-Ibor Aliño

23-10-2019


The aircraft lessors or banks financing aircrafts always look for a quick repossession of an aircraft immediately after an event of default by the operator. The Cape Town Convention on International Interests in Mobile Equipment and its Protocol (CTC) made a major breakthrough by providing to lessors or banks the right to re-possess aircraft by the use of an irrevocable De-registration and Export Request Authorisation (IDERA), without a court order or the operator´s consent.

 

The CTC provides that if IDERA has been issued in favor of the creditor (“authorized party”) by operator of the aircraft, and has submitted such authorization for recordation to the registry authority then the creditor can procure de-registration of aircraft and export the same without consent of the operator. The aircraft register and other administrative authorities should expeditiously cooperate and assist the creditor.

 

Before joining the Aircraft Protocol to the CTC, the Kingdom of Spain only accepted consensual deregistration from Spain and did not recognized a deregistration powers of attorney. The airline or operator consent was necessary, most times by means of an early lease termination agreement a fact which diminished in practice the rights of a lessor to repossess the aircraft.

 

After the accession of Spain to the Cape Town system, there can be two possible scenarios in relation to the enforcement of an IDERA in Spain which is now effective:

 

On the one hand, if the operator of the aircraft is willing to cooperate, the aircraft authority requires the following: (i) the service of a letter to the Spanish Aircraft Registry signed by the authorized party under the IDERA provided that the IDERA is duly registered with the Spanish Aircraft Register. The authorized party shall specify the causes for the failure by the lessee to comply with the contractual provisions of the lease e.g. non payments of rent, invalid insurance of the aircraft, etc, (ii) serve a notice by Spanish authenticated mode (“burofax”) to the operator of the aircraft advising that the IDERA is being enforced.

 

In a very recent case, an acknowledgement document issued by the operator of the aircraft declaring its consent to the enforcement of the IDERA has also been filed. The latter document is not compulsory but it has sped the deregistration.

 

On the other hand, if the operator of the aircraft is not willing to cooperate, the authorized party can also enforce the IDERA by sending above documents (i) and (ii). The aircraft registrars may certainly delay the deregistration in order to satisfy themselves that the IDERA enforcement letter has been signed by a lessor duly authorized officer and that the lessee is actually in default under the lease. For that purpose, registrars may carry out their own investigation (i.e. requesting copies of default notices or other evidence, etc.).

 

The recent enforcement of an IDERA in Spain is a step forward on the implementation of CTC as the only remedy before CTC was a tedious and time-consuming process in which an early lease termination agreement (and its translation into Spanish) needed to be filed with the Spanish Register of Goods and Chattels and thereafter with the Spanish Aircraft Register.