Go First planes : how leased aircraft tare repossessed

Subject : International Organization

Section: International Conventions

Concept :

The Go First has moved the National Company Law Tribunal, seeking voluntary insolvency resolution proceedings.
Indian airline Go First’s effort to start insolvency proceedings has become ensnared in a tussle with aircraft lessors after they asked the aviation regulator to deregister some of its planes using their Irrevocable De registration and Export Request Authorisation (IDERA).
It empowers lessors to get their aircraft off the registry of the country where the lessee is based, and repossess and fly the mout, in cases like lease payment defaults.
The cash-strapped airline wants the tribunal to accept its plea and is seeking an interim moratorium to save its assets, a move the lessors oppose.
Unless Go First can get legal relief that overrides international aviation conventions and protocols, in particular IDERA, it could lose more than a third of its aircraft in about a week.

Cape Town Convention

The Convention on International Interests in Mobile Equipment was concluded in Cape Town on 16th November 2001, as was the Protocol on Matters Specific to Aircraft Equipment.
The Convention and the Protocol, were adopted under the joint auspices of the International Civil Aviation Organisation (ICAO) and the International Institute for the Unification of Private Law (UNIDROIT).
ICAO is a United Nations (UN) specialized agency, established in 1944, which laid the foundation for the standards and procedures for peaceful global air navigation. India is a member.
Objective: To resolve the problem of obtaining certain and opposable rights to high-value aviation assets, namely airframes, aircraft engines and helicopters which, by their nature, have no fixed location.
This problem arises primarily from the fact that legal systems have different approaches to lease agreements, which creates uncertainty for lending institutions regarding the efficacy of their rights.
This hampers the provision of financing for such aviation assets and increases the borrowing cost.

UNIDROIT

The International Institute for the Unification of Private Law (UNIDROIT) is an independent intergovernmental Organisation with its seat in the Villa Aldobrandini in Rome.
Its purpose is to study needs and methods for modernising, harmonising and coordinating private and in particular commercial law as between States and groups of States and to formulate uniform law instruments, principles and rules to achieve those objectives.
It was established in 1926 as part of the League of Nations.
It was reestablished in 1940 following the League’s dissolution through a multilateral agreement, the UNIDROIT Statute.
It has 63 member countries, with India as a partner.