The Ministry of Civil Aviation has proposed a new law that will help international aircraft leasing companies to reposess and transfer planes out of India incase of a financial dispute with an Indian airline at a time many regional airlines have been refused planes on rent.
The Ministry has sought stakeholders' comments on the draft Protection and Enforcement of Interests in Aircraft Objects Bill, 2022. The Bill implements the provisions of the Convention on International Interests in Mobile Equipment and Protocol on Matters Specific to Aircraft Equipment which was adopted at a conference in Cape Town in 2001. India acceded to the two instruments in 2008. These provide default remedies for the creditor and create a legal regime for disputes.
In its explanatory note, the Ministry says the draft legislation is necessary because several Indian laws such as the Companies Act, 2013 and the Insolvency and Bankruptcy Code, 2016 are in conflict with the Cape Town Convention and Protocol. It says that Indian entities have also suffered as international financial institutions demand an implementing legislation.
