General Aviation: The Next Steps
Indo-American Chamber of Commerce Seminar
PHD House, March 6, 2013, New Delhi
Legal Issues Framework
Ravi NATH
RNClegal/ Rajinder Narain & Co.
t: + 91 11 4122 5000
f: + 91 11 4122 5001
c: + 91 98110 27193
e: ravi.nath@rnclegal.com
Indian Aviation Market
 Duopoly
189 Aircraft
181 Aircraft (As per DGCA website)
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Other Manufacturers
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Legislative Framework
• Aircraft Act, 1934
• Aircraft Rules, 1937
• Civil Aviation Requirements (CAR) & Aeronautical Information
Circulars (AIC)
• Bilateral Treaties
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Regulator and Other Authorities
 DGCA
Registration – Aircraft Register.
Does not establish legal ownership. Raises presumption of
ownership and Security Interest.
 AAI
 Customs
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Indo-US Agreements
 The International Air Transport Agreement, 1944 – Fifth Freedom
Agreement
 Air Transport Agreement 2005 (‘Open Skies’)
 Bilateral Aviation Safety Agreement
 India-US Aviation Cooperation Program
 Indo-US DTAA
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FDI
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FDI
 Equity investments by foreign airlines up to 49%.
 Only through ‘Approval Route’.
 Chairman and two-thirds of the Directors must be citizens.
 Deals: Jet-Etihad / AirAsia-TATA
 Kingfisher ??? !!!
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Aviation Finance and Leasing
 Purchase / Financing options
 Leases
Wet or Dry
Operating Leases/ Finance Leases/ Hire Purchases
− RBI Permission ?
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Owners/ Lessors and Security Interest
Holder Issues
Choice of
Jurisdiction
&
Choice of Law
Enforcement
of Foreign
Decrees
&
Arbitral
Awards
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Deregistration &
Repossession
Enforcement of Foreign Decrees
 From Higher Courts of Reciprocating Territories
Section 13, CPC
Section 44A , CPC
 From Non-Reciprocating Territories
Suit based on the foreign judgment/ decree.
Implications?
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Arbitral Award Enforcement
 Foreign awards under New York and Geneva Conventions enforceable
(Part II of Arbitration and Conciliation Act, 1996.)
 Enforcement can be refused if, for e.g.:
Parties under incapacity, Arbitration Agreement invalid.
Improper notice of Arbitrator appointment/ Arbitral proceedings
improper.
Arbitration not conducted in accordance with the Agreement or
Governing Law.
Party otherwise unable to present its case.
Award on matter beyond scope of Arbitration Agreement.
Subject not arbitral under Indian Law.
Award set aside/ suspended by competent authority.
Public policy.
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Deregistration
 Bureaucracy -
DGCA issues Consent of the Indian Lessee
Role of IDERA / DPoA
 Liens -
AAI / Mechanic’s Lien: Rights?
 Taxes -
Service and other taxes : Rights?
 Recent Experience – DVB et al.
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Cape Town Convention
 Ratified by India in 2008. Ratified by 56 countries.
 Registration of International Interest, Remedies for Default,
Repossession, IDERA
 Aviation Authorities are enjoined to act in accordance with the holders
of IDERAs without the necessity of a Court Order.
 But no underpinning Legislation in India. Therefore, conflicts arise.
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Treaty Conflicts
 Self-help – Art. 8 - ???
 Speedy Relief – Art. 13 - ???
 Registration of Charges at IR and the ROC under Section 125 of the
Companies Act.
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Q&A
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