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24 February 2021
The domestic air transport market is mainly serviced by airlines whose fleets are comprised primarily of leased aircraft owned by foreign lessors. According to Peruvian law, 'local' aircraft are those that are registered in the Peruvian public registry, while 'foreign' aircraft are those that are not.
Foreign aircraft may operate in Peru while bearing foreign registration marks (eg, N, C or CC) or obtain provisional local registration marks, but this affects neither the legal definition of the aircraft as foreign nor the title to the assets.
It is in the best interests of domestic operators, as lessees, that aircraft leases are duly and promptly recorded in the local public registry. This is a requirement for transferring the operator condition and for having the local aviation authority inspect the aircraft.
Recording aircraft leases in the public registry is also in the best interests of aircraft owners. It releases them from liability for actions attributable to carriers pursuant to the Civil Aviation Law, "in case the lease agreement is not registered, the owner and the operator are jointly liable for any infringement or damage caused by the aircraft". Registering an aircraft also enables the owner to evidence its title to the aircraft with respect to third parties.
However, the public registry does not constitute a title registry for foreign aircraft. Recordings in the public registry relate solely to lease agreements and only the terms of the agreements are published, the focus being on the relationship between lessors and lessees. For instance, in the case of a sublease, the owner of the aircraft would not be a party to the main agreement included in the publicly available registry entry, the title thereto needing to be shown only through a bill of sale (a supporting document for the filing) and the owner would intervene only through a separate consent to sublease instrument (another supporting document).
Therefore, the rights of owners of foreign aircraft that operate in Peru may be seen as being insufficiently public under local laws. If actions were taken against owners' assets, these rights may be threatened.
Nonetheless, owners may be reassured by the fact that an opposing third party may not ignore the scope of property rights upon the aircraft by arguing that ownership terms are not necessarily included in the entry of a particular lease. Therefore, parties that intend to take action in Peru against a foreign-owned aircraft, or any opposing interests, would not be able to deny any terms of the owner's title to the aircraft which were filed before the public registry. With regard to foreign aircraft, this places the Peruvian public registry at a midpoint between a title registry and an interests registry.
For further information on this topic please contact Fernando Hurtado de Mendoza at Kennedys Law LLP by telephone (+51 1562 5150) or email (firstname.lastname@example.org). The Kennedys Law LLP website can be accessed at www.kennedyslaw.com.
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