Cains’ Aviation team are delighted to have served as contributing editors of the Isle of Man chapter within the recently published The Legal 500: Aviation Finance & Leasing Comparative Guide  4th Edition.

Published by Legalease and The Legal 500, the definitive global law guide provides a comprehensive and pragmatic insight into the current issues aviation finance and leasing law across a variety of jurisdictions.

Steven Quayle and Jess Whitley, joined top ranked lawyers offering analysis on topics such as International conventions, foreign judgments, registration, Lessor’s rights, security documents, insurance, taxes, and import or export restrictions as well as insight and opinion on challenges and opportunities that may occur in Isle of Man.

To read the Isle of Man chapter online click here or for a pdf version click download it here.

Below is a short excerpt from the guide.

Isle of Man: Aviation Finance & Leasing

What international aviation conventions has your jurisdiction signed and/or ratified:

With certain exceptions, the UK is responsible for the Isle of Man’s international relationships. To apply to the Isle of Man, a treaty must be signed and ratified by the UK, then extended to the Isle of Man.

The Isle of Man has signed and ratified the Chicago Convention of 1944 on International Civil Aviation and the 2001 Cape Town Convention on International Interests in Mobile Equipment and the associated Protocol on Matters Specific to Aircraft Equipment.

The Aviation (Cape Town Convention) (No.2) Order 2016 (the “Order”) applies to the Isle of Man, with modifications, the UK’s International Interests in Aircraft Equipment (Cape Town Convention) Regulations 2015 (SI 2015 No.912) (the “Regulations”). The Regulations implement the Convention on International Interests in Mobile Equipment (the “Convention”) and Protocol on Matters Specific to Aircraft Equipment (the “Aircraft Protocol”). The Regulations are subject to, and to be applied in accordance with, the provisions of the Convention, the Aircraft Protocol and the Protocol Regulations.

If your jurisdiction has signed and ratified the Cape Town Convention: a. Which qualifying declarations (opt-in and opt-out) has your jurisdiction made under the Cape Town Convention? b. Does the Cape Town Convention take priority over conflicting national law?

Following on from our answer above, we understand that the UK has opted for adopting the Convention to the fullest extent. However, for the UK, as a Member State of the EU when the UK made the Regulations and ratified the treaty, certain options fell within the competence of the EU. As the Isle of Man is outside of the EU in relation to civil aviation matters, those constraints were not binding on the Isle of Man.

The Isle of Man differs from the UK in respect of Article X (which allows a Contracting State to make declarations to modify provisions regarding relief pending foal determination); Article XII (which allows a Contracting State to make a declaration requiring courts of the Contracting State to cooperate to the maximum extent possible with foreign courts and foreign insolvency administrators in carrying out the provisions in Article XI); and Article XXI (which provides for the courts of a Contracting State to have jurisdiction where the aircraft object is a helicopter or an airframe pertaining to an aircraft, for which that State is the State of registry).

Is your aircraft registry an owner-register (registering ownership interests) or an operator-register (registering interests as operator)? Please also state any conditions, procedural steps or formality requirements for such registration and explain how this is evidenced (for example, the issuance of a Certificate of Registration).

Neither definition fits precisely. The Isle of Man Aircraft Register (“IOM Aircraft Register”) is not a register of legal title, but a person who is either the legal owner or ‘charterer by demise’ (dry lessee) has the standing to register the aircraft in its name. An aircraft is not registered in the name of an operator (unless that operator is also a dry lessee).

In order for an aircraft to be registered and operated, there are suites of documents and information that need to be provided and approved in respect of the registered owner, the aircraft’s airworthiness and airworthiness management, the operator, radio licensing, airspace approvals, crew license validations and other matters.

The following information would appear on the public register if a search was made against an Isle of Man registered aircraft: date registered; register number; core number; registration mark; airframe manufacturer; aircraft type (model); sub-classification; manufacturer’s serial number; mode s number; registered owner name and address; whether registered owner is registered as a ‘charter by demise’; previous international registration; previous Isle of Man registration; and date of last change of registration mark. A certificate of registration is issued in favour of the owner.

Generally, the registered owner – which may be the legal owner or a dry lessee – of an Isle of Man registered aircraft must be incorporated in a Commonwealth or European Economic Area jurisdiction and Switzerland. The Aircraft registered in the Isle of Man are also only for private and corporate use, not commercial air transport or aerial work.

However, there is a specific exemption for ‘parked’ (off-lease or repossessed) airliners (Qualified Ownership Exemption 17/2018) which allows owners incorporated in the USA, Hong Kong (Special Administration Region), Japan and China to be registered owners of the aircraft.

An aircraft can be leased from a non-qualifying legal owner to a qualifying lessee and be registered in the name of the lessee on the IOM Aircraft Register. The Isle of Man Aircraft Registry (the “Registry”) has discretion to decline such a registration, but we have never witnessed this discretion be exercised.

Click here to view the complete Legal 500: Aviation Finance & Leasing Comparative Guide.