CAYMAN ISLANDS Law and Practice Contributed by: Sarah Humpleby, Alexandra Franklin, Peter Kendall and Sam Hall, Walkers
3.3.5 Verification of an Aircraft’s Freedom From Encumbrances In order to verify that an aircraft is free of encumbranc - es, a potential purchaser of an aircraft can search the Mortgage Register. See also 3.4 Enforcement . 3.4 Enforcement 3.4.1 Differences Between Enforcing Security Assignments, Loans and Guarantees Enforcement of a security assignment, as opposed to a loan or guarantee, will depend on the terms of each of these instruments. 3.4.2 Security Trustees’ Enforcement of Their Rights Subject to certain limited qualifications, the courts of the Cayman Islands should recognise as effec - tive a foreign law-governed security assignment that is effective under that law to create an assignment by way of security of the relevant rights and benefits under a lease agreement. 3.4.3 Application of Foreign Laws See 2.1.2 Application of Foreign Laws . 3.4.4 Recognition and Enforcement of Foreign Judgments and Arbitral Awards See 2.6.6 Domestic Courts’ Recognition of Foreign Judgments/Awards with respect to foreign judg - ments. See 2.6.12 Enforcement of Foreign Arbitral Deci- sions with respect to arbitral awards. 3.4.5 Secured Parties’ Right to Take Possession of Aircraft Enforcement will be determined by the provisions of the relevant security agreement. As per 2.6.2 Lessor Taking Possession of the Aircraft , the Cayman Court will recognise self-help remedies for enforcement of security interests over the aircraft and/or enforce - ment of security interests over the shares in a Cay - man Islands company claiming title to the aircraft. The CAACI will also typically deal directly with the benefi - ciary of an IDERA to effect deregistration. See also 2.6.3 Specific Courts for Aviation Disputes .
3.4.6 Domestic Courts Competent to Decide on Enforcement Actions See 2.6.3 Specific Courts for Aviation Disputes . 3.4.7 Summary Judgments or Other Relief See 2.6.4 Summary Judgment or Other Relief . 3.4.8 Judgments in Foreign Currencies See 2.6.6 Domestic Courts’ Recognition of Foreign Judgments/Awards and 2.6.7 Judgments in Foreign Currencies . 3.4.9 Taxes/Fees Payable See 1.1.1 Taxes/Duties Payable Upon Execution of the Sales Agreement and 2.6.9 Lessor’s Require- ment to Pay Taxes/Fees . 3.4.10 Other Relevant Issues Any document that purports to create a security inter - est (a “Security Document”) is subject to general prin - ciples of enforceability, including (without limitation): • The Cayman Court may treat a purported fixed charge over assets as a floating charge if the chargor has sufficient authority to deal with its assets in the course of its business and/or the holder of security does not exercise sufficient con - trol over the relevant assets. • Any charge in the nature of a floating charge will not take priority in ranking over any subsequent fixed mortgage or charge or lien which is created prior to the crystallisation of the floating charge and will be subject to such preferential payments as are set out in Section 141 (1) and Schedule 2 of the Companies Act. • In the case of a winding-up of a Cayman Islands company in a jurisdiction other than the Cayman Islands, the priority of any security granted by or over the assets of that Cayman Islands company may be affected by any provision of the laws of that jurisdiction as to the priority of claims in a winding-up. • To the extent that any collateral that is the subject of any security interest (“Relevant Collateral”) is held in the Cayman Islands or has its lex situs in the Cayman Islands or is otherwise governed by or constituted according to the laws of the Cayman Islands (”Cayman Relevant Collateral”), failure to
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