CHAD Law and Practice Contributed by: Claudy Monja and Felana Ranaivoson, John W Ffooks & Co
2.3.7 Registration of Aircraft in Alternative Countries This is not applicable in Chad. There are no other alternative countries for the registration of aircraft under Chadian law. 2.3.8 Requirements for Documents Concerning Registration The applicant should provide the original of the lease agreement and the original certificate of registration of the aircraft. However, power of attorney should be notarised. Apart from this, the authors are not aware of any other requirement. 2.4 Lessor’s Liabilities 2.4.1 Tax Requirements for a Foreign Lessor A foreign lessor will not be required to pay any income or capital gains or other taxes upon leasing an aircraft or engine to a domestic lessee. However, any pay - ment of rent made by the lessee to the lessor will be subject to a withholding income tax of 18%. This will be withheld by the paying entity (ie, the lessee). This is the reason why there are tax gross-up clauses in lease agreements. 2.4.2 Effects of Leasing on the Residence of a Foreign Lessor No foreign lessor to any lease will be deemed to be resident, domiciled or carrying on business in Chad, or subject to any taxes in Chad, as a result of its being a party to, or its enforcement of, the lease. 2.4.3 Engine Maintenance and Operations No liabilities in respect of aircraft or engine mainte - nance and operations should be imposed on a foreign lessor under a lease as a result of its being a party to such lease. 2.4.4 Damage or Loss Caused by an Asset Only the lessee (as operator of the aircraft) is liable with respect to the use and operation of the aircraft for the duration of the lease. It is advisable to insert in the lease a statement specifying that the aircraft is under the care and custody of the lessee for the dura - tion of the lease.
2.4.5 Attachment by Creditors The retaining right is the right of a creditor to retain in its possession a debtor’s asset in the event of default and until full payment of the debts. This is applicable to movable assets and properties. Note that the retain - ing right is not subject to any agreement or registration formalities in order to be enforceable. The creditor’s security is materialised by its right to retain in its pos - session the asset that is the object of the dispute. For example, an aircraft maintenance service company is entitled to retain the aircraft in its possession if the aircraft operator fails to pay the maintenance fees. 2.4.6 Priority of Third Parties’ Rights In terms of ranking, employees’ salaries, court fees, legal fees (eg, bailiff’s fees), taxes and other state fees, suppliers’ debts secured by rights of detention ( droit de rétention ), mortgages and pledges (possessory and non-possessory pledges) take priority over a les - sor’s rights under an aircraft or engine lease. 2.5 Insurance and Reinsurance 2.5.1 Requirement to Engage Domestic Insurance Companies If an aircraft is registered in Chad, the aircraft is required to be placed with domestic insurance com - panies. Reinsurance can be subscribed with foreign insurance companies. 2.5.2 Mandatory Insurance Coverage Requirements Aircraft operators must have insurance to cover their liability for damage to third parties, persons, baggage and goods. 2.5.3 Placement of Insurance Outside of Jurisdiction Foreign reinsurance subscription is allowed. 2.5.4 Enforceability of “Cut-Through” Clauses There is no such concept under local law. The enforce - ment of such clause would be left to the discretion of the judge. 2.5.5 Assignment of Insurance/Reinsurance The assignment of insurances/reinsurances is permit - ted. However, this is subject to the consent of the insured party.
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