CONGO BRAZZAVILLE Law and Practice Contributed by: Claudy Monja and Sarah Razafindrafito, John W Ffooks & Co
2.9.4 Effect of Lessee’s Insolvency on a Deregistration Power of Attorney
be equally paid in accordance with the debtor’s exist - ing assets. 2.9.7 Imposition of Moratoria in Connection With Insolvency Proceedings In the case of legal redress, the debtor must propose an arrangement with the creditors. This arrangement can usually impose moratoria. A two-year moratorium on the payment of rents may be granted to the lessee in accordance with the provisions of Articles 9 and 75 The methods by which a domestic lessee can be liq - uidated or placed in administration or receivership are conciliation, preventative settlement, legal redress and liquidation of property, as defined under the Uniform Act on Insolvency. The lessee can lodge a declaration of cessation of payment with the commercial court and request the initiation of insolvency proceedings. The cessation of payment and the insolvency proceedings (ie, either a judicial restructuring or a winding-up) can also be requested by the creditors or the court itself. In theory, three scenarios are possible: • self-declaration; or • request by the creditors; or • request by the court. 2.9.9 Ipso Facto Defaults Performance defaults are required to repossess an aircraft during a lessee insolvency proceeding. 2.9.10 Impact of Domestic Lessees’ Winding-Up See 2.9.5 Other Effects of a Lessee’s Insolvency . 2.10 Cape Town Convention and Others 2.10.1 Conventions in Force et seq of the Uniform Act on Insolvency. 2.9.8 Liquidation of Domestic Lessees The Convention on International Interests in Mobile Equipment (the “Convention”) and the related Pro - tocol on Matters Specific to Aircraft Equipment (the ”Protocol”) are in force in the Republic of Congo. They have been applicable in the Republic of Congo since 1 May 2013. The “authorised entry point” codes are not required for registering international interests.
Irrevocable powers of attorney regarding the assets that make up the estate of the insolvent party will not survive its insolvency. However, and taking into account that the aircraft is not owned by the lessee/ insolvent, the aircraft is not part of the insolvency estate, for which reason the deregistration power of attorney will survive. If the amounts regarding the lease are not paid, the lessor may invoke an event of default to terminate the agreement, requesting the repossession and deregistration of the aircraft through a deregistration power of attorney. 2.9.5 Other Effects of a Lessee’s Insolvency The opening of insolvency proceedings against a les - see (ie, legal redress or liquidation of assets) neither suspends nor terminates a lease agreement. However, as the Republic of Congo has adhered to the Cape Town Convention and the Protocol (see 2.10 Cape Town Convention and Others ), the following options may be considered as per Article XI of the Convention. If the lessee is declared insolvent, the receiver(s) must give back the aircraft within a maximum waiting period of 60 calendar days unless the lessee executes the outstanding obligations and commits to execute all its future contractual obligations. The aircraft must be immediately returned to the lessor upon the occur - rence of a new event of default and the lessee cannot claim any further delay. Any attempt to delay or prevent the repossession of the aircraft by the lessor after the expiry of the waiting period of 60 days is prohibited. Subject to the above, which is fully recognised and applicable in the Republic of Congo, the Cape Town Protocol does not prevent the lessor from using any remedy available in the local legislation. 2.9.6 Risks for a Lender if a Borrower, Guarantor or Security Provider Becomes Insolvent The main risks for a lender if a borrower providing security becomes insolvent would be the lack of suffi - cient assets to provide for payments due to the lender, which, if it does not have a guarantee of its own, will be deemed as any other common creditor that should
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