EGYPT Law and Practice Contributed by: Sherif El Hosseny, Malak El Amiry and Farida Degheidy, Matouk Bassiouny & Hennawy
sor would also need to request the court/bankruptcy trustee to set aside the aircraft from any proceedings and allow its repossession. The bankruptcy law further stipulates that the bankruptcy trustee, after consulting the bankruptcy controller and obtaining a permission from the bankruptcy judge, may return the aircraft to its owner. If such repossession has been rejected, the party (owner) requesting it may bring a dispute before the court. The bankruptcy trustee may impose the rights of any other creditors in priority to the lessor. 2.9.6 Risks for a Lender if a Borrower, Guarantor or Security Provider Becomes Insolvent If the security provided is not perfected, then the security is at risk as other secured or unsecured credi - tors may also be able to claim. 2.9.7 Imposition of Moratoria in Connection With Insolvency Proceedings There is a moratorium imposed in connection with bankruptcy proceedings, which excludes certain mat - ters such as criminal claims. Under Egyptian law, there is no fixed moratorium period. However, said morato - rium commences on the date on which the bankruptcy judgment is rendered and continues until the decision to conclude the bankruptcy is rendered. 2.9.8 Liquidation of Domestic Lessees An Egyptian company may be voluntarily or involun - tarily liquidated or made bankrupt. 2.9.9 Ipso Facto Defaults A provision in an agreement creating a default for spe - cific reasons – such as insolvency or reorganisation and restructuring – and thereby permitting the lessor to terminate the leasing of the asset, is permissible. 2.9.10 Impact of Domestic Lessees’ Winding-Up If the lessee is wound up by a court or administration proceeding, there is a suspect period as stipulated in 2.9.4 Effect of Lessee’s Insolvency on a Dereg - istration Power of Attorney . In that regard, the law provides that any transaction conducted during the suspect period under a bankruptcy scenario may be nullified if it is evidenced that it is conducted against the interests of the creditors and that the other party
was aware of the financial status of the bankrupt enti - ty. Accordingly, for the lease rentals, the lease security deposit and maintenance reserves may be ordered by the court to the liquidator or bankruptcy control if such payments would be deemed void by the bankruptcy judge if said judge is of the view that such transactions were made to the detriment of third parties. As to the aircraft, please see 2.9.5 Other Effects of a Lessee’s Insolvency (second and third paragraphs). 2.10 Cape Town Convention and Others 2.10.1 Conventions in Force Egypt ratified the Cape Town Convention and the Air - craft Protocol, and both came into force on 1 April 2015. However, neither instrument has yet been fully implemented by Egyptian authorities. Accordingly, the ECAA is not yet involved in the registration of inter - national interests and this process is left to the lessor and lessee. 2.10.2 Declarations Made Concerning Conventions Originally, Egypt made declarations only under Articles 39 (1)(a), 40 and 54 (2) of the Cape Town Convention with no declarations relevant to the Aircraft Protocol. Recently, Egypt has made new declarations whereby Egypt has notified UNIDROIT on 7 November 2019 of subsequent declarations under Articles 39 (1)(a), 53 and 54 (2) of the Cape Town Convention and Articles XIX, XXX(1), XXX(2) and XXX(3) of the Aircraft Protocol. These subsequent declarations came into effect on 1 June 2020. 2.10.3 Application of Article XIII of the Protocol on Matters Specific to Aircraft Equipment Egypt has made the relevant declaration to apply IDERA. Historically, the ECAA began approving the registra - tion of IDERA provided the inclusion of the following qualification: “We acknowledge that the provisions in the Cape Town Convention and the Protocol to the Convention on International Interest in Mobile Equipment on Mat - ters specific to Aircraft Equipment relating to recogni - tion of Irrevocable Deregistration and Export Request
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