EGYPT Law and Practice Contributed by: Sherif El Hosseny, Malak El Amiry and Farida Degheidy, Matouk Bassiouny & Hennawy
3.2.7 Formalities/Mandatory Terms to Create and Perfect Security Assignments If there are any assignments of rights, the registration of such assignments must be registered for them to be valid vis-à-vis third parties. As per Egyptian law, for an assignment of rights to be effective against third parties, the assignment must have an “established date”, which can take place either before an Egyp - tian notary (the ECAA for aircraft-related transactions) or through service of a formal notice through a court bailiff. Failure to do so may risk losing the priority of the assignment. 3.2.8 Domestic Law Security Instruments If an English or New York law-governed security assignment were to be taken in respect of an aircraft registered domestically, other security instruments available to a financier include mortgages, share pledges, mortgages over other assets, guarantees, DPOA, IDERA, or account pledges. For filing fees, please see 2.1.5 Taxes/Duties Payable for Physical Execution of a Lease and 2.3.6 Taxes/Duties Payable for Registering a Lease . To date there are no Cape Town filings made through the ECAA. An English or New York law-governed security assign - ment or a domestic law security instrument may be registered domestically. 3.2.10 Transfer of Security Interests Over Aircraft/ Engines The transfer of security interests over an aircraft and/ or engines is recognised. However, a transfer of secu - rity over an engine would not be registrable with the ECAA. 3.2.11 Effect of Changes in the Identity of Secured Parties If the identity of the secured parties under a security assignment changes after its execution, then such changes may need to be reflected in the underlying security documents. 3.2.9 Domestic Registration of Security Assignments Governed by Foreign Laws
• Interest cannot exceed 7% if such transaction is considered a commercial transaction – any agree - ment to the contrary may be deemed void. • Under an aircraft mortgage, the interest due on the loan secured by a mortgage cannot exceed 12% – any agreement to the contrary may be deemed void. • Under banking transactions such as loans, the interest is calculated as per market norms. 3.2 Security 3.2.1 Typical Forms of Security and Recourse Mortgages, account pledges, share pledges, assign - ments of rights, assignments of insurances and rein - surances, guarantees, bank cheques, IDERA, DPOA, and letters of credit are the typical forms of security in an aviation finance transaction. 3.2.2 Types of Security Not Available There are no specific types of security that cannot be taken over an aircraft so long as they do not contra - The concept of the trust is not recognised in Egypt. The role of a security trustee acting on behalf of the lenders as a security agent in a transaction is, how - ever, recognisable. 3.2.4 Assignment of Rights to an Aircraft by a Borrower to a Security Trustee A borrower can assign to a security trustee, pursuant to a security assignment/assignment of insurances or under an aircraft lease or mortgage, its rights in the aircraft. 3.2.5 Assignment of Rights and Benefits Without Attendant Obligations It is possible to assign the rights and benefits only without also assigning the attendant obligations of the lessor under an aircraft lease. 3.2.6 Choice of Foreign Law A security assignment or a guarantee can be gov - erned by English or New York law. vene Egyptian public order. 3.2.3 Trust/Trustee Concepts
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