FRANCE Law and Practice Contributed by: Yves Hénaff d’Estrées, HENAFF D’ESTREES
2.4.6 Priority of Third Parties’ Rights Some third parties’ rights may take priority over a lessor’s rights under an aircraft lease whether or not such lease/lessor is registered in the national aircraft register. For example, creditors may take advantage of retention rights for repair and maintenance costs, warehousing and depository costs, preservation costs and judicial costs. 2.5 Insurance and Reinsurance 2.5.1 Requirement to Engage Domestic Insurance Companies It is not a mandatory requirement that either all or part Commercial air carriers must be insured for damag - es caused to passengers, luggage, freight and third parties, with a mandatory minimum. The mandatory insurance coverage requirements imposed by Euro - pean regulations for damages caused to passengers are 250,000 SDR (about USD350,000 at the current rate of 1 SDR to USD1.40), and 300 million SDR (about USD420 million) for aircraft weighing between 50,000 and 200,000 kgs, in respect of liability for third parties. 2.5.3 Placement of Insurance Outside of Jurisdiction Reinsurances of up to 100% coverage may be placed outside of France with foreign insurance companies based in a member country of the European Eco - nomic Area. Outside the European Union, in 2015, the European Commission granted ten-year equiva - lent conditions for reinsurance companies based in Australia, Bermuda, Brazil, Canada, Mexico and the United States. of the insurance be placed in France. 2.5.2 Mandatory Insurance Coverage Requirements Switzerland has been granted a limited equivalence. A “covered agreement” between the European Union and the United States was signed on 22 September 2017, detailing the financial and prudential obligations imposed on insurance and reinsurance companies. 2.5.4 Enforceability of “Cut-Through” Clauses “Cut-through” clauses in insurance/reinsurance docu - ments are valid and enforceable.
2.5.5 Assignment of Insurance/Reinsurance Assignment of insurance/reinsurance is permitted. 2.6 Lease Enforcement 2.6.1 Restrictions on Lessors’ Abilities There are no substantial restrictions on a lessor’s abil - ity to: • terminate an aircraft lease; • re-export the aircraft; and/or • sell the aircraft following such termination. The aircraft need not be physically located in France at the time of any such action(s). 2.6.2 Lessor Taking Possession of the Aircraft A lessor cannot take physical possession of an air - craft without a court order in a case where the lessee is opposing the lessor’s possession. A court order is necessary in this case. 2.6.3 Specific Courts for Aviation Disputes In France, there are no specific courts to decide avia - tion disputes, but commercial courts have compe - tent subject matter jurisdiction to adjudicate disputes between commercial undertakings, whether French or foreign. 2.6.4 Summary Judgment or Other Relief A lessor may obtain a summary judgment, equitable or other injunctive relief pending final resolution of judi - cial proceedings to enforce an aircraft lease. A French court would issue a summary judgment on the condi - tion that the obligation of the debtor is not seriously questionable, or in the case of urgent matters. 2.6.5 Domestic Courts’ Approach to Foreign Laws and Judgments French courts will generally uphold: • a foreign law as the governing law of an aircraft lease between a French and a foreign party; • the submission to a foreign jurisdiction; • a contractual waiver of jurisdiction immunity by the parties of such lease; and • a contractual waiver of immunity of execution which expressly describes the assets subject to the waiver of such immunity.
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