GERMANY Law and Practice Contributed by: Konrad Schott, Jan Brinkmann and Johannes Vogel, Freshfields
ZPO) are fulfilled; and • an arbitral award pursuant to the ZPO, which refers to the United Nations Convention on the Recogni - tion and Enforcement of Foreign Arbitral Awards of 10 June 1958 (the New York Convention) (see 2.6.12. Enforcement of Foreign Arbitral Decisions for further details). 2.6.7 Judgments in Foreign Currencies A judgment can be obtained in any currency. A judg - ment for payment of money expressed in a foreign currency may be satisfied in euros at the exchange rate prevailing at the time of payment unless the enforcement court decides that specific performance of the obligation to effect payment in the judgment currency has been agreed. 2.6.8 Limitations on Lessors’ Actions Following Termination General limitations under German law with respect to punitive damages, compound interest, contraven - tion of good morals ( Sittenwidrigkeit ), general princi - ples of equity ( Treu and Glauben ) or German public policy ( ordre public ) have to be observed, and provi - sions of a lease agreement in violation thereof may be unenforceable and actual remedial actions taken by a creditor in violation thereof may be held to be illegal. 2.6.9 Lessor’s Requirement to Pay Taxes/Fees A lessor under an aircraft lease has to pay regular income taxes on its income in Germany in connection with the performance or enforcement of such lease agreement if the lessor is subject to either unlimited (German tax residents) or limited income taxation (for - eign lessors such as those having a permanent estab - lishment in Germany or if the aircraft is registered in the German aircraft register, subject to double taxation agreements). 2.6.10 Mandatory Notice Periods Unless the relevant aircraft lease contains specific provisions, a lessor must comply with statutory notice periods under the laws governing the lease if it termi - nates an aircraft lease. 2.6.11 Lessees’ Entitlement to Claim Immunity Commercial lessees would usually not be entitled to any immunity from suit, execution or attachment,
subject to restrictions on the attachment of aircraft in scheduled service operated by a lessee. 2.6.12 Enforcement of Foreign Arbitral Decisions Germany ratified the New York Convention, and Ger - man courts will recognise and enforce an arbitral deci - sion if and to the extent it contains a final and binding decision which conclusively resolves the matter. 2.6.13 Other Relevant Issues In an enforcement scenario, safeguarding the legiti - mate interests of either party requires the examina - tion of the underlying facts as well as the entire range of legal areas affected, such as contract law, statu - tory law, insolvency law, aircraft regulations, etc. In an imminent enforcement scenario, a creditor is well advised to retain legal experts with in-depth knowl - edge of domestic and international aviation laws. 2.7 Lease Assignment/Novation 2.7.1 Recognition of the Concepts of Contractual Assignment and Novation German law recognises legal concepts of assign - ment and novation. An assignment ( Abtretung ) is the transfer of the relevant rights, claims or receivables. In a novation ( Novation ), an existing right or claim is replaced by a new right or claim with the replacement right or claim having equal content as the replaced right or claim, except that the right or claim is estab - lished anew and any counterclaims, objections and the like arising from the relationship between the debtor and the (original) creditor would generally not be available against the replacing right or claim. If the rights and claims under a lease agreement that is to be transferred have been assigned for security purposes, an assignment or novation will likely require the consent or co-operation of the secured party and – depending on the terms of the security assignment – a new security assignment may have to be entered into upon completion of the transfer. 2.7.2 Assignment/Novation of Leases Under Foreign Laws German law will apply German and European con - flict of law rules to any finance or security document. Subject to limitations in certain circumstances and compliance with ordre public, there is general freedom
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