GERMANY Law and Practice Contributed by: Konrad Schott, Jan Brinkmann and Johannes Vogel, Freshfields
Once the required documents have been submitted to the mortgage register, it usually takes at least one to two weeks until written confirmation of deregistration is received by the mortgagee and mortgagor. 3.3.3 Register of Mortgages and Charges German aircraft mortgages must be registered in the German aircraft mortgage register to be effective. The mortgage registration avails in rem effects and gener - ally entitles the secured party to enforce the aircraft mortgage and obliges the owner to tolerate the fore - closure of the aircraft. 3.3.4 Statutory Rights of Detention or Non- Consensual Preferential Liens In the case of: • a default in the payment of Eurocontrol charges by an aircraft operator and, if the operator is unknown, non-payment of such charges by the owner; • unpaid VAT and/or customs in case of an import of an aircraft; and • non-payment of charges for official acts, especially for examinations and inspections, according to the German Air Traffic Act ( Luftverkehrsgesetz ) and the Act on the German Civil Aviation Authority ( Gesetz über das Luftfahrt-Bundesamt ), a bailiff ( Gerichtsvollzieher ) can be retained by the rel - evant authority to detain and encumber the aircraft – to the extent that the defaulting debtor is also the owner of the aircraft, whereupon an aircraft which is registered in the German aircraft register may be encumbered with a German aircraft mortgage and an aircraft registered abroad may be encumbered by way of attachment. In principle, the non-consensual lien would arise over one aircraft, whereas the Act on the Rights in Aircraft generally provides for the entitlement of the bailiff to encumber more than one aircraft registered in the Ger - man aircraft register with a German aircraft mortgage. 3.3.5 Verification of an Aircraft’s Freedom From Encumbrances A potential purchaser of an aircraft may request a search of the German aircraft mortgage register to verify that an aircraft is free from encumbrances;
furthermore, a check should be run for Eurocontrol charges and, if the aircraft was previously registered in any other country, a check in that jurisdiction and in the International Register is recommended. 3.4 Enforcement 3.4.1 Differences Between Enforcing Security Assignments, Loans and Guarantees A security assignment over rights and claims, consti - tuting an in rem interest over the respective collateral, is typically enforced by the secured party collecting any claims and, in the case of other rights, by realising them by private sale or auction. A loan or guarantee, constituting claims in personam are enforced by filing a lawsuit against the respective debtor and seeking court title for payment or performance, as the case may be. 3.4.2 Security Trustees’ Enforcement of Their Rights Under German law, notice and acknowledgement of a security assignment over German law-governed rights or claims are not necessary to establish a valid secu - rity assignment or allow for enforcement. The third- party debtor may, however, continue to discharge its obligations to the assignor and will be otherwise pro - tected – eg, by a continuing right to set-off – unless notice of assignment or other appropriate proof of assignment is given to the third-party debtor by the relevant assignor. 3.4.3 Application of Foreign Laws German law applies German and European conflict of law rules to any finance or security document. Subject to limitations in certain circumstances and compliance with ordre public, there is general freedom of choice of applicable law under contracts between commer - cial parties. Regarding security, the law governing the collateral (eg, a claim or tangible item) should typically determine the law applicable to any security interest over such asset. The submission to the jurisdiction of a foreign venue is generally permissible between commercial parties.
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