ARMENIA Law and Practice Contributed by: Narine Beglaryan, Arianna Adamyan and Anahit Aloyan, Concern Dialog
2.5.3 Placement of Insurance Outside of Jurisdiction
ership and preventing third-party enforcement against the leased asset. 2.4.6 Priority of Third Parties’ Rights Under Armenian law, the rights of certain third parties can take precedence over a lessor’s rights under an aircraft lease, regardless of whether the lease or the lessor’s interest is registered in the national aircraft register. For instance, creditors may assert retention rights related to repair and maintenance costs, warehousing and storage fees, preservation expenses, and judicial costs. These rights enable these third parties to make priority claims on the aircraft, even in the presence of the lessor’s ownership or lease rights. 2.5 Insurance and Reinsurance 2.5.1 Requirement to Engage Domestic Insurance Companies Under Armenian law, there is no mandatory require - ment that any part of the insurance for an aircraft or engine lease be placed with domestic insurance com - panies. Parties may arrange insurance with either foreign or domestic insurers, provided that the insurance com - plies with applicable Armenian legal and aviation requirements. 2.5.2 Mandatory Insurance Coverage Requirements Under Armenian law, mandatory insurance coverage requirements apply to aircraft operators conduct - ing flights to, from, or within the territory of Armenia. Operators must maintain valid insurance covering liability for:
Reinsurance can be placed outside of Armenia for up to 100% coverage, as long as the reinsurers are deemed reliable and not prohibited by the Central Bank of Armenia. The Central Bank regulates and may restrict the use of reinsurers that are financially unstable or pose risks to insured parties. 2.5.4 Enforceability of “Cut-Through” Clauses Regarding cut-through clauses in insurance contracts, no known regulatory or judicial restrictions exist to their enforceability. 2.5.5 Assignment of Insurance/Reinsurance There are no prohibitions regarding the assignment of insurance or reinsurance under Armenian law. 2.6 Lease Enforcement 2.6.1 Restrictions on Lessors’ Abilities Under Armenian law, a lessor may unilaterally termi - nate the lease if: • the lessee uses the leased aircraft inconsistently with the lease terms or intended purpose; • the lessee obstructs the lessor’s control over the leased asset; and • the lessee repeatedly fails to pay lease fees within the agreed deadlines (usually more than twice consecutively), unless otherwise agreed in the contract. If the lease is terminated on these grounds, the les - see bears all costs related to the return of the aircraft, including disassembly, insurance, and transportation. The lease agreement may also specify additional grounds for early termination by either party. In general, there are no restrictions under Armenian law on a lessor’s ability to export an aircraft from Armenia following lease termination, except for cas - es involving exports to countries subject to sanctions or restrictions. Additionally, if the aircraft contains dual-use components (ie, parts with potential military applications), an export license may be required under Armenia’s export control regulations.
• passenger injury or death; • third-party damage; and • crew liability.
The minimum coverage levels are set by Armenian law and the 1999 Montreal Convention, which Arme - nia has ratified. Operators must provide proof of such insurance to the Committee as part of the certification and oversight process.
23
CHAMBERS.COM
Powered by FlippingBook