INDIA Law and Practice Contributed by: Nitin Sarin and Vistasp Irani, Sarin & Co
as such. The courts will not revisit the issues involved in the arbitration nor sit as a court of appeal. 2.6.13 Other Relevant Issues In general, it is prudent to factor in a significant amount of time to properly enforce one’s rights in India, mainly due to the country’s complex bureaucracy. In case of any contest by the lessee, enforcement may be delayed. 2.7 Lease Assignment/Novation 2.7.1 Recognition of the Concepts of Contractual Assignment and Novation India recognises the concepts of both contractual assignment and novation. 2.7.2 Assignment/Novation of Leases Under Foreign Laws As long as the New York or English law-governed assignment and assumption agreement or novation agreement is a valid contract under Indian law, the courts in India will uphold the validity of such an agree - ment. The consent of the lessee will also be required for such an agreement to be valid and enforceable. As long as the agreement itself is not opposed to public policy, such an agreement does not need to contain any specific mandatory terms in order to be valid under Indian law. 2.7.3 Enforceability of Lease Assignments/ Novations The aircraft and/or engine lease assignment and assumption/novation agreement should be translated if it is not in English, and then notarised. 2.7.4 Filing/Registration of Lease Assignments/ Novations The DGCA recently mandated that all aircraft lease assignment and novation agreements must be filed with the regulator. As such, there is no requirement for an engine lease assignment and novation agreement to be filed with the DGCA, but it is recommended. Such agreements are not subject to any consent from any government entity. The procedure for filing an aircraft or engine lease assignment and assumption/novation agreement is fairly simple: a notarised copy of the agreement may
be filed under a covering letter with a request that it be placed on the aircraft file. A change in the owner - ship of an aircraft needs to be recorded in the aircraft register and on the certificate of registration of the aircraft; the rules and regulations also state that it is illegal for any person to fly or assist in flying such an aircraft until the name of the new owner is endorsed on the certificate of registration. Permission must spe - cifically be sought from the DGCA to continue flying the aircraft until such activity is carried out. No consent is required in advance, but it is usual prac - tice to apply to the DGCA for permission to continue flying the aircraft in case of a change of ownership. 2.7.5 Taxes/Duties Payable on Assignment/ Novation No taxes or duties are payable in respect of such an assignment and assumption/novation agreement. As is usual practice with lease agreements, the original assignment and assumption/novation agreement, if brought into India, must be “stamped” within three months of it first being received in the country. Cer - tain states also require copies of agreements to be ”stamped”. 2.7.6 Recognition of Transfer of Ownership Interests In cases where the ownership interest of an entity own - ing an aircraft is transferred with legal title to the asset remaining with that entity, a change on the certificate of registration of the aircraft would not be required, so the aircraft may continue flying unhindered. 2.8 Aircraft Deregistration and Export 2.8.1 Deregistering Aircraft in This Jurisdiction An aircraft in India may be deregistered on the appli - cation of the lessee/operator, the owner, the lessor, the holder of the Irrevocable De-Registration and Export Request Authorisation (IDERA) or its certified designee. DGCA Suo Moto The DGCA may also suo moto cancel the registration of an aircraft if: • it no longer satisfies the ownership test;
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