INDONESIA Law and Practice Contributed by: Enny Purnomo Widhya, Nugrahani Astiyanti and I Gusti Ngurah Oka Anantajaya, Mochtar Karuwin Komar
2.4 Lessor’s Liabilities 2.4.1 Tax Requirements for a Foreign Lessor For any tax advice, please consult with an Indonesian tax consultant on this matter. 2.4.2 Effects of Leasing on the Residence of a Foreign Lessor The leasing of an aircraft engine to an Indonesian les - see will not of itself create a Permanent Establishment (PE) in Indonesia. For any tax advice, please consult with an Indonesian tax consultant on this matter. 2.4.3 Engine Maintenance and Operations No liability in respect of aircraft or engine maintenance and operations can be imposed on a foreign lessor under a lease, as a result of being a party to the lease, to the extent that the lease is structured as a dry lease and as long as the lessor has not caused or contrib - uted in any material way by act or omission to the circumstances giving rise to the liability arising from such use of the aircraft and/or they are not involved in the operation of the aircraft. 2.4.4 Damage or Loss Caused by an Asset Under Article 1367 of the Indonesian Civil Code, a person is only vicariously liable for the tortious acts of those under their supervision. This article applies to cases where the tortfeasor is a party who cannot exercise their own discretion and is subject to and dependent on the supervision and direction of a prin - cipal or is an agent of a principal. This article was originally conceived for minors, servants, subordi - nates and agents. Arguably, where there is bargaining power to control their own affairs, a cause of action under Article 1367 can be fashioned. In the event that the monitoring activities of lessor would not constitute direct supervision and direction of the lessee’s day- to-day affairs, the application of this article is unlikely. 2.4.5 Attachment by Creditors To the extent that the aircraft is not owned by the les - see, creditors of the lessee should not be entitled to attach the aircraft. 2.4.6 Priority of Third Parties’ Rights In general, Indonesian law provides retention rights in relation to repair costs, salvage costs and crafts - man costs. Further, the Indonesian government may
2.3.5 Requirements for a Lease to Be Valid and Registrable For aircraft registration purposes, a copy of the lease documents to be filed with the DGCA should be legal - ised by a public notary. For requirements and formali - ties of lease for aircraft registration purpose, see 2.2.1 Mandatory Terms for Leases Governed by English or New York Law . 2.3.6 Taxes/Duties Payable for Registering a Lease For any tax advice, please consult with an Indonesian tax consultant on this matter. 2.3.7 Registration of Aircraft in Alternative Countries Under the Aviation Law, only an Indonesian registered aircraft can be operated in the territory of the Repub - lic of Indonesia. Under certain circumstances and for a limited period, a foreign registered aircraft can be operated in the territory of the Republic of Indonesia after obtaining an approval from the Ministry of Trans - portation. A foreign registered civil aircraft can be operated by an Indonesian or foreign aircraft operator to and from overseas based on a bilateral agreement. Such foreign registered civil aircraft must comply with the airworthiness requirement stipulated by the Indo - nesian government. Further, one of the requirements for registration of aircraft in Indonesia is evidence of de-registration from or confirmation that the aircraft is not registered in another country. 2.3.8 Requirements for Documents Concerning Registration For the purpose of registration of an aircraft, the pre - requisite documents include evidence of aircraft own - ership, which can be in the form of a bill of sale or affidavit of ownership for the aircraft, a copy of which needs to be legalised by a public notary, seller or the issuing institution. In addition, a copy of the lease should also be legalised by a public notary. Further, a power of attorney that is signed outside Indonesia needs to be notarised by the local nota - ry and further apostilled (if the relevant country is a member of the 1961 Hague Convention Treaty) or con - sularised by the nearest Indonesian Embassy or the consulate general.
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