INDONESIA Law and Practice Contributed by: Enny Purnomo Widhya, Nugrahani Astiyanti and I Gusti Ngurah Oka Anantajaya, Mochtar Karuwin Komar
2.6.13 Other Relevant Issues Other than as mentioned above, for the purpose of enforcing its rights in repossessing an aircraft and exporting it, should the aircraft come under its pos - session, the lessor should ensure that all documenta - tion pertaining to importation of the aircraft and any tax payments/exemptions upon importation are within its possession to allow the lessor or its attorney to apply for an export clearance. The lessor will need to provide copies of such documentation to the customs authorities. 2.7 Lease Assignment/Novation 2.7.1 Recognition of the Concepts of Contractual Assignment and Novation Indonesian law recognises the concept of contractual assignment and novation. However, as a general rule under Indonesian law, it is not possible to assign contractual rights for purposes of security, except the right to payments or monies and other in-rem rights (such as intellectual property rights). Further, Indonesian law may also not recog - nise or enforce documents governed by a foreign law purporting (i) to create a security interest in assets located in the Republic of Indonesia, such as the rel - evant insurance proceeds (except for aircraft objects in accordance with the Cape Town Convention and the Aviation Law), or (ii) to assign rights under docu - ments governed by Indonesian law or assign other contractual rights governed by Indonesian law. This is why a security assignment is typically governed by non-Indonesian law. 2.7.2 Assignment/Novation of Leases Under Foreign Laws Assignments of aircraft leases governed by New York or English law should be recognised and held valid under Indonesian law. The question of wheth - er a lessee’s consent is required to an assignment is a contractual matter for the parties and should be addressed in the aircraft lease. It should be noted that, as it is not possible to assign contractual rights for purposes of security, except right to payments or monies, a security assignment cannot be governed under Indonesian law.
On a separate matter, if, under the assignment for security, the assigned object is insurance proceeds payable by the lessee or the lessee’s insurer to the lessor for security purposes, such assignment has to be made in the form of a fiduciary security assignment agreement governed under Indonesian law, drawn up before a notary in Indonesian language and registered with the Fiduciary Registry Office (failing which, (i) the security assignment over the insurance proceeds of the lessee may not be enforceable in Indonesia and (ii) the assignee will not have a priority right (security right), which will be pertinent in the event of bankrupt - cy of the lessee or the insurance company). In addi - tion, if there is removable equipment to be secured separately from the airframe, then the most common form of security over such movable assets shall be fiduciary security. For the latter, the fiduciary security can be registered if granted by an Indonesian entity. 2.7.3 Enforceability of Lease Assignments/ Novations If the lease assignment/novation results in a change to the owner of the aircraft as stated in the certifi - cate of registration of the aircraft, then the certificate will need to be amended naming the new owner as the owner of the aircraft. Further, if the assignment or novation above results in the requirement for the lessee to issue a new IDERA in respect of the aircraft, upon the issuance of the new certificate of registra - tion, such new IDERA will have to be recorded by the DGCA (subject to cancellation of the existing IDERA). In addition, if there is an existing certified designee letter (CDL) granted by the authorised party named in the relevant IDERA and the transfer results in a change to the certified designee under a CDL recorded with the DGCA, the existing CDL needs to be revoked and a new CDL can be recorded with the DGCA. In such case, a copy of the lease assignment/novation which has been legalised by a public notary will need to be filed with the DGCA for the purpose of (i) issuing a new certificate of registration of the aircraft naming the new owner as owner of the aircraft and/or (ii) the registration of the new IDERA and/or CDL. With regard to language requirement, see 2.2.1 Man- datory Terms for Leases Governed by English or New York Law .
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