INDONESIA Trends and Developments Contributed by: Enny Purnomo Widhya, Nugrahani Astiyanti and I Gusti Ngurah Oka Anantajaya, Mochtar Karuwin Komar
One court ruling granted the petitioner’s request to repossess the helicopter and granted authorisation to enter the premises where the helicopter was located. However, other court rulings in different filings rejected such petition due to lack of proper jurisdiction (forum non conveniens) as the underlying lease agreements stated that any disputes arising out of the lease agree - ments should be settled in the Singapore International Arbitration Centre (SIAC). Other rejections were due to ongoing proceedings in the US courts regarding the aircraft and also the court requesting further review of the alleged default. Based on the authors’ review of these court decisions and as elaborated above, the Indonesian courts do not take a uniform approach in treating interim relief. This is because Indonesian courts lack detailed pro - cess of law rules in treating interim relief under the Aviation Law and Cape Town Agreements. Another cause is lack of knowledge (on the part of Indonesian judges) about the possibility of filing for interim relief and being granted such relief under the Aviation Law even though there are separate ongoing proceedings between the parties concerning the defaults. Practical challenges of enforcing Cape Town Agreements and repossession in Indonesia Based on the preceding discussion of how Indonesian courts treat interim relief, there are still practical chal - lenges in enforcing Cape Town Agreements in Indone - sia. One challenge is that the courts treat interim relief inconsistently. Interim relief can be very helpful for les - sors or creditors that do not have an IDERA registered in their favour in filing for deregistration of the aircraft and also to gain possession of the aircraft should the repossession be carried out in a non-friendly man - ner. Indonesian law does not adopt the stare decisis principle, and so there is no doctrine of precedent, meaning that judges may adopt different stances. Separately, the IDERA (and CDL if there is financing), which is introduced due to the Cape Town Agree - ments, can be a powerful tool for lessor or creditors to protect their interests. As previously elaborated, once an IDERA (as well as the CDL) is acknowledged by the DGCA, it provides the possibility for the authorised party (or the certified designee) to file for deregistra - tion of the aircraft in the event there is a default by
the airline under the lease agreement. Nevertheless, even though an IDERA exists, challenges remain as the IDERA can only be used for deregistration of the aircraft with the DGCA. For exporting aircraft, an IDERA itself is insufficient. In order to export, administrative and exportation requirements of the aircraft or equipment will also need to be met: export clearance (from customs), security and diplomatic clearance (from the Indone - sian Armed Forces and Foreign Ministry if the aircraft is already deregistered) as well as Flight Approval from the DGCA will be required. In a friendly repossession, for these administrative requirements, the airline may be able to help the lessor obtain these permits and clearances; however, in a non-friendly repossession, the lessor or owner itself will need to file for them. Therefore, as a result, the lessor would always require airlines to issue a deregistration and export power of attorney (known as DPOA), which grants lessors or financiers (with substitution rights to their attorney) the authority to apply for these administration and expor - tation permits from the relevant Indonesian authorities beyond the DGCA. It is worthy of note that when an aircraft delivery occurs, documentation obtained by the airline in relation to importation, customs, tax and relevant filings should be provided to the lessor or owner of the aircraft as these documents will be needed upon repossession of the aircraft. In the event of a lease restructuring, including lease novation, which will result in change of ownership of the aircraft, the new lessor or owner needs to be provided with copies of these documents from the existing lessor or owner, in preparation for repossessing the aircraft in the future. In certain cases, during novation deals, airlines may refuse to provide these documents to the new lessor or owner, giving the reason that the documents were provided upon delivery. Therefore, to anticipate this situation, it is important for incoming lessors or own - ers to request copies of the documentation from the outgoing lessors or owners.
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