ARMENIA Law and Practice Contributed by: Narine Beglaryan, Arianna Adamyan and Anahit Aloyan, Concern Dialog
2.10.3 Application of Article XIII of the Protocol on Matters Specific to Aircraft Equipment This is not applicable in Armenia. 2.10.4 Enforcement of Conventions This is not applicable in Armenia. 2.10.5 Other Conventions Armenia is not a party to these conventions. 3. Aircraft Debt Finance 3.1 Structuring 3.1.1 Restrictions on Lending and Borrowing Foreign lenders may finance the purchase of aircraft by Armenian residents. As such, there is no restric - tion on an Armenian company or a natural person obtaining funds from abroad. However, the place of financing cannot be Armenia because it may trigger the license requirements for the lenders, depending on the financial structure. 3.1.2 Effect of Exchange Controls or Government Consents There are no exchange controls or government con - sents that would be material to any financing or repa - triation of realisation proceeds under a loan, guaran - tee or security document. 3.1.3 Granting of Security to Foreign Lenders Borrowers are permitted to grant security to foreign lenders. 3.1.4 Downstream, Upstream and Cross-Stream Guarantees Downstream, upstream, and cross-stream guarantees are generally permitted in favour of lenders, subject to corporate approvals. No registration requirements apply. 3.1.5 Lenders’ Share in Security Over Domestic SPVs The advisability of accepting shares in a domestic SPV as collateral depends on the overall structure of the transaction. However, in transactions involving loans from financial institutions, it is both the com -
by the creditors’ meeting. If the plan is not submitted, is rejected by the creditors, or is terminated early on grounds provided by law, the court is required to issue a decision initiating liquidation proceedings against the debtor. Upon issuance of the liquidation decision, the management and control of the company are car - ried out by the bankruptcy manager. 2.9.9 Ipso Facto Defaults Under Armenian law, ipso facto defaults are generally recognised; however, such a default does not auto - matically result in the termination of a lease agreement. If the lease agreement provides for it, the ipso facto default authorises the lessor to apply to the court for early unilateral termination of the lease (rent) or notify of out-of-court termination of the leasing agreement. 2.9.10 Impact of Domestic Lessees’ Winding-Up The leased aircraft would be regarded as the property of the owner or lessor and, therefore, would not form part of the lessee’s insolvency estate. With respect to lease rentals, any amounts unpaid at the time of the lessee’s winding up, including penal - ties and interest arising from default under the lease, would be treated as unsecured claims. The lessor may submit a proof of claim in the insolvency proceedings for such amounts as a creditor of the debtor. The cal - culation of interest must cease since the announce - ment of the debtor’s bankruptcy. The treatment of lease security deposits depends on their contractual structure. In most cases, the lessor should be entitled to apply these deposits to satisfy the lessee’s obligations in the event of an insolvency- triggered default. Once the lessee is declared bankrupt, the perfor - mance of its obligations will be governed by the Law of Armenia on Bankruptcy. 2.10 Cape Town Convention and Others 2.10.1 Conventions in Force The Convention and Protocol are not in force in Arme - nia. 2.10.2 Declarations Made Concerning Conventions This is not applicable in Armenia.
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