JAPAN Law and Practice Contributed by: Taro Omoto, Yusuke Nakajima and Makoto Sakai, Mori Hamada & Matsumoto
3.3.5 Verification of an Aircraft’s Freedom From Encumbrances A potential purchaser can search the aircraft register to verify that an aircraft is free of aircraft mortgages. Please note that other encumbrances do not appear on the aircraft registry, and that the accuracy of the descriptions in the aircraft registry is not guaranteed. 3.4 Enforcement 3.4.1 Differences Between Enforcing Security Assignments, Loans and Guarantees There are two major methods for a creditor to enforce a security assignment: • the creditor obtains the claims definitively and applies the value of the claims to the secured obli - gations; or • the creditor sells the claims to a third party and applies the proceeds to the secured obligations. These processes can be done without the involvement of the court. In order to enforce (collect) the loan or guarantee, the creditor must first obtain a court judgment and apply to the court for an attachment of the debtor’s assets. 3.4.2 Security Trustees’ Enforcement of Their Rights If, under a security assignment, security is granted to a security trustee by a lessor in respect of its rights under an aircraft lease, that security trustee can enforce its rights under the security assignment pursuant to a notice and consent (with certified date) executed by that lessor and the relevant lessee, respectively, in connection with such security assignment. 3.4.3 Application of Foreign Laws See 2.6.6 Domestic Courts’ Recognition of Foreign Judgments/Awards . However, the following security interests are subject to mandatory Japanese conflict of laws rules: • security interest: governing law; • aircraft mortgage: the laws of the jurisdiction where the aircraft is registered;
• security assignment of claims: the governing law of the claims; • share pledge: the governing law of the issuer; and • account pledge: the governing law of the account. 3.4.4 Recognition and Enforcement of Foreign Judgments and Arbitral Awards See 2.6.6 Domestic Court’s Recognition of Foreign Judgments/Awards . 3.4.5 Secured Parties’ Right to Take Possession of Aircraft A Japanese aircraft mortgage does not entitle the mortgagee to take physical possession of the air - craft. If the secured party acquires the ownership of the aircraft as a result of the enforcement of the air - craft mortgage, the secured party may take physical possession of the aircraft without the consent of the lessee. However, if the lessee does not voluntarily sur - render the possession of the aircraft to the secured party, the secured party must obtain a court order or judgment. 3.4.6 Domestic Courts Competent to Decide on Enforcement Actions The district court having jurisdiction over the location of the aircraft at the time of issuance of a commence - ment order for enforcement of the aircraft mortgage has jurisdiction as the execution court. 3.4.7 Summary Judgments or Other Relief A creditor is generally entitled to provisional relief under the Civil Provisional Remedies Act, which is designed to cover the period before obtaining a court judgment necessary for enforcement. Since a secured creditor can judicially enforce its security interest with - out a court judgment, provisional relief is not usually used. There is a special provisional relief with respect to the enforcement of aircraft mortgages. An aircraft mort - gagee is entitled to apply to the court for a provision - al order to deliver the aircraft registration certificate, which is necessary for flight, before the petition for enforcement of the aircraft mortgage, to prevent the aircraft from flying away from the current location. Such provisional relief does not require a bond.
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