LITHUANIA Law and Practice Contributed by: Gintautas Šulija and Eduard Plešak, Šulija & Partners
in this regulation. The regulation specifies the minimal insurance coverage for the liability of third parties. The minimum insurance coverage per accident for each aircraft depends on the maximum take-off mass. The Lithuanian civil aviation authority is authorised to con - trol whether operators comply with the requirements of this regulation. International lessors often contrac - tually require airlines to purchase insurance policies with higher limited liability, as the portion of the claim settlement in excess of the limits would not be cov - ered by the insurance policy. 2.5.3 Placement of Insurance Outside of Jurisdiction Reinsurance can be placed outside Lithuania. Lithu - anian insurance laws are compliant with applicable EU regulations. However, it is considered to be a busi - ness risk of the fronting company (insurer) to settle the insured’s claim. Thus, the fronting company would deal with reinsurers and then make the payments in accordance with the initial insurance contract. 2.5.4 Enforceability of “Cut-Through” Clauses It is not certain how cut-through clauses would be enforced in Lithuania as, owing to the absence of fronting requirements, cut-through clauses are not customarily found in the contracts entered into on behalf of Lithuanian companies. 2.5.5 Assignment of Insurance/Reinsurance Assignments of insurance (reinsurance) are often used in aviation finance transactions and, in the authors’ view, should generally be enforceable from the per - spective of Lithuanian law. Assignments should be perfected by making relevant notifications to or seek - ing acknowledgements from a debtor. 2.6 Lease Enforcement 2.6.1 Restrictions on Lessors’ Abilities If the contract provides for cases where the lessor may terminate the agreement and repossess the air - craft, the lessor may enforce such rights subject to the terms and conditions of the agreement and its govern - ing law. Lithuanian law states that parties may agree on the conditions of terminating the agreement. How - ever, if no such agreement is made, relevant provi - sions of Lithuanian law apply – stating that the nature of the lessee’s breach must be taken into considera -
tion (as material or non-material) and the lessor must file a default notice requesting the lessee to comply with its respective obligations prior to terminating the lease. The aircraft does not need to be physically located in Lithuania at the time of aircraft lease termination. Ferrying the aircraft to another EU jurisdiction does not require any permits. 2.6.2 Lessor Taking Possession of the Aircraft Repossession of the aircraft must be exercised peace - fully. If an operator does not voluntarily surrender the aircraft, the owner or lessor would not be entitled to enforce the repossession by force. The use of self- help remedies is very limited under Lithuanian law and is allowed only when expressly permitted by law. The owner or lessor will be permitted to repossess the aircraft without the co-operation of an operator when it is specifically authorised to do so by the court. An enforceable court order will be enforced by a bailiff, with the assistance of the police, if necessary. 2.6.3 Specific Courts for Aviation Disputes Lithuanian law considers an aircraft registered in Lith - uania as immovable property. The procedural laws of Lithuania state that lawsuits regarding rights in rem to immovable property, regarding the use of immov - able property or regarding the cancellation of a lien on immovable property shall be brought before the court of the location of the immovable property or its main part. There are no specific courts to hear the aviation disputes. The courts of general competence generally decide aviation disputes, unless parties agreed to set - tle their disputes through arbitration. 2.6.4 Summary Judgment or Other Relief A summary judgment can be obtained for monetary claims only – although there are several procedural rules that need to be complied with. Specifically, the debtor should not be established in a foreign jurisdic - tion, and there should be no unfulfilled obligations of the lessor for which remuneration is due and the debt - or requests such obligations to be fulfilled. The esti - mated timeframe for obtaining a summary judgment is two business days from the moment the respective motion is brought before the court.
357 CHAMBERS.COM
Powered by FlippingBook