MADAGASCAR Law and Practice Contributed by: Claudy Monja and Sarah Razafindrafito, John W Ffooks & Co
2.5.3 Placement of Insurance Outside of Jurisdiction Reinsurances of up to 100% coverage can be placed outside Madagascar. 2.5.4 Enforceability of “Cut-Through” Clauses According to the Malagasy Insurance Law, it is pos - sible for rights belonging to the insurer, and conferred on this party under the reinsurance agreement, to be conferred to third parties whenever permitted by gen - eral law. Therefore, it follows that cut-through clauses in such documents are enforceable under Malagasy law. 2.5.5 Assignment of Insurance/Reinsurance Assignments of insurances/reinsurances are permit - ted. 2.6 Lease Enforcement 2.6.1 Restrictions on Lessors’ Abilities There are no restrictions on the lessor’s ability to termi - nate an aircraft lease and sell the aircraft following that termination, except if any limitations were established in the lease agreement in this regard. The aircraft does not need to be physically located in Madagascar for any such termination and sale to take place, but the consent of the lessee to carry out the deregistration of the aircraft, given the termination of the agreement, is required. This consent is not required if the deregis - tration of the aircraft is a result of an event of default. With regard to the re-export of the aircraft in such circumstances, from a contractual point of view, the main conditions are: • the irrevocable deregistration authorisation (IDE - RA); • the deregistration power of attorney (DPOA); • the usual deregistration and export government guarantee; and • any clause of the lease allowing the lessor to export the aircraft if an event of default occurs and is continuing. The lease should provide a clause allowing the lessor, by serving notice, to require the lessee to deliver the aircraft to a specific location; in addition, the DPOA should expressly allow the lessor to require a pilot of
In all cases, the lease should contain a statement specifying the party liable for the ongoing airworthi - ness of the aircraft, as well as for the maintenance of the aircraft, for the duration of the lease. 2.4.4 Damage or Loss Caused by an Asset Malagasy law distinguishes between the strict liabil - ity that may arise for the operator of the aircraft (as lessee/operator) and any potential fault based on the liability of the lessor or owner arising from the owner - ship of the aircraft. 2.4.5 Attachment by Creditors The retaining right is the right of a creditor to retain in their possession a debtor’s asset in an event of default and until full payment of the debts. This is applicable to movable assets and properties. Note that the retain - ing right is not subject to any agreement or registration formalities in order to be enforceable. The creditor’s security is materialised by its right to retain in its pos - session the asset that is the object of the dispute. For example, an aircraft maintenance service company is entitled to retain the aircraft in its possession if the aircraft operator fails to pay the maintenance fees. 2.4.6 Priority of Third Parties’ Rights In terms of ranking, employees’ salaries, court fees, legal fees (eg, bailiff’s fees), taxes and other state fees, suppliers’ debts secured by rights of detention ( droit de rétention ), mortgages and pledges (possessory and non-possessory pledges) take priority over a les - sor’s rights under an aircraft or engine lease. 2.5 Insurance and Reinsurance 2.5.1 Requirement to Engage Domestic Insurance Companies The main insurance of the aircraft must be subscribed with a local insurance company. Reinsurance can be subscribed with foreign insurance companies. 2.5.2 Mandatory Insurance Coverage Requirements According to Malagasy law, airlines and aircraft operators must have insurance covering their liability towards passengers, luggage, cargo and third parties regarding acts of war, terrorism, hijacking of aircraft, acts of sabotage, illicit apprehension of aircraft and civil turmoil.
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