PANAMA Law and Practice Contributed by: María de Lourdes Marengo and Joaquín De Obarrio, Patton Moreno & Asvat
2.6 Lease Enforcement 2.6.1 Restrictions on Lessors’ Abilities
2.4.5 Attachment by Creditors Creditors of a domestic lessee do not have the right to attach an aircraft leased to it and owned by a different entity. Such creditors can only attach assets owned by the domestic lessee. 2.4.6 Priority of Third Parties’ Rights Panamanian law grants a possessory lien to the per - son that has executed work on movable assets such as an aircraft, giving such person the right to retain the asset until it receives payment. A possessory lien is granted to the repair and maintenance provider for unpaid services performed on an aircraft, whether or not such lease/lessor is registered in the national air - craft register. 2.5 Insurance and Reinsurance 2.5.1 Requirement to Engage Domestic Insurance Companies Panamanian insurance law requires that insurances be placed with domestic insurance companies to the extent that these are available. 2.5.2 Mandatory Insurance Coverage Requirements Panamanian aviation law requires that operators obtain insurance for the damages they may cause to third parties on the ground, crew, users and in general any damages that may be caused as a consequence of the operation of an aircraft. 2.5.3 Placement of Insurance Outside of Jurisdiction Domestic insurance companies may take out reinsur - ance with foreign insurance companies provided that these are registered with the Foreign Reinsurance Companies Registry of the Insurance and Reinsur - ance Superintendency of Panama. 2.5.4 Enforceability of “Cut-Through” Clauses Cut-through clauses in insurance/reinsurance docu - ments are permitted and enforceable. 2.5.5 Assignment of Insurance/Reinsurance Assignments of insurance and reinsurance are per - mitted.
There are no restrictions on a lessor’s ability to (i) ter - minate an aircraft lease, (ii) re-export the aircraft and/ or sell the aircraft following such termination except for those contained in the lease agreement. The air - craft does not need to be physically located in the Republic of Panama at the time of termination of the lease, re-exportation or sale of the aircraft. 2.6.2 Lessor Taking Possession of the Aircraft There are no self-help remedies in the Republic of Panama. If the lessee refuses to return the aircraft, the lessor must obtain a court order. 2.6.3 Specific Courts for Aviation Disputes There are no specific courts that are competent to decide aviation disputes. Aviation-related claims must be filed before the Panamanian civil circuit courts. 2.6.4 Summary Judgment or Other Relief A summary judgment is not available in proceed - ings in Panama. Notwithstanding this, a lessor may apply to the court for cautionary measure in the form of an injunction preventing a lessee from taking cer - tain actions relating to the asset or in the form of an attachment on the physical asset or its title. 2.6.5 Domestic Courts’ Approach to Foreign Laws and Judgments Domestic courts will uphold: • foreign law as the governing law of an aircraft lease as a valid choice of law and will enforce this in any action in the courts of the Republic of Panama, provided that these do not contravene the public policy of the Republic of Panama; • the submission to a foreign jurisdiction agreed in a lease agreement; and • a waiver of immunity by the parties as permitted by the applicable laws. 2.6.6 Domestic Courts’ Recognition of Foreign Judgments/Awards Court Judgments/Orders Any judgment or order given by a foreign court may be enforced in the Republic of Panama by suit on the judgment, and the judgment/order will be recognised
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