AUSTRIA Law and Practice Contributed by: Farid Sigari-Majd and Mathias Lehner, Freshfields
2.5.3 Placement of Insurance Outside of Jurisdiction
Austrian registered aircraft need not be physically pre - sent in Austria for the purposes of a termination of the lease or, as a matter of Austrian law, for a sale of the aircraft. Given that the conflict of laws rules at the place of the actual transfer may point to a law other than Austrian law to determine the validity of the title transfer, and the physical presence of the aircraft at the time of title transfer is recommended. Unregis - tered aircraft sold under an Austrian law-governed title agreement should, in any event, be present in Austria at the time of the title transfer. 2.6.2 Lessor Taking Possession of the Aircraft The parties to a lease are generally free to agree on certain events that allow the lessor to repossess the aircraft (eg, an event of default under the lease). The agreement may be supported by a deregistration power of attorney. Nevertheless, it should be noted that Austrian law recognises a right of self-help only in very limited cir - cumstances when judicial relief would not be available in time (eg, imminent risk that the lessee will transfer the aircraft to a country where the lessor will not be able to enforce its rights due to lack of due process or rule of law). Thus, if an Austrian lessee attempts to frustrate the repossession (eg, by revoking powers of attorney or blocking access to the aircraft), the lessor will normally have to repossess the aircraft by way of enforcement proceedings. 2.6.3 Specific Courts for Aviation Disputes Lease disputes would typically fall within the jurisdic - tion of the commercial courts (ie, a specialised sub- division of the civil law courts). There are, however, no specific panels for aviation-related disputes. 2.6.4 Summary Judgment or Other Relief Where a claim is for payment only, an Austrian court may issue a payment order to an Austrian defendant without going into the merits ( Mahnverfahren ). Unless the defendant objects within four weeks, the pay - ment order becomes enforceable. This instrument is available for claims up to EUR75,000. EU law offers a similar (uncapped) instrument for cross-border claims. Similar proceedings are available for bills of exchange.
Austrian law does not restrict the placement of rein - surances outside of Austria up to 100% coverage. 2.5.4 Enforceability of “Cut-Through” Clauses Austrian law generally does not prohibit “cut-through” clauses in insurance/reinsurance documents, and such clauses should be enforceable. 2.5.5 Assignment of Insurance/Reinsurance Austrian law generally allows assignments of insur - ances/reinsurances. In practice, assignments of insur - ances are typical in aviation leasing and financing transactions, whereas assignments of reinsurances are not. 2.6 Lease Enforcement 2.6.1 Restrictions on Lessors’ Abilities Prior to a lessee’s insolvency, the lessor may freely terminate an Austrian law-governed lease in accord - ance with its terms. In addition, a lessor would be permitted to terminate the lease at any time for cause ( aus wichtigem Grund ), such as a non-payment or a material breach. If insolvency proceedings have been commenced with respect to the lessee, a lessor may – if the administra - tor intends to continue the operations – be prevent - ed from terminating an aircraft lease for six months unless the operator/administrator defaults on lease payments due after the commencement of insolvency proceedings or otherwise commit a material breach. Similar restrictions may apply to the repossession of an aircraft or if the lessee has applied for restructuring proceedings. Even if the lessor’s termination right is temporarily restricted, the lessor would not normally be prevented from selling its ownership interest in the aircraft to a third party. Without prejudice to the above, there are no gener - ally applicable export restrictions regarding Austrian registered aircraft, other than: • export and sanctions control legislation (eg, with respect to military aircraft or dual-use goods); and • deregistration (and reregistration, respectively) of the aircraft with the ACG.
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