PANAMA Law and Practice Contributed by: María de Lourdes Marengo and Joaquín De Obarrio, Patton Moreno & Asvat
2.7 Lease Assignment/Novation 2.7.1 Recognition of the Concepts of Contractual Assignment and Novation Panamanian laws recognise the concepts of contrac - tual assignment and novation. 2.7.2 Assignment/Novation of Leases Under Foreign Laws A lease assignment and assumption agreement gov - erned by New York or English law will be held valid by domestic courts to the extent that such laws are not contrary to the public policy of the Republic of Pana - ma. The consent of the lessee will be required if pro - vided in the lease. It is advisable to obtain the consent of the lessee to facilitate registration with the Public Registry. There are no mandatory terms required to be included in such agreement. The assignment and assumption agreement must be recorded with the Public Registry Office, which will require for registra - tion the complete identification of the parties and the aircraft and a certificate of existence of the assignee if this is not already registered at the Public Registry. 2.7.3 Enforceability of Lease Assignments/ Novations Aircraft lease assignment and assumption/novation agreements must be translated into Spanish by an official translator in Panama, notarised and legal - ised according to the 1961 Hague Convention on the Apostille (if executed outside Panama) and recorded with the Public Registry Office. 2.7.4 Filing/Registration of Lease Assignments/ Novations Aircraft and/or engine lease assignment and assump - tion/novation agreements must be registered with the Public Registry Office and filed with the AAC. No gov - ernmental consents are required for such registration. The assignment and assumption/novation agreement must be translated into Spanish by an official transla - tor in Panama, protocolised into a notarial deed and recorded with the Public Registry Office. Registration may take from five to fifteen days. Once recorded with the Public Registry a copy of the aircraft lease assignment and assumption/novation agreement must be filed with the AAC with an applica -
2.6.7 Judgments in Foreign Currencies The lessor under an aircraft lease may obtain a judg - ment in a foreign currency. 2.6.8 Limitations on Lessors’ Actions Following Termination Subject to what is agreed in the lease agreement, there are no limitations on a lessor’s ability to recover default interest or to charge additional rent following termination of the lease for default, including where the lessee fails to return the aircraft. 2.6.9 Lessor’s Requirement to Pay Taxes/Fees The lessor is not required to pay taxes under an air - craft lease in connection with the enforcement of such lease in Panama. Stamp tax in the amount of USD0.10 for each USD100.00 or fraction of the value of the aircraft lease must be paid for enforcement in Panama. However, where such amount has been paid in respect of notarial paper for the deed whereby the aircraft lease has been recorded with the Public Reg - istry, no additional amounts are required to be paid. 2.6.10 Mandatory Notice Periods There are no mandatory notice periods for the lessor’s termination of the lease. Termination notice periods are generally regulated in the lease. 2.6.11 Lessees’ Entitlement to Claim Immunity The lessee is not entitled to claim sovereign immunity from any suit or legal proceedings under the laws of the Republic of Panama. 2.6.12 Enforcement of Foreign Arbitral Decisions Panama has adopted the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”). Please refer to 2.6.6 Domestic Courts’ Recognition of Foreign Judgments/Awards for further discussion of the recognition and enforcement of foreign arbitral awards. 2.6.13 Other Relevant Issues There are no other relevant issues that a lessor should be aware of in relation to the enforcement of rights in the Republic of Panama.
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