PHILIPPINES Law and Practice Contributed by: Kerwin Tan, Eugene Kaw and Veronica Balbin, Tan Hassani and Counsels
general agent shall be admitted and held as valid as if served upon the foreign company at its home office. 2.5.2 Mandatory Insurance Coverage Requirements There are no strict mandatory insurance coverage requirements. The PCAR only requires that insurance is taken out to cover the aircraft hull, each person, freight and mail onboard the aircraft, and third-par - ty liability, as prescribed by the CAAP. However, air operators that provide public air transport services are required to have not only hull insurance, but also passenger, pilot and third-party liability insurance. 2.5.3 Placement of Insurance Outside of Jurisdiction Insurance companies doing insurance business in the Philippines may cede all or part of any risks situated in the Philippines by way of reinsurance directly to any foreign insurer that is not authorised to do business in the Philippines if such foreign insurer is represented by a resident agent duly registered with the Insurance Commissioner. 2.5.4 Enforceability of “Cut-Through” Clauses There is no prohibition on “cut-through” clauses under the Insurance Code of the Philippines. Therefore, cut- through insurance can be enforceable. 2.5.5 Assignment of Insurance/Reinsurance There is no prohibition under the Insurance Code of the Philippines on the assignment of insurance or rein - surance. 2.6 Lease Enforcement 2.6.1 Restrictions on Lessors’ Abilities Generally, restrictions on a lessor’s ability to terminate an aircraft lease, re-export the aircraft and/or sell the aircraft following such termination shall be determined by the terms and conditions of the lease agreement entered into by the parties. The aircraft location during any of the aforementioned actions will depend on what is provided in the lease agreement. The lease agreement has the force of law between the parties. As long as it does not contain provisions
that are contrary to law, public policy or public order, the courts will uphold the validity of such lease agree - ment. For deregistration, the aircraft does not need to physi - cally be in the Philippines, but the process will entail additional time and cost for the CAAP to ensure that the aircraft markings are removed prior to deregistra - tion. 2.6.2 Lessor Taking Possession of the Aircraft Generally, a court order is required if the lessee does not voluntarily give up possession. However, if the lease agreement includes a provision whereby the lessor may take physical possession of the aircraft while the lease agreement is still effective (eg, under a power of attorney), the lessor can take such pos - session without a court order. 2.6.3 Specific Courts for Aviation Disputes There are no specific courts designated to decide aviation disputes. Court jurisdiction is defined by law rather than the subject matter. 2.6.4 Summary Judgment or Other Relief Before Philippine courts, the lessor may move for a summary judgment, which will be issued only if there is no genuine issue as to any material fact requiring the presentation of evidence, except as to the amount of damages. Other lessor remedies are: • a preliminary injunction requiring the other party to refrain from a particular act or acts (eg, continued use of the aircraft); or • a preliminary mandatory injunction to require the performance of a particular act or acts (eg, delivery of the aircraft). The application for an injunction will require the post - ing of a bond and the conduct of hearings. The lessor may also make use of replevin to recover possession of the aircraft during the pendency of the proceedings, subject to the posting of a bond equiva - lent to twice the fair market value of the aircraft.
474 CHAMBERS.COM
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