SERBIA Law and Practice Contributed by: Uroš Popović and Stefan Golubović, Drašković Popović & Partners
• co-ordination of managing the assets of the debtor; • conclusion of the agreement on co-ordination between the courts; and • co-ordination of the proceedings. 2.9.4 Effect of Lessee’s Insolvency on a Deregistration Power of Attorney A deregistration power of attorney is not regulated under Serbian law. However, from a general legal per - spective, even if it is issued, the opening of insolvency proceedings will not have any effect on it. 2.9.5 Other Effects of a Lessee’s Insolvency When insolvency proceedings are opened, an insol - vency administrator is appointed. It is the insolvency administrator who, from that point onwards, man - ages the debtor. At the moment when the insolvency is opened the insolvency administrator is entitled to choose which contracts will remain in force and which will be terminated (including the existing leases). If, for any reason, the lease is continued as of the moment of opening the insolvency proceedings, the insolvent estate will continue to be a party to the lease agree - ment and will have to settle the rent. If the lease agreement is terminated, the lessor is enti - tled to issue a request for the removal of the aircraft from the estate of the lessee and hand the aircraft over to the lessor. 2.9.6 Risks for a Lender if a Borrower, Guarantor or Security Provider Becomes Insolvent The main risk for a lender if a borrower, a guarantor or an entity providing security becomes insolvent is that it will not be able to collect its receivable. 2.9.7 Imposition of Moratoria in Connection With Insolvency Proceedings A moratorium is imposed at the opening of the insol - vency proceedings and lasts for the duration of the proceedings. It encompasses all the obligations of the insolvency debtor apart from the obligations under - taken by the insolvent estate. 2.9.8 Liquidation of Domestic Lessees A lessee may be liquidated or placed in administra - tion or receivership either at its own request or at the
request of a third party (liquidator or a creditor) in Ser - bia. 2.9.9 Ipso Facto Defaults Ipso facto default clauses are valid under Serbian law and often appear in practice. If the clause is activated, the lessor is entitled to issue a request for the removal of the aircraft from the estate of the lessee and the handover of the aircraft to the lessor. 2.9.10 Impact of Domestic Lessees’ Winding-Up If a domestic lessee is liquidated by a Serbian court ruling, the following generally occurs. • The aircraft may only be repossessed if the lessor fails to take action in order to remove the aircraft from the insolvent estate. • The lessor must register its debt to the insolvency administrator for rentals and other costs (if any) that became owed before the insolvency proceed - ings were opened. • The lease security deposit will remain with the les - see as long as the lease is in force. • The maintenance reserves paid to the lessor (whether classified as reserves or supplemental rent) will remain with the lessor as long as the lease is in force. 2.10 Cape Town Convention and Others 2.10.1 Conventions in Force The Cape Town Convention is not recognised in Ser - bia. 2.10.2 Declarations Made Concerning Conventions See 2.10.1 Conventions in Force . 2.10.3 Application of Article XIII of the Protocol on Matters Specific to Aircraft Equipment
See 2.10.1 Conventions in Force . 2.10.4 Enforcement of Conventions See 2.10.1 Conventions in Force . 2.10.5 Other Conventions
Serbia has ratified the 1948 Geneva Convention on the International Recognition of Rights in Aircraft. However, it has not ratified the 1933 Rome Conven -
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