THAILAND Law and Practice Contributed by: John Frangos, Nuanchun Somboonvinij, Santhapat Periera and Niti Muangkote, Tilleke & Gibbins
• the aircraft will not be considered as the lessee’s asset. However, the lease agreement can be reviewed by the official receiver; • the repossession of the aircraft can be delayed on the termination of the lease as the termination can be reviewed and challenged by the official receiver; • as mentioned in the first item, the aircraft will not be considered as the lessee’s asset and the official receiver must comply with the lease agreement; and • the liquidator/administrator will not impose the rights of any other creditors in priority to the les - sor’s. However, the secured creditor naturally has rights over the asset, which are secured by the debtor before the receivership order and so do not need to file a debt repayment application. 2.9.6 Risks for a Lender if a Borrower, Guarantor or Security Provider Becomes Insolvent The unsecured assets of the lender will be managed by the official receiver. These assets will generally be sold at a public auction and money received by the official receiver will be distributed to all creditors who have submitted their debt repayment application on a pro rata basis. 2.9.7 Imposition of Moratoria in Connection With Insolvency Proceedings The Bankruptcy Court can place an “automatic stay” (ie, a moratorium) if the lessee files a business reor - ganisation petition with the court and the term of the lease agreement has not yet expired. In this case, the lessor cannot repossess the aircraft from the day the court accepts the business reorganisation petition until the expiry of the time to implement the business plan or the day on which the business plan is suc - cessfully accomplished. The ”automatic stay” is lifted on the day the court dismisses the debtor’s petition, rejects the case, or the day the debtor is placed into absolute receivership. If a repossession action has been taken before the “automatic stay”, the ”automatic stay” causes the repossession action to be suspended, unless other - wise ordered by the Bankruptcy Court which received the debtor’s rehabilitation petition. The repossession case can also resume after the day on which the Bankruptcy Court orders the business reorganisation
and the party responsible for the rent defaults on pay - ment under the lease agreement twice consecutively or commits a material breach of the agreement. 2.9.8 Liquidation of Domestic Lessees There are several ways in which a domestic lessee can be liquidated or placed into administration or receiver - ship. These are as follows. • The creditor of the lessee submits a complaint requesting the court declare the lessee bankrupt. • A lessee who has more liabilities than assets can request the court declare the lessee bankrupt. • The lessee files a business reorganisation petition with the court. 2.9.9 Ipso Facto Defaults To repossess an aircraft during the insolvency of a lessee, the “automatic stay” must be lifted and the conditions stated in in 2.9.8 Liquidation of Domestic Lessees must be met. 2.9.10 Impact of Domestic Lessees’ Winding-Up The impact of the winding-up of a domestic lessee is as follows. • Aircraft: because the aircraft is not the lessee’s asset, it will not be sold at a public auction. • Lease rentals: the lessor has to submit a debt repayment application to the official receiver requesting the outstanding debts, which includes rent. • Lease security deposit (please see the second point above). • Maintenance reserves (please see the second point above). 2.10 Cape Town Convention and Others 2.10.1 Conventions in Force Thailand has not ratified or acceded to the Conven - tion on International Interests in Mobile Equipment (the “Convention”) or the related Protocol on Matters Specific to Aircraft Equipment (the ”Protocol”). 2.10.2 Declarations Made Concerning Conventions Thailand ratified the Chicago Convention in 1947, the Geneva Convention in 1967 and the Montreal Conven - tion in 2017.
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