Is there a need to change domestic laws for the Repatriation of Aircraft?
With the development in infrastructure and technology up-gradation, there has been recorded continuous growth of the Indian aviation market. Also India’s Foreign Direct Investment (FDI) and low-cost carriers entry and connectivity expansion of airports leading it to provide better services to the customers at cheaper rates leading it to more demand and growth in the domestic market. According to Boeing, in the near future, India will require 2400 aircraft to meet this rising demand for aviation. But since most of the aircraft are working on the lands of India are based on contracts from other countries, that is they are imported from outside India on the operating lease agreement. This gave rise to Imports and therefore to get more benefits from imports, the State should provide lessor remedies as under the Aircraft Protocol to the Cape Town Convention of 2001.
Cape Town Convention is an International treaty made for providing benefit to the aircraft financiers by creating a predictable and safe legal regime. India once amended its laws following the treaty after which certain parts of the treaty were incorporated in the Indian Laws, but even after these changes, the India repatriation laws remain to the unwieldy task.
Laws Prevalent
Export and import are the fundamental pillars of international trade, which ensure that the wheels of the economy keep turning. India exports approximately 7500 commodities to 190 countries and imports around 6000 products from 140 countries. The Ministry of Commerce, Government of India, estimates that India’s overall export for 2019-2020 was around $137.26 billion. Being such an essential factor of the economy, India has laws and regulations in place to control and regulate imports and exports.[1] As such International laws are governed in India only by the Foreign Trade (Development and Regulation) Act, 1992 but in the real sense, these are being controlled by many other statutes like that of Custom Act, 1968; GST Act, etc.
Section 7 of the Foreign Trade (Development and Regulation) Act, 1992 specifies that exporter and importer can’t take place without IEC which is a 10 digit number given by the Directorate-General of Foreign Trade. However, this was done to keep a check on the persons and institutions involved in doing international trade. This same regulation is also applied to exports and imports without IEC code unless exempted by Central Government no Foreign Trade can take place.
Problem with the existing laws:
Domestic laws that are made seem unfair towards the lessor, as lessor is required to face unwarranted and hectic legislative litigation procedures. As once the lease agreements are broken due to the fault of the lessee, the lessor is then required to file an Irrevocable Deregistration and Export Request Authorisation (“IDERA”) with the Directorate-General of Civil Aviation (“DGCA”). Once the IDERA is received, the DGCA is required to follow the procedures as prescribed in the Standard Operating Procedure provided in Aeronautical Information Circular (“AIC”) 12 of 2018. Once it has been demonstrated by the lessor that he has complied with the requirements of Rule 32A of the Aircraft Rules, 1937, the DGCA will grant permission to export.[2] However, Rule 32A was inserted to make sure conformity with the Cape Town Convention.
That is in simple language when an aircraft is imported in the land of India soil the lessee uses his IEC code for importing, after making default when all the procedure is completed then also lessor is not allowed to take back his aircraft without specifically exempted from Central Government permission as mentioned earlier no export can take place without IEC code which he lessor can’t get easier and this makes it difficult for lessor to repatriation of aircraft.
Conclusion:
To overcome such problem remedies are provided under the Cape Town Convention which is yet to be incorporated into the parliamentary legislation inclusive of the non-obstante clause. However, the Ministry of Civil Aviation has taken initiative and introduced it in Cape Town Convention Bill 2018 which is yet to be passed.
Submitted by
Sakshi Raje
Student
Reporter, INBA
[1] https://www.livelaw.in/columns/repatriation-of-aircraft-conflicts-between-international-laws-and-domestic-laws-153463
[2] Ibid.