Big Relief To Aircraft Lessors From Moratorium

Introduction

On October 3, 2023, the Ministry of Corporate Affairs (MCA) issued a notification under Section 14(3) of the Insolvency and Bankruptcy Code (IBC), exempting the applicability of the moratorium to transactions, agreements or arrangements, under the Cape Town Convention on International Interests in Mobile Equipment (Convention) and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment (Protocol), relating to aircraft, aircraft engines, airframes and helicopters (Aircrafts; such notification, the Notification)

This article analyses the underlying objective of the Notification, and its implications on the aviation industry, particularly in the context of insolvency proceedings of Go First Airlines. Furthermore, an emphasis has been supplied on the need for ratification of the Protocol and the interplay of the IBC and the Convention while dealing with insolvencies in the aviation sector.