Governing Law in Aircraft Finance & Leasing
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What is the principal domestic legislation applicable to aviation finance and leasing in Panama?
Aircraft finance and leasing in Panama are governed by the following:
Decree Law 2 (1955), which regulates mortgages on chattel property;
Law 129 (2013), which modernises the law of mortgages on chattel property;
Law 21 (2003) on Civil Aviation;
Law 29 (2003), which adopts the Cape Town Convention;
the provisions of the Civil Code and the Commerce Code of the Republic of Panama; and
the administrative practices observed by the Civil Aeronautics Authority.
Are the parties free to choose applicable law, or is the law of the place where the aircraft is located or where it is registered the relevant applicable law?
Purchase contracts and aircraft mortgages would be deemed acts of commerce, and the parties thereto may choose the applicable law to govern the terms thereof. However, the laws of Panama govern the title and mortgage with respect to particular requirements that should appear therein, as well as their registration and the effect thereof. The courts of Panama generally uphold choice-of-law clauses, but may refuse to enforce terms that are contrary to public policy in Panama.
Aviation Finance & Leasing in Panama – María de Lourdes Marengo (email@example.com)
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An extract of the Aviation Finance & Leasing Guide 2021, originally published by Getting the Deal Through / Lexology