Feb 20, 2007

Indonesian Legal Digest - Cape Town Convention in Indonesia

Cape Town Convention in Indonesia: A Brief Overview
On 20 February 2007 by Presidential Regulation No. 8 of 2007, Indonesia ratified the Convention on International Interests in Mobile Equipment and the related Protocol on Matters Specific to Aircraft Equipment (known as the “Cape Town Convention”).
The Cape Town Convention ratified by Indonesia is lessors/financiers-friendly. Key features that worth to note are as follows:
(i) Indonesia has adopted “Alternative A” for all insolvency proceedings. This is the most lessor favourable option as it requires the receiver to give possession of the Aircraft to the lessor         within a defined waiting period (60 calendar days in the case of Indonesia).
(ii) Indonesia applies all provisions under Article X of the Protocol of the Cape Town Convention. Article X relates to Article 13 of the Cape Town Convention and deals with a number of key issues related to “Relief pending final determination”. The Cape Town Convention provides the creditor (including lessors) with a right to obtain “speedy relief” from a court in relation to certain orders pending final determination of a claim, relating for example to preservation, possession and immobilisation of the Aircraft.