The Protection Of Lessor In International Aircraft Leasing

Aviation industry corporation of China established a new company of leasingaviation in Ireland which obtained the approval of the Department of Commerce. Thisspecial purpose company (that is, the legal person uses its assets to set up a specialpurpose company outside its territory for international finance) is the beginning ofChina to get involved in the financial leasing business. The purpose of the SPV is torun the aircraft financial leasing through the separate account and management whichcan help the company isolate from the financial risk and preserve the capital.However, in this period, the development of aircraft leasing in our country isstill in its infancy. Though China has joined the Cape Town Convention in June2009,the Convention creates many new concepts and systems, for example, like theregistration system of international interests, the debtee’s remedy of debtor notperforming the regulation, which has not gotten a corresponding system building inChina’s domestic legislation. In other words, our current laws and regulations are stilllagging, It makes us facing more challenges in cross-border aircraft finance leasing.With the improving of our own manufacturing strength, in the future, themanufacturer like China Aviation Group, as a lessor, will involved in the internationalaircraft leasing market as much as possible. But the domestic legislation isincompatible with the international’s regulation. This problem will cause majorimpediment in this trade. So we need to learn the conventions and practices whichhave the worldwide influence, to grasp some of its creation system, and graduallyadapting the domestic systems and institutions to protect our lessor in the internationalaircraft leasing market.Combining with the "Cape Town Convention",”International Financial LeasingConvention”, this article will discuss the lessor as a special participation subject inthis trade.First, the paper will describe the basic concept of aircraft leasing, form thefinance leasing to aircraft leasing gradually. This industry is special because of itsproperty belonging to a larger chattel, high value,and related to the different areas ofthe body. The other way, the characteristics of modern aircraft leasing is financing, soits relates to the guarantor. So, considering the multi-subjects, multi-mode, theapplying of the law in different regions, the writer needs to write this research. The second part of this paper mainly uses text analysis measure, though thelessor’s perspective on the "Cape Town Convention",”International Financial LeasingConvention” to analysis. The protection of the lessor reflects in the provisions andpractices in the identification of the international interest of the internationalregistration system, the debtor not performing the promising, the debtor’s insolvency.Combining with international conventions and international custom, the lessor canobtain the protection at different cases after registration international interests and getthe remedy after the detor’s bankruptcy and not performing the regulation. Thissection will discuss the detail expounded.The third part of the paper uses the comparative analysis, mainly compared theinternational conventions, international custom, as well as the domestic legislation toappraise. Though Comparison and Analysis, the writer sums up the innovation pointof the Convention, fully demonstrated the "Cape Town Convention "for the creationof the international interests of the system, registration system and so on.The fourth part is combined with the provisions of the domestic legislation,mainly discussing the missing parts combined with the international Convention.These shortcomings and differences are mainly reflected in the internationalinterests,the registration system, the debtor not performing the regulation, thedebtor’s bankruptcy.The perfection of these shortcomings and differences willprovide a new way to construct the future legal system.Protection the rights of the lessor is the perspective of this paper. The analysisof the main protection system is throughout the entire finance leasing process.Combined with the "Cape Town Convention", giving much freedom to the lessor foradapting and promoting the rapid development of the leasing industry is the purposeof the Convention. Under this premise, the Convention is based on the registration ofinternational interests, and then forms a system which the lessor can negotiate withthe lessee and can choose the remedy when the lessee bankrupts. This innovationbreaks through the old restrictive terms of the protection, so that the lessor can get aself-protection system combined with domestic legislation and the agreement betweenthe lessee. The provisions of the Convention is rational, and its purpose is to balancethe interests of the different parties, which is the missing part of the China’s domesticlegislation. It is worth to learning.