Overview

Conventions

To which major air law treaties is your state a party?

Greece has ratified the Warsaw Convention 1929 (effective since 11 April 1938), the Hague Protocol 1955 (effective since 21 September 1965), the Guadalajara Convention 1961 (effective since 17 December 1973) and the Guatemala Protocol 1971 (effective since 11 January 1989), as well as the Montreal Protocols Nos. 1 and 2 (effective from 15 February 1996) and the Montreal Convention 1999 (effective since 4 November 2003). Greece is also a party to the Rome Convention (1933), which nevertheless is not in effect to date, to the Chicago Convention (1944), the Geneva Convention (1948) and to the New York Convention of 1958, which it approved under the condition of the two limitations set forth in its article I(3).

Domestic legislation

What is the principal domestic legislation applicable to aviation finance and leasing?

The principal domestic legislation applicable is Law 1665/86 on Financial Leasing, as amended (by Laws 2367/95 and 2682/99), and currently in effect. The adoption by the Greek Parliament of Laws 4172/2013, 4223/2013 and 4308/2014 introduced significant changes to the institutional framework for leasing in Greece.

Governing law

Are there any restrictions on choice-of-law clauses in contracts to the transfer of interests in or creation of security over aircraft? If parties are not free to specify the applicable law, is the law of the place where the aircraft is located or where it is registered the relevant applicable law?

According to article 49 of the Greek Air Law Code (Law 1815/1988, GALC) on applicable law, all rights in rem on an aircraft shall be governed by the law of the place where the aircraft is registered. Moreover, in the case that the lessor is a foreign financial leasing company that is licensed to be established and operate in Greece, any issues arising between the foreign lessor and the Greek lessee with regard to the establishment and the extent of rights in rem on an aircraft, shall be governed by law of the nationality of the aircraft (ie, the law of the country where the aircraft is registered), as per article 1 of the Geneva Convention (1948).

Title transfer

Transfer of aircraft

How is title in an aircraft transferred?

Title in an aircraft is transferred according to the general provisions of the Greek Civil Code (GCC) on the transfer of ownership of movables. The transfer of title in an aircraft is effected via (1) an explicit written agreement signed between the owner (seller) and the acquirer of ownership (buyer), and (2) the registration of this agreement with the Aircraft Registry kept by the Greek Civil Aviation Authority (GCAA) (article 41 of the Greek Air Law Code). For the transfer of ownership on aircraft, it is sufficient to register the transfer agreement (bill of sale etc) with the Greek Aircraft Registry, while delivery of the aircraft is not required. The publicity to which the aircraft is submitted substitutes delivery. This does not mean, however that delivery is unimportant: it is advisable to pursue delivery, so that, if the agreement (bill of sale) has any defect, the three-year ordinary acquisition by possession starts running (article 1041 GCC and article 48, section 1 GALC).

 

Transfer document requirements

What are the formalities for creating an enforceable transfer document for an aircraft?

The agreement for the transfer of an aircraft is always in writing. The transfer document may be either private or notarial. A private document is considered adequate per se. Notarial form is required when such a prerequisite also applies to the primary contractual relationship, therefore the same form must be kept for the transfer of the aircraft in rem. The transfer document is enforceable (ie, immediately recordable with the Aircraft Registry) when it bears certification of the authenticity of the signatures of the parties, as well as certification that the signatories are lawfully authorised and bind with their signatures the contractual parties concerned. If the transfer document was drawn up abroad, it must be certified by the local Greek Consular Authority at the place where it was actually executed or legalised in the form of an apostille in accordance with the provisions of the Hague Convention 1961.

 

For the legalisation of signatures of the corresponding parties it is necessary that the agreement has the form of a notarial document and bears the indication ‘notarised apostille’. If the agreement does not have the form of a notarial document, the contractual parties are obliged to produce appropriate certificates of a foreign competent authority, evidencing the company’s lawful establishment and its headquarters, as well as the authority and legalisation of the corporate bodies signing the agreement or authorising other corporate bodies or physical persons to sign the specific agreement in the name and on behalf of the legal entity. These certificates should also bear legalisation in the form of an apostille. In the case of legal entities, the will of their competent administration bodies for the realisation of the specific agreement should be evidenced via lawful documents (such as an appropriate decision of their board of directors). All foreign documents that are submitted to the Greek Aircraft Registry should be accompanied by a certified Greek translation.

Registration of aircraft ownership and lease interests

Aircraft registry

Identify and describe the aircraft registry.

The Greek Aircraft Registry is a public registry operated by the Greek Civil Aviation Authority (GCAA). It comprises both aircraft ownership and lease registers. Separate registers are kept of aircraft of Greek and foreign ownership respectively, as well as registers of leased aircraft. Additionally, there are separate, specific registers for (non-attached) aircraft engines of Greek and foreign ownership, books recording mortgages imposed on aircraft and engines, books recording attachments imposed on aircraft and engines and a separate book recording claims on their ownership (article 17 of the Greek Air Law Code (Law 1815/1988, GALC). The aircraft registry is open to the public and anyone may have access to it and apply for official certificates relating to any registered aircraft or engine for a nominal administrative charge. All the aforementioned departments of the Aircraft Registry are administered and kept by the GCAA. Similar registries and books are also kept by Greek consular authorities, with the exception of the aircraft claims register.

Registrability of ownership of aircraft and lease interests

Can an ownership or lease interest in, or lease agreement over, aircraft be registered with the aircraft registry? Are there limitations on who can be recorded as owner? Can an ownership interest be registered with any other registry? Can owners’, operators’ and lessees’ interests in aircraft engines be registered?

more specifically, if the owner is a physical person, he or she must have the citizenship of an EU member state or of a member state of the European Economic Area (EEA) and be the majority owner at a percentage of more than 50 per cent. In the case of a legal entity, it must be a Greek entity with its registered head office and principal place of business in Greece and hold a majority of more than 50 per cent, and:

  •  in the case of a general partnership, all partners should be physical persons who have citizenship of member states of the EEA ;
  • in the case of a limited liability partnership, all general partners should be physical persons who are citizens of the European Economic Zone, while the two-thirds of the share capital should have been paid by physical persons who are citizens of the EEA ;
  • in the case of a limited liability company, the directors and three-quarters of the shareholders should be citizens of the European Economic Zone, while three-quarters of the shares should also belong to citizens of states that are members of the EEA ;
  •  in the case of a société anonyme, all the shares should be registered and, in their absolute majority, should belong to physical persons who are citizens of the EEA, while two-thirds of the members of the board of directors, its president, its general manager and its mandatory or managing directors are physical persons who have the citizenship of state members of the EEA ; or
  • in the case of associations or unions of persons, two-thirds of their members and all members of their board of directors and supervisory council should be physical persons having citizenship of a state of the EEA (article 18 GALC).

 

In order to avoid multiple registrations, an aircraft may only be registered in the Greek Aircraft Registry on condition of its deregistration from its previous registry (article 24 GALC). Greek nationality of an aircraft is acquired with its registration in the Greek registry (article 19 GALC).

Owners’, operators’ and lessees’ interests in aircraft engines can be registered in the relevant Greek registries for engines of aircraft of Greek or foreign ownership kept by the GCAA.

Registration of ownership interests

Summarise the process to register an ownership interest.

The party seeking to register an aircraft ownership interest with the Greek Aircraft Registry must submit the following:

  • a petition;
  • a solemn declaration that the aircraft is not registered with the registry of any other state in the case of a new aircraft. If the aircraft is not new, then, in addition to this solemn declaration and prior to the aircraft’s registration with the Greek registry, it is necessary to produce the aircraft’s deregistration certificate from the previous registry. This deregistration certificate is sent to the GCAA directly by the state of the previous registration;
  • the necessary documentary evidence proving the petitioner’s nationality. If this is a physical person, his or her ID card or passport will suffice (a copy of which is submitted to the GCAA). If the petitioner is a legal entity, then submission of its updated articles of association is required, together with other documents (authorisations, legalisation, minutes of the board of directors etc, as the case may be) that verify the identity of the person who has the right to bind [HS1] [MS2] the legal entity (company, etc) with his or her own signature;
  • the documents necessary to evidence the aircraft’s ownership (ie, sale and purchase agreement or bill of sale (private or notarial)). If the transaction takes place abroad, the bill of sale should be drafted according to the formalities provided by the law of the state where it was redacted and be certified by the local Greek Consular Authority or by the local state authority according to the Hague Convention 1961 in the form of an apostille. Any document in a foreign language other than English should be accompanied by an official Greek translation as a condition to be registered with the Greek Aircraft Registry;
  • documentary evidence from the Greek Customs Authority certifying the settlement of the aircraft’s financial or fiscal obligations, as the case may be (eventual customs clearance, payment of VAT, etc);
  • an insurance policy or certificate from an insurance company or broker, but not a simple insurance agent, confirming the insurance coverage of liabilities arising from its operation, including damage to the aircraft and passengers or cargo, as well as towards third parties on the ground. The insured must be named as the final user (ie, the operator of the aircraft), irrespective of whether he or she is the aircraft’s owner or lessee. Other physical persons or legal entities may be included in the insurance policy as co-insured;
  • an airworthiness certificate of the aircraft issued or acceptable by the GCAA. This is valid only for the aircraft’s initial registration in the Greek registry; and
  • the aircraft must also bear the identification mark described in article 2, the sixth edition of ICAO’s Annex 7.

 

The costs entailed for an aircraft registration presently are:

  • for a petition for the indenture of nationality and registration particulars of an aircraft (duration up to six months), following up the successive order of registration, whether the particulars are kept by the GCAA or not, €500 and €250, respectively;
  • for the filing of a petition for the registry of an aircraft with a maximum take-off weight (MTOW) up to 2,000kg, €100;
  • for a petition for registration of an aircraft of MTOW 2,001 kg up to 5,700kg, €150;
  • for a petition for registration of an aircraft of MTOW 5,701 kg up to 15,000 kg, €250;
  • for a petition for registration of an aircraft of MTOW 15,001 kg up to 50,000 kg, €500;
  • for a petition for registration of an aircraft of MTOW of more than 50,000 kg, €1,500; and
  • for the issuance of ownership certificate, €100. Title to the engine automatically vests in the owner of a host aircraft.
Title and third parties

What is the effect of registration of an ownership interest as to proof of title and third parties?

The bill of sale document must be registered with the Greek Aircraft Registry. This registration is a condition for the transfer of ownership to be completed, without which transfer of ownership is not effected. Moreover, a condition for the transfer of ownership is that the transferring party is the owner of the aircraft at the time of its registration with the Registry. Before proceeding to registration, the competent registrar carries out an exhaustive check of the validity of the agreement for the transfer of ownership (bill of sale or any other similar title) and also reviews and checks the legalisation of the parties and the content and validity of all filed necessary documents and petitions. Therefore, registration constitutes proof of title, and thus third parties can rely on the accuracy of the public registration of the ownership interest. It is imperative that the transfer of ownership, either contractually or through acquisition due to death (via inheritance or bequest), derives from a document that should be duly registered, along with all other documentation required, with the Greek Aircraft Registry; otherwise no transfer of ownership is effected or registered. The registered ownership interest is effective as against third parties, even if the owner has a defective title and until its legal annulment.

Registration of lease interests

Summarise the process to register a lease interest.

The supporting documents to be produced with the Greek Aircraft Registry are identical to those required for the registration of ownership interests but instead of a bill of sale, the petitioner shall file the relevant lease contract.

Certificate of registration

What is the regime for certification of registered aviation interests in your jurisdiction?

Certificates of registration of registered aviation interests are issued by the Greek Aircraft Registry, which is kept by the GCAA. The aircraft or engine registration certificate comprises explicit reference to the aircraft’s or engine’s main identification characteristics and data and their owner, as well as other data, as these are specified by the provisions of presidential decrees in force (article 26 GALC). A certificate regarding any mortgage or other encumbrance on an aircraft may be issued by the registrar on special application.

Deregistration and export

Is an owner or mortgagee required to consent to any deregistration or export of the aircraft? Must the aviation authority give notice? Can the operator block any proposed deregistration or export by an owner or mortgagee?

An aircraft is deregistered from the Greek Aircraft Registry in case of:

  • loss of its Greek nationality;
  •  total destruction, damage or loss;
  • dismantling or scrapping, in any way that this may possibly occur; or
  •  lack of any news concerning the aircraft for three months after the last information concerning the same, if its loss is deemed as highly probable (article 31 GALC).

 

The loss of the aircraft’s Greek nationality must be notified, without delay, to the GCAA, via a written declaration; the documents certifying the loss of the aircraft’s Greek nationality must be attached to this written declaration, which must be submitted to the GCAA by the aircraft’s owner or his or her legal successor. Deregistration of the aircraft is ordered by ministerial decision, issued after a petition of the interested party or ex officio, and following a proposal of the GCAA after having completed its research on the specific circumstances. Any sale transaction that entails loss of the aircraft’s Greek nationality is invalid unless it is effected on the written consent of the mortgagee. If the mortgaged aircraft is sold despite the aforementioned interdict, the mortgagee has the right to claim full payment of the amount of the outstanding debt. No deregistration can be made by the registrar without the written consent of the mortgagee.

The operator may block any proposed deregistration or export of aircraft by an owner or mortgagee if the operation agreement in force gives him or her such right.

Powers of attorney

What are the principal characteristics of deregistration and export powers of attorney?

There are no standard or principal characteristics of deregistration or export powers of attorney. The mortgagee does not have the right to deregister and export the aircraft. This right belongs exclusively to the aircraft’s owner, under the condition of his or her compliance with the legal provisions for such deregistration. It is self-evident that the owner of the aircraft does not need a power of attorney to exercise such a right. Deregistration and export powers of attorney are revocable and grantable to more than one attorney. Such powers of attorney do not survive the grantor’s insolvency, as, when declared insolvent, he or she is deprived of the ability to dispose of any of his or her property. Powers of attorney are not registered per se but are duly submitted to the registry and any other public authority involved, along with any other required documents.

Cape Town Convention and IDERA

If the Cape Town Convention is in effect in the jurisdiction, describe any notable features of the irrevocable deregistration and export request authorisation (IDERA) process.

This is not applicable, as Greece has not ratified the Cape Town Convention.

Security

Security document (mortgage) form and content

What is the typical form of a security document over the aircraft and what must it contain?

The usual language of a security document (mortgage) is Greek; English is also acceptable. A security document in any other language must be accompanied by its official, certified and accurate translation in Greek. The right to establish a mortgage on an aircraft is granted via a written unilateral statement of its owner or a contract between the owner and the mortgagee, in the form of either a private or notarial document, which is then registered with the relevant mortgage registry kept with the Greek Aircraft Registry of the Greek Civil Aviation Authority (GCAA).

For the registration of a security document drawn up abroad, the document must be certified by the competent consular authority.

The security document must comprise:

  • the name, surname, nationality, residence or domicile and profession of both the person or legal entity granting the right to mortgage and the mortgagee;
  • details of the secured claim, the end time and the contractual interest;
  • the title of acquisition of ownership over the aircraft that is mortgaged, description of the aircraft and its engines, its nationality and registry marks; and
  • the appointment of an attorney residing in the place where the mortgage registry is kept.
Security documentary requirements and costs

What are the documentary formalities for creation of an enforceable security over an aircraft? What are the documentary costs?

The documentary formalities for the creation of an enforceable security over an aircraft consist of certification and the notarisation and legalisation of the signatures of the signing parties by following the formalities provided by domestic Greek law for documents executed in Greece or by the Hague Convention 1961. Documentary costs, mainly in the form of notarial dues, vary, depending on the amount of the secured claim, and are in the region of 2 per cent of the claim.

Security registration requirements

Must the security document be filed with the aviation authority or any other registry as a condition to its effective creation or perfection against the debtor and third parties? Summarise the process to register a mortgagee interest.

The security document must be filed with the Greek Aircraft Registry as a condition of the security’s effectiveness and validity against the debtor and third parties.

The person applying for the registration of a mortgage must produce the relevant title (declaration for the granting of the mortgage title in the form of private or notarial document), together with a summary of the title in duplicate and the supporting documentation required. Other than this, the same formalities that pertain to registering an ownership interest apply. The cost for the filing of a petition with the registry claiming the inscription of a mortgage on an aircraft or engine is €500.

Registration of security

How is registration of a security interest certified?

Registration of a security interest is confirmed via an appropriate certificate issued by the Greek Aircraft Registry. This certificate states the rank (priority) of the security interest. The certificate can be immediately available against an extra charge.

Effect of registration of a security interest

What is the effect of registration as to third parties?

The effects of registration are: (1) priority ranking over subsequent security interests; (2) prohibition of sale of a mortgaged aircraft in the case that its transfer would lead to the loss of its Greek nationality; and (3) interruption of the time-bar. The date of registration is crucial for the priority of the registered security interest over other subsequently registered securities. There is no priority notice system in place. Third parties can rely on the accuracy of the public registration of the security interest.

Security structure and alteration

How is security over aircraft and leases typically structured? What are the consequences of changes to the security or its beneficiaries?

The concept of trust is not recognised in Greek jurisdiction. The security (mortgage) under Greek law is a right in rem. In the case of a loan transfer, the new lender may be substituted for the original lender and the existing securities are transferred to the former by agreement between them without the need for new security registrations.

Security over spare engines

What form does security over spare engines typically take and how does it operate?

Article 53 of the Greek Air Law Code (Law 1815/1988, GALC) specifically provides for the possibility to register a mortgage on spare engines (ie, engines that are not installed or are installed on a host aircraft), on the condition that they are independently registered with the (spare) Engines Registry kept by the Greek Aircraft Registry. In the case of a security interest (mortgage) over a financed aircraft, the latter and its engines are treated as a single item of property (ie, when an engine is integrated in an aircraft, it is considered as its component). In order for a security interest to be effectively created over an engine that is also in the jurisdiction but is not installed on the aircraft, the non-installed engine must be already registered with the relevant Engines Registry kept by the GCAA. The owner of such an engine burdened with a mortgage has the right, unless there is a contrary agreement, to place the engine on an aircraft of his or her ownership, also burdened with a mortgage, as security of the same claim. In this case, (1) the engine’s mortgage is extinguished upon the engine’s installation on the aircraft and revives upon the engine’s detachment from the aircraft; and (2) the engine’s installation on an aircraft is not a ground for deregistration of the separate engine mortgage from the relevant book of engine mortgages. If the mortgage on the aircraft is extinguished while the engine is installed, thus being its component, the mortgage on the engine is extinguished as well.

 

Enforcement measures

Repossession following lease termination

Outline the basic repossession procedures following lease termination. How may the lessee lawfully impede the owner’s rights to exercise default remedies?

After lease termination, the lessee is obliged to deliver the aircraft to his or her contractual counterpart, owner or lessor. Nevertheless, if the lessee fails to comply with this obligation, the owner or lessor may exercise the self-help remedy provided in a notarial lease contract and seek its enforcement against the lessee. If the lease agreement is a private contract and not enforceable per se, there are no self-help remedies available to the owner or lessor, who may only proceed to claim repossession by following the Greek law provisions on enforcement of his or her rights as such. These provisions require pursuing and obtaining an enforceable judgment against the lessee through legal proceedings before the competent Greek civil court. Such a judgment is vested in the form of enforcement and is served upon the lessee via a competent court bailiff, ordering him or her to return possession of the aircraft to the owner or lessor. If the lessee fails to comply, the court bailiff expels the lessee from the possession of the aircraft, which he or she hands over to the owner or lessor. These steps are recorded in an enforcement report, which is served without delay upon the administrator of the airport where the aircraft is situated. It is self-evident that the enforcement procedure presupposes the previous arrest of the aircraft.

The lessee may lawfully impede the owner’s rights to exercise default remedies only if he or she can prove that the aircraft is defective and as a result it has caused damages to the lessee while the lease was running, due to delays in the performance of scheduled flights etc.

 

Enforcement of security

Outline the basic measures to enforce a security interest. How may the owner lawfully impede the mortgagee’s right to enforce?

If a security (mortgage) on an aircraft is given by notarial deed, which is expressly enforceable, the mortgagee may proceed to enforcement against the aircraft without a court order. If the security is given by a private non-enforceable agreement, it will be necessary for the mortgagee to pursue an enforceable court order, which will give him or her the right to enforce his or her interest against the aircraft.

Enforcement on aircraft may take place by applying the general provisions of the Greek Code of Civil Procedure (GCCP) on enforcement and execution (articles 904 to 940) and the specific provisions of articles 992 to 1016 ‘on attachment of the debtor’s immovable property, ships or aircraft’.

An aircraft may be detained provisionally by way of an ex parte application.

In the case of insolvency, a creditor’s enforcement rights are suspended and must follow the procedures provided by Greek law on insolvency.

Priority liens and rights

Which liens and rights will have priority over aircraft ownership or an aircraft security interest? If an aircraft can be taken, seized or detained, is any form of compensation available to an owner or mortgagee?

The liens that have priority over an aircraft or aircraft security interest (mortgage) are (1) costs and fees relating to salvage and rescue; (2) extraordinary and necessary expenses for the aircraft’s maintenance; and (3) charges, dues and air navigation taxes that burden the aircraft (article 74, section 2 GALC). Liens are also exercised on the insurance indemnity for the damage to or loss of the insured aircraft if the creditor notifies the insurer of the amount of his or her claim within 30 days of the occurrence (article 78, section 2 of GALC). Liens are not exercised on freight, nor on various inducements owed to the owner of the aircraft, either for contribution to joint average, or for effected salvage or rescue. The aforementioned liens are extinguished upon the aircraft’s sale in public auction; or once three months have elapsed after the claim arose.

Aircraft may be seized as a means of enforcement of a private claim. The seizure of an aircraft entails prohibition of take-off. When the decision ordering confiscation becomes irrevocable, the ownership of a confiscated aircraft passes to the Greek state. No compensation is available to an owner or mortgagee.

Enforcement of foreign judgments and arbitral awards

How are judgments of foreign courts enforced? Is your jurisdiction party to the 1958 New York Convention?

With regard to judgments issued by the courts of other EU member states, Regulation (EU) No. 1215/2012 on jurisdiction and recognition and enforcement of judgments in civil and commercial matters applies. More particularly, as per the provisions comprised in Chapter III, section 2 of the above Regulation on enforcement (articles 39 to 44), a judgment issued in a member state, which in that same member state is enforceable, shall be enforceable in the other member states without the requirement of any declaration of enforceability (article 39). An enforceable judgment shall carry with it, by operation of law, the power to proceed to any protective measures that exist under the law of the member state addressed (article 40).

According to Regulation (EU) No. 1215/2012, the procedure for the enforcement in Greece of judgments issued in another member state, shall be governed by Greek law. A judgment issued in a member state, which is enforceable in that state, shall be enforced in Greece under the same conditions as those applying to a judgment that was issued in Greece (article 41, paragraph 1).

For the purposes of enforcement in a member state, and in Greece, of a judgment issued in another member state, the applicant shall provide the competent enforcement authority with (1) a copy of the judgment that satisfies the conditions necessary to establish its authenticity, and (2) a certificate confirming that the judgment is enforceable, containing an extract of the judgment as well as, where appropriate, relevant information on the recoverable costs of the proceedings and the calculation of interest (article 42, paragraph 1). Where enforcement of a judgment issued in another member state is sought, the aforementioned certificate shall be served on the person or legal entity against whom the enforcement is sought prior to the first enforcement measure. The certificate shall be accompanied by the judgment, if the latter is not already served on that person or legal entity (article 43, paragraph 1).

If enforcement is sought for judgments issued in a non-EU member state, then article 905 of the GCCP shall apply. According to this, provisions of international treaties to which Greece is a party and EU regulations, enforcement of a foreign court judgment is possible in Greece, under the condition that this judgment is declared enforceable via a Greek court decision issued by the one member court of first instance of the residential district or the headquarters’ of the debtor. The afore-mentioned competent court shall issue its decision according to the Rules on Non-Contentious Jurisdiction Procedure provided in articles 740 to 781 of the GCCP. According to article 905, paragraph 3 of the GCCP, the prerequisite for the declaration by the Greek courts of the enforceability of a foreign (non-EU) court decision is that the conditions explicitly set out in article 323, paragraphs 2 to 5 of the GCCP are met. More specifically, a foreign, non-EU court judgment shall be declared enforceable if:

  • the subject case was, according to the provisions of GCCP, subject to the jurisdiction of the courts of the state where the court that issued the judgment belongs;
  • the defeated litigant party was not deprived of its right to defend itself and, generally, of its right to participate in the trial, except for the case where the deprivation of such a right took place according to a specific legal provision applicable to the citizens of the state of the court that issued the judgment; and
  • the judgment is not contrary to fair practices or public order. (It should be noted that there is no different treatment relating to the enforcement in Greece of English and New York  judgments).

 

As far as the enforcement of arbitral awards is concerned, article 906 of the GCCP applies, according to which foreign arbitral judgments are declared enforceable in the same way as foreign court judgments are, (ie, via a court decision issued by the one member court of first instance of the residential district or the headquarters’ of the debtor). The aforementioned competent court shall issue its decision according to the same Non-Contentious Jurisdiction Procedure provided by articles 740–781 of the GCCP. Additionally, though, in the case of foreign arbitral judgments, all six prerequisites explicitly set out by article 903 of the GCCP must collectively be met. More particularly, an arbitral award may be declared enforceable in Greece if:

  • the relevant arbitration agreement, upon which the issuance of the award is based, is valid under the provisions of the governing law;
  • the object of the award may be the object of an arbitration agreement according to Greek law;
  • the award is not subject to an appeal or recourse, or there is no pending procedure questioning the validity of the award;
  • the defeated party was not deprived of the right of defence during the arbitration procedure;
  • the award is not contrary to a Greek court judgment issued in the same case, thus resulting in res judicata for the parties among which this award was issued; and
  • the award is not contrary to public order or fair practices.

 

Greece is a party to the New York Convention of 1958, which it ratified via Legislative Decree No. 4220/1961, under the condition of the two limitations set forth in the Convention’s article I (3).

Taxes and payment restrictions

Taxes

What taxes may apply to aviation-related lease payments, loan repayments and transfers of aircraft? How may tax liability be lawfully minimised?

Mobile assets that are the object of financial leasing by means of ownership or possession, and consist in means of transport (aircraft, inter alia) are not exempted from income tax, VAT and other taxes and levies in favour of the Greek state (article 6, section 1, Law 1665/1986). As far as VAT is concerned, there are specific provisions on aircraft (article 27, section 1(b)–(e) of the Greek VAT Code (Law 2859/2000)), according to which delivery and import of aircraft destined for use by the armed forces and the state or destined for scrap, or operation by airline companies that execute mainly international carriage against airfare and their income from international carriage exceeds the 50 per cent of their annual turnover, are exempt from VAT. Leasing of private use aircraft destined for leisure or sport is not exempt from VAT. Exemption from VAT also applies to delivery or import of materials and spare parts to be used by aircraft that are exempt from VAT. No VAT is due on delivery and import of fuel, victuals, lubricants and other goods destined for the supply of aircraft that are exempt from VAT. Leasing of aircraft is exempt from VAT, provided that it is made for the aircraft’s further exploitation, whereas the leasing of a leisure aircraft is not exempt from VAT. Finally, also exempt from VAT are aircraft building, modification or alteration, and restoration and repair works, as well as similar works on objects and parts installed on  the aircraft or being used for the operation of aircraft that are exempt from VAT. Delivery of aircraft leased by a Greek airline, when the seller and buyer are not established in Greece, is exempt from VAT provided that the aircraft is disposed for exclusive use (as in the case of lease) by an airline company that is exempted from VAT as per article 148.e of Directive 2006/112/EC. If the aircraft is not in Greece during its transfer, the transfer is not subject to VAT payment in Greece, but the contractual parties shall have to examine their eventual obligations for VAT payment in the country where the aircraft actually is. For transfer registration in the Greek Aircraft Registry, one should submit, inter alia, any document certifying the location of the aircraft during its transfer. The Greek Civil Aviation Authority (GCAA) notifies the lessee’s competent Public Fiscal Office of the realisation of the transfer, mentioning the particulars of both the seller and buyer, as well as the location of the aircraft during its transfer.

The sale of aircraft is generally subject to Greek import VAT of 24 per cent when the delivery of the aircraft, originating from a non-EU member state, arrives in Greece. With regard to income taxation imposed in the jurisdiction, there are no specific provisions on aircraft. The general provisions now applicable on transfers and leasing and on loan repayments are that the profit of a legal entity from the transfer of aircraft, as part of its assets, as well as income from the aircraft’s leasing, is taxed, as income of the company’s legal activity, at the tax rate of 24 per cent as of 1 January 2020.

Exchange control

Are there any restrictions on international payments and exchange controls in effect in your jurisdiction?

All restrictions on international payments and exchange controls that were in effect in Greece since July 2015, were lifted as of 1 September 2019. More particularly, article 86 of Law 4624/2019 enacted the complete lift of capital controls, thus restoring free movement of capitals after four years of restrictions on transfers abroad by companies and individuals. Therefore, no approval or notification are required for payments effected out of the jurisdiction, and all relevant procedures, in force since mid-July 2015, ceased to apply as of 1 September 2019.

Default interest

Are there any limitations on the amount of default interest that can be charged on lease or loan payments?

There are no limitations, but the amount of default interest that may be agreed and charged on lease or loan payments is subject to a reasonable percentage; this depends on the agreement of the contracting parties involved. If no special agreement or specific reference is made, then the statutory default interest shall apply, which, as of 16 March 2016, is 7.25 per annum (article 3, paragraph 2, Law 2842/2000).

Customs, import and export

Are there any costs to bring the aircraft into the jurisdiction or take it out of the jurisdiction? Does the liability attach to the owner or mortgagee?

There are no such costs imposed: as per the European Commission’s Implementing Regulation (EU) 2016/1821 of 6 October 2016, amending Annex I to Council Regulation (EEC) 2658/1987, civil aircraft is explicitly provided with relief from customs duties. This relief is subject to the conditions laid down in the relevant EU provisions with a view to making possible the customs control of such goods, as per article 254 of Regulation (EU)  952/2013.

Insurance and reinsurance

Captive insurance

Summarise any captive insurance regime in your jurisdiction as applicable to aviation.

Liability insurance is not only compulsory as per EU and Greek law but is also a prerequisite for an aircraft to be operated in Greece. Any lawful interest exposed to aviation risks, inclusive of expected profit, may be the subject of aviation insurance (article 129 of the Greek Air Law Code (Law 1815/1988, GALC). Insurance cover of an air carrier’s liability for damages deriving from a contract of carriage to passengers, goods or luggage is compulsory (article 137, section 1 GALC). Any aircraft operator should also insure his or her eventual liability for damages caused to crew members or other persons on board the aircraft for the service of a flight, as well as to third parties on the ground (article 137, section 2 GALC). The aircraft’s insurance cover is also compulsory and extends to the aircraft’s hull, its components and parts (article 131 GALC). Thus, the most usual kinds of aviation insurance in Greek jurisdiction are (1) liability insurance for damage caused to passengers or crew members on board the aircraft during its operation or to third parties on the ground; (2) casualty or accident insurance; and (3) hull insurance, covering damage caused to the aircraft. There is no domestic requirement that insurance should necessarily be purchased in Greece. Special legislation specifies the minimum percentage of the insurance, with the reservation of articles 110 and 112 of the GALC (article 137, section 4 GALC). No single local captive insurer is used so risks may be spread across more than one insurance company.

Cut-through clauses

Are cut-through clauses under the insurance and reinsurance documentation legally effective?

Yes, cut-through clauses are legally effective, depending on the exact content of each specific agreement.

Reinsurance

Are assignments of reinsurance (by domestic or captive insurers) legally effective? Are assignments of reinsurance typically provided on aviation leasing and finance transactions?

Yes, assignments of reinsurance are, in general, legally effective, subject to the specific provisions of the assignment agreement, and may also be provided on aviation leasing and finance transactions.

Liability

Can an owner, lessor or financier be liable for the operation of the aircraft or the activities of the operator?

The aircraft’s operator and its owner are jointly liable for damages caused to third parties on the ground by the aircraft while in flight or by a person or object that fell from it (article 117 GALC; see also article 1 of the Rome Convention 1952). The operator’s obligation to compensation cannot exceed triple the aircraft’s value, if this was new on the day of the incident, whereas the owner’s liability does not exceed the actual value of the aircraft on the day of the occurrence (article 119, section 1 GALC). In the case of an aircraft collision, the operator of the liable aircraft is liable for the damages caused (article 121, section 1 GALC). Contributory negligence of the injured person may reduce or even remove liability of the owner and operator (article 118 GALC). The operator is obliged to insure his or her liability for damages caused to passengers or crew members, as well as for damages caused to third parties on the ground (article 137, section 2 GALC). Violation of this obligation is a criminal offence (article 165 GALC). Except for the aforementioned cases, the owner is liable only when he or she is also the operator (ie, operates his or her own aircraft) or is the air carrier (Montreal Convention 1999, article 17 et seq). Lessors or financiers are not liable.

Strict liability

Does the jurisdiction adopt a regime of strict liability for owners, lessors, financiers or others with no operational interest in the aircraft?

The aircraft’s operator and its owner are jointly liable for damages caused to third parties on the ground by the aircraft while in flight or by a person or object that fell from it (article 117 GALC; see also article 1 of the Rome Convention 1952). The operator’s obligation to compensation cannot exceed triple the aircraft’s value, if this was new on the day of the incident, whereas the owner’s liability does not exceed the actual value of the aircraft on the day of the occurrence (article 119, section 1 GALC). In the case of an aircraft collision, the operator of the liable aircraft is liable for the damages caused (article 121, section 1 GALC). Contributory negligence of the injured person may reduce or even remove liability of the owner and operator (article 118 GALC). The operator is obliged to insure his or her liability for damages caused to passengers or crew members, as well as for damages caused to third parties on the ground (article 137, section 2 GALC). Violation of this obligation is a criminal offence (article 165 GALC). Except for the aforementioned cases, the owner is liable only when he or she is also the operator (ie, operates his or her own aircraft) or is the air carrier (Montreal Convention 1999, article 17 et seq). Lessors or financiers are not liable.

Third-party liability insurance

Are there minimum requirements for the amount of third-party liability cover that must be in place?

Yes. As per article 6, section 1 of Regulation (EC) No. 785/2004, the minimum insurance cover for liability in respect of passengers is 250,000 Special Drawing Rights (SDRs) per passenger. However, in respect of non-commercial operations by aircraft with a maximum take-off weight of 2,700kg or less, member states may set a lower level of minimum insurance cover, provided that such cover is at least 100,000 SDRs per passenger. According to article 1, sections 2 and 3 respectively of Regulation (EU) No. 285/2010, amending the aforementioned Regulation (EC) No. 785/2004, for liability in respect of baggage, the minimum insurance cover is 1,131 SDRs per passenger in commercial operations, whereas for liability in respect of cargo, the minimum insurance cover is 19 SDRs per kilogram.

Update and trends

Key developments of the past year

What were the key cases, decisions, judgments and policy and legislative developments of the past year?

The key legislative development of the past year in Greece was Law 4624/2019. Article 86 of this Law enacted the complete lift of capital controls, thus restoring the free movement of capital after four years of restrictions on transfers abroad by companies and individuals. Article 86 of the Law 4624/2019 entered into force on 1 September 2019.