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?

Repossession is achieved in practice by sending a written notice to the lessee to return the aircraft to the lessor’s possession. If the lessee refuses to return the aircraft, judicial intervention will be required. In practice, however, it is quite common that lease agreements determine the unilateral right of the lessor to take possession of the subject of the lease in case of contract violation without judicial intervention.

The exercise of such a right could be legally disputed by the lessee. The lessee could seek judicial protection to protect him or her from interference in his or her possession of the subject of the lease. If this were to happen, the lessor would have to file a separate lawsuit that aims to protect ownership (the lessor will have to claim that he or she is entitled to possession of the aircraft on the basis of ownership or other similar right). Both proceedings shall run in parallel. The rule is that the decision in the proceeding commenced by the lessor’s lawsuit (based on the protection of ownership) shall prevail over the decision in the proceeding commenced by the lessee’s lawsuit (based on the protection of possession).

Each party (lessor or lessee) may, prior to or during the court proceeding, seek from the court an interim injunction to temporarily decide on the rights and duties of parties with regard to the possession of the subject of the lease.

Enforcement of security

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

The repayment of a mortgage on an aircraft is usually made on the basis of a judicial sale of the aircraft. ZOSRL also allows the creditor to repay his or her claim in the event of non-payment of the claim by exploiting the aircraft, if such an option is stipulated in the contract.

In the case of an insolvency the creditor gains the position of a creditor with a right to separate satisfaction. This right enables the creditor to claim in the insolvency proceedings that his or her claim is secured by a right of separation, which is the right for the payment of his or her claim from certain assets of the insolvent debtor before the payment of claims of other creditors from these assets. The basic rule that applies in the bankruptcy proceeding for the right of separation and claims secured by them is that the initiation of a bankruptcy proceeding does not affect them. Therefore, the initiation of a bankruptcy proceeding does not affect the existence of a claim and the right of separation.

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?

A privilege on an aircraft has priority over a mortgage, whereby the law does not require the registration of the privilege on the Register for the occurrence of the privilege and the legal effects arising for third parties. The following receivables are secured by a privilege:

  • court costs that are necessary for the common interest of all creditors in enforcement or insurance procedures for the purpose of safekeeping of the aircraft or for a forced sale;
  • claims relating to a specific prize for the search of an aircraft or its rescue;
  • claims relating to extraordinary expenses necessary for the maintenance of the aircraft; and
  • costs to be paid to the service provider at the airport in connection with the services provided and the use of infrastructure as determined by the provisions of ZLet.

The aviation regulations do not determine the possibility of seizure of aircrafts. ZLet only provides that an official of the CAA is entitled to seal the aircraft or device if he or she finds irregularities that could endanger the safety of air traffic.

Enforcement of foreign judgments and arbitral awards

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

The proceedings of enforcement of foreign judgments depend on whether the foreign judgment is issued by an EU member state or by a non-EU member state.

The enforcement of a foreign judgment issued by an EU member state will be performed in accordance with Regulation (EU) No. 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. In accordance with the provisions of this Regulation, a judgment given in a member state that is enforceable in that member state shall be enforceable in the other member states without any declaration of enforceability being required. A judgment given in a member state that is enforceable in the member state addressed shall be enforced there under the same conditions as a judgment given in the member state addressed.

For other foreign judgments issued in jurisdictions with which Slovenia did not conclude any treaty, enforcement will be done in accordance with the general rules that are determined in the Private International Law and Procedure Act. Regarding the provisions of this Act, foreign court decisions are equal to the decisions issued by the court in Slovenia and have the same legal effect in Slovenia as a domestic court decision, only if they have been recognised by a Slovenian court. The person filing for enforcement has to supplement the request with the original foreign court decision or an authenticated copy thereof, a certificate, issued by the competent foreign court or other body stating that the decision is final under the law of the country in which it was issued and a certificate of enforceability of the decision under the law of the country in which it was issued. The Act also contains provisions that determine grounds, based on which the Slovenian courts have to refuse the enforcement of the foreign judgment. Inter alia, these grounds are: the subject matter is within the exclusive jurisdiction of the court or other body in Slovenia, if the court or another body of Slovenia has issued on the same matter a legally binding decision, or if some other foreign decision on the same matter has been enforced in Slovenia, if the effect of the enforcement would be contrary to the public order of Slovenia or if mutuality does not exist.

Slovenia is a party to the New York Convention of 1958, whereby on the basis of reciprocity, it applies the Convention only to the recognition and enforcement of those arbitration awards issued in the territory of any other contracting state.

According to article III of the Convention, each contracting state shall enforce the arbitral awards in accordance with the rules of the procedure of the territory where the award is relied upon, under the conditions laid down in the Convention. The party applying for enforcement shall, at the time of the application, supply the duly authenticated original award or a duly certified copy thereof, the original agreement, referred to in article II of the Convention or a duly certified copy thereof. The Convention also provides a list of reasons for which enforcement of the award may be refused (see article V of the Convention).