Summary: There have been some recent updates relating to French aspects of aircraft finance transactions, which we set out below.
One is “signification”, pursuant to French Civil Code (the “Code”). Where an interest originating from a French entity is being assigned, perfection of such interest should be performed in accordance with the Code – known as the signification procedure. The Code requires the appointment of a local bailiff or authorised officer of the French Court, known as a “Hussier”, to deliver the notification of the document assigning an interest to the relevant party (in most cases the manufacturer).
For example, if a purchase agreement assignment was being entered into with a French manufacturer, it would be necessary to appoint a Hussier to deliver the notice to such manufacturer. A Hussier appointment would also require a translation of the subject document into the French language and the scheduling of the notification by the Hussier, within the prescribed time period under the Code.
Effective 1 October 2016, we understand that the Code has been updated. A signification will no longer be required in such instances. Instead, a notification will be required. The effect of the update is that the delivery of notices pursuant to the instrument of assignment will be sufficient for perfection purposes and in accordance with the updated Code.
Transfer of warranties
Separately, and over the course of the last year, some French manufacturers have updated and simplified the method by which warranties are transferred by manufacturers to represent the interests of owners, financiers and operators.
Certain manufacturers will now facilitate the transfer of warranties to a financier/lessor and operator using a revised manufacturer warranties agreement (entered into solely by the manufacturer by way of a unilateral agreement, and under English law, a deed poll), containing scheduled notices for each financier/lessor and operator to adhere to such warranty agreement. The intention of this form is to allow the warranty agreement to follow the asset for its economic life, allowing interested parties, such as financiers, security trustees, lessors and operators to step in and out of such warranties as necessary. Should the aforementioned parties wish to make additional arrangements governing such warranties, then these are made by way of a separate bilateral agreement without the manufacturer being party to such a separate agreement.
The above mentioned changes, brought into effect by French legislators and manufacturers, will reduce the administrative tasks and expenses in such transactions, and will be most welcome by practitioners.