1 | Qualifications for Registration of an Aircraft in Singapore
Pursuant to the Air Navigation Order (the Order), an aircraft shall not be registered or continue to be registered in Singapore if:
- “the aircraft is registered outside Singapore and that such registration does not cease by operation of law upon the aircraft being registered in Singapore;
- an unqualified person is entitled as owner to any legal or beneficial interest in the aircraft or any share therein; or
- it would be inexpedient in the public interest for the aircraft to be registered in Singapore”.
In relation to (b) above, only the following persons are qualified to be a legal or beneficial owner of a Singapore registered aircraft: (a) the Government, (b) citizens of Singapore, (c) citizens of any Commonwealth country; and (d) bodies incorporated in Singapore or in some part of the Commonwealth and having their principal place of business in some part of the Commonwealth. The operator will be named as the “owner” on the certificate of registration issued by the Civil Aviation Authority of Singapore (CAAS).
2 | Cape Town Convention
Singapore has deposited the instrument of accession to the Cape Town Convention on International Interest in Mobile Equipment (2001) (theConvention) and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment (the Protocol and together with the Convention, the Cape Town Convention). The Cape Town Convention came into force in Singapore on 1 May 2009 (pursuant to the International Interests in Aircraft Equipment Act (Chapter 144B) of Singapore (the Singapore Cape Town Act).
3 | Choice of Law
As a matter of Singapore law, parties are generally free to choose the governing law of a contract provided that such express selection by the parties was not made in bad faith, was made illegally, was contrary to Singapore rules of public policy or limited by applicable bankruptcy, reorganisation or other laws of general application relating to or affecting creditors’ rights. In addition, the choice of law may not be relevant to the determination of proprietary issues (such as those relating to security). It should also be noted that Singapore has acceded to Article VIII of the Protocol referred to in section 2 above which generally provides that the parties to an agreement, contract of sale, guarantee agreement or subordination agreement may agree on the law which is to govern their contractual rights and obligations in whole or in part.
4 | Enforcement of Foreign Judgments
The enforcement of foreign judgments in Singapore is provided for under common law and statute.
A final and conclusive judgment for a fixed sum of money in the superior courts of England in respect of any legal suit or proceedings arising out of or relating to a document governed by English law, may be registered in the High Court of Singapore in accordance with the provisions of the Reciprocal Enforcement of Commonwealth Judgments Act, Chapter 264 of Singapore and when so registered will be enforced by the courts of Singapore without re-examination of the merits. However, the foreign judgment will not be registered if:
- the original court acted without jurisdiction,
- the judgment debtor, being a person who was neither carrying on business nor ordinarily resident within the jurisdiction of the original court, did not voluntarily appear or otherwise submit or agree to submit to the jurisdiction of that court;
- the judgment debtor, being the defendant in the proceeds, was not duly served with the process of the original court and did not appear, notwithstanding that he was ordinarily resident or was carrying on business within the jurisdiction of that court or agreed to submit to the jurisdiction of that court;
- the judgment was obtained by fraud;
- the judgment debtor satisfies the High Court in Singapore either that an appeal is pending or that he is entitled and intends to appeal against the judgment; or
- the judgment was in respect of a cause of action which for reasons of public policy or for some other similar reason could not have been entertained by the High Court in Singapore.
5 | Aircraft Requisition
Pursuant to the Air Navigation Act (Chapter 6) (the Act), the Minister of Transport may, by way of an order, provide for the taking of possession and use of the aircraft in the event of war, whether actual or imminent, or in the event of national emergency. Any person who suffers direct injury or loss as a result of such order will be entitled to receive compensation from the Government (in the absence of any agreement such amount to be determined by a single arbitrator).
6 | Sovereign Immunity
Pursuant to section 5(1) of the State Immunity Act (Chapter 313) (the SI Act), a State is (subject to carve outs) not immune with respect to proceedings relating to:
- “a commercial transaction entered into by the State; or
- an obligation of the State which, by virtue of a contract (whether commercial or not), falls to be performed wholly or partly in Singapore”.
However, section 5(1) of the SI Act would not apply if: (a) the parties to the disputes are States; or (b) the parties have otherwise agreed in writing. As such, caution should always be exercised when dealing with a sovereign body or a government organ and an appropriate waiver of sovereign immunity should be sought.
7 | Stamp Duty
The transfer of shares of a Singapore company attracts stamp duty which is payable at the prevailing rate at the time of the transfer. Such stamp duty is payable within 14 days of the execution of the document evidencing transfer in Singapore or 30 days of its receipt into Singapore if the document was executed outside Singapore. Registration fees are also chargeable in respect of the registration of certain security documents granted by a Singapore company at the Accounting and Corporate Regulatory Authority in Singapore (ACRA). The time period for the registration of a security document depends on whether the said document is executed inside or outside Singapore but failure to register the security document with ACRA will mean that the security document will be void against the liquidator and other creditors of the Singapore company.
8 | Security over Aircraft
Singapore law recognises the creation of security over a moveable object such as an aircraft. As stated above, parties are generally free to choose the law governing an aircraft mortgage. However, it should be noted that the validity of the transfer of title to a tangible movable (for example an aircraft) and its effect on the proprietary rights of the parties thereto and of those claiming under them, are likely to be governed by the laws of the country where that aircraft is located at the time of the transfer (i.e. the lex situs). Parties should therefore ensure that the aircraft is located where the chosen law of the transfer applies at the time of the creation of the aircraft mortgage. An aircraft mortgage granted by a Singapore company will be registrable with the International Registry pursuant to the Cape Town Act and we would also recommend that it be registered with ACRA (although such registration is not mandatory pursuant to s 131 of the Companies Act (Chapter 50)).
9 | Repossession and Deregistration
Singapore has made a specific declaration under the Cape Town Convention that self-help remedies are available for creditors. As such, a creditor with a registered international interest under the Cape Town Convention should have a range of basic default remedies and, where there is evidence of default on the part of the debtor, the creditor may, pending final determination of its claim and to the extent that the debtor has at any time so agreed, obtain from a court speedy relief in the form of one or more of the following orders as the creditor may request:
- preservation of the aircraft object and its value;
- possession, control or custody of the aircraft object;
- immobilisation of the aircraft object;
- lease or management of the aircraft object and the income deriving from such activities; or
- sale of the aircraft object and application of proceeds arising therefrom.
In addition, the creditor may, to the extent that the debtor has at any time so agreed and in circumstances specified in Chapter III of the Cape Town Convention procure the deregistration of the aircraft and the export and physical transfer of the aircraft object from Singapore (exercisable by an authorised party under an irrevocable deregistration and export request authorisation lodged with the CAAS).
10 | Insolvency
Under Article XI of the Second Schedule of the Singapore Cape Town Act, an insolvency administrator or the debtor, as applicable, shall, subject to certain exceptions, give possession of the aircraft object to the creditor no later than the earlier of: (a) the end of the waiting period (the period specified in the declaration of the Contracting State where the Aircraft is located); or (b) the date on which the creditor would be entitled to possession of the aircraft object if the Article did not apply. During this period the insolvency administrator or debtor, as applicable, shall preserve the aircraft object and maintain it and its value in accordance with the agreement and the creditor shall be entitled to apply for any other forms of interim relief. If by this time the debtor has cured all defaults other than a default constituted by the opening of insolvency proceedings the debtor may retain possession of the aircraft.