Security

Security document (mortgage) form and content

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

Pursuant to the Civil Code, the mortgage must be granted and formalised before a notary public. In the event that the security is granted outside Mexico, the document must be legalised or apostilled, as applicable, and duly translated into Spanish by a translator authorised by the local or federal court. The security should contain economic terms and conditions agreed by the parties.

In accordance with article 101 of the Regulation of the Civil Aviation Law, the security document must be authorised by the Ministry of Communications and Transport and duly recorded with the Mexican Aeronautic Registry.

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 mortgage must be granted and formalised before a notary public. In the event that the security is granted outside Mexico, the document must be legalised or apostilled, as applicable, and duly translated into Spanish by a translator authorised by the local or federal court.

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.

Pursuant to article 101 of the Regulation of the Civil Aviation Law, the security must be filed before the Mexican Aeronautic Registry; and in accordance with the Cape Town Convention and its Protocol, the security could be registered before the International Registry.

In accordance with the regulations of the Mexican Aeronautic Registry, in order to register a security the applicant must provide the following:

  • name;
  • certificate of incorporation;
  • power of attorney;
  • domicile to receive notification within Mexican territory;
  • evidence of the payment of duties regarding the document or documents to be registered;
  • authorisation granted by the Ministry of Communications and Transport to the carrier to execute the security document; and
  • the transaction documents duly executed by the parties, formalised before a notary public, legalised or apostilled as applicable and duly translated into Spanish by an authorised translator if applicable.

The officers of the Registry should record the documents within 10 business days of the filing.

Registration of security

How is registration of a security interest certified?

The officers of the Registry record the security document within its corresponding section in accordance with the regulations of the Mexican Aeronautic Registry. Furthermore, the officers modify or incorporate the registration of the security document into the certificate of registration of the aircraft. In addition to the above, any party of the security document has the right to request before the Mexican Aeronautic Registry an evidence of the said registration.

Effect of registration of a security interest

What is the effect of registration as to third parties?

The registration of a security document before the Mexican Aeronautic Registry confers priority over subsequent interest and, owing to its registration, it is enforceable before third parties. The Mexican Aeronautic Registry has a designated section before which the security documents are duly recorded on a date basis.

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?

According to the Civil Aviation Law, any alterations carried out in previously recorded interests before the Mexican Aeronautic Registry must be duly recorded before said Registry, otherwise they will not be effective before the new involved parties. This attests to the fact that the interests and rights are in rem and not in personam.

Security over spare engines

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

Pursuant to the Civil Code, the security document must be granted and formalised before a notary public. In the event that the security is granted outside Mexico, the document must be legalised or apostilled, as applicable, and duly translated into Spanish by a translator authorised by the local or federal court. The security should contain financial terms and conditions agreed by the parties. The said security document must be duly registered before the Mexican Aeronautic Registry.