Bermuda amends the Mortgaging of Aircraft and Aircraft Engines Act 1999
The Mortgaging of Aircraft and Aircraft Engines Amendment Act 2017 (Amendment Act) has received Royal Assent and became operative on 2 June 2017. The Amendment Act amends the Mortgaging of Aircraft and Aircraft Engines Act 1999 to remove the requirement that an aircraft or aircraft engine must be owned by, leased or chartered to, or otherwise in the lawful possession of a company incorporated in Bermuda to be made security for a loan.
The amendment is beneficial to secured parties who seek to protect their interests at a local level. The Amendment Act and the extension of the Cape Town Convention to Bermuda (which is likely to be effective on 1 January 2018) will put Bermuda on a more level playing field with the global aircraft finance market.
The amendments allow security for loans or other valuable consideration to be made over aircraft registered on the Bermuda register or capable of being registered; and aircraft engines if (a) the engine is attached to an aircraft registered on the Bermuda register, or attached to an aircraft capable of being registered, or (b) the engine is for such aircraft and is owned by, or leased to, the owner of such aircraft.
The amendments to the Act correlated a lacuna in Bermuda law that had been created as a result of the Bermuda Civil Aviation Authority lifting a policy which had previously required aircraft to be entered on the Bermuda register to be owned by or in the possession of a company incorporated in Bermuda.
This article was first published in the Royal Gazette, by Shannon Cann.