International Interests in Aircraft Equipment Bill

Bill No. 37/2008

Read the first time on 17th November 2008.

An Act to implement the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment, each signed at Cape Town on 16th November 2001 and for purposes connected therewith, and to make related amendments to the Bills of Sale Act (Chapter 24 of the 1985 Revised Edition) and the Companies Act (Chapter 50 of the 2006 Revised Edition).

Be it enacted by the President with the advice and consent of the Parliament of Singapore, as follows:

Short title and commencement

1. This Act may be cited as the International Interests in Aircraft Equipment Act 2008 and shall come into operation on such date as the Minister may, by notification in the Gazette, appoint.

Interpretation

2.—(1) In this Act, unless the context otherwise requires —

“agreement” has the same meaning as in Article 1(a) of the Convention;

“aircraft objects” has the same meaning as in Article I(2)(c) of the Protocol;

“commencement of insolvency proceedings” means —

(a)	in the case of proceedings in bankruptcy under Part VI of the Bankruptcy Act (Cap. 20), the date of presentation of the bankruptcy application under section 57 or 58 of that Act;
(b)	in the case of winding up proceedings under Part X of the Companies Act (Cap. 50), the time the winding up is deemed to have commenced under section 255 of that Act or the time specified under section 291(6) of that Act;
(c)	in the case of a voluntary arrangement under Part V of the Bankruptcy Act, the date of the application for an interim order under section 45(1) of that Act;
(d)	in the case of a compromise or an arrangement under section 210 of the Companies Act, the date of the application for an order under section 210(1) of that Act; or
(e)	in the case of judicial management proceedings under Part VIIIA of the Companies Act, the date of the application for a judicial management order under section 227A read with section 227B of that Act;

“Convention” means the Convention on International Interests in Mobile Equipment signed at Cape Town on 16th November 2001, the text of which is set out in the First Schedule;

“creditor” has the same meaning as in Article 1(i) of the Convention;

“debtor” has the same meaning as in Article 1(j) of the Convention;

“declaration” means a declaration or designation made by Singapore under the Convention or Protocol;

“insolvency administrator” means —

(a)	in the case of proceedings in bankruptcy under Part VI of the Bankruptcy Act (Cap. 20), the trustee of the bankrupt’s estate;
(b)	in the case of winding up proceedings under Part X of the Companies Act (Cap. 50), the liquidator or provisional liquidator; or
(c)	in the case of judicial management proceedings under Part VIIIA of the Companies Act, the judicial manager;

“insolvency proceedings” means —

(a)	proceedings in bankruptcy under Part VI of the Bankruptcy Act;
(b)	winding up proceedings under Part X of the Companies Act;
(c)	the making of a voluntary arrangement under Part V of the Bankruptcy Act or a compromise or an arrangement under section 210 of the Companies Act; or
(d)	judicial management proceedings under Part VIIIA of the Companies Act;

“international interest” has the same meaning as in Article 1(o) of the Convention;

“Protocol” means the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment signed at Cape Town on 16th November 2001, the text of which is set out in the Second Schedule;

“registered” has the same meaning as in Article 1(bb) of the Convention.

(2) Unless a contrary intention appears, words and expressions used in this Act have the same meanings as in the Convention and Protocol.

Application of Convention and Protocol

3.—(1) Subject to the provisions of this Act, the Convention and Protocol, to the extent that they apply —

(a)	in respect of aircraft objects; and
(b)	to Singapore as described in the declarations,

shall have the force of law in Singapore.

(2) If a provision of this Act, including a provision given force of law by this section, is inconsistent with any other law, the provision prevails over the other law to the extent of the inconsistency.

(3) In interpreting the Convention and the Protocol, recourse may be had to —

(a)	the Official Commentary on the Convention on International Interests in Mobile Equipment and the Protocol thereto on Matters Specific to Aircraft Equipment, as approved for distribution by the Governing Council of the International Institute for the Unification of Private Law (UNIDROIT); and
(b)	the Consolidated Text of the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment, the text of which is set out in the Third Schedule.

Remedies on insolvency

4.—(1) This section gives effect to Article XI of the Protocol to the extent that it applies to Singapore as described in the declarations.

(2) This section applies in relation to an agreement where —

(a)

the debtor of the agreement —

(i)	if it is a body corporate or firm, is incorporated or registered in Singapore; or
(ii)	if he is a natural person, is domiciled in or has his principal place of business in Singapore;

(b)

the international interest of the agreement has been registered; and

(c)

the debtor and creditor have not by written agreement excluded the application of this section.

(3) Subject to subsection (4), where any insolvency proceedings have commenced against the debtor of an agreement and the aircraft object is in Singapore, the debtor or (if he has custody of the aircraft object) the insolvency administrator of the debtor shall, no later than the date referred to in subsection (14), give an opportunity to the creditor to take possession of the aircraft object.

(4) The insolvency administrator of the debtor or the debtor, as the case may be, may retain possession of the aircraft object where, on or before the date referred to in subsection (14) —

(a)	the insolvency administrator of the debtor or the debtor (as the case may be) has agreed to perform all future obligations of the debtor under the agreement; and
(b)	all defaults under the agreement (other than a default constituted by the commencement of the insolvency proceedings) have been cured.

(5) Where the insolvency administrator of the debtor or the debtor fails to perform all future obligations of the debtor as agreed under subsection (4)(a), the creditor may immediately exercise his right to take possession of the aircraft object.

(6) Unless and until the creditor is given the opportunity by the insolvency administrator of the debtor or the debtor (as the case may be) to exercise his right to take possession of the aircraft object under subsection (3) —

(a)	the insolvency administrator of the debtor or the debtor (as the case may be) shall preserve the aircraft object and maintain it and its value in accordance with the agreement; and
(b)	the creditor shall be entitled (notwithstanding anything in any law) to apply for and obtain any interim relief available to it under this Act or any other law.

(7) For the purposes of subsection (6)(a), the insolvency administrator of the debtor or the debtor may use the aircraft object under arrangements designed to preserve it and its value.

(8) The insolvency administrator of the debtor shall be indemnified by the creditor for all reasonable costs incurred in complying with subsection (6)(a).

(9) The right of the creditor to exercise any remedies under the Convention or Protocol after the date referred to in subsection (14) is not limited or otherwise affected by any other law.

(10) No obligation of the debtor under the agreement may be modified under the relevant insolvency law except with the consent of the creditor.

(11) Subsection (10) is without prejudice to the right of the insolvency administrator of the debtor to terminate such agreement under the relevant insolvency law.

(12) In this section, “insolvency law” means a provision of Part V or VI of the Bankruptcy Act (Cap. 20), or Part VII, VIIIA or X of the Companies Act (Cap. 50).

(13) Subsections (3) to (8) shall not apply to the insolvency administrator of the debtor if he is appointed on or after the date referred to in subsection (14).

(14) The date referred to in subsections (3), (4), (9) and (13) is the earlier of —

(a)	30 days after the commencement of insolvency proceedings; and
(b)	the date on which the creditor would have been entitled to take possession of the aircraft object but for this section.

(15) No rights or interests, except for non-consensual rights or interests of a category covered by a declaration pursuant to Article 39(1) of the Convention, shall have priority in insolvency proceedings over registered interests.

(16) The Convention as modified by Article IX of the Protocol shall apply to the exercise of any remedies under this section.

High Court to be court having jurisdiction

5. The High Court shall be the court having jurisdiction to hear and determine all matters under this Act, including provisions given force of law by section 3.

Regulations

6.—(1) The Minister may make such regulations as are necessary or expedient for carrying out the purposes of this Act.

(2) Any regulations made under subsection (1) shall be presented to Parliament as soon as possible after publication in the Gazette.

Related amendment to Bills of Sale Act

7. The Bills of Sale Act (Cap. 24) is amended by renumbering section 2 as subsection (1) of that section, and by inserting immediately thereafter the following subsections:

“(2) This Act shall not apply to a bill of sale executed at any time on or after the date of commencement of the International Interests in Aircraft Equipment Act 2008 to the extent that any interest therein is capable of being registered under that Act.

(3) In subsection (2), “registered” has the same meaning as in section 2(1) of the International Interests in Aircraft Equipment Act 2008.”.

Related amendment to Companies Act

8. Section 131 of the Companies Act (Cap. 50) is amended by inserting, immediately after subsection (3A), the following subsections:

“(3B) A charge referred to in subsection (3) does not include a charge created at any time on or after the date of commencement of the International Interests in Aircraft Equipment Act 2008 to the extent that it is capable of being registered under that Act.

(3C) In subsection (3B), “registered” has the same meaning as in section 2(1) of the International Interests in Aircraft Equipment Act 2008.”.

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