Vietnam: A mortgaged aircraft is not entitled to transfer of ownership

Specifically, according to Article 41 of the Law on Vietnam Civil Aviation 2006, mortgage of aircraft is specified as follows:

One is, the mortgagor of an aircraft shall keep the original nationality registration certificate of the mortgaged aircraft.

Two is, the mortgage of an aircraft under common ownership is subject to written approval of its co-owners, unless otherwise agreed upon.

Three is, when an aircraft is mortgaged to several creditors, the order of mortgage shall be determined according to the time of registration of mortgage.

Four is, after prioritized debts have been paid off, creditors whose mortgage has been registered shall be paid with their debts in the order of registration.

Five is, a mortgaged aircraft is not entitled to transfer of ownership, unless it is so agreed by the mortgagee.

Six is, aircraft mortgage registration shall be deleted in the following cases:

- The secured obligation terminates;

- The aircraft mortgage contract is canceled;

- The aircraft used as mortgaged property has been disposed of;

- There is a legally effective court judgment or decision or arbitral award on the cancellation of the aircraft mortgage or declaring the aircraft mortgage contract invalid;

- At the request of the aircraft mortgagee.

Seven is, when an insured mortgaged aircraft is missing or damaged, the mortgagee who has registered the mortgage is entitled to the insurance sum.

View more details at the Law on Vietnam Civil Aviation 2006, effective from January 01, 2007.

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