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Indonesia’s Air Law Based on Aviation Law No. 1/2009

Aviation Law No. 1/2009 is a new regulation concerning aviation which replaces the previous regulation Aviation Law No. 15/1992. The Aviation Law No. 1/2009 aims to perfect and to complete the previous law in order to confirm with the development of science and technology, the change in paradigm and strategic environment.

Cape Town Convention 2001 is one of international treaties in aviation, and one of many reasons for its ratification was to perfect Indonesian’s Aviation Law in order to empower national aviation industry. It is in accordance with the explanation chapter of Aviation Law No. 1/2009.

In the effort to empower national aviation industry, this Law shall also contain provisions regarding international interests on aircraft objects regulating aircraft objects that may bear international interests arising from a security agreement, a title reservation agreement, and/or a leasing agreement. These regulations refer to the Convention on International Interest in Mobile Equipment and the protocol to the Convention on Interest in Mobile Equipment on Matters Specific to Aircraft Equipment, airplane engines, as a consequence of ratifying the convention and protocol normally called the Cape Town Convention.[1]

Based on this explanation, it could be understood that Indonesia’s Government will enact international obligation after ratify international treaty as an effort to implement the treaty in good faith according to the Vienna Convention 1969. Although the purpose to ratify the Cape Town Convention 2001 is to perfect the Aviation law, the Aviation law does not clearly state that Art.71-82 are the implementing legislation of the Cape Town Convention 2001. As such, it is important to discuss the international interest provisions under the Aviation law contained in the Section XI.

According to Art. 71 of Aviation Law, an aircraft object may be borne with international interests arising from a security agreement, title reservation agreement, and/or leasing agreement. The aircraft object includes airframe, its engine, and helicopter. Art. 71 also adopted provision of the Cape Town Convention 2001 are the definition of the aircraft object which could be borne with international interest as regulated under Art. 2(3) of the Cape Town Convention, the definition of international interest under Art. 2(1) of the Cape Town Convention, the agreement as the basis of international interest under Art. 2(2) of the Cape Town Convention.

Airframe which may be borne with international interests is airframe which is not used as the state aircraft that if an engine is assembled onto the body, it should be certified by the authorized official for at least 8 persons including its crew or goods which exceeds 2.750 kg with all of the equipments, components and tools which are installed, included or related (other than aircraft engines), and all data manuals and records relating to it.

Aircraft engine which may be borne with international interest is aircraft engine (apart from military, customs, or police purposes) powered by jet propulsion or turbine or piston technology. As for aircraft engine powered by jet propulsion, the Aviation Law requires thrust in 1750 lbs or equivalent, for engine powered by turbine or piston it requires 550 hp usually used to take off or anything equivalent, and all of moduls, gears, components, and other equipment which are installed, included or related (other than aircraft engines), and all data manuals and records relating to it.

Helicopter which may be borne with international interests is certain helicopter (apart from military, customs, or police purposes) which are certified by the authorized aviation institution to transport at least 5 persons including its crew or goods more than 450 kg and gears, components, and other equipment which are installed, included or related (rotor included), and all data manuals and records relating to it.

International interest is an interest acquired by creditor due to security agreements, title reservation agreement, and/or leasing agreement which comply to Cape Town Convention.

Art. 72 of Aviation law gives the parties right to choose their own choice of law. Chargor vs chargee or lessor vs lessee could choose the governing law for the agreement, be it title reservation agreement or leasing agreement, in accordance with private international law. Principle of private international law could be invoked by the parties in order to choose the law that would govern the contractual rights and obligations under the agreement or in the absence of a link between the choice of law chosen by one of the parties to the agreement or the implementation of the obligations under the agreement. Besides the freedom of choice of law principle, Art. 72 also gives the parties the freedom of choice of forum.

Art. 72 is an implementing provision on choice of law under Art. VIII of the Protocol which Indonesia adopted and is bound by. Hence, it could be concluded that Art. 72 is an implementing legislation based on the Cape Town Convention 2001.

Art. 73 provides that in the case the agreement as meant in Article 71 is a subject under the Indonesian laws, the agreement must be drawn in an authentic deed containing, at the least: identities of all the parties; identification of the aircraft object; and the rights and obligations of the parties. Art. 73 is not regulated under the Cape Town Convention 2001, however this provision is intended for an agreement which cause an international interest and use Indonesian law according to the requirements set out by Art. 73.

Art. 74 concerns the Power of Attorney. This provision regulate that the debtor may issue power of attorney in regard to application of irrevocable de-registration and export request authorization to creditor to apply deregistration and export of the Indonesia’s aircraft or helicopter. The power of attorney to application of deregistration should be claimed and listed by the Minister of Transportation and could not be annulled without creditor’s consent. Creditor is the one and only person to apply for deregistration of the nationality of the aircraft[2] or helicopter based on rules.

Provisions referred to in Article 74 called IDERA is one of remedies set forth in the Cape Town Convention 2001, Chapter 3 on Default Remedies (recovery measures). The explanation of this article states clearly that the power to apply for deregistration and export can not be withdrawn, the corresponding provisions of the Cape Town Convention in 2001 (Explanation of Article 74 of Aviation Law 2009). Regarding IDERA also the further provisions laid down in the Protocol Article XIII adopted by and binding on Indonesia through declarations (opt-in) made at the time of ratification.

The authorization to apply for deregistration and export of the aircraft that can not be withdrawn is one of the remedies that may be filed by the creditor in case of default in the implementation of the agreement. This is provided for in Article 75 of the Aviation Law 2009, which is the basis of the power to apply deregistration and export that can not be withdrawn. Furthermore, this article provides that the petition be submitted to the Minister of Transportation, to apply deregistration and export of aircraft and helicopters. The Minister of Transportation shall remove the registration marks and nationality of aircraft and helicopters in less than 5 working days from the receipt of the application. Removal of the nationality of the aircraft is set also in Article 29. The Indonesia’s Aviation Law regulates that for an aircraft that has a nationality and registration marks of aircraft removal of nationality and registration may be requested when default is committed by the aircraft’s tenant without a court decision (Article 29 of The Aviation Law 2009).

The provision concerning the removal of registration under Article 29, stating that removal can be done without a court decision is in line with the provisions of Article 54 (2) of the Convention on the remedies, which Indonesia has declared to be bound by the declaration at the time of ratification, that Indonesia declared that all remedies available to the creditor under the Convention can be implemented without the need for court action and without notifying the court.

The provisions of Article 74 and Article 75 regulate the available remedies in the event of default for creditors. Regarding the obligations in the implementation of the remedies in accordance with these provisions, Article 76 stipulates that the ministry in charge of the affairs of aviation and other government agencies should assist and expedite the implementation of the remedies made by the creditor under a security agreement, title reservation agreement, and/or leasing agreement. Explanation of this article clarifies that what is meant by “other government agencies” are, among other agencies, those that have the duty and responsibility in customs, taxation, foreign affairs and defense. Remedies and creditor rights referred to in this article is the creditor’s rights and remedies that arise from the agreement by the parties in accordance with the given constraints of Article 77 of Aviation Law 2009. These articles are the implementation of the default remedies of the Cape Town Convention in 2001.

The appointment of the Ministry of Transportation as a representative in the implementation of the remedies of the Cape Town Convention 2001 should constitute one of the mandates of the Aviation Law 2009 to give mandate to several related government institutions. The Provision concerning the remedies is one of the crosscutting provisions that are already in case the implementation of this article should be equivalent provisions of the Presidential Decree.[3]

International interest is one of the most important things under the Cape Town Convention 2001. An international interest has priority or precedence rights over the rights that are not registered or subsequently registered rights as stipulated in Article 29 of the Convention called Priority Rules. Aviation Law 2009 has formulated what is meant by the international interest in the law and in line with the Convention as well as giving priority rights or the rights of precedence as stipulated in Article 78. This section further regulates that the right of priority of the international interest is a right granted after the international interest is registered in the office of the international registration.

International registration office referred to in this act is the International Registry established for the purposes of the Cape Town Convention 2001 and will be the only office for the registration of international interests for the aircraft object (Explanation of Article 78 of Aviation Law 2009). The International Registry is an electronic registration system under the coordination of the ICAO, which is the only registry for the international interest. Currently, the international registration office in question has been established and can be visited via the website (https://www.interna- tionalregistry.aero). However, this article does not set out more about the implementation of the registration of international interest as provided in detail in Chapter 4 of the Convention on the International Registration System (See Articles 16 and 17 of the Cape Town Convention 2001, which regulates the international registration system).

International interest, priority rules, the international registration and default remedies are four main things in the Cape Town Convention 2001. In order to determine the effectiveness of the implementation of this Convention, it shall be assessed with the implementing regulations for the four important issues whether it is sufficient or not. The fact that there is no regulation of the international registration in detail in this legislation makes it less effective in implementing the obligations under the Convention, as Art. 78 clearly provides that the limitation of international interest which has priority is an interest which has been registered through the office of the international registration.

Furthermore, Art. 79 set the decision of the district court, namely that when the debtor did default then the creditor can ask for the decision of the court chosen by the parties or the district court of Indonesia which has a relative competence in the absence of a choice of forum in the agreement to acquire an interim measure based on agreements on aircraft object that may be borne with international interest without any prior claim to carry out the principal case demands in Indonesia and without the parties to follow the mediation ordered by the court. Regarding the decision of the court, the Aviation Law has assigned ten (10) calendar days in respect of the remedies specified in Article 13(1)(a), (b) and (c) of the Convention and thirty (30) calendar days in respect of the remedies specified in Article 13(d) and (e) of the Convention in accordance with the declaration submitted Indonesia under the Protocol Article XXX (2) in respect of Article X. This period is also the time period that must be complied with by the court, curator, bankruptcy administrators, and/or debtor to hand over control of aircraft object to the creditor as provided for in Article 80 of Aviation Law.

In addition to the priority rules, international interest which has been registered by Indonesia also specify some bills or certain rights precedence or has priority over the international interest that has been registered in the aircraft object. It is stipulated in Article 81 of Aviation Law and the implementation of the declaration made by Indonesia to Art. 39 and 40 of the Convention. Such provisions allow the Contracting States to determine what rights have priority over an international interest.

Article 82 of Aviation Law is the last article in the section governing the international interest. This article provides that the provisions of the International Convention on Security Interest on mobile equipment and the Aircraft Protocol, to which Indonesia is a party, shall have the force of law in Indonesia and is a specific legal provision. According to its explanation, specific legal provision is in the case of inconsistency or discrepancy between the provisions of the Convention, protocols and declarations with Indonesian Law, the provisions of the Convention, the Protocol and the declaration should be applied.

The last provision in the chapter of international interest under Aviation Law, according to the authors’ opinion, this article gives a description of the Indonesia’s view towards international treaty that had always been a subject of debate. By putting the provisions of the convention, it can be said that Indonesia adheres to monism with the primacy of international law that international law enjoys precedence when there is a conflict between international law and national law proposed by Mochtar Kusumaatmadja. This article also states that although the convention is a non-selfexecuting treaty, there are some provisions that could be self-executing. Of the provisions of international interest on movable equipment or property, Indonesia will prioritize the provisions contained in the Cape Town Convention 2001.

The Cape Town Convention 2001 covers not only the legal scope of the Aviation law, but also bankruptcy. Aviation Law 2009 indirectly regulates bankruptcy to the extent international interest is related. The presence of the bankruptcy provisions in the Aviation Law 2009 could cause an overlap or conflict of law between the Cape Town Convention 2001 and Law No. 37 Year 2004 on Bankruptcy. The provisions contained in the tangent to the bankruptcy declaration made in Indonesia at the time of ratification, especially declarations under Article XXX (3) in respect of Article XI of the Protocol on measures to be taken in the event of bankruptcy.

The possibility of this conflict of law would be anticipated with the provision of Art. 82 of Aviation Law 2009. In case its implementation is contrary to the Bankruptcy Law, the provisions of the Cape Town Convention in 2001 are to be used. However, the intention of the legislator to include the term ‘lex specialis’ according to the author is incorrect, because it does not indicate the terms of the provisions of this specialist provision apart from generalist. Except where the provisions mentioned in the explanation of which is the provision of lex specialis and lex generalis.[4]

  • [1] Explanation chapter of Aviation Law No.1/2009.
  • [2] Article 17 Chicago Convention 1944.
  • [3] The Formation of Regulation Law of Indonesia No. 12 in 2011.
  • [4] Hikmahanto Juwana, “Kewajiban Negara Mentransformasikan ketentuan Perjanjian Internasionalkedalam Peraturan perundang-undangan: Studi Kasus Pasca Keikutsertaan dalam Cape TownConvention 2001”, Jurnal Hukum Bisnis, Vol 28 No. 4 Tahun 2009, P. 56.
 
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