Taxes or duties are payable after the execution of a sales agreement for an aircraft or parts thereof within the jurisdiction of Mauritius. However, no capital gains tax is applicable in Mauritius.

It is not necessary for an agreement to be translated, certified, notarised or legalised in order for it to be enforceable against a domestic party in Mauritius.

Transfer of title can occur pursuant to a purchase/acquisition agreement being in place and duly registered. Until a new owner (being anyone holding a legal or beneficial interest in an aircraft, or a share therein) registers its interest with the Department of Civil Aviation Authority, an aircraft cannot be flown over Mauritius.

It should be noted that both the registered owner of the aircraft and the new owner are required to notify the Director of Civil Aviation (the “Authority”) of a change in ownership. The registered owner must surrender the certificate of registration to the Authority, while the new owner may apply for a new certificate of registration, as may be applicable.

Upon a change in ownership of an aircraft, the new owner will be responsible for any outstanding payment of charges in respect of the aircraft, even if these charges were incurred before the change in ownership.

Transfers of title governed by either English or New York law are recognised provided that the provisions of the bill of sale do not contravene Mauritius public policy. The bill of sale will be enforceable under the laws of Mauritius to the extent that the document has been duly executed and complies with the governing law of the agreement.

See 1.1.2 Enforceability Against Domestic Parties.

Prior to the execution and delivery of a bill of sale of either an aircraft or an engine, appropriate notice and application must be made to the Director of Civil Aviation. The latter is responsible for registration of the aircraft and maintaining the register. Any change in particulars, other than a change in ownership, in relation to the application for registration of an aircraft or where an aircraft has been destroyed or permanently withdrawn from use, has to be communicated to the Authority within 28 days of such change or the occurrence of such event. The Authority is empowered to cancel the registration of an aircraft provided it is expedient and in the public interest to do so, or to amend an entry in the register.

Pursuant to the Registration Duties Act, a bill of sale must ordinarily be registered with the Registrar General of Mauritius.

In addition to the above, private flights are required to provide accurate data, as prescribed under the law, to the Authority in order to obtain clearance to land in or depart from Mauritius.

The taxes and duties payable for executing and/or delivering a bill of sale or transfer of title to an aircraft or engine are as follows:

• when located in Mauritius, taxes and duties are payable and mandatory, ranging from USD1,000–5,000 (or higher if the lease is of unlimited duration);
• over international waters, a payment is recommended but not mandatory; and
• there are no provisions for payment when an aircraft is in transit to or from Mauritius.

The general rules concerning the validity of a contract as laid down in the Civil Code apply. Regarding operating, wet and finance leases, or leases concerning engines or parts, the provisions of an agreement will not be recognised where they contravene public policy.

A lease involving either a domestic party or an asset located in Mauritius can be governed by foreign law. An aircraft lease governed by foreign law will be recognised and upheld by the Mauritius courts, provided that it is made in good faith and does not contravene the public policy of Mauritius.

No material restrictions are imposed on domestic lessees making rent payments in US dollars.

There are no exchange control restrictions in Mauritius.

If an original or copy of a lease is brought into Mauritius, either physically or electronically, taxes and duties are payable for its execution.

In Mauritius, a lessor does not have to be licensed or otherwise qualified in order to do business with a domestic lessee.

Should a lease be governed by English or New York law, the terms of the lease must not contravene public order provisions under Mauritius law with respect to capitalisation of interests, default interests and exclusion of liability.

Tax and other withholding gross-up provisions are both permissible and enforceable.

It is common for a lease to cover parts that have been installed or replaced on an aircraft or engine after the original execution of the lease. Alternatively, a lease agreement can be amended to include the additional parts.

It is also the obligation of an owner or operator of a registered aircraft in Mauritius to ensure that they receive and comply with all airworthiness directives and mandatory service bulletins issued by the Authority. All repairs or modifications done are subject to approval by the Authority.

There are no specific provisions with respect to title annexation of aircraft engines installed on an airframe.

The concept of a trust and the role of an owner trustee under a lease are recognised in Mauritius. Trusts are legal arrangements regulated by the Trusts Act 2001 but they do not have a legal personality.

The aircraft register focuses mainly on the names of those holding the interest, nationality mark and registration mark. The following information is entered on the register:

• the name of the registered owner;
• the number of the certificate of registration;
• the nationality mark of the aircraft;
• the registration mark assigned to the aircraft;
• the name of the manufacturer of the aircraft;
• the name or designation of the aircraft;
• the serial number of the aircraft;
• the name and address of any person who has an interest or a share in the aircraft;
• where the aircraft is chartered by demise, the name of the charterer; and
• where the aircraft is registered under paragraph 5 (a) or (b), an indication that it is so registered.

Even if the operator is not the owner of the aircraft in its use, such an aircraft may be registered in Mauritius in the name of the operator. Likewise, it may be registered in the name of the owner if the owner is not the operator. This is, however, uncommon in practice.

There is no specific register for leases concerning aircrafts or engines. The Authority is entitled to register the aircraft in Mauritius in the name of the lessee where the Authority is satisfied that the aircraft may be so registered and it may remain registered as per the provisions of the law during the subsistence of the lease. This will apply in cases where the aircraft is leased to a qualified person (a citizen of Mauritius or a body corporate registered in Mauritius), irrespective of whether an unqualified person is the owner or has a legal or beneficial interest therein.

An aircraft can only be flown in or over Mauritius if, among other things, the lease has been submitted as part of the registration process with the Director of Civil Aviation.

See 1.1.2 Enforceability Against Domestic Parties.

Taxes and duties are payable upon registering a lease.

Aircraft habitually based in Mauritius are not typically registered elsewhere. In determining whether an aircraft will be registered or will continue to be registered in Mauritius, the Authority will consider whether:

• the aircraft has already been registered outside Mauritius, in which case such registration will cease by operation of law upon the aircraft being registered in Mauritius;
• the owner, lessor, lessee, any sub-lessee or operator of the aircraft is a qualified person;
• the aircraft can more suitably be registered in another state; and
• it will be contrary to the public interest for the aircraft to be, or to continue to be, registered in Mauritius.

See 1.1.2 Enforceability Against Domestic Parties for documentation requirements.

There may be income tax liabilities on leasing an aircraft or engine to a domestic lessee. However, capital gains tax is not applicable in Mauritius.

A foreign lessor cannot be deemed to be resident, domiciled, carrying on business or subject to any taxes in Mauritius as a result of being party to a lease.

If governed by local laws, liabilities could be imposed on a foreign lessor regarding aircraft or engine maintenance and operation as a result of being party to a lease. In addition to the certificate of airworthiness (transport or aerial work category), an aircraft registered in Mauritius may not fly unless:

• the aircraft (including in particular its engines, together with its equipment and radio station) is maintained in accordance with a maintenance schedule approved by the Authority in relation to that aircraft;
• a certificate of maintenance review has been issued in respect of the aircraft; and
• all airworthiness directives issued by the Authority or the state of manufacture or design, and all mandatory service bulletins issued by the manufacturer have been complied with.

It is a strict requirement for every owner or operator of a Mauritius-registered aircraft to ensure that they receive all airworthiness directives and mandatory service bulletins that affect the aircraft and that are issued by the Authority, the airworthiness authority in the state of manufacture or the manufacturer.

Failure to comply with the above regulations will entail the liability of the owner/operator and, upon conviction, they may be subject to a fine not exceeding MUR10,000 and to imprisonment for a term not exceeding 12 months.

Generally, a foreign aircraft or engine owner or lessor will not be liable for damages or loss caused by the asset. Tortious claims are an exception to this.

It is not possible for creditors of a domestic lessee to attach an aircraft leased to it but owned by a different entity.

The rights of third parties will not take priority over a lessor’s rights under a lease. The principle of privity of contract will apply.

It is not mandatory for insurances, in full or in part, to be placed with domestic insurance companies.

No mandatory insurance coverage requirements are imposed, although all particulars in relation to the aircraft must be submitted for registration.

Reinsurances of up to 100% are permissible when placed outside Mauritius.

In theory, “cut-through” clauses in relation to insurance/reinsurance documents are enforceable to the extent that they are permissible under foreign law. However, there is no example of this concept being applied in Mauritius.

Assignments of insurances/reinsurances are permitted.

There are no restrictions on a lessor’s ability to terminate an aircraft lease, re-export the aircraft and/or sell the aircraft after such termination if this is provided for under foreign law. There is no requirement that the aircraft must be physically located in Mauritius.

A lessor can take physical possession of an aircraft without the lessee’s consent to enforce a lease, if this is provided for under foreign law.

There are no courts specific to or dedicated to aviation disputes, nor are there any examples of historical cases.

A lessor can obtain a summary judgment, equitable or other injunctive relief pending final resolution of judicial proceedings to enforce an aircraft lease. Common law requirements applicable to injunctions will apply.

With regards to summary judgment, urgency and a clear legal right must be demonstrated.

Subject to certain specific requirements under Mauritius law, domestic courts will uphold:

• a foreign law as the governing law of an aircraft;
• submission to a foreign judgment; and
• a waiver of immunity by the parties to a lease.

Domestic courts will recognise and enforce a final judgment of a foreign court or an arbitral award without re-examination of the matter, subject to certain specific requirements under local law.

It is possible for a lessor under an aircraft lease to obtain a judgment in a foreign currency.

If the lease has been conducted under Mauritius laws, provisions regarding capitalisation of interests under the Mauritius Civil Code will apply. Penal clauses with respect to liability would also be subject to review by the court if found to be manifestly excessive or inadequate.

No taxes or fees are required in connection with the enforcement of a lease in Mauritius.

To terminate an aircraft lease related to the domestic operation of the aircraft, or where it is leased by a domestic operator, the lessee must give 28 days’ notice to the Department of Civil Aviation Authority.

If a party is a commercial entity, there is no entitlement to claim sovereign or other immunity from suit. This cannot be waived.

Mauritius has adopted the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”). Pursuant to this, Mauritius courts recognise and enforce arbitral decisions.

There are no other relevant issues in this area.

Mauritius recognises the concepts of contractual assignment and novation.

Mauritius courts will hold deeds or agreements valid should a lessor transfer its rights, provided they do not contravene public order provisions. Notification is required as a mandatory term.

See 1.1.2 Enforceability Against Domestic Parties regarding documentation requirements.

Aircraft and engine lease assignments and assumptions/novations must be registered or filed in the domestic aircraft registry. Failure to do so will lead to rejection of the application.

There are taxes and/or duties payable in respect of an assignment agreement, be it an original or a copy, and whether brought in physically or electronically. However, the law makes no provision for assumption or novation agreements.

The transfer of ownership of an aircraft must be recorded in the aircraft register maintained by the Civil Aviation Authority.

Only the registered owner of an aircraft can deregister the aircraft in Mauritius. Where there has been a change, other than a change in ownership, in the particulars furnished to the Director of Civil Aviation in connection with the application for registration of an aircraft, or an aircraft has been destroyed or permanently withdrawn from use, the registered owner of the aircraft must, within 28 days of the change, destruction or permanent withdrawal, as the case may be, give written notice of that fact to the Director of Civil Aviation.

Only the registered aircraft owner, mortgagee or lessor can apply for the deregistration of an aircraft without the lessee’s or operator’s consent.

A written notice must be provided in order to deregister an aircraft.

The length of the deregistration process in Mauritius is not specified.

The Director of Civil Aviation does not provide advance assurances to an owner, mortgagee or lessor in regard to the prompt deregistration of an aircraft.

There are no significant costs, fees or taxes chargeable regarding the deregistration of an aircraft.

A deregistration power of attorney will be recognised. When drawn up under a foreign law, the power of attorney will need to be apostilled and notarised and must not contravene public order.

To enforce a deregistration power of attorney, the appropriate board or representative approval must be obtained.

A deregistration power of attorney does not have to be governed by Mauritius law.

If governed by Mauritius law, a deregistration power of attorney is revocable.

Depending on the contractual terms, an aircraft can be exported without the lessee’s consent to the extent provided contractually.

Export permits and licences can be issued in Mauritius.

There are no set fees relating to the export of an aircraft.

There are no practical issues relating to deregistration that an owner, mortgagee or lessor should be aware of.

The Insolvency Act and Companies Act cover the main procedures applicable to a lessee domiciled in Mauritius.

The primary types of voluntary or involuntary procedures are as follows:

• liquidation can be conducted compulsorily, by the member shareholders voluntarily or the creditors voluntarily;
• a receiver may be appointed by a secured creditor in order to take control of the property placed in receivership for protection of the creditor and realisation (or management) of the asset for repayment;
• administration focuses on the continuance of the company and may be initiated by directors, a liquidator, a secured creditor or the courts of Mauritius; and
• the Companies Act provides an arrangement with creditors known as “compromise”.

Part VI of the Insolvency Act 2009, dealing with cross-border insolvencies, came into force in July 2019. This is based on the UN Model Law on Cross-Border Insolvency of 1997. Foreign or foreign-based creditors who have a claim in a Mauritius proceeding are treated as equal to a Mauritian or Mauritius-based creditor.

If a deregistration power of attorney is governed by local law, the liquidation of the lease will cause an irrevocable de-registration and export request authorisation (IDERA) to lapse.

This will depend on the security arrangement that the lessor has over the aircraft when liquidation, administration or a similar process is imposed during insolvency.

The primary risk for a lender upon a borrower, guarantor or entity providing security becoming insolvent is the lender’s position in the order of priority in terms of payments under the Insolvency Act.

A moratorium in relation to insolvency proceedings is generally less than or equal to 60 days but it can last longer.

A liquidation may be initiated by way of a court petition or by way of a resolution of shareholders or creditors.

An administration may be initiated by the directors of the company, a liquidator or provisional liquidator, a secured creditor or by application to the courts of Mauritius.

Ipso facto defaults are recognised in Mauritius.

Should a domestic lessee be wound-up by a court or administration proceeding, all assets within the pool are available for secured and unsecured creditors.

The Convention on International Interests in Mobile Equipment (the “Convention”) and the related Protocol on Matters Specific to Aircraft Equipment (the “Protocol”) are not in force in Mauritius. Likewise, authorised entry point (AEP) codes are not necessary for registering international interests.

These are not applicable in Mauritius.

This is not applicable in Mauritius.

The Convention and the Protocol are not enforced in Mauritius.

Mauritius adheres to the 1948 Geneva Convention, but is not a party to the 1933 Rome Convention.

Mauritius accedes to the following conventions relating to aviation law:

• Convention on the Privileges of the Specialised Agencies;
• Convention on International Civil Aviation – Chicago;
• International Air Services Transit Agreement – Chicago;
• Convention for the Unification of Certain Rules Relating to International Carriage by Air-Warsaw;
• Protocol to Amend the Warsaw Convention of 12 October 1929, 2002 – the Hague;
• Protocol on the Authentic Quadrilingual Text of the Convention on International Civil Aviation – Montreal;
• Convention Supplementary to the Warsaw Convention, for the Unification of Certain Rules Relating to International Carriage by Air Performed by a Person Other Than the Contracting Carrier – Guadalajara Convention on the International Recognition of Rights in Aircraft – Geneva;
• Protocol on the Authentic Quinquelingual Text of the Convention on International Civil Aviation – Montreal; and
• Protocol on the Authentic Six-Language Text of the Convention on International Civil Aviation – Montreal.

The following conventions have also been ratified:

• International Convention Against the Taking of Hostages, adopted by the General Assembly of the United Nations on 17 December 1979 and which came into force on 3 June 1983;
• Convention on Offences and Certain Other Acts Committed on Board Aircraft, signed at Tokyo on 14 September 1963 and which came into force on 4 December 1969;
• Convention on the Suppression of Unlawful Seizure of Aircraft, signed at the Hague on 16 December 1970 and which came into force on 14 October 1971;
• Convention on the Suppression of Unlawful Acts Against the Safety of Civil Aviation, signed at Montreal on 23 September 1971 and which came into force on 26 January 1973; and
• Protocol for Suppression of Unlawful Acts of Violence at Airports Serving International Civil Aviation, Supplementary to the Convention for the Suppression of Unlawful Acts Against the Safety of Civil Aviation of 1971, agreed in Montreal on 24 February 1988 and which came into force on 6 August 1989.

There are also other conventions relating to disarmament that have been acceded to or ratified by Mauritius.

There are no restrictions on foreign lenders financing an aircraft locally, or on borrowers using the loan proceedings.

No exchange controls or government consents are material to any financing or repatriation of realisation proceeds under a loan, guarantee or security document.

Borrowers are permitted to grant security to foreign lenders.

Downstream, upstream and cross-stream guarantees are permitted, and favoured over lenders. The “corporate benefit” requirement under the Companies Act must be satisfied.

Lenders are advised to take share security over a domestic special purpose vehicle (SPV) that owns a financed aircraft. Pledges of shares are recognised.

Negative pledges are recognised.

No material restriction or requirement is imposed on intercreditor arrangements.

The concept of agency and the role of an agent under syndicated loans are recognised in Mauritius.

Subordinate deeds are permissible and recognised.

The transfer or assignment of all or part of an outstanding debt under an English or New York law-governed loan is permissible, but it will depend on the consent clause in the agreement.

Both usury and interest limitation laws are enacted in Mauritius.

A mortgage is the typical form of security in Mauritius.

There are no types of security that cannot be taken over an aircraft or related collateral, ie, engines, warranties or insurances.

The concept of a trust and the role of a security trustee are recognised in Mauritius.

While a borrower can assign its rights to an aircraft to a security trustee, pursuant to a security assignment or mortgage, this will also depend on the consent clause in the agreement.

It is possible to assign the rights and benefits only, without also assigning the attendant obligations of the lessor under an aircraft lease, but this will also depend on the consent clause in the agreement.

A security assignment or guarantee can be governed by foreign laws but, in order to be enforced, it must not contravene, among others, public policy.

There are no formalities or mandatory terms required to create and perfect a security assignment if this is done under foreign law. There are therefore no consequences for failure to comply. See 1.1.2 Enforceability Against Domestic Parties regarding documentation.

A domestic aircraft mortgage may be considered as a domestic law security instrument should a security assignment be governed by English or New York law.

Only a domestic law security instrument must be registered and inscribed. Those governed by foreign law are not required to register to ensure the validity and enforceability of the security instrument.

The transfer of security interests over an aircraft and/or engines is recognised in Mauritius.

Whether or not security interests are jeopardised, should the identity of the secured parties under a security assignment change after its execution, will depend on the consent clause in the agreement.

“Parallel debt” structures are not used in Mauritius.

A foreign party under a security assignment is at no point deemed to be resident, domiciled, carrying on business or subject to any taxes in Mauritius as a result of being party to said security assignment.

A domestic law mortgage over an aircraft or engine may be perfected by the registration and inscription of the mortgage.

There is no difference in the form of security that can be taken over an aircraft or a spare engine.

The typical form of security taken over a bank account is a bank account pledge. A notice must be circulated to all the parties.

A third party can only take or register a lien over an aircraft or engine. In the case of repairs, the lien only covers the work done on actual secured assets.

The average timeframe to discharge a lien or mortgage over an aircraft is one to two months.

There is a register of mortgages and charges. Notice of registration must be shared to third parties.

Statutory rights of detention or non-consensual liens can only arise over individual aircraft.

The Conservator of Mortgages’ register must be searched by a potential purchaser to establish an aircraft’s freedom from encumbrances.

Security assignments are enforced differently to a loan or guarantee. Security assignments can be enforced on a self-help basis, whereas a loan or guarantee must be enforced by way of legal proceedings.

A security trustee can enforce its rights under a security assignment pursuant only to a notice and acknowledgement executed by that lessor and the relevant lessee respectively in connection with such security assignment.

Domestic courts will uphold a foreign law as the governing law of a finance or security document and its submission to a foreign jurisdiction.

Mauritius courts will uphold and enforce the final judgment of a foreign court or an arbitral award, without further re-examination, provided certain conditions are fulfilled.

A court order is required in order for a secured party to enforce a security agreement or mortgage without the lessee’s or operator’s consent.

Mauritius courts are competent to decide on the enforcement action of security agreements or aircraft mortgages.

A secured party can obtain a summary judgment, equitable or other injunctive relief pending final resolution of judicial proceedings to enforce a security agreement/aircraft mortgage. Common law requirements applicable to injunctions will apply.

A secured party under a security agreement/aircraft mortgage may obtain a judgment in a foreign currency.

A secured party is not required to pay taxes or fees in a non-nominal amount in connection with the enforcement of a security agreement/aircraft mortgage.

There are no other relevant issues that a lender ought to be aware of in relation to the enforcement of its rights.