REGISTRATION OF AIRCRAFT
Is there a register of aircraft?
The Virgin Islands Aircraft Register (the ‘‘Register’’) was originally created under the Air Navigation (Overseas Territories) Order 2007 (as amended) which has since been repealed and replaced by The Air Navigation (Overseas Territories) Order 2013 (the ‘‘Order’’). The Register is a US Federal Aviation Authority Category One aircraft register. Pursuant to the Order, the Register is managed and maintained by the Governor of the British Virgin Islands and these responsibilities have been delegated to the Director of the Department of Civil Aviation. The Department of Civil Aviation is subject to oversight by the Air Safety Support International (‘‘ASSI’’), a wholly owned non-profit subsidiary of the United Kingdom Civil Aviation Authority (the ‘‘CAA’’). The CAA is therefore indirectly responsible for ensuring international aviation safety standards in the BVI as promulgated by the International Civil Aviation Organisation (‘‘ICAO’’).
What aircraft may be registered?
Both commercial and private aircraft may be registered in the BVI.
What documentation and contents are required for registration?
- Step 1 (Due Diligence): The process begins with the submission of a written request to the Director of Civil Aviation (the ‘‘Director’’). Upon receipt of the request from the applicant the Director will send the applicant an Aircraft Registration Application Form (‘‘BVI Form 001’’). The Director will then review the application to ensure that the applicant is eligible to register an aircraft in the BVI. The aircraft must be owned by certain specified types of individuals or companies,1 and in this regard the Director encourages prospective applicants to incorporate a BVI business company for the purposes of owning the aircraft.
- Step 2 (Operation of the Aircraft): If the Director is satisfied that the applicant is eligible to register an aircraft, the Director will send a registration package to the applicant, including all necessary forms and guidance material applicable to the applicant’s operational and aircraft certificate requirements. The applicant will be required to demonstrate compliance with overseas territory navigation requirements (‘‘OTARs’’) Pts 91 and 125 for an aircraft being registered for private or corporate use, and Pts 119, 121 and 135 for an aircraft being registered for commercial use; and flight crew licensing requirements under OTARs Pt 61.
- Step 3 (Certificate of Airworthiness and Supporting Maintenance): Upon satisfaction of the operational requirements outlined above, the applicant will submit BVI Form 002 for a certificate of airworthiness. A certificate of airworthiness will not be issued unless there is in force a Type Acceptance Certificate issued by the Director for that aircraft type. The Director will also accept a Type Acceptance Certificate from the FAA (USA), Transport Canada or European Aviation Safety Agency for any aircraft which is the first of its type on the Register. The applicant will also submit BVI Form 3 for the approval of a technical coordinator, who is responsible for ensuring the aircraft’s continued airworthiness.
What particulars are recorded in the Register?
The following particulars will be recorded in the Register on registration of the aircraft:
- the registration certificate number assigned to the aircraft;
- the nationality and registration marks of the aircraft;
- the manufacturer’s name and designation of the aircraft;
- the serial number assigned to the aircraft;
- the name and address of every person entitled as owner to a legal interest in the aircraft;
- in the case of an aircraft which is the subject of a charter by demise, the name and address of the charterer; and
- in the case of an aircraft which is registered under any other provision of the Order, an indication that it is so registered.
Once the above particulars have been entered the Registry will issue a Certificate of Registration with these details.
Can the Register be amended?
Yes, upon an application in writing to the Director. The registered owner of an aircraft registered in the BVI must immediately inform the Director in writing of:
- any change in the particulars provided as part of the registration of the aircraft;
- the destruction of the aircraft, or its permanent withdrawal from use; or
- the termination of the demise of the charter (where the aircraft is registered in the name of the charterer by demise).
The Director shall, at such time and in such manner as directed by the Civil Aviation Authority from time to time, submit to the Civil Aviation Authority particulars of all registrations, and changes in or cancellations of registrations, entered in the Register.
What is the effect of registration?
The aircraft is registered in the BVI and entitled to the rights and privileges under the Order. Registration of title to the aircraft constitutes prima facie evidence of ownership of the aircraft however, such evidence is not conclusive.
How is deregistration affected?
The owner of an aircraft registered in the BVI may submit a written application requesting that the Director cancel the registration of the aircraft. The original Certificate of Registration and other documents issued at the time of registration must be returned to the Director for cancellation.
Can a deregistration certificate be obtained on registration?
There is no provision for the issuance of such a certificate.
REGISTRATION OF AIRCRAFT MORTGAGES
Is there a register of mortgages over rights of an aircraft?
The framework for registration of security over aircraft and separately, aircraft engines was established under the Mortgaging of Aircraft and Aircraft Act 2011 (the ‘‘Act’’) and the Mortgaging of Aircraft and Aircraft Regulations 2012 (the ‘‘Regulations’’). The Act makes provision for the appointment of a Registrar, who is responsible for the general administration, control and management of the register of aircraft and aircraft engine mortgages (the ‘‘Mortgage Register’’). Neither the Act nor the Regulations place any limitations on a person or company who may be a mortgagee. A mortgage may cover any store of spare parts (including engines) for the aircraft; however, a mortgage created as a floating charge is not registrable.
In addition to the above registration, where the mortgagor is a BVI company the mortgagor must enter details of the mortgage over the aircraft and/or engine (as assets of the BVI company) in its private register of mortgages maintained at the company’s registered office in the BVI pursuant to BVI Business Companies Act 2004 (the ‘‘BCA’’) s.162. The mortgagor or mortgagee may also register the mortgage under BCA s.163 with the Registrar of Corporate Affairs by entering the details of the mortgage in a register of charges and filing the register with the Registrar of Corporate Affairs. The public registration of the mortgage under s.163 may be desirable in order to protect the priority of such charge in the BVI, subject to any priority afforded to pre-existing registered charges. In the following sections, registration under the BCA shall not be discussed in any further detail.
What documentation and consents are required for registration?
An application for registration of a mortgage over an aircraft and/or aircraft engine under the Act shall be submitted by or on behalf of the mortgagee to the Registrar in the prescribed form (Form 1 of Sch.1 to the Regulations) and accompanied by a certified true copy of the mortgage and the prescribed fee.
Can the register be amended?
Any change in the person appearing in the Mortgage Register as mortgagee or as mortgagor or in the name or address of such person or in the description of the mortgaged property shall be notified to the Registrar by or on behalf of the mortgagee, in the form set out in the prescribed form (Form 3 of Sch.1 of the Regulations).
If the Registrar is satisfied that it is necessary or expedient to correct an error in the register, the Registrar may amend the Mortgage Register and shall enter a notation of the correction and the date of the correction on the Mortgage Register and shall notify the mortgagee, the mortgagor and the owner of the aircraft or aircraft engine of the correction.
Will registration secure priority for the mortgagee?
A mortgage of an aircraft or an aircraft engine entered in the Mortgage Register shall have priority over any other unregistered mortgage or charge on that aircraft or aircraft engine. As between registered mortgages, priority is established based on the order of registration with previously registered mortgages taking priority over subsequently registered mortgages. A notice of intention to make an application to enter a contemplated mortgage of an aircraft or an aircraft engine in the Register may also be entered in the Mortgage Register as a priority notice An application to enter a priority notice in the Mortgage Register shall be made to the Registrar by or on behalf of the prospective mortgagee in the form set out in Form 2 of Sch.1, and shall be accompanied by the prescribed fees. Where a priority notice has been entered in the Mortgage Register and the contemplated mortgage referred to therein entered in the Mortgage Register within 14 days thereafter, that mortgage shall be deemed to have priority from the time when the priority notice was registered.
What is the effect of registration?
The principal effects of registration are as follows:
- Registration of a mortgage affects priority as described at VGB 2.4 above. A registered mortgage will not, ipso facto, have priority over possessory liens or statutory rights of detention on the express or implied authority of any party lawfully entitled to possession of the aircraft.
- All persons shall at all times be taken to have express notice of all facts appearing in the register, but the registration of a mortgage shall not be evidence of its validity nor is it required to perfect the mortgage.
- A registered mortgage will not be affected by any act of bankruptcy committed by the mortgagor after registration and the mortgagee will take priority over the rights and claims of other creditors over the aircraft.
- Registered mortgages are not affected by the terms of any statutory provisions relating to bills of sale.
- The Minister responsible for civil aviation will indemnify any person suffering loss by reason of any error or omission in the Mortgage Register or of any inaccuracy in a copy of an entry in the Mortgage Register supplied by the Department of Civil Aviation.
How is deregistration effected?
Where a mortgage of an aircraft or aircraft engine registered in the Register is discharged, the mortgagor or the mortgagee shall make an application to discharge the registered mortgage in the form set out in Form 4 of Sch.1 to the Regulations. The form must be duly completed and signed by or on behalf of the mortgagee, and be accompanied by a copy of the document of discharge or receipt for the mortgage money, or of any other document which shows, to the satisfaction of the Registrar, that the mortgage has been discharged and payment of the prescribed fees.
TYPES OF AIRCRAFT MORTGAGES
What types of aircraft mortgage are possible under BVI law? There are many different types of mortgages but they may be classified as either legal mortgages (where the legal title is transferred to the mortgagee until the mortgage is released) or equitable mortgages (where the legal title remains with the mortgagor).
A legal mortgage takes effect as an assignment of the mortgagor’s title and interest in the aircraft to the mortgagee. The assignment is a conditional one since the mortgagor will retain the right to redeem the aircraft upon payment of the mortgage debt (the ‘‘equity of redemption’’). That right cannot be excluded even by express provision.
Equitable mortgages of aircraft constitute enforceable agreements to transfer legal title upon certain events of default. Thus there is no actual transfer of legal title upon entry into the equitable mortgage, though the mortgagee will have a right to call for such a transfer, which will be enforceable by the BVI courts in the exercise of their equitable jurisdiction. As in the case of a legal mortgage, the mortgagor shall have the right to redeem the aircraft upon payment of the mortgage debt, which may not be excluded by any express contractual provision. Whenever possible, mortgagees will require a legal mortgage. Both legal and equitable mortgages are registrable in the BVI and the priority of such mortgages is discussed at VGB 2.5 above.
Power of Sale
Mortgages typically contain a power of sale upon default by the mortgagor. Pursuant to such power of sale the mortgagor shall have the ability to dispose of any aircraft in respect of which he is registered and to give effectual receipts for the purchase money; however, where there are any prior mortgages the mortgagee may only exercise such power of sale subject to the rights of the prior mortgagees.
The complete chapter, including further information around fees, judicial procedure, aircraft leasing, and sales and possession, is available below.