The Protection of Interests in Aircraft Objects Act, 2025 officially came into force on May 1, 2025, following a notification from the Central Government. This notification was was published on April 30, 2025.
The Ministry of Civil Aviation has designated May 1 as the commencement date for the Act’s provisions. It formally confirms the implementation date for the legislation.
The enactment of the Protection of Interests in Aircraft Objects Act, 2025 marks the operationalization of new legal frameworks concerning interests tied to aircraft assets within India.
What is the Protection of Interests in Aircraft Objects Act, 2025?
The Protection of Interests in Aircraft Objects Act, 2025 aims to provide a robust legal framework for the protection of interests in aircraft objects, aligning India with international standards and facilitating smoother transactions in the aviation industry.
It seeks 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, both signed in Cape Town on November 16, 2001. These international agreements are crucial for creating a global system for the registration and protection of security interests in high-value mobile assets like aircraft.
Section 3 of the Act explicitly states that, subject to the Act’s provisions, the Convention and Protocol will have the force of law in India, specifically concerning aircraft objects and in accordance with declarations made by India. This section seeks to enhance the confidence of international financiers and lessors in the Indian aviation market, potentially leading to more favorable financing terms and increased investment.
The Act also establishes the Directorate General of Civil Aviation (DGCA), constituted under the Bharatiya Vayuyan Adhiniyam, 2024, as the registry authority. This authority will be empowered to issue necessary directions for the implementation of the Convention and Protocol provisions within India.
A significant aspect of the Act is that it mandates that debtors maintain and submit records of dues related to the ownership or use of aircraft objects to the registry authority. Furthermore, it stipulates that creditors cannot exercise remedies under the Convention or Protocol unless they formally notify the registry authority of a default. This provision aims to bring transparency and order to the process of enforcing international interests.
The Act also addresses remedies in insolvency situations, making provisions of Article XI of the Protocol applicable, with certain conditions. These conditions include the debtor being a body corporate, firm incorporated in India, or a person domiciled or having their principal place of business in India, and the international interest being duly registered.
The Act also incorporates provisions related to de-registration and export requests, aligning with Article XIII of the Protocol, subject to the existing framework of the Bharatiya Vayuyan Adhiniyam, 2024. Moreover, section 8 designates the High Court having territorial jurisdiction as the relevant court for the purposes of Article 53 of the Convention, clarifying the judicial authority for related matters.
Importantly, section establishes the overriding effect of this Act in case of any inconsistency with other existing laws, ensuring the primacy of the provisions designed to implement the Cape Town Convention and Protocol. However, it also safeguards the rights of the Central Government, public service providers, and inter-governmental organizations to arrest or detain aircraft objects under existing laws for outstanding dues.
The Act empowers the Central Government to make rules for carrying out its provisions and implementing the Convention and Protocol. It also grants the government the authority to make, amend, or withdraw declarations in accordance with the international agreements and to amend the Second Schedule of the Act accordingly.
