The Aviation Law Review The Aviation Law Review

Third Edition Editor Sean Gates

Law Business Research

The Aviation Law Review

The Aviation Law Review Reproduced with permission from Law Business Research Ltd. This article was first published in The Aviation Law Review - Edition 3 (published in July 2015 – editor Sean Gates) For further information please email [email protected]

The Aviation Law Review Third Edition Editor

Sean Gates

Law Business Research Ltd

PUBLISHER Gideon Roberton BUSINESS DEVELOPMENT MANAGER Nick Barette SENIOR ACCOUNT MANAGERS Katherine Jablonowska, Thomas Lee, Felicity Bown ACCOUNT MANAGER Joel Woods PUBLISHING MANAGER Lucy Brewer MARKETING ASSISTANT Rebecca Mogridge EDITORIAL COORDINATOR Shani Bans HEAD OF PRODUCTION Adam Myers PRODUCTION EDITOR Robbie Kelly SUBEDITOR Janina Godowska MANAGING DIRECTOR Richard Davey Published in the United Kingdom by Law Business Research Ltd, London 87 Lancaster Road, London, W11 1QQ, UK © 2015 Law Business Research Ltd www.TheLawReviews.co.uk No photocopying: copyright licences do not apply. The information provided in this publication is general and may not apply in a specific situation, nor does it necessarily represent the views of authors’ firms or their clients. Legal advice should always be sought before taking any legal action based on the information provided. The publishers accept no responsibility for any acts or omissions contained herein. Although the information provided is accurate as of July 2015, be advised that this is a developing area. Enquiries concerning reproduction should be sent to Law Business Research, at the address above. Enquiries concerning editorial content should be directed to the Publisher – [email protected] ISBN 978-1-909830-61-5 Printed in Great Britain by Encompass Print Solutions, Derbyshire Tel: 0844 2480 112

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ACKNOWLEDGEMENTS

The publisher acknowledges and thanks the following law firms for their learned assistance throughout the preparation of this book: ALLEN & OVERY LLP ANJARWALLA & KHANNA ASSEGAF HAMZAH & PARTNERS AYBAY & AYBAY BERNARDI & SCHNAPP ADVOGADOS CHRISSANTHIS & PARTNERS LAW FIRM CHRISTODOULOU & MAVRIKIS INC COLIN BIGGERS & PAISLEY CUATRECASAS, GONÇALVES PEREIRA DLA PIPER DQ ADVOCATES FITZPATRICK & HUNT, TUCKER, PAGANO, AUBERT, LLP GATES AVIATION LTD GONDAR & ASOCIADOS GRANDALL LAW FIRM JIPYONG JURVNESHSERVICE INTERNATIONAL LEGAL SERVICES KENNEDYS

i

Acknowledgements

KROMANN REUMERT LAWOFFICE DR ANDREAS GRASSL LS LEXJUS SINACTA MAPLES AND CALDER RAJA, DARRYL & LOH SCHILLER RECHTSANWÄLTE AG SQUIRE PATTON BOGGS STEVENSON, WONG & CO URWANTSCHKY DANGEL BORST PARTMBB YOMI OSHIKOYA & CO (LEGAL PRACTITIONERS)

ii

CONTENTS

Editor’s Preface

��������������������������������������������������������������������������������������������������vii Sean Gates

Chapter 1

ARGENTINA�����������������������������������������������������������������������������1 Ana Luisa Gondar

Chapter 2

AUSTRALIA�����������������������������������������������������������������������������13 Andrew Tulloch

Chapter 3

AUSTRIA���������������������������������������������������������������������������������25 Andreas Grassl 

Chapter 4

BELGIUM��������������������������������������������������������������������������������35 Dimitri de Bournonville and Cyril-Igor Grigorieff

Chapter 5

BRAZIL������������������������������������������������������������������������������������44 Ricardo Bernardi

Chapter 6

CANADA���������������������������������������������������������������������������������61 Laura M Safran QC and Prasad Taksal 

Chapter 7

CAYMAN ISLANDS����������������������������������������������������������������74 Dale Crowley, Wanda Ebanks, Shari McField and Barnabas Finnigan

Chapter 8

CHINA�������������������������������������������������������������������������������������88 Gao Feng

Chapter 9

DENMARK����������������������������������������������������������������������������101 Jens Rostock-Jensen and Jakob Dahl Mikkelsen

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Contents

Chapter 10

DOMINICAN REPUBLIC���������������������������������������������������111 Rhina Marielle Martínez Brea and Mayra Carolina Jacobo Troncoso

Chapter 11

EUROPEAN UNION������������������������������������������������������������125 Dimitri de Bournonville, Cyril-Igor Grigorieff and Charlotte Thijssen

Chapter 12

FRANCE��������������������������������������������������������������������������������141 Vonnick le Guillou, Marie Hindré-Guéguen, Marie Bresson, Fayrouze Masmi-Dazi, Jonathan Rubinstein, and Guilhem Argueyrolles

Chapter 13

GERMANY����������������������������������������������������������������������������156 Peter Urwantschky, Rainer Amann, Claudia Hess and Marco Abate

Chapter 14

GREECE��������������������������������������������������������������������������������177 Christos Chrissanthis, Xenia Chardalia and Antonia Vasilogamvrou

Chapter 15

HONG KONG����������������������������������������������������������������������196 Neville Watkins and Simon Tong

Chapter 16

INDONESIA��������������������������������������������������������������������������208 Yogi Sudrajat and Eri Hertiawan

Chapter 17

ISLE OF MAN�����������������������������������������������������������������������217 Stephen Dougherty

Chapter 18

ITALY�������������������������������������������������������������������������������������225 Anna Masutti 

Chapter 19

JAPAN������������������������������������������������������������������������������������240 Tomohiko Kamimura

Chapter 20

KENYA�����������������������������������������������������������������������������������256 Sonal Sejpal, Tabitha Joy Raore and Saahil Patel 

Chapter 21

KOREA�����������������������������������������������������������������������������������271 Choon-Won Lee

iv

Contents

Chapter 22

MALAYSIA�����������������������������������������������������������������������������283 Chong Kok Seng and Chew Phye Keat 

Chapter 23

NETHERLANDS������������������������������������������������������������������298 Hilde van der Baan

Chapter 24

NIGERIA��������������������������������������������������������������������������������315 Otunba Yomi Oshikoya and Gbenga Oshikoya

Chapter 25

PORTUGAL���������������������������������������������������������������������������331 Luís Soares de Sousa

Chapter 26

RUSSIA�����������������������������������������������������������������������������������342 Alexandra Rodina

Chapter 27

SINGAPORE�������������������������������������������������������������������������352 Anita Quy and Shi Yan Lee

Chapter 28

SOUTH AFRICA�������������������������������������������������������������������367 Chris Christodoulou

Chapter 29

SPAIN�������������������������������������������������������������������������������������382 Diego Garrigues

Chapter 30

SWITZERLAND�������������������������������������������������������������������392 Heinrich Hempel and Daniel Maritz

Chapter 31

TURKEY��������������������������������������������������������������������������������405 M Ali Kartal 

Chapter 32

UKRAINE������������������������������������������������������������������������������414 Anna Tsirat

Chapter 33

UNITED KINGDOM�����������������������������������������������������������427 Mark Welbourn

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Contents

Chapter 34

UNITED STATES�����������������������������������������������������������������443 Garrett J Fitzpatrick, James W Hunt and Mark R Irvine

Appendix 1

ABOUT THE AUTHORS�����������������������������������������������������467

Appendix 2

CONTRIBUTING LAW FIRMS’ CONTACT DETAILS���489

vi

EDITOR’S PREFACE

The Aviation Law Review has become a compulsory purchase for the libraries of those with commercial, legal or academic interest in international aviation law, contributing a unique perspective on these subjects from experts in many countries around the world. In this edition there are several helpful contributions on the approach of different jurisdictions to aircraft registration, made easier now in the United Kingdom following its recent the accession to the Cape Town Convention. There are also highly insightful contributions from a number of new jurisdictions, including Colombia, the Isle of Man, the Cayman Islands and Singapore, further extending the reach of the Review. This might be regarded as the year of the drone! With a number of alternative acronyms proposed by a variety of organisations, the remotely piloted unmanned aerial vehicle (UAV) is clearly on its way to becoming ubiquitous. Having been developed primarily for military purposes, it seems likely that its commercial uses will expand from aerial photography to aerial delivery courtesy of Amazon and beyond. While regulatory developments are continuing apace with these vehicles, not all of these are aligned. It is to be hoped that an international body representing the needs of operators will be formed so as to avoid a  patchwork of conflict in the regulatory arena. No adequate resolution has yet been found to the vexed issue of the appropriate minimum insurance requirement for UAVs; progress in this matter will be an essential requirement given their potential for damage. The difficulties here include establishing ownership and the viability of small businesses faced with substantial, though arguably realistic, insurance premium demands. There have been a number of significant decisions in different courts around the world in the preceding year and there are two startling examples of this in relation to airlines’ liability to passengers. In the case of Casey v. Pel Air in the Supreme Court of New South Wales, the Court held that post-traumatic stress disorder (PTSD) is compensable under the Montreal Convention as bodily injury. The facts of the case are truly appalling and underline the truism that bad facts will never make good law. One has to wonder why, given that all other claims by the passenger were agreed, it was decided that this element of the claim should be resisted. This is an alarming development for carriers and

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Editor’s Preface their insurers, who can expect to receive claims of this sort in Australia every time there is a hard landing or mid-air turbulence. Other jurisdictions will take note of the judicial view that PTSD is evidenced by physiological changes in the brain, opening the issue up for argument in every country where courts have hitherto found in favour of carriers. This was a hard-fought issue at the drafting stages of the Montreal Convention 1999 and the victories won there would seem to have been lost in this decision. There seems little doubt there is a tide in the affairs of toxic cabin claims that is rising so far as employees are concerned, as represented in litigation in various jurisdictions around the world. The few attempts by passengers to launch such claims have foundered on the difficulty of establishing a probable link between the event and the illness. The current litigation can be expected to fortify passengers with illnesses that might be said to flow from exposure to the elements of ‘toxic air’, and will encourage plaintiff lawyers to redouble their efforts in pursuit of claims. The Germanwings accident has electrified debate in a  number of areas concerning the legal regulation of aviation. In a recent briefing by the French prosecutor, consideration is clearly being given to the possibility of criminal prosecutions arising out of the accident and the circumstances in which the co-pilot was allowed to continue to fly notwithstanding his serious and worsening psychological condition. Latest reports indicate numerous doctors had seen him and recommended that he stop flying but were constrained from advising his employer by privacy laws in Germany and Europe. Criminal prosecutions in France following aircraft accidents are unremarkable and it seems likely that this investigation will continue with serious consideration being given to criminal redress. The accident itself has again triggered the debate concerning whether cockpit doors should be locked during flight. The events of 9/11 were the trigger for the decision to lock cockpit doors. Both before and after that event, however, there have been numerous events of pilot incapacity and suicide. Different airlines have taken steps to ensure that when one of two pilots must leave the cockpit the other should not be left alone, but whether a determined pilot would be inhibited practically by a second person in the cockpit will be the subject of further debate and probably further rule-making. Once again I would like to extend my thanks to the many contributors to this volume and welcome those who have joined the group. Their studied, careful and insightful contributions are much appreciated. Sean Gates Gates Aviation Limited London July 2015

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Chapter 17

ISLE OF MAN Stephen Dougherty1

I INTRODUCTION As this the first entry for the Isle of Man in The Aviation Law Review we will provide an overview of the industry from the outset together with a review of the recent developments and the outlook. The Isle of Man aviation sector is a relatively new introduction to the industry. The Isle of Man Civil Aviation Administration (CAA) is the division of the government’s Department of Economic Development (DED) that is responsible for regulating aviation in the Isle of Man. The CAA’s role is to administer the Isle of Man Aircraft Registry (the Registry) and regulate the Isle of Man airport. The CAA is responsible for ensuring aviation legislation in the Isle of Man meets International Civil Aviation Organization (ICAO) Standards and Recommended Practices and other relevant European aviation standards. The Registry was created in May 2007 and it is specifically aimed at private and corporate business jets and helicopters. Isle of Man registered aircraft cannot be used for Commercial Air Transport. It is the largest dedicated corporate aircraft register in Europe, with a policy to accept only aircraft with a maximum take-off mass (MTOM) of over 5,700kg and twin turbine helicopters. Aircraft with a  MTOM of between 2,730kg and 5,700kg may be considered for registration only if supported by evidence of significant economic benefit to the Isle of Man. There is no MTOM restriction for aircraft registered for Isle of Man residents. The Registry has proven to be an unqualified success, having registered over 800 aircraft since its inception. The Air Navigation (Isle of Man) Order 2007 (which came into force on 1 May 2007) was the governing legislation for the aircraft industry in the Isle of Man and because of the success of the Registry and the continuing development of the industry

1

Stephen Dougherty is a senior associate at DQ Advocates.

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Isle of Man in the Isle of Man it has been updated and replaced by the Air Navigation (Isle of Man) Order 2015 (ANO). We will set out in further detail in this chapter the main aspects and developments introduced by the new ANO. i

About the Isle of Man

The Isle of Man is one of the most politically and economically stable jurisdictions in the world. It is not part of the United Kingdom but conveniently lies within the British Isles. The Island is politically and constitutionally separate from the United Kingdom. It has its own political system and its own parliament (Tynwald), which is independent and is the oldest continuous parliament in the world, with over 1,000 years of unbroken parliamentary rule. Tynwald is responsible for setting the Island’s laws, including matters of taxation. The island has one of the highest credit ratings of any offshore financial centre and has never entered recession. The island has benefitted from year on year economic growth. The Isle of Man is on the OECD ‘white list’ and is one of the few countries in the world to be awarded the top ‘compliant’ rating for transparency by the OECD Global Forum. II

LEGAL FRAMEWORK FOR LIABILITY

The Isle of Man aviation industry is governed by the following pieces of legislation: the ANO; the Civil Aviation (Subordinate Legislation) (Application) Orders 2006 and 2008; and the Airports and Civil Aviation Act 1987. In addition to the above pieces of legislation, the CAA has adopted the content of UK CAA Civil Aviation Publications (CAPs) to address issues or topics not covered by the Isle of Man regulations and instructions for continued airworthiness. Examples of the UK CAA CAPs adopted by the CAA include: CAP

Title

032

UK Aeronautical Information Publication

168

Listing of Aerodromes

382

Mandatory Occurrence Reporting Scheme

584

Air Traffic Controllers Training

642

Airside Safety Requirements

694

The UK Flight Planning Guide

740

UK Airspace Management Policy

757

Occupational Health and Safety on-board Aircraft Guidance on Good Practice

The ANO came into force on 1 May 2015 and revoked the Air Navigation (Isle of Man) Order 2007 and the Air Navigation (Isle of Man) (Amendment) Order 2008. The ANO is effectively the guiding legislation for the Isle of Man aircraft industry, covering the many practicalities of registering and operating an aircraft in the Isle of Man as further detailed in this chapter.

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Isle of Man The Civil Aviation (Subordinate Legislation) (Application) Orders 2006 and 2008 applied a number of pieces of UK legislation to the Isle of Man, including: a Mortgaging of Aircraft Order 1972; b Mortgaging of Aircraft (Amendment) Order 1972; c Civil Aviation (Procedure) Regulations 1991; d Civil Aviation (Investigation of Air Accidents and Incidents) Regulations 1996; e EC/Swiss Air Transport Agreement (Consequential Amendments) Regulations 2004; f Civil Aviation (Insurance) Regulations 2005; g Civil Aviation (Safety of Third Country Aircraft) Regulations 2006; h Rules of the Air Regulations 2007; and i Rules of the Air (Amendment) Regulations 2007. The Airports and Civil Aviation Act 1987 also, inter alia, applied a number of pieces of UK legislation to the Isle of Man, namely: a the Carriage by Air Act 1961; b the Carriage by Air (Supplementary Provisions) Act 1962; c the Tokyo Convention Act 1967; d the Civil Aviation Act 1982; e the Aviation Security Act 1982; f the Airports Act 1986; and g any provision of an Act of Parliament that relates to civil aviation, air navigation or airports. The Isle of Man is not a signatory to any of the Warsaw, Chicago or Montreal Conventions, but the United Kingdom is, and through its Department for Transport it has accountable oversight responsibility for the United Kingdom, Crown dependencies and Overseas Territories, which includes the Isle of Man. III

LICENSING OF OPERATIONS

i

Licensed activities

Certificate of Airworthiness All Isle of Man registered aircraft must be issued with a  certificate of airworthiness (CoA) before they are able to fly. The CoA must specify the category ‘Private’, meaning that the aircraft is not an aerial work aircraft or a commercial air transport aircraft and be issued subject to the condition that the aircraft may not be flown except for the purposes (which may not include commercial air transport or aerial work) specified in the certificate (ANO Article 16(3)). Each Isle of Man registered aircraft is required to submit to an annual survey to confirm conformity with the Isle of Man aviation legislation requirements to renew its CoA. A Registry airworthiness surveyor attends the aircraft wherever in the world it is based, and conducts a sample review of the aircraft records for the past 12 months, since its previous CoA, together with a physical check of the aircraft itself. When the surveyor is satisfied that the aircraft remains compliant

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Isle of Man to its Type Certificate Data Sheet, a recommendation is made by the surveyor to renew the CoA. The Registry will then consider the recommendation and subsequently issue the new CoA. The normal practice for an aircraft to apply for a  CoA is that its Nominated Airworthiness Technical Representative, who will be the Registry’s single point of contact with the operator of the aircraft regarding all matters of airworthiness, completes his or her own inspection of the aircraft and records and satisfies him or herself that he or she is in a position to demonstrate that each of the applicable items to be inspected has reached a full level of compliance and that he or she has all of the requisite documents. A survey will be carried out by one of the Registry’s surveyors, and these surveys do not have to be carried out on the Isle of Man as the Registry has 20 accredited surveyors resident in central Europe, the United States, the United Kingdom and the Isle of Man and they can be flown to various locations as necessary. A maintenance programme must be submitted for approval that identifies the location of the aircraft manufacturer’s recommended aircraft actions, and that has been customised to reflect the aircraft’s operational and emergency equipment and scope of operations and it must include ‘instructions for continued airworthiness’ in relation to any modifications embodied on the aircraft. Modification and repair data approved in accordance with European Aviation Safety Agency (EASA) regulations are acceptable to the Registry and this includes countries with bilateral agreements with EASA for such activities (e.g., the United States, Canada, Brazil and Switzerland). As the Registry can only register aircraft for private or corporate use and not aircraft that are operating for commercial air transport with airlines or air charter operations, the Isle of Man does not issue air operator certificates, unlike the majority of countries with an aviation industry. Notwithstanding the fact that any aircraft registered on the Isle of Man Registry cannot be used for commercial air transport, commercial airliners that are between leases or parked at the end of a lease and not operating commercially may be registered in the Isle of Man as private aircraft. The Isle of Man Registry is attractive to such commercial airliners because there is no minimum time that an aircraft has to remain on the register; any EASA Part 145 maintenance organisation with the appropriate approvals can conduct work on Isle of Man registered aircraft without requiring further approval from the Registry, thus providing flexibility when choosing an end-of-lease maintenance organisation; and type-rated ICAO flight-crew licences can be validated for flight crew of Isle of Man registered aircraft, so local pilots with appropriate licences can operate the aircraft at the end of the lease. ii

Ownership rules

In accordance with Part 1, Article 5 of the ANO, only the following persons are qualified to hold a legal or beneficial interest by way of ownership in either an aircraft registered in the Isle of Man or a share in such an aircraft: a the Crown in right of the Isle of Man, the United Kingdom or any part of the United Kingdom; b Commonwealth citizens; c Nationals of any EEA state or Switzerland;

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Isle of Man d e f

British protected persons; Bodies incorporated in some part of the Commonwealth or having their registered office, central administration or principal place of business in a part of the Commonwealth; or Undertakings formed in accordance with the law of the Isle of Man, an EEA state or Switzerland and having their registered office, central administration or principal place of business within the Isle of Man, an EEA state or Switzerland.

Notwithstanding the above qualification requirements, under the terms of the ANO there are instances wherein the rules may be relaxed somewhat, namely: a if an unqualified person resides or has a place of business in the Isle of Man and holds a legal or beneficial interest by way of ownership in an aircraft or a share in an aircraft, the CAA/DED may register the aircraft if it is satisfied that the aircraft may otherwise be properly registered; and b If an aircraft is chartered by demise to a person qualified under the list above, the CAA/DED may, whether or not an unqualified person is entitled as owner to a legal or beneficial interest in the aircraft, register the aircraft in the Isle of Man in the name of the charterer by demise if it is satisfied that the aircraft may otherwise be properly so registered and the aircraft may remain registered during the continuation of the charter. Note that under the terms of Article 4 of the ANO, an aircraft may not be registered or continue to be registered in the Isle of Man if it appears to the CAA/DED that: a the aircraft is registered outside the Isle of Man and that the registration would not cease by operation of law were the aircraft to be registered, or continue to be registered, in the Isle of Man; b an unqualified person holds a legal or beneficial interest by way of ownership in the aircraft or in a share in the aircraft; c the aircraft could more suitably be registered in some other part of the Commonwealth or in an EEA state or Switzerland; or d it would not be in the public interest for the aircraft to be or continue to be registered in the Isle of Man. IV SAFETY As set out above, the Isle of Man has implemented a number of pieces of UK legislation and regulations and these include those relating to and covering safety issues. EASA has no involvement with Isle of Man registered aircraft or directive responsibilities and all Isle of Man aircraft are required to follow any national aviation authority directives while operating in its national airspace, but as the Registry meets the recommendations set by ICAO, there are no regulatory aspects in relation to safety from any other state. In relation to the licensing of aircrew and engineers, the Registry is not a signatory state, but it is able to validate other ICAO states’ licences to be effective in relation to Isle of Man registered aircraft, so long as the licence meets the ICAO Annex 1 standard.

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Isle of Man Following the implementation of the ANO the Registry has notified owners of registered aircraft that it may from time to time issue Air Worthiness Directives to address an urgent safety concern or vary the requirements of a State of Design Airworthiness Directive and in such circumstances the Isle of Man directive will take precedence. V INSURANCE By virtue of the application of the Civil Aviation (Insurance) Regulations 2005 to the Island by way of the Civil Aviation (Subordinate Legislation) (Application) Orders 2006 and 2008, the Isle of Man is subject to EC regulations relating to insurance requirements. Section 12 of the Regulations on penalties is amended to reflect Isle of Man criminal law and procedures for convictions, otherwise the Island is subject to the same rules as the United Kingdom on what must be insured and to what level. Regulation (EC) No. 785/2004 (as amended by Regulation (EU) No. 285/2010) sets out the insurance requirements for all air carriers flying within, into, out of, or over the territory of a Member State (this is covered in more detail in the UK chapter). The CAA is the competent authority on the Island for enforcement and this mirrors the position in the United Kingdom. No insurance premium tax is payable in the Isle of Man, as opposed to the 6 per cent payable in the United Kingdom. VI COMPETITION The primary legislation in relation to competition on the Island is the Fair Trading Act 1996 (the FTA 1996). This legislation applies across all sectors of industry on the island, including the aviation sector, and gives the Isle of Man Office of Fair Trading (OFT) certain powers to enforce anti-competition regulations. Anti-competitive practices are defined by Section 8(1) of the FTA 1996 as follows: a person engages in an anti-competitive practice if, in the course of business, he pursues a course of conduct which, of itself or when taken together with a course of conduct pursued by another person or other persons, has or is intended to have or is likely to have the effect of restricting, distorting or preventing competition in connection with the production, supply or acquisition of goods in the Island or the supply or securing of services in the Island.

Under Section  8(8) of the FTA 1996, public authorities are also specifically brought under this provision, preventing anti-competitive practices by any such body. If it appears to the Council of Ministers, the highest-level decision-making body of the Isle of Man government, that any person has in the past or is currently pursuing a practice that could be considered anti-competitive, they may refer such an individual to the OFT for investigation and for a report to be prepared as to whether the practice in question was actually anti-competitive under the legislation. As an initial remedy the OFT may seek an undertaking from the individual, if such an undertaking ‘would remedy or prevent effects adverse to the public interest which

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Isle of Man the practice may now or in future have’. The OFT is required to review the operation of any such undertakings and make decisions as to whether the individual can be released from the undertaking or whether the undertaking should be revised. If no such undertaking is sought or given, then the OFT must submit its report to the Council of Ministers, who may then decide whether they think it should be referred to a  ‘Commission’, which may be any appropriate statutory board or government department. The Commission must then make its own investigations and conclude whether the individual has in fact engaged in anti-competitive practices and whether such a practice did, or might be expected to, operate against the public interest. This report is submitted to the Council of Ministers with suggestions as to any actions that may need to be taken to ensure that the effects of the anti-competitive practice are remedied. The Council of Ministers then has certain powers available to it in relation to the individual found to be engaging in anti-competitive practice. An order may be made prohibiting the individual from engaging in the practices identified in the report or any course of action of a similar form or effect. There are also further powers specified in Schedule 2 of the FTA 1996 in relation to the requirements that may be placed on the individual within an order, including a  requirement to terminate any agreements involving practices identified in the report as anti-competitive (unless they relate to employment of workers or their physical working conditions). VII

ESTABLISHING LIABILITY AND SETTLEMENT

There are no specific legal or procedural rules in operation on the Isle of Man in respect of claims brought in relation to aviation matters. Any and all legal proceedings that are related to the aviation sector (for example, claims for a declaration of ownership of an aircraft, or personal injury claims against an airline) will proceed in the Isle of Man courts in accordance with the usual rules of procedure adopted by those courts. Isle of Man law prescribes different limitation periods depending upon the nature of the claim. Pursuant to the Limitation Act 1984, claims for breach of contract and claims in tort must be brought within six years of the date on which the cause of action accrued. In respect of personal injury claims, the time limit is three years from the date on which the cause of action accrued (or the date on which the claimant became aware of the cause of action, if later). It must be noted, however, that the court retains discretion to relax the limitation period in respect of personal injury claims if there are equitable grounds justifying such a course of action. Although the Isle of Man High Court Rules do not contain pre-action protocols (such as are found in the English Civil Procedure Rules), the Isle of Man courts nonetheless expect parties to litigation to correspond with each other and make some effort to resolve the dispute prior to launching court proceedings. To this end, it is advisable for litigants at least to attempt alternative dispute resolution procedures such as mediation and arbitration prior to involving the court in the dispute. In respect of arbitration, in 1979 the Isle of Man ratified the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards

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Isle of Man (the Convention), meaning that awards made pursuant to the Convention will be recognised and enforced on the Isle of Man. The Isle of Man also has its own arbitration legislation in the shape of the Arbitration Act 1976. i

Notable case law

The Isle of Man Courts have not yet had cause to give judgment in any proceedings relating to passenger rights or claims brought by passengers against carriers. Most judgments (which are publicly available on the Isle of Man Courts’ website, www.judgments.im) concern applications for declaratory injunctions relating to the ownership of aircraft or freezing orders in respect of specific aircraft. Ausco Oil Limited and others (CHP 2014/58) Ausco Oil Limited and others (CHP 2014/58) concerned a dispute about the registration of an aircraft on the Isle of Man aircraft register. Concurrent proceedings had been commenced in Nigeria. The Isle of Man High Court initially granted an injunction restraining the respondents in the case from facilitating the deregistration of the aircraft on the Isle of Man, but the injunction was subsequently discharged on the grounds of material non-disclosure. Salaam v. Takieddine and another (CP 2009/43) Salaam v. Takieddine and another (CP 2009/43) was a dispute relating to the purchase of a special purpose vehicle (SPV) company, the sole asset of which was a Boeing Executive aircraft. The respondent in that case had paid a deposit of $4 million to purchase the SPV, but then, having allegedly discovered that the sale of the SPV to him was a ‘sham’, obtained a freezing injunction restraining the applicant from dealing with the deposit. The applicant was subsequently successful in discharging the freezing injunction on the basis that the respondent had not given full and frank disclosure at the original court hearing. Flexton v. Breeze (SUM 2012/08) In Flexton v. Breeze (SUM 2012/08) the defendant had agreed to sell a Cessna 303 aircraft to the claimant. The claimant paid the purchase price and used the aircraft for a period, but subsequently the defendant breached the contract by failing to transfer legal title to the claimant. The case contains an interesting discussion in respect of the issue of the use of goods by one party after it has discovered that it does not have legal title to those goods. VIII OUTLOOK The Registry continues to prove to be an unqualified success story and as a result the Isle of Man is seen as an industry leader for the registration of business jets and twin turbine engine helicopters. With the implementation of the ANO the Isle of Man can ensure that it is current and reflective of the changing face and development of the aviation industry, and this should help to ensure that its growth and reputation for high quality are maintained and continue in the future.

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Appendix 1

ABOUT THE AUTHORS

STEPHEN DOUGHERTY DQ Advocates Stephen is a senior associate in the corporate and commercial and insolvency departments. Stephen is also head of the firm’s British Virgin Isles (BVI) team. Stephen advises on all aspects of corporate and commercial law, aviation matters, solvent and insolvent insolvency matters and BVI litigation, insolvency and corporate and commercial law. Prior to joining DQ, Stephen practised in the BVI for a  number of years for leading offshore firms, and also spent time in their Cayman offices. DQ ADVOCATES The Chambers 5 Mount Pleasant Douglas Isle of Man IM1 2PU Tel: +44 1624 626999 Fax: +44 1624 626111 [email protected] www.dq.im

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