The Research Of Legislation On The Registration Of Aircraft Financing Lease In China

For the reason that the price of aircraft is tag, the financing lease becomes the major type of aircraft transaction in current aircraft transaction market. The rights on aircraft, as special movable, should be published in form of registration in the international legislation practice. It is of most valuable to improve the system of the financing lease registration of aircraft to protect the benefit in aircraft transaction. The target of this paper is to research deeply into the system of the financing lease registration of aircraft combining the international legislation practice and the illustration to the Article 33 in Civil Aviation Law to identify the meaning of the system of the financing lease registration of the lessee’s rights of possessing the aircraft, to indicate the existing issue of the Civil Aviation Law and to make advise to restructure the system of the financing lease registration of the lessee’s rights of possessing the aircraft. Meantime, the opinion on the interpretation and application of the article in terms of aircraft financing lease in Civil Aviation Law will be proposed to provide reference to the settlement on aircraft financing leasing dispute.The purpose of the system of the financing lease registration of the lessee’s rights of possessing the aircraft is to confirm the corresponding rights and make it published. It is similar with the registration of general civil rights in the legal foundation and judicial practice. The system of the financing lease registration of the aircraft consists of the procedural rules of registration and the substantial registration matters, including administrative department of registration, the main party of registration, the object to be registered, the form of examining the registration, the effect of registration and the duty of false registration. The effect of registration, the core part of the system of the financing lease registration, influences the form of examining and the duty of false registration indirectly.There are two types of regulation on the effect of registration in practice summarized the registration validity doctrine and the registration against the third party doctrine in theory. Under legal principle of registration validity doctrine indicating that the rights are null or void without registration, the registration is kind of behavior setting up rights with deep public law meaning. The rights are still effect even without registration under the regulation of the registration against the third party doctrine implying the respect to the autonomy of will. But the rights cannot be against the third party without registration. Under the registration validity doctrine, the registration department should examine the corresponding material substantially to make sure the content true and valid. Under the registration against the third party doctrine, the registration department only needs to examine the material formally.Except for the effect of registration, the object of the registration is also one of the most important parties. And the legislation in China is different from the international corresponding legislation in terms of the object of the registration. The object of registration regulated in Cape Town Convention is international profit to the whole aircraft besides the body and engine of the aircraft. But the object of registration is only in the form of right on the whole aircraft.It is typical of the Geneva Convention, the Cape Town Convention and U.S. Law in the international legislation. The best contribution of the Geneva Convention to the whole protecting system of aircraft consisting of the system of the registration of aircraft is the proposition of the concept that the rights of aircraft should be protected specially and the determination of the basic scope of aircraft rights protection. But there are no detail regulations on the financing lease of aircraft in the Geneva Convention for the financing leasing market of aircraft was not well developed when the Geneva Convention turn into effect.The Cape Town Convention adds some regulation creates some new rule on aircraft transaction including taking the international profit as the object of protection and extending the object to the international profit from the whole aircraft to the body and the engine of the aircraft. Meantime, the Cape Town Convention inherits the rule of the registration in civil law regulating the registration against the third party doctrine as the effect of the registration which guarantees the join between the national law and international law. It also exist some deficiency in the Cape Town Convention like protect the possessory excessively which can be indicated by the rule of international profit lacking of the rules emphasizing the protection to the lessee.As the developed aircraft manufacturing and transacting country, USA has huge experience in legislation and judicature in terms of registration of aircraft. At the level of federal legislation, the Chapter 49 of U.S. Federal Code regulates the registration of aircraft. U.C.C., which is more influencing than federal law, plays an important role in the financing lease of aircraft at the level of state legislation.There are some technical legislative issues in the system of the financing lease registration of the aircraft. For example of the Article 33 in provision of Civil Aviation Law, there are some issues should be mentioned, like the ambiguous meaning of the word “against”, the unreasonable express of “possession” and the lack of the specific scope of “the third party”, and so on. On the basic of the analysis to the legal theory, the word “against” provided in the Article 33 of Civil Aviation Law indicate the “complete against doctrine”, which means the possession of the lessee is exclusive to the other debt on the target matter. The “possession” provided in the article means the financing lease rights of lessee formulated by contract, which include the possessory, instead of pure right of possession. The reasons the word “possession” being used are as follows. Firstly, the possession still indicated a type of right rather than a kind of facts when formulating the Civil Aviation Law. Secondly, the core of the financing lease rights of lessee is the rights to possess the target matter. Thirdly, the character hire-purchase strengthens the actual value of possession in the 4typical financing lease. The meaning of the third party should be interpreted as the bona fide interested party of financing leasing target matter on the basic of the legal theory and the practice of the judiciary. It doesn’t matter that what character of the rights of the interested party and whether the interested party.The legal foundation of the corresponding provisions in Civil Aviation Law is to register the financing lease of aircraft to protect the right of lessee such as possession and expected ownership. The former guarantees the protection of the rights of the lessee during the performance of the financing lease contract. The later indicates the warranty that the lessee can acquire the target matter after the fulfillment of the contract. The balance between the security and the efficiency of the transaction can be well keep in this way leading the lessor and lessee both cannot dispose of the target matter unilaterally and warranting the channel the bona fide third party can acknowledge the rights registered on the target matter.Meantime, the provisions of Civil Aviation Law are consistence with the legal spirit of the “rent against sale” in civil law theory emphasizing the protection to the steady condition existed and promise which indicates the restriction on the individual free will. The kind of provision implies the value judgment that the behavior of pursuing the most valuable profit should be intervened by legal and moral mind and the origin rights and obligations should be protected and confirmed prior to the derivative rights and obligations.Wholly speaking, the improvement to the provisions of Civil Aviation Law should be taken as follows. Firstly, refining the provision to adjust the express of “possession” and indicate the specific scope of the third party and inheriting the provisions like the form and effect of the registration. Secondly, concluding the body and engine of aircraft into the scope of objects of the registered rights to settle the issue of protection to aircraft parts of high value in the financing lease. Thirdly, unite the registration system regulated by the people’s Bank of China credit management center with the registration system of the civil aviation administration provided by Civil Aviation Law to confirm the state of the civil aviation administration the major administrative department. Fourthly, adding the claiming right on the registration of financing lease of aircraft to guarantee the lessor and less will comply with the registration procedure to confirm the effective so that the rights of parties will be warranted better.