Aircraft Lease Agreements – Governing Law

Within the aircraft lease agreements, we often talk about aircraft leasing and the importance of a lease agreement; we also know that many lease companies (lessor) are not based in the same country as the company who leases the aircraft (lessee) – one topic of note therefor is always the lease agreement “Governing Law”.

You might be curious about the lease agreement and of course, where is the lease agreement valid and what law does it apply with regards to the governing body or jurisdiction.

This is covered in the lease agreement, and it is noted in a section that will state the governing jurisdiction; while not considered during a lease return or review looking at records directly, it is an important part of the lease agreement itself.

Such conditions might include wording like:

“Governing Law – This Agreement is, and any non-contractual obligations arising out of or in connection with it shall be, governed by and shall be construed in accordance with the laws of England.

Jurisdiction – The courts of England are to have jurisdiction to settle any disputes arising out of or in connection with this Agreement (including a dispute regarding the existence, validity, or termination of this Agreement) and any dispute relating to non-contractual matters (a Dispute).

(b) The parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no party will argue to the contrary.

(c) This clause is for the benefit of the parties to this Agreement only. As a result, no party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the parties may take concurrent proceedings in any number of jurisdictions.”

Here you can see that it is stated disputes arising from the agreement will be ruled in England.

There are many statements in the lease agreement that we can overlook as they do not directly affect us during a lease return or lease out regarding the technical records, but they of course are also important with regards to their implications in the event of a dispute in this case.

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