Philippines
Answer ... The following statutes apply to aviation finance transactions in the Philippines:
- the Civil Code of the Philippines, which is the general law covering contracts and obligations;
- the Civil Aviation Authority Act (9497/2008), which is the special law covering aircraft registration and operations; and
- the Financing Company Act (8556/1998), as amended, which governs Philippine financing companies.
Philippines
Answer ... The High Court of the Philippines has held that no conflicts rule on the validity of contracts is expressly provided for under Philippine law. Nonetheless, choice of law is recognised by the Philippine courts under the Civil Code provision that the parties are free to stipulate the terms and conditions of their contract, provided that such terms and conditions are not contrary to the laws, morals or public policy of the forum.
In preparing for an aircraft finance transaction, the Philippine courts will consider:
- where the contract is made, is negotiated and is to be performed; and
- the domicile, place of business or place of incorporation of the parties.
All of these factors are taken into consideration in determining the validity of choice of law.
Philippine government agencies, tribunals and courts are formalistic insofar as foreign-issued or foreign-executed documents are concerned. Generally, these foreign-sourced documents must be notarised and apostilled (or consularised or legalised in the Philippine consulate where signed) in order to be recognised and enforced in the Philippines. Documentation such as the aircraft finance transaction documents that must be filed with the Civil Aviation Authority of the Philippines (CAAP) must be apostilled if foreign sourced.
The practical effect of this is that the aircraft owner-lessor – even if it signs through a counterpart outside the Philippines – should have its counterpart notarised and apostilled, since the lease will be filed with CAAP.