On Reports of Potential Reregistration of Aircraft in Breach of the 1944 Chicago Convention

According to media reports, the President of the Russian Federation Vladimir Putin recently signed a bill into law that would allow Russian-based airlines to re-register foreign owned airplanes on the Russian national register to enable them to be flown nationally within Russia, even though those airplanes are duly registered abroad, mostly in Ireland or Bermuda.[i] Russia is one of the biggest markets world-wide for leased aircraft. Currently, Russian-based airlines operate over 750 aircraft, 550 of which are foreign-owned.[ii]

This retaliatory move against western sanctions may be prompted by a sense of necessity to keep domestic aviation service running but it will, if implemented, have a serious impact on the regulatory aviation regime globally because Russia will then be not only in breach of its Cape Town Convention obligations[iii] but also of its obligations under the Chicago Convention,[iv] which underpins modern aviation as we know it.

The Cape Town Convention, together with its Aircraft Protocol, facilitates and protects interests of lessors and financiers in airframes, aircraft engines, and helicopters. For this purpose, the Convention creates an international registry to record, establish priority, and provide advance information to prospective creditors and lessors about existing international interests. Signatories commit themselves to respecting the contractual arrangements between the parties as to what constitutes a default under the relevant contracts, the governing law to interpret those contracts, and the choice of legal system to adjudicate disputes, as well as providing remedies to enable, among other things, swift repossession in the event of a default. In addition to the protections afforded by the Cape Town Convention, lessors, wary of leasing to an airline based in a country with an operator-only registration system such as Russia (where there may be concerns as to their ability to deregister the aircraft in the event of a default) have the opportunity under Article 83bis of the Chicago Convention to keep the aircraft registered in their own country. Under Article 83bis, the State of registration and the State of the airline operator may, if they agree at the sovereign level, sign a bilateral agreement that transfers and delegates certain responsibilities under the Chicago Convention for the regulation and safety oversight for a leased aircraft from the State of registration to the State of the operator. This can be important in the case of leased aircraft because it allows the State of registration, ordinarily the State in which the lessee as the owner of the leased aircraft is incorporated, to maintain and keep the aircraft on its register. Such Article 83bis delegation agreements have been signed between Ireland and Russia and between Bermuda and Russia. However, it is noteworthy that in both cases the bilateral delegation agreement expressly excludes an Article 31 delegation, which means that certification of airworthiness of aircraft was not delegated to Russia. This is the reason why Ireland and reportedly Bermuda, the latter acting through the UK Aviation Authority, have begun to revoke the certificates of airworthiness for Russian-operated aircraft leased in Ireland and Bermuda as both countries are presently unable to discharge their duties to ensure that the aircraft remain airworthy.

Effectively this would mean that these leased aircraft are grounded, because under the Chicago Convention no Contracting State shall allow an aircraft to be flown internationally without valid airworthiness certification.[v]

This is what Russia aims to circumvent by allowing Russian operators to re-register foreign-owned aircraft on their national register. It constitutes not only a breach of the bilateral Article 83bis agreements, which it has with Ireland and Bermuda, but it also strikes at the very heart of the Chicago Convention itself.

The Chicago Convention only allows one State of registration at any given time.[vi] To register the aircraft in another State, not only is the approval of the operator needed, but more importantly also the consent of the current State of registration, which would first need to de-register the aircraft. Without the consent of the current State of registration, the de-registration and subsequent re-registration in a new contracting State is not possible under the Chicago Convention. Both Ireland and Bermuda have not agreed to de-register the aircraft and thus if Russia were to allow the re-registration of the aircraft on the Russian national registry in these circumstances, it would be in breach of the Chicago Convention and both Ireland and Bermuda would have no choice but to bring a complaint before the International Civil Aviation Organization (ICAO), since third countries would need to be warned of the invalidity under the Chicago Convention of any Russian registration and any Russian-issued certificates of airworthiness in respect of such aircraft.

Further, since Ireland and Bermuda have begun to revoke the certificate of airworthiness, any State that allowed such a re-registered aircraft to traverse over or fly into its airspace, or to depart from its airspace, would likely equally be in breach of its obligations under the Chicago Convention. What are the implications for the Chicago Convention should such (until recently unimaginable) events occur?

Possibly, Russia could designate the aircraft as State aircraft, which would provide friendly States with the excuse that the Chicago Convention does not apply. However, this does not change the fact that the aircraft were taken by Russia in violation of the Chicago Convention in the first place. Russia could argue that it is entitled to act under Article 89 of the Chicago Convention, which provides for a country’s freedom of action in times of war or declared emergency, but this has not, to the authors’ knowledge, ever been tested. Any dispute in respect thereof could be brought to the ICAO Council by Bermuda or Ireland. The ICAO Council would be obliged to hear the complaint.

There are, however, even further implications. Registration of an aircraft does not only affect safety oversight, but it also anchors the nationality of an aircraft. An aircraft has the nationality of the State of registry.[vii] This is one of the fundamental principles of aviation law without which incidents onboard an aircraft would presumably fall under the lex loci of the State overflown.[viii] The State of registration has quasi-territorial jurisdiction (e.g., for crimes committed on board) and the aircraft maintains its nationality even when on the ground in a foreign country. Coincidentally, this is a legal fact which the Soviet Union used to its advantage during the famous 1979 Godunov defection in order to keep American authorities off a Soviet registered airplane.[ix]

Therefore, the forced re-registration of the leased aircraft, which in the view of the authors is illegal under the Chicago Convention, constitutes a breach of sovereignty of both Ireland and the United Kingdom, which has sovereignty over Bermuda. Equally, any other State that would recognise any purported Russian registration would risk being seen to infringe on the sovereignty of Ireland and the United Kingdom and prima facie be guilty of allowing aircraft to operate without valid certificates of airworthiness in breach of the Chicago Convention.

The situation in Russia is an (already) burning powder keg and the question which the aviation community urgently needs to ask is whether there is a way out of it. On the facts available to us so far, we do not see how. The deadline set by the European Union to terminate all leasing agreements with Russian-based operators is fast approaching and Russia seems determined to force, or at least to facilitate, re-registration in violation of the Chicago Convention. The resilience of the Chicago Convention will be tested in a way it has never been tested before. Issues at the very heart of the Convention, the very principles upon which this treaty rests, will be put to the test, with implications well beyond Russia. In the end, the survival of the system of civil aviation under the Chicago Convention will depend on how other countries react if they allow these aircraft into their sovereign airspace while not validly registered or certificated.