Cayman Islands: The Aviation Law Review (Fifth Edition)

I LOCAL REGISTRATION

i The regulator

The Civil Aviation Authority of the Cayman Islands (CAACI) is responsible for the regulation of the aviation industry within the Cayman Islands. A body corporate originally established under the Civil Aviation Authority of the Cayman Islands Law 1987 (the current law is the Civil Aviation Authority Law (2015 Revision)), this self-funding statutory authority has actually proven to be a revenue-generating operation for the Cayman Islands government.2

The CAACI's functions include those conferred on the Governor of the Cayman Islands by the Air Navigation (Overseas Territory) Order 2013 (ANOTO) or other similar regulations.3 The CAACI's authority covers all aspects of regulation and supervision of the aviation sector within the jurisdiction, including aircraft registration through the Cayman Islands Aircraft Registry operated by the CAACI (the Registry), safety of air navigation and aircraft (including airworthiness), regulation of air traffic, certification of operators of aircraft, licensing of air crews, licensing of air transportation services and certification and licensing of airports.4 The CAACI is also responsible for ensuring that civil aviation in the Islands conforms to the standards of the International Civil Aviation Organization, established by the Convention on International Civil Aviation, signed in Chicago on 7 December 1944 (ICAO).

The CAACI is headed by a director general and a statutorily appointed board of directors. The board is responsible for the effective implementation and performance of the CAACI in accordance with applicable law.5

The register maintained by the Registry (the Aircraft Register) is primarily a 'private-use category' register and aircraft registered thereon must not be used for commercial operations (i.e., for 'hire or reward') unless a separate air operator's certificate (AOC) is granted.6 Despite its relatively small size,7 the Registry has evolved as a highly regarded private aircraft registry.

ii Registration of aircraft

Requirements relating to the registration of aircraft are fully set out in the ANOTO.

Eligibility for registration

To register an aircraft with the Registry, the owner, or, if the aircraft is chartered, the charterer by demise, must be a 'qualified person' as defined in the ANOTO.

A qualified person includes:

  1. the Crown in right of Her Majesty's government in the United Kingdom or in right of the government of the territory;
  2. United Kingdom nationals;
  3. Commonwealth citizens;
  4. nationals of any European Economic Area state;
  5. bodies incorporated in any part of the Commonwealth and that have their registered office or principal place of business in any part of the Commonwealth; or
  6. undertakings formed in accordance with the law of a European Economic Area state and that have their registered office, central administration or principal place of business within the European Economic Area.8

An unqualified person holding a legal or beneficial interest in an aircraft or a share therein may still register an aircraft if he or she resides or has a place of business in the Cayman Islands and the CAACI is satisfied that the aircraft may properly be registered. Similarly, if the aircraft is chartered by demise (whether by dry or wet lease) to a qualified person the CAACI may permit registration, irrespective of whether an unqualified person is entitled as owner to a legal or beneficial interest in an aircraft or a share in the aircraft. Both of the foregoing exceptions are subject to the discretion of the CAACI and the full facts and circumstances must be presented to the CAACI before any such registration will be considered.

The ANOTO also provides that an aircraft shall not be registered or continue to be registered in the Cayman Islands if it appears to the Registry that:

  1. the aircraft is registered outside the Cayman Islands and that registration does not cease by operation of law upon the aircraft being registered in the Cayman Islands;
  2. an unqualified person holds any legal or beneficial interest in the aircraft;
  3. the aircraft could more suitably be registered in some other state (including the United Kingdom and its territories and dependencies) that is a party to the ICAO; or
  4. it would be inexpedient in the public interest for the aircraft to be or to continue to be registered in the Cayman Islands.

Requirements for registration of aircraft for private use

Applications for registration are made to the CAACI and applicants can typically take advantage of the CAACI's online portal, VP-C Online, to submit much of the documentation supporting the application.

The application process is as follows:

  1. submission of an aircraft registration application to the Registry and payment of deposit;
  2. satisfactory completion of financial and legal due diligence with respect to the applicant;
  3. issuance by the Registry of (1) notice of acceptance of the applicant, and (2) a reserved Cayman Islands registration mark;
  4. completion of airworthiness survey of aircraft by a CAACI surveyor;
  5. completion and submission of supporting documentation (including various technical forms); and
  6. effecting deregistration from existing state of registry (if applicable).

A Cayman Islands certificate of registration, certificate of airworthiness and all associated certification documents will be issued by the Registry on registration.

Requirements for registration of aircraft for commercial operations

An application for a Cayman Islands AOC permitting the holder to undertake commercial operations requires provision of certain information, including the following:9

  1. the official name, address and telephone number of the applicant;
  2. the types, serial numbers and registration marks of each aircraft for which a certificate is required;
  3. the purpose for which the aircraft will be operated;
  4. the specific location of the principal operating base and any other places at which the aircraft will be operated or based;
  5. the names and addresses of organisations responsible for all maintenance of each type of aircraft;
  6. the names, qualifications and experience of the accountable manager and nominated post holders and details of the duties for which each individual is responsible (with résumés); and
  7. the names, qualifications and experience of persons nominated to be responsible for conducting on behalf of the operator, the training and assessments specified in the relevant legislation.

In addition, the CAACI requires that the holder of a Cayman AOC operate a Cayman Islands office. An applicant for an AOC is encouraged to seek Cayman Islands legal advice on setting up a physical presence in the Cayman Islands to meet this requirement.

Fees payable on registration of aircraft

The fees payable on registration of aircraft are set out in the Air Navigation (Fees) Regulations 2010. A summary of these may be found on the CAACI's website at: www.caacayman.com.

Effect of registration

The registration of title to the aircraft constitutes prima facie evidence of ownership of the aircraft. However, such evidence is not conclusive. The ANOTO provides that, to the extent its provisions apply to Cayman Islands aircraft, such provisions have extraterritorial effect.10

No registration of leases

Leases are not required to be registered with the Registry in relation to Cayman registered aircraft and the law of the Cayman Islands does not otherwise provide for their registration by filing or recording in the Cayman Islands.

Deregistration of aircraft registered with the Registry

When it becomes necessary to deregister an aircraft from the Registry (following a sale or otherwise):

  1. the registered owner11 or the person responsible for the aircraft, must provide the CAACI with instructions to deregister the aircraft;
  2. the registered owner's financial account with the CAACI must be fully settled;
  3. if a certificate of airworthiness for export is required by the importing state, a CAACI surveyor must inspect the aircraft prior to issuance. To initiate this process a certificate of airworthiness request form must be submitted to the CAACI;
  4. the original certificate of registration must be submitted to the CAACI, with Section III on the reverse side signed by the registered owner of the aircraft or the person responsible for the aircraft (accompanied by the related certified power of attorney in the latter case);
  5. if an aircraft has a mortgage registered against it on the aircraft mortgage register maintained by the Registry (the Mortgage Register), the mortgagee must confirm in writing to the Registry how the mortgage is to be addressed following deregistration. If the mortgage is to be discharged, this must be effected prior to or simultaneously with deregistration. If not, the CAACI will require a certified or notarised confirmation letter from the mortgagee that:

    • the mortgage will not be discharged;
    • the mortgage remains in force; and
    • a notation will remain on the Mortgage Register; and
  6. if necessary, the CAACI will confirm to the new state of registry that the aircraft is being or has been deregistered from the Register.

In a default enforcement scenario, the above deregistration procedure applies save that the following will also be required:

  1. a notarised or original deregistration power of attorney (in favour of the person seeking to instruct the CAACI);
  2. proof of default under the agreement giving rise to the right to deregister the aircraft and the details thereof;
  3. proof of right to deregister the aircraft in an event of default (i.e., reference to the relevant section of the agreement);
  4. confirmation that the adversely affected party is seeking to enforce its rights under the agreement; and
  5. if the enforcement is contentious and the original certificate of registration cannot be obtained from the owner, an affidavit by the adversely affected party confirming that to be the case and requesting deregistration of the aircraft indicating the new state of registry.

To read this Chapter in full, please click here.

Footnotes

1. Dale Crowley and Wanda Ebanks are partners, and Shari McField and Barnabas Finnigan are associates at Maples and Calder.

2. CAACI revenues are generated from regulatory activities and the registration of aircraft (private and corporate) on the Cayman Islands Aircraft Registry. The CAACI's latest annual report indicates that 2013–2014 was another successful year for the CAACI, reporting its highest net income ever realised.

3. Civil Aviation Authority Law (2015 Revision), Section 5(1)(a).

4. Ibid., Section 5(1)(a).

5. Civil Aviation Authority Law (2015 Revision), Section 7(1).

6. Only six approved AOC holders are reported in the 2013–2014 CAACI Annual Report.

7. As at 19 May 2017, the CAACI records indicated a total of 241 aircraft were registered on the Cayman Islands Aircraft Registry (Active Aircraft Register on CAACI website at www.caacayman.com).

8. Air Navigation (Overseas Territories) Order 2013, Article 16(1).

9. More detailed information is available from the CAACI directly.

10. Air Navigation (Overseas Territories) Order, 2013, Article 188 (1).

11. References to 'registered owner' mean either the owner or the charterer by demise (as relevant).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Authors
Barnabas Finnigan
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