Common use of Emissions lien Clause in Contracts

Emissions lien. Pursuant to Council Directive 2008/101/EC, the European Union has amended Council Directive 2003/87/EC (the “EU ETS Directive”) so as to include aviation activities in the scheme for greenhouse gas emission allowance trading within the European Union. Accordingly to the AWG,334 it has been proposed in various member states that a regulator may, in respect of breaches of the EU ETS directive, exercise a fleet lien in respect of aircraft in a manner similar to the Eurocontrol right discussed supra. In such event, the appropriate regulator would have, in addition to having the power to ban aircraft operators which failed to do so, the right to detain and sell any and all aircraft that are operated by an operator (regardless of whether or not it owns such aircraft) which has failed to pay civil penalties imposed on it for failing to submit an emissions plan or failure to report as to emissions or to provide requested information as set out in the proposal. AWG contends that any such “right of sale and detention is unlawful and ambiguous and fails to adequately address the rights of parties who are property holders in an aircraft (or any part thereof) and who are not also operators of such aircraft.”335 It sets out the same arguments mutatis mutandis as it did in relation to the Eurocontrol right. It is difficult at this stage to determine the effect, if any, on any such new lien right of the case of Bosphorus Airways v Ireland.336 In that case, pursuant to EC Council Regulation 990/93 imposing sanctions on Yugoslavia, the Irish government seized an aircraft which was leased by a Yugoslav owner to a Turkish airline and which had been sent by the airline 332 At 71-74. 333 [1905] 2 K.B. 817 334 Aviation Working Group, Position Paper Objecting to Liens to Securing Airline Obligations under Rules Implementing the EU ETS, February 2011, at 6, at ▇▇▇▇://▇▇▇.▇▇▇.▇▇▇▇/Environmental_Issues.htm on 16 June 2011. 335 ▇▇▇▇://▇▇▇.▇▇▇.▇▇▇▇/pdf/Env.Annex1.pdf on 4 May 2009. 336 Grand Chamber Judgment of the European Court of Human Rights, 362 30.6.2005. to an Irish MRO for maintenance.337 The airline claimed this was a breach of discretion by the Irish government under Article 1 of ECHR. The court held however, that it was not, given that the Irish government had no discretion in the matter, being obliged to impound any aircraft to which Article 8 of EC Regulation 990/93 applied. The court held that there was a presumption that the European Union régime offered equivalent protection to the one that state parties should offer under the ECHR, and that, as the protection of the airline’s rights was not manifestly deficient, the presumption that ECHR had been complied with was not rebutted.

Appears in 2 contracts

Sources: Aircraft Operating Lease, Aircraft Operating Lease