Contributor: Sonal Sejpal – Partner, Linda Ondimu – Principal Associate, Tony Areri – Associate, Anjarwalla & Khanna
1. Which authority is in charge of the civil aviation registry in Kenya? Does Kenya use a single-registry system or is there a dual-registry system in place?
Kenya operates a single registry system with the registration of aircraft being the responsibility of the Kenya Civil Aviation Authority (the KCAA). The KCAA is the body responsible for all civil aviation functions in Kenya and their functions cover, inter alia, the registration of aircraft in Kenya, licensing of air services, certification and registration of aerodromes, the provision of air services and the establishment, and maintenance of a system for the registration and marking of civil aircraft.
2. Is the registry an operator registry or an owner registry (or both)?
Kenya maintains both operator and owner registry systems. Under the Civil Aviation (Aircraft Nationality and Registration Marks) Regulations, 2018, an aircraft eligible for registration may be registered by either the owner or operator of the aircraft.2 An aircraft is eligible for registration in Kenya if the aircraft is either owned or leased by a citizen of Kenya, an individual citizen of a foreign State who is lawfully admitted for residency in Kenya, a corporation lawfully organized and doing business under the laws of Kenya, or a government entity of Kenya provided that the aircraft is not registered under the laws of any foreign country.
3. What are the requirements and documentation to register an aircraft in Kenya? Include references to formalities such as notarisation, legalization, etc.
To register an aircraft in Kenya, an application for aircraft registration must be submitted with the KCAA in the prescribed form. Each application must show the citizenship of the applicant and be accompanied by evidence relating to ownership of the aircraft and be signed in ink. The form is available on the KCAA website (available at https://www.kcaa.or.ke/node/62, or here).
The application is required to contain the proper description of the aircraft that identifies it by reference to the manufacturer and, if the aircraft has previously been registered in Kenya or anywhere else, particulars of the registration mark of the aircraft, the name and address of the owner, the name and address of each person who holds a proprietary interest, and a description of the person’s proprietary interest (such as a financier or lessee), the physical location where the aircraft will be usually stationed and the name and signature of the applicant. An application for registration may be made by or on behalf of the owner provided that the applicant is legally entitled to the aircraft and a written notice is submitted to KCAA identifying the person making the application on behalf of the owner.
In practice the following are the documents/items that KCAA usually require to register an aircraft:
- A completed application for the registration form AC-AWS001C (the form is available at https://www.kcaa.or.ke/, KCAA website);
- A document to prove aircraft ownership i.e., a bill of sale;
- Copy of certificate of incorporation or registration of the owner or operator of the aircraft if the aircraft is owned/operated by a company or a certified copy of identity card or passport (proof of nationality status) if aircraft is owned by an individual;
- Letter from the operator of the aircraft (in the case where the operator is different from the owner) giving authority to register the aircraft. The letter should also contain the names of the directors of the operator and their specimen signatures and indicate who among the directors has the mandate to transact/act on behalf of the operator on matters relating to registration and operation of the aircraft or give appropriate power of attorney;
- A certified copy of the lease agreement if the aircraft is on lease (which lease should be approved by KCAA) together with a letter from the lessee indicating the names and the specimen signatures of the persons authorised to transact with respect to the aircraft on behalf of the lessee;
- In the event that the aircraft is financed, a letter from the financier stating that it does not have any objection to the aircraft being registered in Kenya together with a certified copy of the document creating the security interest in the aircraft in favour of the financier;
- A certified copy of the power of attorney from the owner/lessor and the lessee authorising the dealing of the registration of the aircraft on behalf of the owner/lessor and the lessee (in case the aircraft is not being registered by the owner or the lessor or the lessee);
- Original Customs (Kenya Revenue Authority) Certificate of Clearance in respect to the aircraft;
- Original clearance certificates from Kenya Airports Authority and KCAA confirming payment of air landing and air navigation fees together with other regulatory fees;
- Certificate of Deregistration of the aircraft from the previous state of registry, or a letter from the manufacturer confirming type and serial number if the aircraft is direct from the factory and has never been registered in any other State (it should be noted that in practice proof of deregistration must be sent by the former registry direct to KCAA (State to State and not presented by the applicant));
- Aircraft inspection acceptance for registration note (in case the aircraft is being registered in Kenya for the first time). Prior to registration, the aircraft will be subject to an inspection by the airworthiness section of KCAA to ascertain the aircraft is acceptable for registration;
- A certified copy of the current insurance certificate;
- Proof of payment of the prescribed fee; and
- Letter from the owner of the aircraft to KCAA confirming ownership and stating that the owner does not have any objection to the aircraft being registered in Kenya.
4. What fees are payable to register an aircraft in Kenya?
The following fees are paid to KCAA for the issuance of a Certificate of Registration or re-registration. Please note that these fees may be reviewed by KCAA from time to time.
|Registration of a glider||KES 6,000/= (approx. $60 USD)|
|Registration of a balloon||KES 10,000/= (approx. $100 USD)|
|Registration of aeroplanes, helicopters, or gyroplanes||KES 15,000/= (approx. $150 USD)|
|Additional charges for any special registration||KES 45,000/= (approx.$450 USD)|
|Reservation of Special Registration Mark Series||KES 20,000/= (approx. $200 USD)|
|Aircraft Certificate of Registration Cancellation||KES 10,000/= (approx. $100 USD)|
|Inspection and acceptance of an aircraft on the Kenyan Register||30% of fee for issuance of Certificate of Registration|
|Obtaining copy of the Civil Aircraft Register||KES 3,000/= (approx. $30 USD)|
5. Are there any weight and/or maximum age restrictions to register an aircraft in Kenya?
There are no weight and/or maximum age restrictions when registering an aircraft in Kenya.
6. Does registration of an aircraft in the national registry constitute proof of ownership under the laws of Kenya?
Registration of aircraft in the Kenya’s national registry and the subsequent issuance of the Certificate of Registration by KCAA constitutes prima facie evidence of ownership of the aircraft. However, such evidence is not conclusive evidence of ownership given that the Register does not confirm legal title. It is worth noting that all certificates of registration issued by the KCAA are endorsed with the following note: “This Certificate is not proof of the Aircraft Ownership”.
7. How is an aircraft title transfer effected in Kenya? What are the formalities required to register such title transfer in the national registry of Kenya (e.g., notarization, legalization etc.)? Please summarize the related costs and procedures.
The transfer of aircraft in Kenya is effected by way of a bill of sale. The bill of sale documents the agreed terms between the transferor and transferee including the consideration for the sale of the aircraft.
In Kenya, every instrument chargeable to stamp duty is required to be stamped within 30 days after it is first executed or if executed outside Kenya, within 30 days after it is received in Kenya. No instrument or document chargeable to stamp duty can be admitted in evidence in any proceedings (other than criminal proceedings) unless it is duly stamped. A bill of sale is chargeable to nominal stamp duty (approximately $2 USD) under the Stamp Duty Act (Chapter 480 of the Laws of Kenya). Therefore, once the bill of sale is duly executed by the relevant parties, stamp duty must be paid to the Collector of Stamp Duty in Kenya. There is no requirement for the bill of sale to be notarized or legalised in Kenya.
If the aircraft is registered in Kenya, the transferee must then write to the KCAA and inform them of the change of ownership of the aircraft. If the aircraft is not registered in Kenya, the duly stamped aircraft bill of sale will be required as proof of aircraft ownership when submitting an application for registration.
8. What information and details are reflected in the certificate of registration of an aircraft?
The following particulars are reflected in the Certificate of Registration3
- the nationality mark of the aircraft, and the registration mark assigned to it by the KCAA;
- the name of the manufacturer and the manufacturer’s designation of the aircraft;
- the serial number of the aircraft;
- the name of the owner;
- address of the owner;
- name or logo of the Authority;
- the number of the certificate;
- the name and address of every person who is entitled as owner to a legal interest in the aircraft or a share therein, or, in the case of a lease agreement or financial arrangement, the names and addresses of lessee and lessor or as the case may be, the financier;
- conditions with regard to which it is registered; and
- date of issue.
9. Are the entries in the aircraft registry of Kenya made available to the public upon submission of a specific application to the competent authority? Are there any fees payable for this?
The entries are available upon a party making a formal request and paying the applicable fee of KES 3,000 (approx. $30 USD) to the KCAA, which will then provide an extract of the register relating to the aircraft.
10. What kind of aircraft operations can be conducted with aircraft registered in Kenya (i.e., private use, commercial air transport or both)?
Both private and commercial air transport operations can be conducted with aircraft registered in Kenya. However, it is worth noting that commercial air transport operations4 are subject to heightened regulatory scrutiny. For example, no operator can engage in commercial air transport in Kenya unless the operator is issued with an air operator certificate by the KCAA.
11. Does the civil aviation authority in Kenya authorise the operation of foreign registered aircraft? If so, with which countries has Kenya entered into bilateral agreements on the basis of article 83-bis of the ICAO Chicago Convention for the delegation of regulatory oversight?
The KCAA does not generally authorise the operation of foreign registered aircraft. An operator in Kenya can lease a foreign registered aircraft but only for six months (as provided in the Civil Aviation (Air Operator Certification and Administration) Regulations, 2018), renewable only once. The aircraft, subject of the lease herein, will therefore eventually have to be registered in Kenya. Kenya is not party to any 83-bis bilateral agreements.
12. Is there a separate register of aircraft mortgages and/or leases and/or security interests in Kenya?
Kenya does not have a separate register of mortgages, rights over aircraft, or a law that specifically governs the same.
13. What are the formalities required to register a mortgage / lease / security interest in the national registry of Kenya (e.g., notarization, legalization etc.)? Please summarize the related costs and procedures.
While the KCAA does not maintain a separate register of security interests, the KCAA typically includes the financier’s interests and other interests in aircrafts in the register of aircrafts and notes the interests of financiers/lessors/lessees in the Certificate of Registration5 A certified copy of the mortgage or the document creating the financial arrangement together with a letter from the financier to the KCAA requesting for its interest to be registered must be produced to the KCAA for the KCAA to register the financier’s interest. It is our understanding that the KCAA intends to introduce legislation in relation to the registration of mortgages, but this has still not been done.
Where an aircraft mortgage over an aircraft is created by a Kenyan company (as mortgagor), registration at the Companies Registry in accordance with section 878 of the Companies Act, 2015 is necessary. In order to perfect the charge under the Companies Act, the charge must be assessed for stamp duty at the rate of 0.1% of the secured amount. The stamped charge should then be presented to the Registrar of Companies together with the duly completed statutory form for registration. For charges created in Kenya, the stamped charge should be presented for registration within 30 days of the date of the charge. Where the charge is created outside Kenya, it should be presented for registration within 21 days of the date of its receipt in Kenya. Registration fees will vary between KES 2,000 (approx. $20 USD) and KES 14,000 (approx. $140 USD) depending on the amount secured by the charge.
It is noteworthy that failure by a Kenyan company to meet the above deadlines amounts to a criminal offence and upon conviction, each defaulting officer of the company will be liable to a fine not exceeding KES 1,000,000/= (approx. $10,000 USD). On successful registration, a certificate will be issued by the Companies Registrar which shall constitute conclusive evidence that the requirements as to registration have been complied with.
14. Is a mortgage priority notice an available security instrument for aircraft financiers in Kenya?
A mortgage priority notice is not an available security instrument for aircraft financiers in Kenya.
15. Does an aircraft mortgage duly registered in the national registry of Kenya extend to engines and other parts of such aircraft (either installed or not on the airframe)?
Kenya does not have a separate register of mortgages or rights over aircraft and does not maintain a specific register over parts of an aircraft.
16. What statutory liens (if any) would rank prior to an aircraft mortgage duly registered in the national registry of Kenya?
Under the Second Schedule to Kenya’s Insolvency Act (No. 18 of 2015), money realised from the assets of an insolvent company is applied to meet the claims of creditors in the order of priority set out below. It should be noted that this ranking is after fixed charge security holders have been paid since secured assets would not form part of the insolvency estate.
Generally, the claims are settled in the following order:
- First priority claims: Liquidators’ and administrators’ fees and expenses together with reasonable costs incurred during the court proceedings. Costs incurred by a creditor to preserve an insolvent company’s assets are also included.
- Second priority claims: Employee-related claims (such as unpaid wages and contributions to occupational pension schemes). Outstanding statutory deductions from employees’ salaries that were not paid (for example, PAYE, NSSF (retirement benefits contribution), NHIF (statutory health insurance contributions)) are also due.
- Third priority claims: Unpaid taxes, such as customs and excise duty.
- Fourth priority claims: Holders of non-crystallised floating charges.
- Unsecured creditors: These claims having the same priority rank equally among themselves and are payable on a pari passu basis.
In addition, Kenya has made the following declaration under Article 39(1)(a) of the Cape Town Convention relating to priority of a non-consensual right or interest and provides:
‘‘Kenya declares that the following categories of non-consensual right or interest:
- Liens of workers for payments due arising out of employment relations;
- Liens created by repairmen on goods in their possession;
- Liens created by bailees on goods in their possession; and
- Taxes, duties and or levies due to the Government,
have priority under its law over an interest in an object equivalent to that of the holder of a registered international interest and shall have priority over a registered international interest, whether in or outside insolvency proceedings.’’
17. Do the laws of Kenya provide for possessory rights and/or rights of detention over aircraft in favor of third parties (such as airport taxes, customs duties, air navigation charges, crew’s wages, MRO’s receivables)?
Section 35 (5) of the Civil Aviation Act gives the KCAA’s Director General powers to seize and detain an aircraft where an operator has failed to pay any fees payable to the KCAA. The KCAA may also detain an aircraft if serious safety and security concerns are identified.
18. Are foreign law-governed security agreements (e.g., mortgages) recognized in Kenya in order to validly create a security interest over an aircraft registered in the national registry of Kenya? If so, are there any formalities/requirements to bear in mind?
Foreign law-governed security agreements are recognized in Kenya. Kenyan contract law is based on the fundamental principle of freedom to contract which gives the parties the right to agree on a choice of law that would govern the performance of the contract and dispute settlement that may arise from performance or non-performance of the contract. Where the parties to a contract expressly stipulate that the contract shall be governed by a particular law, that law will be the law of the contract. The courts of Kenya will observe the choice of the said foreign law as the governing law of the contract, provided that the choice of law was made in good faith and not for extraneous purposes or to perpetuate fraud or any other illegal purpose and that there is no objection on the grounds of public policy.
That said, it is important to note that in the case of Blue Sky One Ltd v Mahan Air (the Blue Sky case)6 which would have persuasive authority in Kenya, the English High Court confirmed that the validity of an English law aircraft mortgage is to be determined by the law of the place where the aircraft is situated (the lex situs) on the date the English law aircraft mortgage is executed. In addition, the court held that in determining whether the mortgage was valid, one has to look at the domestic law of the lex situs rather than the contractually agreed governing law of the mortgage. Kenya recognises an English law aircraft mortgage. The effect of the Blue Sky Case is that Kenyan law will be the law governing the validity of the mortgage if the aircraft is situated in Kenya at the time the aircraft mortgage is executed.
19. Are foreign law-governed leases recognized in Kenya in order to validly lease an aircraft registered in the national registry of Kenya to a lessee incorporated in Kenya? If so, are there any formalities/requirements to bear in mind?
Foreign law-governed leases are recognized in Kenya. As discussed above, Kenyan contract law is based on the fundamental principle of freedom to contract which gives the parties the right to agree on a choice of law that would govern the performance of the contract and dispute settlement that may arise from performance or non-performance of the contract.
20. Has Kenya ratified the Cape Town Convention on International Interests in Mobile Equipment and the related Aircraft Protocol? Has Kenya made any declarations to better determine the scope of application of the Convention / Protocol in Kenya? If so, what is the impact of such declarations on aircraft registration issues? Are there any specific aspects relating to the enforcement of IDERA’s to be considered?
Kenya ratified the Cape Town Convention and the related Aircraft Protocol on 13 October 2006. Kenya has also lodged several declarations relating to both the Cape Town Convention and the Aircraft Protocol.7 The declarations do not affect aircraft registration and do not affect the enforcement of IDERAs.
21. What are the requirements and documentation to deregister an aircraft from Kenya? How does the aircraft deregistration process work?
The KCAA may, deregister or cancel the registration of an aircraft upon application by the registered owner for the purposes of registering the aircraft in another State or for any other purpose; or upon the destruction of the aircraft or its permanent withdrawal from use.8
Before deregistering an aircraft, KCAA will require the registered owner of the aircraft to return to KCAA the Certificate of Registration, settle all liens or encumbrances attached to the aircraft and remove all nationality and registration marks assigned to the aircraft.9
The following documents are required when applying for deregistration:
- The original and duly signed Certificate of Registration;
- Proof of payment of the prescribed fees;
- Landing and parking fees clearance;
- Air Navigation charges clearance; and
- Evidence of release from previous lease agreement or financier (if applicable).
In many financing transactions, financiers ask mortgagors to provide deregistration powers of attorney enabling the financier to deregister the aircraft in the event of a default under the terms of the loan agreement.
22. What fees are payable to deregister an aircraft from Kenya?
The fee payable is KES 10,000/= (approx. $100 USD).
23. Is the consent of the mortgagee / lessor (as the case may be) required in order to deregister an aircraft from Kenya?
In Kenya, the KCAA requires the registered owner or a mortgagee whose interest has been noted on the aircraft’s Certificate of Registration to consent to the deregistration of the aircraft.
24. What are the usual practical difficulties (if any) involved in deregistering aircraft from Kenya?
Deregistration of the aircraft may be difficult in the event the process involves an operator who impedes access to the removal of the aircraft from the jurisdiction. Administrative challenges such as further information requests at the KCAA may also delay the process.
In addition, the process may also be delayed where there is a financier or lessee who has not filed the requisite documents with the KCAA, such as the letters of consent to allow the deregistration to proceed. This is because the financier must file the relevant documents at the KCAA which are subject to further verification.
25. How long does deregistration take, both where there is co-operation from the defaulted party (mortgagor / lessee / Operator) and where there is no such co-operation from it?
In leasing and financing transactions, the lessees and mortgagors are asked to provide deregistration powers of attorney enabling the seamless deregistration without the need for cooperation by the defaulted party. Following this, the timeline for the deregistration process varies on a case-by-case basis, but ordinarily takes five to 21 business days.
26. Please outline the applicable repossession rules under the national laws of Kenya (and the Cape Town Convention, if applicable) following an event of default under a mortgage or a lease, including registration issues with the national registry in Kenya.
Upon an event of default, the lessor may peacefully take possession of the aircraft provided that this is a stipulated term of the lease or the lessee otherwise agrees. The lessor will be required to write to KCAA to ground the aircraft to enable it to take possession of the aircraft. KCAA usually requires that all the charges that have accrued in respect of the aircraft to KCAA and any other government entity be paid first before it grounds the aircraft. The lessor must also have obtained an Irrevocable Deregistration and Export Request Authorisation (IDERA) signed by the lessee and recorded with KCAA for KCAA to agree to ground the aircraft.
A lessee can accede to a lessor’s request to return or surrender the aircraft. Alternatively, if the lessor can gain access to the aircraft, the lessor can proceed with repossession. In the event that the lessee is not cooperative, the lessor can apply to the High Court for an order to repossess or sell the aircraft.
The lessor’s rights to repossess can be impeded by a lessee by applying to the courts for injunctive orders to prevent repossession of the aircraft by a lessor or orders for the restoration of the repossessed aircraft.