On October 3, 2023, the Ministry of Corporate Affairs issued a notification exempting transactions and agreements relating to aircraft, aircraft engines, airframes, and helicopters from the applicability of moratorium under Section 14(1) of the Insolvency and Bankruptcy Code, 2016. The declaration of moratorium under said Section prevents the institution of suit against, and recovery of property in the possession of the corporate debtor till the completion of the insolvency resolution process.
This notification is based on the Convention on International Interests in Mobile Equipment and the Protocol on matters specific to Aircraft Equipment which were adopted in the year 2001. India acceded to the said Convention and the Protocol in March 2008.
Subsequently, the Ministry of Civil Aviation introduced the Protection and Enforcement of Interests in Aircraft Objects Bill, 2022, to facilitate the repossession of aircraft equipment. Since the Bill has not been passed by the Parliament, the provisions of IBC took precedence leading the National Company Law Tribunal to grant a blanket moratorium during Go First’s insolvency resolution proceedings.