29.1 Registration of rights of a Brazilian registered aircraft
The Brazilian Aeronautical Registry (“RAB”), operated by the Brazilian Agency of Civil Aviation (“ANAC”), is the public registry for recording ownership and other rights related to Brazilian-registered aircraft.
The RAB is responsible for: (i) issuing certificates of registration and airworthiness; (ii) registering aircraft; (iii) recording liens and encumbrances; and (iv) issuing certificates to evidence title and registered liens or encumbrances.
The RAB routinely registers leases, sub-leases, aircraft mortgages, novation agreements, security assignments, and other relevant liens or securities for Brazilian-registered aircraft. A RAB Certificate serves as evidence of such registrations. Parties filing documents with the RAB must provide proof of their authority to execute them, such as a power of attorney or corporate documents.
The transfer of title to a Brazilian-registered aircraft becomes effective upon the execution and registration of a bill of sale with the RAB. Such registration, as stipulated in Articles 72 (II) and 115 (IV) of the Brazilian Aeronautical Code (“BAC”), constitutes proof of ownership.
Documents executed abroad must be notarized, apostilled, and translated into Portuguese by a sworn public translator before filing with the RAB. For a bill of sale executed in Brazil, the document must: (i) be signed by both seller and buyer; (ii) include signatures of two witnesses; (iii) have all signatures notarized for authenticity or digitally signed via the ICP-Brazil platform; and (iv) be translated into Portuguese by a sworn public translator, if applicable.
In addition to RAB registration, creditors, owners, or lessors typically register their international interests in aircraft transactions with the International Registry under the Cape Town Convention.
29.2 Leases
The Brazilian Aeronautical Registry (“RAB”), Brazilian courts, the Central Bank of Brazil, the Federal Revenue Service, and other authorities recognize aircraft lease agreements.
The choice of foreign law to govern a lease agreement is valid in Brazil, provided it complies with Article 9 of the Law of Introduction to Brazilian Law (Decree-Law No. 4,657 of September 4, 1942). This article stipulates that contract obligations are governed by the law of the place where the contract was established, which the second paragraph defines as the proponent’s place of residence. Brazilian courts may require parties invoking foreign law to prove its existence, content, and validity.
Regarding the forum for resolving disputes arising from aircraft lease agreements, Law 14,879, enacted on June 4, 2024, amended Article 63 of the Brazilian Code of Civil Procedure.
Previously, parties could choose an unrelated forum. Now, the chosen forum must be connected to the domicile or residence of one of the parties or the place of the obligation. However, this amendment does not apply to aircraft lease agreements, as they are governed by the Cape Town Convention. Article 13 of the Brazilian Code of Civil Procedure states:
“Art. 13. Civil jurisdiction is governed by Brazilian procedural rules, except for specific provisions in treaties, conventions, or international agreements to which Brazil is a party.”
Thus, under Article 42 of the Cape Town Convention, parties may choose any jurisdiction for disputes, regardless of connection to the parties or transaction, and Brazilian courts must honor this choice when proceedings occur in Brazil.
Lease agreements require no specific form, allowing lessors and lessees to freely negotiate terms. For validity and enforceability in Brazil, the agreement must be signed by the lessor, lessee, and two witnesses, with signatures notarized or digitally signed via the ICP-Brazil platform. If executed abroad, the lessor’s signature must be notarized and apostilled. Agreements not in Portuguese must be translated by a sworn public translator.
A full copy of the lease agreement is registered with the RAB, which is open to public scrutiny. Anyone may request an aircraft certificate, which includes a summary of registered documents. To discharge a lease from the RAB, the lessor and lessee must execute a lease termination agreement.
29.3 Termination and Enforcement of Leases (assuming the Brazilian debtor is not in a form of insolvency protection)
Self-help remedies are not permitted under Brazilian law. If a lessee defaults and does not voluntarily return the aircraft, the lessor must file a repossession claim (“ação de reintegração de posse”) to recover the aircraft.
Repossession is facilitated if the lease agreement includes provisions that allow the lessor to unilaterally terminate the agreement upon a non-cured default (“cláusula resolutiva expressa” or express resolutory clause). In such cases, the lessor must serve a default notice (“notificação extrajudicial”) via the Registry of Titles and Documents, specifying the default events and granting a cure period, typically 24 to 48 hours. The notice should state that failure to cure the default will automatically terminate the lease, pursuant to the express resolutory clause, without requiring judicial action.
If the lease lacks an express resolutory clause, the lessor must file a judicial interpellation (“interpelação judicial”) under Article 474 of the Brazilian Civil Code, notifying the lessee of the default and requiring a cure, failing which the lease will be terminated.
In either scenario, if the lessee fails to cure the default, the lessor may file a repossession claim, arguing that the lease termination renders the lessee’s possession unlawful. If the judge is satisfied with the initial documentation, they may grant provisional repossession to the lessor without hearing the lessee.
If the documentation is insufficient, the judge may request the lessor to substantiate its claims and summon the lessee for a hearing. If satisfied with the justification, the judge will order provisional repossession.
Regardless of whether provisional repossession is granted, the claim proceeds under the ordinary procedures of the Brazilian Code of Civil Procedure until a final decision is issued.
Provisional repossession can be obtained within three days as a preliminary injunction if the judge finds the lessor’s documentation and arguments compelling. The lower court’s final decision typically takes about one year, though appeal timeframes vary depending on court dockets.
The Brazilian legal system is complex, and most court decisions are subject to interlocutory and final appeals, which may delay proceedings.
Court costs in Brazil depend on the state where the claim is filed, typically ranging from 0.5% to 1% of the case value (“valor da causa”), which reflects the economic benefit sought by the lessor (often the debt amount in repossession claims). Appeal fees range from 1% to 4% of the case value.
Under Article 83 of the Brazilian Code of Civil Procedure, non-resident plaintiffs must post a bond (in cash or another court-approved security) to cover legal costs and attorneys’ fees, typically 10% to 20% of the case value.
Foreign judgments require an exequatur procedure before the Brazilian Superior Court of Justice (“STJ”) for recognition and enforcement in Brazil. The prerequisites, per Article 15 of the Law of Introduction to the Civil Code, Article 217 of the Brazilian Supreme Court’s Internal Rules, and STJ Resolution No. 9/2005, are:
- The judgment was issued by a court of competent jurisdiction.
- Parties were lawfully summoned (for Brazilian-domiciled parties, via Rogatory Letters or service on an empowered attorney).
- The judgment is final, non-appealable, and meets enforceability requirements in its country of origin.
- The judgment is apostilled and accompanied by a Portuguese translation by a certified translator.
- The judgment does not violate Brazil’s national sovereignty, public policy, or good moral customs.
Per Article 221 of the Brazilian Supreme Court’s Internal Rules, the exequatur procedure does not involve rehearing the case. The lessee’s defense is limited to challenging document authenticity, the foreign decision’s interpretation, or non-compliance with the above requirements.
To collect amounts due under a lease, the lessor may file a collection lawsuit (“ação de cobrança” or ordinary lawsuit), which allows extensive evidence production and appeals. Depending on the lease terms, a foreclosure lawsuit (“ação de execução”) may be filed for a more expedited process.
29.4 Bankruptcy
Bankruptcy in Brazil encompasses both the reorganization of a debtor (judicial or out of courts) and the liquidation of the company.
Brazilian Reorganization and Bankruptcy Law (Lei de Falências e Recuperação de Empresas) (“Bankruptcy Law”) establishes that lessor’s rights shall not be affected by the judicial recovery or liquidation of Lessee, whether the aircraft is under an operating lease or a finance lease.
In the event of a judicial reorganization, it has been the understanding of Brazilian courts that rights arising out of lease agreements (of any type of assets) may be suspended for a period of one hundred and eighty (180) days, if the leased asset is absolutely necessary to preserve the activity of the company during this period. This is the period granted by the law for the debtor to present and have a recovery plan approved by its creditors. Notwithstanding the foregoing, the conditions of aircraft lease agreements cannot be impacted by recovery plans.
In case of liquidation, lessor may repossess the aircraft immediately, as long as it complies with the legal requirements and judicial procedure to do so (repossession lawsuit). The judicial administrator may discuss with the lessor the maintenance of the lease agreement, provided that the court authorizes the provisory continuance of the bankrupt company’s activities.
The ranking of credits in case of liquidation is set forth by Article 83 of the Bankruptcy Law, as amended from time to time as follows:
- labor credits limited to 150 (one hundred and fifty) minimum wages per creditor and credits arising out of labor accidents,
- credits secured with a “right in rem” up to the amount of the collateral.
- fiscal credits, regardless of their nature and time of constitution, except for the post-petition credits (“extraconcursais”) and tax fines.
- unsecured credits.
- contractual fines and pecuniary penalties due to violation of criminal or administrative laws, including the tax fines.
- subordinated credits; and
- interest due after the declaration of the bankruptcy, in accordance with the provision of Article 124 of the Bankruptcy Law.
29.5 EXPORTATION AND DEREGISTRATION OF BRAZILIAN REGISTERED AIRCRAFT
Upon lease termination, whether at expiry or otherwise, the foreign lessor may: (i) repossess the aircraft with the lessee’s cooperation or through court action if cooperation is withheld; (ii) deregister the aircraft from the RAB; and (iii) export the aircraft from Brazil, subject to approval from customs authorities and ANAC.
Since March 1, 2012, the Convention on International Interests in Mobile Equipment (“Cape Town Convention”) and its Aircraft Equipment Protocol (“Aircraft Protocol”) have been in effect in Brazil. For local matters, these became effective on May 16, 2013, under Decree No. 8008, dated May 15, 2013. The Aircraft Protocol was fully implemented on March 21, 2014, via ANAC Resolution 309, dated March 18, 2014. As the designated entry point for International Registry registrations, the RAB has issued regulations governing procedures to register interests in Brazilian-registered aircraft and engines with the International Registry.
ANAC Resolution 309, as amended by ANAC Resolution 597, dated November 5, 2020, mandates that aircraft deregistration from the RAB must occur independently of any export approval request to the Federal Revenue Service.
29.6 DETENTION OF A BRAZILIAN REGISTERED AIRCRAFT
Article 303 of the BAC, provides that an aircraft may be detained by aeronautical authorities, customs authorities or the federal police in the following cases:
- if, in Brazilian air space, an aircraft violates the international conventions, or the Brazilian aeronautical authorizations required to fly in the Brazilian airspace.
- if, going through the Brazilian air space, an Aircraft violates the obligation of landing at an international airport.
- to examine an aircraft’s certificates or other essential documents.
- to inspect its load, in case of legal restriction, such as dangerous substances for public security.
- to verify any illegality.
Furthermore, in accordance with the provisions of Articles 305 and 306 of the BAC, an aircraft can be also interdicted (“interdição”) by the aeronautical authority which prevents it from flying but allows it to operate only if required for purposes of maintenance. The interdiction can happen in the following situations:
- When an aircraft violates rules with respect to its use;
- During the investigation of an accident in which an aircraft is involved.
Moreover, Article 308 of the Brazilian Aeronautical Code provides for the seizure of an aircraft in order to grant efficacy to the above mentioned detention or interdiction, which means that if the owner or operator of a detained or interdicted aircraft fails to obey the order, such aircraft shall be seized by the competent authority, until its demands are complied with.
The owner or operator of the aircraft shall have the right to be indemnified if any of the above mentioned acts is carried out with abuse of power, otherwise no indemnity will be due.
Other than in the cases above, which are related to irregular operations, instances of governmental interference would be rare. The requisition of the aircraft/engine may be ordered in the case of war, actual or imminent, or of great national emergency.
Aircraft used for smuggling or drug trafficking may be confiscated, after due process, as provided for in Article 91, item II (a) of the Brazilian Criminal Code and Article 34 of the Law of Drugs (Law nº. 11.343, of August 23, 2006).
Brazilian Law further provides that an aircraft can be attached as result of a fiscal enforcement, by means the inclusion of the tax debt due by its owner in the relation of the credits of the Federal State (Fiscal Enforcement Law, Article 11, item V).
29.7 FOREIGN CAPITAL IN BRAZILIAN AIRLINE COMPANIES
On June 17, 2019, Law No. 13,842/2019 amended the Brazilian Aeronautical Code, allowing 100% of a Brazilian airline’s voting capital to be held by foreign companies. Previously, the BAC, enacted in 1986, capped foreign ownership of voting shares at 20%. This change, debated since 2009, removed earlier restrictions on foreign investment.
Permitting 100% foreign investment has attracted low-cost airlines to the Brazilian market, with some already operating flights.
This measure is expected to enhance competition in the Brazilian airline industry, increase domestic flights, and expand international routes offered by Brazilian carriers.
29.8 AVIATION CONSUMER PROTECTION
ANAC Resolution No. 400, dated December 13, 2016, as amended, protects passengers during flight delays, cancellations, or denied boarding. In case of a flight delay, airlines must notify passengers of the delay and expected departure time. If a flight is delayed over four hours, canceled, or causes a missed connection, airlines must offer: (i) rebooking on another flight; (ii) reimbursement of the fare actually paid, including taxes and airport fees; or (iii) alternative transportation.
For delays and cancellations, airlines must provide material assistance as follows: (i) after one hour, access to communication; (ii) after two hours, a meal or meal voucher appropriate to the time of day; (iii) after four hours, hotel accommodation for overnight waits and ground transfers.
ANAC Resolution No. 280, dated July 11, 2013, protects passengers with special needs, defined as: (a) persons aged 60 or older; (b) pregnant or lactating women; (c) persons with infants; (d) persons with reduced mobility; or (e) individuals whose specific conditions limit their autonomy as passengers.
Regarding airline liability, a Brazilian Supreme Court decision mandates that the Montreal Convention, rather than the Brazilian Consumer Protection Code, applies to cases such as lost luggage. Previously, Brazilian courts often applied the Consumer Protection Code, disregarding the Montreal Convention. This shift significantly impacts lawsuit handling due to the Convention’s indemnity limits and statute of limitations.
29.9 AIR TRANSPORT SERVICES
Air transport services in Brazil are regulated. In order to engage in air transport services, a company must obtain a concessionary license to operate as an airline. Such license is issued by ANAC for cargo and regularly scheduled passenger and non-scheduled passenger services.
Foreign airlines that seek authorization to operate in Brazil must begin the process by submitting ANAC a request to perform their activities in Brazil, in accordance with the provisions of Section 205 of the BAC. Basically, a foreign airline must (i) be designated by the government of its own country to operate in Brazil, (ii) obtain the ANAC’s authorization to establish operations in Brazil and (iii) obtain ANAC’s authorization to operate aviation services in Brazil.
A foreign air carrier must appoint a permanent legal representative in Brazil and provide evidence of its incorporating and submit its Articles of organization. In addition, a foreign airline will have to submit to ANAC (a) its technical and operational plan; (b) the airfares it plans to charge; (c) the cities it plans to stop in Brazil and its further stops outside Brazil and (d) the specific hours in which it plans to fly to and from Brazil.
Authors: Ana Luísa Derenusson e Rita de Cássia Godoy
DDSA – De Luca, Derenusson, Schuttoff & Advogados
Rua James Joule, 92 – 6th floor – Brooklin
04576-080 – São Paulo – SP
Phone: +55 (11) 3040 4040
[email protected] / [email protected]