{"id":35222,"date":"2023-05-06T05:21:02","date_gmt":"2023-05-05T23:51:02","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=35222"},"modified":"2025-04-20T22:49:22","modified_gmt":"2025-04-20T17:19:22","slug":"irrevocable-deregistration-and-export-request-authorisation-idera-how-does-the-idera-process-work","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/irrevocable-deregistration-and-export-request-authorisation-idera-how-does-the-idera-process-work\/","title":{"rendered":"Irrevocable Deregistration and Export Request Authorisation (IDERA)"},"content":{"rendered":"<h3><strong>What\u2019s in today\u2019s article?<\/strong><\/h3>\n<ul>\n<li><strong>Why in News?<\/strong><\/li>\n<li><strong>Insolvency Laws in India<\/strong><\/li>\n<li><strong>What is the Purpose of IDERA?<\/strong><\/li>\n<li><strong>India and IDERA<\/strong><\/li>\n<li><strong>What is the Procedure Followed by the Indian Aviation Regulator (DGCA)?<\/strong><\/li>\n<li><strong>Precedents in India regarding IDERAs<\/strong><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>Why in News?<\/strong><\/h2>\n<ul>\n<li>With the National Company Law Tribunal (NCLT) reserving its order on low-cost airline Go First\u2019s urgent<strong> plea for voluntary insolvency<\/strong>, aircraft lessors sought deregistration and repossession of 20 aircraft leased to the Wadia Group airline.<\/li>\n<li>The lessors did so by filing applications with the Directorate General of Civil Aviation (DGCA) using their Irrevocable Deregistration and Export Request Authorisation (IDERA).<\/li>\n<\/ul>\n<p><strong>\u00a0<\/strong><\/p>\n<h2><strong>Insolvency Laws in India:<\/strong><\/h2>\n<ul>\n<li><strong>Insolvency <\/strong>is a term for when an individual or company can no longer meet their financial obligations to lenders as debts become due.<\/li>\n<li>In India, the <strong>Insolvency and Bankruptcy Code, 2016<\/strong> (IBC) creates a consolidated framework that governs insolvency and bankruptcy proceedings for companies, partnership firms, and individuals.<\/li>\n<li>In the case of a corporate debtor, an application for insolvency proceedings must be submitted to the Adjudicating Authority (AA), which is the <strong>NCLT<\/strong>.\n<ul>\n<li>The application may be filed by a financial creditor (Section 7), an operational creditor (Section 9), or the <strong>corporate debtor (Section 10)<\/strong>.<\/li>\n<\/ul>\n<\/li>\n<li>In this case, admission of Go First\u2019s plea under <strong>Section 10<\/strong> of the IBC would have led to an <strong>immediate and complete moratorium on recovery of assets leased<\/strong> to the debtor (Go First), making it extremely difficult for lessors to repossess their aircraft.<\/li>\n<li>However, <strong>since the order was reserved<\/strong>, lessors are well within their rights to seek deregistration and repossession of planes.<\/li>\n<\/ul>\n<p><strong>\u00a0<\/strong><\/p>\n<h2><strong>What is the Purpose of IDERA?<\/strong><\/h2>\n<ul>\n<li>The Convention on International Interests in Mobile Equipment\/ the <strong>Cape Town Convention (CTC)<\/strong> of 2001 protects lessors\u2019 interests in case of defaults by the lessee.<\/li>\n<li>As per the CTC, the lessor can seek deregistration and export of aircraft <strong>without consent<\/strong> of the airline <strong>using IDERA<\/strong> &#8211; a <strong>voluntary measure<\/strong> that provides greater security to creditors.<\/li>\n<li>Thus, IDERA empowers lessors<strong> to get their aircraft deregistered<\/strong> from the registry of the country where the lessee is based, <strong>repossess and fly them out<\/strong>, in cases like those of <strong>lease payment defaults.<\/strong><\/li>\n<li>The objective of IDERA is to<strong> simplify and improve the efficiency of aircraft leasing operations<\/strong>, minimising the losses they would have to incur if their planes got stuck in litigation<strong>.<\/strong><\/li>\n<li>The IDERA makes lessors ready and willing to lease out aircraft in countries that follow the CTC protocols in letter and spirit.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<figure class=\"media\">\n<div data-oembed-url=\"https:\/\/www.youtube.com\/watch?v=sURIAqKm3yU\">\n<div><iframe src=\"https:\/\/www.youtube.com\/embed\/sURIAqKm3yU\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/div>\n<\/div>\n<\/figure>\n<h2>\u00a0<\/h2>\n<h2><strong>India and IDERA:<\/strong><\/h2>\n<ul>\n<li>Although India ratified the CTC in <strong>2008<\/strong>, its <strong>incorporation in India\u2019s legal framework has been a work in progress.<\/strong><\/li>\n<li>The last CTC-related amendments to India\u2019s aviation rules took place in 2018, <strong>simplifying deregistration and export of aircraft through IDERAs.<\/strong><\/li>\n<li>However, some provisions of the IBC pertaining to moratorium on assets are <strong>in conflict with the CTC and IDERA provisions.<\/strong><\/li>\n<li>This is the reason why lessors have vehemently opposed Go First\u2019s NCLT plea, as its admission would put their aircraft under moratorium.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>What is the Procedure Followed by the Indian Aviation Regulator (DGCA)?<\/strong><\/h2>\n<ul>\n<li><strong>The lessor (IDERA holder) must file an online application<\/strong> with the Director General of Civil Aviation (DGCA) seeking to enforce an IDERA with regard to a specific aircraft.<\/li>\n<li><strong>The DGCA immediately posts on its website<\/strong> the application filed by the IDERA holder.<\/li>\n<li><strong>The application includes<\/strong> requisite details including the operator\u2019s (airline\u2019s) name, Indian registration of the aircraft, and details of the lessor.<\/li>\n<li><strong>The date of the application<\/strong> is considered the date of declared default.<\/li>\n<li><strong>The DGCA then moves to deregister the aircraft<\/strong> within five working days from the date of declared default, and informs airport operators about the date of deregistration.<\/li>\n<li><strong>Meanwhile, airport operators are required to compute outstanding dues<\/strong> of the aircraft for three months prior to the date of declared default.\n<ul>\n<li>Earlier dues, if any, are not included in the calculation.<\/li>\n<\/ul>\n<\/li>\n<li><strong>The lessor then submits all the payment certificates<\/strong> to the regulator, along with the request to export\/fly out the aircraft from India.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>Precedents in India regarding IDERAs:<\/strong><\/h2>\n<ul>\n<li><strong>The bankruptcy of Jet Airways<\/strong> was the first big test pertaining to IDERAs for India.\n<ul>\n<li>Most of the 100-plus planes in Jet\u2019s fleet were on lease, and lessors were able to repossess their planes after deregistration in an efficient, regulated, and structured manner.<\/li>\n<\/ul>\n<\/li>\n<li>Over the past couple of years, lessors have repossessed through the IDERA route a few aircraft that were being operated by no-frills carrier <strong>SpiceJet<\/strong>.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<hr \/>\n<h3><strong>Q1) What is the Cape Town Convention (CTC)?<\/strong><\/h3>\n<p>The Convention on International Interests in Mobile Equipment was signed on 16 November 2001. It is designed to facilitate asset-based financing and leasing of aviation equipment, expand financing opportunities, and reduce costs &#8211; thereby providing substantial economic benefits.<\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<h3><strong>Q2) What is the National Company Law Tribunal (NCLT)?<\/strong><\/h3>\n<p>NCLT is a quasi-judicial authority incorporated for dealing with corporate disputes that are of civil nature arising under the Companies Act.<\/p>\n<p>&nbsp;<\/p>\n<hr \/>\n<p><strong>Source:\u00a0<\/strong><a href=\"https:\/\/indianexpress.com\/article\/explained\/explained-economics\/lessors-seize-go-first-aircraft-idera-process-8593853\/\" target=\"_blank\" rel=\"nofollow noopener\"><strong><u>How does the IDERA process work?<\/u><\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>IDERA empowers lessors to get their aircraft deregistered, repossess and fly them out, in cases like those of lease payment defaults<\/p>\n","protected":false},"author":5,"featured_media":35223,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[],"class_list":{"0":"post-35222","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/35222","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=35222"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/35222\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/35223"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=35222"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=35222"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=35222"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}