Lien of an Aircraft in Finland: A Comprehensive Guide

Understanding Liens Under Finnish Law

In Finnish legal context, the concept of a lien does not have a direct equivalent. However, it is often used to describe security rights arising from statutory provisions, rights of retention, hypothecation, or pledges. For this guide, we define a lien as a statutory right that entitles creditors to preferred payment from the value of a specific object, protected against changes in title without requiring a declaration of intent by the involved parties.

Distinguishing Lien Rights and Rights of Retention

What is a Right of Retention?

A right of retention allows creditors to retain possession of an object as security for claims associated with that property. Like liens, rights of retention remain unaffected by changes in ownership. Under certain conditions, these rights include statutory permission to sell the retained property to settle claims.

Lien vs. Right of Retention

Although similar in effect, liens arise directly from statutory provisions, while rights of retention often relate to possession. In Finland, security rights through hypothecation, based on agreements, also share similarities with liens.

Aircraft Liens in Finland: Definition and Context

Defining an Aircraft Under Finnish Law

The Aviation Act (864/2014) defines an aircraft as a device deriving its elevating power from air reactions. All Finnish aircraft must be registered in the Finnish Transport Register, including those under construction, provided they can be identified.

Legal Framework for Aircraft Liens

The Aircraft Mortgage Act (211/1928) provides priority to certain claims over registered mortgages, such as:

• Claims secured by retention rights.
  
• Damage claims under strict liability as per the Aviation Act.
  

Liability Under the Aviation Act

Aircraft owners, possessors, and operators are jointly liable for damages caused by aviation activities. This strict liability applies only to tort-based claims and excludes contractual obligations.

Registration of Aircraft Liens in Finland

While no statutory mechanism exists for registering aircraft liens, unpaid service charges can trigger a notification in the Aircraft Register, preventing the aircraft's departure. The Finnish Transport Register (Traficom) manages lien-related recordings.

Salvage Liens: A Legislative Oversight

Historical Perspective

Previously, salvage costs enjoyed lien status under the 1964 Aviation Act. However, legislative updates in 1996 inadvertently omitted corresponding provisions, effectively removing salvage liens from aircraft in Finland.

Contractual Aircraft Liens in Finland

Although Finnish law does not explicitly recognize contractual liens, hypothecation allows security rights over aircraft. A mortgage registered in the Aircraft Register establishes such rights, including security for the aircraft, equipment, and insurance claims.

Priority of Aircraft Liens in Finland

The Mortgages on Aircraft Act outlines the priority order:

• Claims secured by retention rights.
  
• Damage claims under the Aviation Act, ranked by occurrence.
  
• Registered mortgages, prioritized by filing date.
  

Enforcement of Aircraft Liens

Rights of Retention Enforcement

Creditors with retention rights can sell the aircraft under the Act on Entrepreneur’s Right to Sell Goods Left Uncontrolled (688/1988). Public auctions are typically used to settle claims, with court proceedings necessary only in disputed cases.

Enforcement of Damage Claims

Enforcement of damages liens requires a court judgment. Execution authorities facilitate aircraft sales, distributing proceeds to lien holders per their statutory priority.

Mortgage Enforcement

Mortgages necessitate court judgments for enforcement. The procedures mirror those used for damage liens, including public or voluntary sales.

Addressing Unpaid Airport Charges

Detention Rights Without Sale

Airport operators can detain aircraft for unpaid charges without court orders, although sales require legal intervention. Scheduled international flights are exempt from detention for unpaid charges, ensuring continuity in regular operations.

Joint Liability

Aircraft owners, possessors, and operators share responsibility for unpaid charges incurred during their registration period, emphasising collaborative accountability.

Call to Action: Partner With Legal Experts in Finnish Aviation Law

Navigating the complexities of Finnish aviation law requires expertise and precision. Whether you are a creditor, operator, or owner, understanding aircraft liens and their enforcement is essential for safeguarding your interests.

At LKOS Law Office our experienced aviation law team provides:

• Tailored advice on aircraft liens and mortgages.
  
• Representation in lien enforcement and aviation disputes.
  
• Guidance on compliance with Finnish aviation regulations.
  

Ready to secure your rights? Contact us today for a consultation and let our experts help you navigate the skies with confidence.

Get in touch now to ensure your legal matters are in trusted hands!

Disclaimer: This article is for informational purposes only.