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Clifford Chance

Clifford Chance


Dispute resolution and aircraft operating leases to PRC airlines: Simply arbitrate?

28 October 2019

Many older aircraft operating leases to PRC airlines provide for disputes to be resolved in the English or other non-Mainland courts, and sometimes include a unilateral option to arbitrate in favour of the lessor. The Mainland courts take a narrow approach to enforcing foreign judgments and there is no precedent of enforcement of English judgments.

Further, there is a risk that including a unilateral option to arbitrate could result in difficulties enforcing an award. This has led to lessors preferring offshore arbitration in 'friendly' jurisdictions, such as Hong Kong. This is now particularly suitable in light of recent developments allowing for onshore interim relief in support of Hong Kong seated arbitrations.

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