An aviation industry body has issued a warning about Vietnam's compliance with international norms on aircraft leasing after a dispute over the repossession of four jets, raising questions over the cost of financing future jet deliveries.

Vietnam is one of the world's fastest-growing air travel markets, with hundreds of jets on order and air transport representing 5% of GDP, according to the International Air Transport Association.

The Aviation Working Group, a UK-based entity that monitors financing laws on behalf of planemakers and lessors, said it had placed Vietnam on a watchlist after a Hanoi court blocked an attempt to seize jets over an alleged rental payment default.

It did not name the airline involved.

Under a treaty known as the Cape Town Convention (CTC), of which Vietnam is a member, airlines are able to secure better financing rates in return for their nations making it easier for lessors to repossess jets in the case of missed payments.

The treaty allows for jets to be de-registered, or removed from the host country's airplane register, in the event of a lawful request from the lessor and placed on an international register, allowing the owner to fly the aircraft away.

The AWG said the unnamed lessor had requested this step between November and January, backed by a court order in England, whose courts had jurisdiction over the lease contract.

Vietnam's regulator agreed to de-register the jets, but in February a Hanoi court quashed that move following a lawsuit from one of the airline's shareholders, it said.

The lessor's request and the negative Hanoi court decision "are material developments that implicate CTC compliance in Vietnam," the AWG bulletin said.

Vietnam's aviation regulator and foreign ministry did not respond to requests for comment.

(Reporting by Tim Hepher; editing by John Stonestreet)