Heading towards Cape Town? Some remarks on the preparation of a future Protocol to the Cape Town Convention with respect to ships and maritime equipment

Abstract

The Cape Town Convention, prepared under the auspices of the International Institute for the Unification of Private Law, is a remarkable success in the field of the unification of private law. Particularly, the Aircraft Protocol thereto has significantly facilitated international aircraft financing. Unsurprisingly, given the parallels between ship and aircraft financing, there are initiatives to prepare a further Protocol to the Cape Town Convention with respect to ships and maritime equipment. This idea, however, is not uncontroversial. Some doubt that a future Maritime Protocol would fit the existing legal framework of ship financing and that it would meet the needs of market participants. This article discusses some specific aspects regarding the preparation of such a Maritime Protocol. After providing some background to the ongoing debate, it examines the possible relationship between a Maritime Protocol to the Cape Town Convention and a possible future Convention on the recognition of judicial sales of ships currently prepared by the Comité Maritime International. It finds that the Maritime Protocol and a Convention on Foreign Judicial sales of ships could serve as complementary instruments that would jointly facilitate shipowners access to credit. In a second step, this article discusses some concerns with respect to a future Maritime Protocol. A closer look is taken at the controversial issue of maritime liens that is perceived to have hindered previous attempts at unification. A possible Maritime Protocol to the Cape Town Convention would provide a flexible regime of maritime liens that strikes a balance between policy interests of Member States and creditors’ interests in securing their investment. Finally, a Maritime Protocol would offer a flexible regime of remedies on insolvency. Therefore, this article concludes that the preparation of a Maritime Protocol would manifestly simplify the legal framework of ship financing.