Public Service and the Cape Town Convention

Abstract

All three protocols to the Cape Town Convention on International Interests in Mobile Equipment consider the balance between the rights of a creditor wishing to foreclose on its asset following a debtor default, and the rights states may wish (or may be obliged) to reserve to themselves to protect the public interest. The Aviation Protocol foresees minimal state intervention. The Luxembourg Rail Protocol and the Space Protocol specifically confront the issue of a ‘public service exemption’, but address the competing interests in radically different ways.This paper looks at when the state can intervene to restrict a creditor's rights, in the context of the Convention, on ‘public service’ grounds. It also considers some of the definitional and substantive problems that arise both, when the public service requirement of the community overreaches a creditor's rights, and what the consequences should be for the creditor when that occurs.