Cape Town Convention Research Articles

Airline insolvencies and environmental concerns: a comparative legal perspective

Abstract Airline insolvencies can be economically stressful for the countries concerned. One of the significant challenges associated with such insolvencies is the grounding of the aircraft over an extended period due to the pendency of the legal proceedings. The ease with which the lessors can regain possession of the aircraft, triggered by the default of the insolvency company, determines the efficacy of the regulatory climate. Leaving aside the financial troubles the insolvent company faces, it may be additionally expected to match its environmental obligations. Therefore, the push for ‘green insolvencies’ is slowly gaining momentum within the international community. The Cape Town Convention stipulates a sui generis process of seeking possession of an aircraft without undue delay. The countries incorporating the Convention into their domestic setups stand to gain a tremendous regulatory edge over those that are yet to align their national laws with this international instrument. While focusing on developing an efficient insolvency framework is not enough in light of the Sustainable Development Goals, it is possible to address environmental concerns by incorporating more climate-sensitive insolvency frameworks at the national level. The countries may continue to turn to their domestic environmental norms in this regard. This research study aims to throw light on how airline insolvencies need to be more considerate towards environmental interests. It seeks to fill the gaps in the current literature regarding this interface and explore this rather tenuous relationship from a comparative legal lens. The first section of the paper provides an overview of the study. The second section considers the applicability of the Cape Town Convention and discusses the relevant insolvency frameworks in the USA, the United Kingdom, Canada, India, and Nigeria. The last section of the study provides the concluding remarks and suggestions.

Dealing with registrations and jurisdiction in aircraft financing

Abstract In aircraft financing, dealing with jurisdiction and applicable law is of paramount importance. Given the global nature of the aviation industry, the parties involved in aircraft-financing transactions must carefully consider the jurisdiction in which disputes may arise as well as the relevant laws that govern such disputes. In aircraft financing, there are a great number of jurisdictions that may be selected by the parties. The existing international treaties in aircraft financing, such as the 1948 Geneva Convention and the 2001 Cape Town Convention with its Aircraft Equipment Protocol, unified international law considerably. Nevertheless, these treaties have not resulted in the elimination of the conflict of laws, and the choice of law in the agreements has limited effect. Despite the registration obligations of aircraft being unified enough due to the rigorous requirements of the 1944 Chicago Convention and its Annexes, further unification is necessary to manage the conflicts of laws. Such uniformity is still awaited, although the Cape Town Convention and its Aircraft Equipment Protocol provide a standardized legal regime for aircraft financing, transactions, and registrations. These international instruments and the registration requirement therein (International Registry) help establish uniformity and clarity in the rights and priorities of the parties involved. This article introduces the complexity of these areas of the aviation industry and focuses on the jurisdictional challenges regarding registration and contractual relations.

Dispute resolution in aircraft finance: question and solutions within the international regulatory context

Abstract The aviation industry has reached a strategic relevance for countries worldwide such that its impact on the global economy cannot be under-estimated. It might be surprising to hear that, notwithstanding such innate international character, generally, aviation disputes are still solved through national jurisdictional channels. Aircraft finance transactions and disputes not only are highly international in nature but also strongly depend on technical nature and specific financial aspects and are in need of a certain degree of expertise on the side of the adjudicatory body. In this light, there have been ever more instances of aviation-specific arbitration courts being established with the objective to ensure efficiency and time-sensitive and expert dispute settlement mechanisms for aviation finance disputes. This article not only addresses the elements of such aviation courts but also examines the current legal regime and challenges arising from the 2001 Cape Town Convention and national laws.

Perspectives internationales de la réforme du droit français des sûretés

Abstract A recent French reform, dated 15 September 2021, which entered into force on 1 January 2022, largely modifies the law of guarantees and security interests. It clarifies a certain number of rules, suppresses several security interests that appeared to be obsolete, and reinforces the protection of warrantors without neglecting the interests of creditors. Adopted to promote security, flexibility, and accessibility to French Law, and to enhance the efficiency of secured transactions, the reform has generally been perceived as successful. The purpose of this paper is to present the reform in an international perspective and to try to understand whether it fits the purpose it was assigned: to strengthen the attractiveness of French Law in the comparative landscape. We will demonstrate that, regarding a certain number of international instruments and foreign laws, the answer tends to be affirmative. The French Government might also seize this opportunity to include France in several international projects that it has, so far, stayed away from, such as the ratification of the Cape Town Convention.

Accessoriness of Cape Town international interest

Abstract This article assesses the accessory nature of the Cape Town Convention (CTC) international interest. It examines how certain aspects in which the accessoriness of a security right can manifest itself look in the case of this international institution. The conclusion is reached that the CTC international interest is a very accessory-flexible security right.

The Cape Town Convention Offers Registered International Interests Providing Maximal Security to American Lessees of Aircraft

This paper focuses on the acquisition of aircraft by United States-based airlines. At present in the U.S., airlines are faced with a fierce competition, and to commercially survive, they keep advertising that they operate modern and safe aircraft. Since the beginning of aviation, there does not exist a fully state-owned “flag carrier” in the U.S. On the contrary, the commercial airlines market has always been in the hands of private undertakings. Traditionally, the airlines themselves have arranged the acquisition of their fleets of aircraft. For this purpose, they have to obtain loans from private banks and other non-governmental financial institutions. A substantial amount of credit is annually extended to realize the acquisition of the costly aircraft. The credit is generally supplied through a “purchase-money loan” that is secured on the aircraft. This practice is called asset-based financing. In the U.S., the aircraft which are operated by the local airlines have generally been acquired by means of international finance and lease transactions. As the acquisition of aircraft is extremely capital-intensive, the financier or lessor must be able to successfully enforce its proprietary interests in the specific aircraft. This requirement is of particular significance in the event that an airline defaults or becomes insolvent. While the aforementioned need to safeguard the financiers and lessors is undisputed, this article firmly puts forward that also the lessees of aircraft must be adequately protected. The arguments contained in this contribution are substantiated by the local laws and international aviation finance and lease conventions which apply in the United States. With respect to the local situation currently existing in the U.S., this contribution focuses on the relevant articles of the Uniform Commercial Code (UCC). Moreover, it refers to the manner in which these provisions have been implemented in the substantive property law of the State of New York. It is noted that in several other countries, the local airlines may obtain similar proprietary rights from the lessors. These foreign legal regimes aim, inter alia, to facilitate the creation, validity, and enforcement of the secured rights of the lessees of aircraft. Nevertheless, not all of these instruments are successful in providing the aircraft lessees with adequate security.

Facilitating access to credit and economic growth in Czechia, Hungary, Poland and Slovakia through international treaty law – The Mining, Agricultural and Construction Protocol to the Cape Town Convention

Facilitating access to credit and economic growth in Czechia, Hungary, Poland and Slovakia through international treaty law – The Mining, Agricultural and Construction Protocol to the Cape Town Convention

Guest editorial

AbstractAgainst the broad background of existing “Earth law”, this article aims to provide an initial assessment of existing “Space law” to start the conversation about what is still needed from a legal perspective to best facilitate the ongoing “commercialisation of Outer Space”. This article considers the ongoing commercialisation of Outer Space primarily from a legal perspective, investigating the rol law (Earth law as well as Space law) and so‐called “space lawyers” may be able to play in it. The focus of the article is to, first and foremost, raise some key questions that need (legal) consideration, without attempting to already provide answers to any of those questions. The article starts by addressing the relevance now of commercialisation of Outer Space and therefore the question asked in the title. It then goes on to briefly explore the existing Space law, highlighting separately the most relevant Space Treaties and Space Principles. Against that background, the article then reflects on what (if any) guidance this provides on the key concept of Space Property. In addition, the article also briefly addresses the 2001 Cape Town Convention on international interests in mobile equipment and explains why this convention, and in particular its Space Protocol, are also very relevant to consider in the context of the commercialisation of Outer Space. Finally, the article provides its initial assessment and ends with a number of concluding remarks.

International Commercial Law Emerging in Africa

This article provides an overview of the history of international commercial law in Africa with reference to instruments of the three sister organisations of private international law (in a wide sense): UNCITRAL (the United Nations Commission on International Trade Law), UNIDROIT (the International Institute for the Unification of Private Law) and the HCCH (the Hague Conference on Private International Law). The adoption of UNIDROIT's Cape Town Convention on International Interests in Mobile Equipment of 2001 is identified as a possible watershed moment in respect of the future development of international commercial law in Africa. Following the creation of an African Continental Free Trade Area by member countries of the African Union, it is suggested that participating states reconsider joining the United Nations Convention on the International Sale of Goods (1980) (CISG) and incorporating the UNCITRAL Model Law on International Commercial Arbitration (1985/2006), which are in a certain sense the two founding documents of the modern lex mercatoria. Another priority, the author suggests, is that Africa needs a supporting instrument on the private international law of contract. The first draft of the African Principles on the Law Applicable to International Commercial Contracts is then discussed with an emphasis on the role of substantive law instruments, in particular the CISG

The requirement of ‘power to dispose’ in the Cape Town Convention and its protocols

Abstract The concept of an ‘international interest’ is central to the Cape Town Convention on International Interests in Mobile Equipment. Once an international interest is created, it can be registered in the International Registry, established under the Convention, in which case it will be given priority over competing interests and enforced if the debtor defaults. One of the essential requirements for the constitution of an international interest is that a chargor, conditional seller, and lessor must have the ‘power to dispose’ of the interest held by them in the object. This article evaluates the basis and meaning of the power to dispose requirement under the Convention. It argues that power to dispose (where it arises without the right to dispose) is a matter governed by the Convention and constructs and proposes an internationally uniform concept of power to dispose under the Convention, autonomous from national law.

Immovable-associated equipment in the CTC MAC Protocol: interactions between international interest and local interests under Chilean law

Abstract The Mining, Agriculture and Construction Protocol (MAC Protocol) of the Convention on International Interests in Mobile Equipment (Cape Town Convention or CTC), provides a major innovation in the CTC system by including the concept of ‘immovable-associated equipment’. Article VII of the MAC Protocol’s mandatory declaration regulates immovable-associated equipment and the interaction between the international law regime of the CTC and domestic law of potential State parties, such as Chile. This article addresses the interactions between the CTC’s international interest in MAC equipment and the local interest under Chilean law. Consequently, it explores which alternative provided by Article VII of the MAC Protocol’s declaration provides the best improvement for Chilean law in order to enhance creditor position and to promote asset-based financing in the case of immovable-associated equipment. For such purpose, the Chilean mortgage is considered as a relevant interest for the immovable-associated equipment and the CTC international interest is compared with the Chilean non-possessory pledge under a case-by-case analysis. The analysis focuses on the cases when MAC equipment is a movable good deemed as immovable by destination under Chilean law.

Self-executable remedies of the Convention on International Interests in Mobile Equipment in the light of Chilean constitutional court case law on due process guarantees

Abstract The purpose of this work is to analyze whether the Constitutional Court decisions on due process as applied to the realization of security interests may hinder an eventual ratification of the Cape Town Convention and its protocols.

Exporting the Luxembourg Rail Protocol to the Convention on International Interests in Mobile Equipment to Africa

Abstract This article recommends the Cape Town Convention on International Interests in Mobile Equipment and appeals to African countries to accede to the Luxembourg Protocol on Railway Rolling Stock (Rail Protocol). The discussion in this article focuses on the extent to which Article XXII of the Rail Protocol can be applied with respect to Africa. The article critically analyses the competence of the African Economic Community (AEC) and its sub-regional organizations to accede to the Cape Town Convention and Rail Protocol. The author provides a detailed argumentative analysis of the legal mandate of the AEC and the influence of African Union (AU) laws on the competence of the AEC’s sub-regional organizations to make declarations under the Cape Town Convention and Rail Protocol. The analysis confirms that competence to accede to the Convention and Rail Protocol resides with sovereign States in Africa and not with the AU, the AEC, the Organisation pour l’harmonisation en Afrique du Droit des Affaires, or any existing sub-regional organization in Africa.

Cape Town Convention in US Bankruptcy Courts: How Foreign Creditors May Seek Greater Protection in US Bankruptcy Courts through Enforcement of Article XXX(4) of the Aircraft Protocol

The Cape Town Convention on International Interests in Mobile Equipment (‘Treaty’) and the Protocol on Matters Specific to Aircraft Equipment (‘Protocol’) were drafted to give more predictability to the aircraft financing market: given that the assets in question often moved through different jurisdictions, there was a need for a body of law that would give owners, lessors, lessees, and creditors assurance that their rights and claims would apply uniformly throughout the globe. The United States has signed and ratified the Treaty and Protocol, and has also passed the Cape Town Treaty Implementation Act of 2004. By simply reading the words of these documents and treaties, one might think that US bankruptcy courts ought to be bound by Protocol Article XXX(4) as well. Protocol Article XXX(4) requires bankruptcy courts to go beyond the US Bankruptcy Code when dealing with debtors whose primary insolvency jurisdiction is another Contracting State of the Treaty. The courts are required to apply versions of an insolvency measure as had been adopted by the Contracting State that is the primary insolvency jurisdiction. As it is then shown that mere ratification does not make a treaty enforceable, I consider various arguments to assess the enforceability of Protocol Article XXX(4). Lastly, utilizing the conclusions made, I briefly comment on the unexpected outcome of In Re: Oceanair and its potential errors.

Issues of Interpretation under the Cape Town Convention and its Protocols

The 2001 Cape Town Convention on International Interests in Mobile Equipment and its associated Protocol on aircraft objects are among the most successful private commercial law instruments to have been adopted in recent years. Together with the other Protocols on railway rolling stock, space assets and mining, agricultural and construction equipment they are also the most complex, raising acute issues of interpretation which can sometimes be resolved only by departing from the strict language of the text. Though the instruments have stood up well to rigorous analysis they do contain errors, omissions, inconsistencies and ambiguities which the various Official Commentaries prepared by the writer have sought to address, with helpful input from the aviation industry, and there is also the difficulty of reconciling multi-language official texts which on occasion are not wholly consistent with each other. This article addresses the main problems of interpretation encountered.

The UNIDROIT Convention on International Interests in Mobile Equipment as the direction for security rights regulations in the COVID-19 economy

In this article some features of the Cape Town Convention security interest were juxtaposed with some features of the Polish registered pledge. The aim of such research was to answer the question which of these two instruments is better adjusted to the COVID-19 economy. On the basis of such analysis, a conclusion was made that the Cape Town Convention security interest constitutes a more flexible security right and therefore one which is better adjusted to the COVID-19 economy. In the opinion of the author, the Cape Town Convention security interest shall constitute the direction in which the Polish security rights, especially in B2B relations, should go. The research was based on an analysis of the laws in force and a comparative analysis.

Cape Town Convention Academic Project Conference 2020

Cape Town Convention Academic Project Conference 2020

Cape Town Convention Academic Project Conference 2019

Cape Town Convention Academic Project Conference 2019

The Relationship between the MAC and the Rail (Luxembourg) Protocols to the Cape Town Convention and Domestic Secured Transactions Law

The Relationship between the MAC and the Rail (Luxembourg) Protocols to the Cape Town Convention and Domestic Secured Transactions Law

Cape Town Convention Academic Project Conference 2020

Cape Town Convention Academic Project Conference 2020