Convention on international interests in mobile equipment

KEY POINTS

Cape Town Convention

• The Cape Town Convention attempts to resolve the problem of obtaining certain and opposable rights to high-value mobile equipment, specifically:
  • aircraft equipment,
  • railway rolling stock,
  • space assets.
• Different legal systems have different approaches to securities, title retention agreements and lease agreements, which creates uncertainty for lending institutions, making them less willing to provide financing for such assets.
• The treaty creates international standards for the registration of contracts of sale (including dedicated registration agencies), security interests (liens), leases and conditional sales contracts.
• It also includes legal remedies for default in financing agreements, including repossession and the effect of particular states’ bankruptcy laws.

Protocol on aircraft equipment

Aircraft equipment refers to airframes, aircraft engines and helicopters.

The protocol sets out how the convention applies specifically to international sales of such equipment, including in terms of:

• the formalities, effects and registration of contracts of sales;
• remedies, such as in the case of insolvency, and rules for debtors;
• the establishment of an international registry relating to international interests in aircraft parts;
• jurisdiction and applicable law rules.

Protocol on railway rolling stock

Railway rolling stock refers to vehicles movable on a fixed railway track or directly on, above or below a guideway, together with items such as traction systems, engines, brakes, axles and other components, equipment and parts, installed on or incorporated in the vehicles.

The protocol sets out how the convention applies specifically to international sales of such rolling stock, including in terms of:

• the identification of the railway rolling stock;
• remedies, such as in the case of insolvency;
• the establishment of an international registry relating to international interests on railway rolling stock;
• jurisdiction and applicable law rules.

Protocol on mining, agricultural and construction equipment

The protocol sets out how the convention applies specifically to international sales of such equipment, including in terms of:

• the identification of equipment;
• association with immoveable property;
• remedies, such as in the case of insolvency;
• the establishment of an international registry relating to MAC equipment;
• jurisdiction and applicable law rules.