Cape Town Update

24 May 2010

European Aviation Group

The EU finally acceded to the Cape Town Convention and Aircraft Protocol on 28 April 2009 and the accession came into force on 1 August 2009.  The EU’s accession was as a regional economic integration organisation, not a Contracting State, and only in respect of the areas in which it has competence.  Member States must individually ratify the Convention to become Contracting States for its purposes to give it full effect.  Signature of the Convention alone is not sufficient.  When ratifying, they will need to decide whether one of the two insolvency remedies available under the Convention is to apply in their jurisdiction or their domestic insolvency law.

Ireland, where the International Registry of Mobile Assets is located, and Luxembourg have already ratified the Convention and Malta will do so shortly. However, as will be seen below, many major EU countries have no immediate plans to do so.  Nevertheless, it is already noticeable that when US (the USA having also ratified the Convention) and Irish parties are involved in an aviation transaction, parties to the transaction located in EU States which have not implemented the Convention are sometimes required to register as transaction users of the International Registry for the purpose of registering and consenting to registration of the interests in aircraft and engines created.  It is to be expected that this will happen increasingly.


The Department for Business, Innovation and Skills has recently announced that it is going to issue a Call for Evidence on the economic benefits (or otherwise) of ratification of the Convention.  However, this is very much a first step and ratification is unlikely for the next year or so.


No action has been taken in Parliament in relation to the Convention and it is generally considered that the Government does not see it as a priority since it was only in 1993 that Belgium ratified the Geneva Convention of 19 June 1948 on the International Recognition of Rights in Aircraft.  However, this attitude may change following the EU’s accession.


The Government has made no public statement regarding ratification of the Convention and it is accordingly unlikely to do so in the near future.


While Germany has signed the Convention, the Federal Ministry of Justice states that Germany has no immediate plans for ratification of it.


The Government has not declared its intentions regarding ratification of the Convention and it would seem that it has no immediate plans to do so. The International Registry’s system of “notice filing” is significantly different to the system in Spain which requires that interests be recorded in a deed filed in the relevant Spanish Registry of Moveable Assets to be enforceable by the Spanish courts.  There would, therefore, be some difficult issues to resolve before ratification could occur.


Sweden has not signed the Convention.  The Ministry of Justice, which is responsible for issues relating to it, says no official action has been taken in relation to the Convention.  It has also confirmed that it is currently prioritising other issues and it is uncertain when it will turn its attention to the Convention.  It is understood that it will not do so until 2012, at the earliest.