Cape_Town_Convention

Cape Town Treaty

Cape Town Treaty

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The Cape Town Convention on International Interests in Mobile Equipment, or Cape Town Treaty, is an international treaty intended to standardize transactions involving movable property. The treaty creates international standards for registration of contracts of sale (including dedicated registration agencies), security interests (liens), leases and conditional sales contracts, and various legal remedies for default in financing agreements, including repossession and the effect of particular states' bankruptcy laws.

Not to be confused with Cape Town Agreement.
Quick Facts Signed, Location ...

Four protocols to the convention are specific to four types of movable equipment: Aircraft Equipment (aircraft and aircraft engines; signed in 2001), railway rolling stock (signed in 2007), space assets (signed in 2012) and "Mining, Agricultural and Construction Equipment" (signed in 2019). The aircraft Protocol entered into force in 2006, while the others are not in effect.

The treaty resulted from a diplomatic conference held in Cape Town, South Africa in 2001. The conference was attended by 68 countries and 14 international organizations. 53 countries signed the resolution proposing the treaty.[1] The treaty came into force on 1 March 2006,[2] and has been ratified by 57 parties. The Aircraft Protocol (which applies specifically to aircraft and aircraft engines) took effect on 1 March 2006 when it was ratified by 9 countries: Ethiopia, Ireland, Malaysia, Nigeria, Oman, Panama, Pakistan, and the United States.

Signatures and ratifications

As of 2023, the convention has been ratified by 80 states as well as the European Union. The railway rolling stock and the space protocols have been ratified by respectively three countries (Gabon, Luxembourg and Sweden), as well as the European Union, and no countries and thus have not taken effect. An overview of the status of the treaty and protocols is shown below:

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European Union

The European Union joined the convention and the Aircraft Protocol as a Regional Economic Integration Organization. On the subject of the convention, both the Member states of the European Union and the Union itself have competence: e.g. while the substantive law regarding insolvency is regulated by the states, the conflict of law-rules (which county has jurisdiction etc.) is regulated by the European Union. According to the Government of the Netherlands the acceptance of the European Union in a member state which itself is not a party to the convention has no practical consequences.[3] The European Union ratified the Luxembourg Rail protocol in December 2014 as a Regional Economic Integration Organization on the same basis.

Protocols

Aircraft Protocol
  Parties
  Signed
  Parties, also covered by EU's accession
  Signatories, also covered by EU's accession
  covered by EU's accession

Aircraft Protocol

The aircraft Protocol (officially: Protocol to the Convention on International Interests in Mobile Equipment on matters specific to aircraft equipment) was signed immediately with the treaty and the only protocol currently entered into force. It applies to aircraft which can carry at least eight people or 2750 kilograms of cargo, aircraft engines with thrust exceeding 1,750 pounds-force (7,800 N) or 550 horsepower (410 kW), and helicopters carrying five or more passengers. The International Registry of Mobile Assets established to record international property interests in the aircraft equipment covered by the treaty is located in Ireland. Mediation cases for leasing disputes are to be heard in the High Court of Ireland.[4] As of 2022, the protocol has 81 contracting parties, which includes 80 states and the European Union.

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Railway Rolling Stock

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The Railway Rolling Stock Protocol, or Luxembourg Rail Protocol, officially the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Railway Rolling Stock was adopted on 23 February 2007 at a diplomatic conference in Luxembourg and applies to railway rolling stock (broadly defined as "vehicles movable on a fixed railway track or directly on, above or below a guideway").

The protocol establishes an international registry located in Luxembourg at which all international interests under the protocol will be registrable. The registry will also issue unique identifiers for rolling stock on request. Regulis S.A., a subsidiary of SITA, was appointed in November 2014 to act as Registrar. The protocol requires ratification by 4 countries, together with a certification by the secretariat to the Supervisory Authority that the registry is fully operational, in order to enter into force. Currently, it has been signed by France, Gabon, Germany, Italy, Luxembourg, Mozambique, Switzerland, Sweden, the UK as well as the European Union, while it has been ratified by the European Union and 3 states: Gabon, Luxembourg and Sweden.

Space Assets

The Space Assets protocol, or Berlin Space Protocol[5] (officially Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Space Assets) was concluded on 9 March 2012 and requires 10 ratifications before entry into force.[6] The protocol applies to objects functioning in space like satellites or satellite parts.[7] The convention was strongly opposed by the satellite industry, claiming that it would lead to increased bureaucracy and "make the financing of new satellite projects more difficult and expensive".[8] The convention has been signed by 5 countries (Burkina Faso, Germany, Saudi Arabia, United States and Zimbabwe), but no country has ratified it.

Mining, Agricultural, and Construction (MAC) Equipment

On 22 November 2019, a fourth protocol to the convention was adopted to extend the convention's framework to mining, agricultural, and construction (MAC) equipment, named Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to mining, agricultural, and construction equipment.[9] The protocol was signed by 4 states (Congo, Gambia, Nigeria and Paraguay) upon its adoption and requires 5 ratifications before entry into force (provided the registry is operational then). On 1 October 2020, the United States of America signed the MAC Protocol and in 2022 the European Union bringing the total number of signatories to 6[10]

References

  1. [1]
    "Diplomatic Conference to adopt a Mobile Equipment Convention and an Aircraft Protocol, Cape Town, South Africa, 29 October – 16 November 2001". International Institute for the Unification of Private Law (UNIDROIT). Archived from the original on 16 April 2013. Retrieved 22 November 2006.
  2. [2]
    "The Cape Town Convention - Now coming into force" (PDF). Hogan Lovells. 1 March 2006. Retrieved 23 July 2021.
  3. [3]
    "32 227 (R 1904) Verdrag inzake internationale zakelijke rechten op mobiel materieel en Protocol bij het Verdrag inzake internationale zakelijke rechten op mobiel materieel betreffende voor luchtvaartmaterieel specifieke aangelegenheden; Kaapstad, 16 november 2001". Government of the Netherlands (in Dutch). 27 November 2009. Retrieved 13 March 2012.
  4. [4]
    "Aircraft leasing disputes to be heard in Dublin". Sunday Business Post. 11 May 2008.[permanent dead link]
  5. [5]
    "Pressemitteilung: Berliner Weltraumprotokoll verabschiedet". Ministry of Justice (Germany) (Press release) (in German). 9 March 2012. Archived from the original on 10 March 2012. Retrieved 11 March 2012.
  6. [6]
    "text of the draft Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Space Assets" (PDF). UNIDROIT. June 2011. Archived from the original (PDF) on 18 October 2011. Retrieved 13 March 2012.
  7. [7]
    "Draft Final Provisions capable of embodiment in the draft Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Space Assets, with Explanatory Notes" (PDF). UNIDROIT. June 2011. Archived from the original (PDF) on 18 October 2011. Retrieved 13 March 2012.
  8. [8]
    "Global Satellite Industry denounces UNIDROIT Protocol". Satellite Industry Association (Press release). SpaceRef.com. 9 March 2012. Retrieved 11 March 2012.
  9. [9]
    "STUDY LXXII K – DEVELOPMENT OF A FOURTH PROTOCOL TO THE CAPE TOWN CONVENTION ON MATTERS SPECIFIC TO MINING, AGRICULTURAL AND CONSTRUCTION EQUIPMENT". UNIDROIT. Archived from the original on 21 September 2018. Retrieved 21 September 2018.
  10. [10]
    "Secretary Michael R. Pompeo at the Mining, Agriculture, and Construction Protocol Signing Ceremony". United States Department of State. Retrieved 17 December 2020.
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Aircraft Protocol
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