Lloyd's Maritime and Commercial Law Quarterly
THE CAPE TOWN CONVENTION: REPOSSESSION AND SALE OF CHARGED AIRCRAFT OBJECTS IN A COMMERCIALLY REASONABLE MANNER
Sanam Saidova*
The Cape Town Convention on International Interests in Mobile Equipment provides a legal regime for the creation, registration and protection of international interests in aircraft, railway and space objects. The international interests are supported by an elaborate system of remedies exercisable in the case of the debtor’s default or insolvency. The remedies must be exercised in a commercially reasonable manner—a requirement that poses several questions. The scope of the requirement is not precisely drawn. It is not entirely clear what principles and factors may be relevant when considering whether a remedy has been exercised in a commercially reasonable manner. Equally unclear are the consequences of non-compliance with commercial reasonableness. This article seeks to examine these issues in the context of the remedies of repossession and sale of aircraft objects.
1. INTRODUCTION
The Cape Town Convention on International Interests in Mobile Equipment (CTC) and its associated Aircraft, Luxembourg and Space Protocols break new ground in an area of great complexity by providing a set of uniform substantive rules aimed at protecting the interests of a secured creditor, conditional seller and lessor in such high-value types of mobile equipment as aircraft, railway and space objects.1 One unique feature of the Convention is that it provides for the creation of an autonomous international interest in these types of equipment which derives solely from the Convention and does not depend
* Lecturer in Law, University of Nottingham. I am very grateful to Professor Howard Bennett and Dr Sandra Frisby for their helpful comments on an earlier draft of this article.
The following abbreviations are used in the footnotes:
Aircraft Protocol: Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment, Cape Town, 2001;
Beale, Bridge, Gullifer & Lomnicka: H Beale, M Bridge, L Gullifer, E Lomnicka, The Law of Personal Property Security (OUP, Oxford, 2007);
CTC: Convention on International Interests in Mobile Equipment, Cape Town, 2001;
Goode: R Goode, Official Commentary to the Convention on International Interests in Mobile Equipment and
Protocol Thereto on Matters Specific to Aircraft Equipment, Revised edn (Rome, UNIDROIT 2008); UCC: Uniform Commercial Code;
White & Summers: J White and R Summers, Uniform Commercial Code, 5th edn (West Group, 2000).
1. The Convention and the Aircraft Protocol came into force in March 2006. The Luxembourg Protocol was adopted in February 2007 and the Space Protocol was adopted in March 2012 (neither Protocol is yet in force). More details are available at: www.unidroit.org/english/implement/i-main.htm.
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