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Practitioners' Guide to the Cape Town Convention

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Practitioners' Guide to the Cape Town Convention Practitioners’ Guide to the Cape Town Convention and the Aircraft Protocol The Legal Advisory Panel of the Aviation Working Group Published October 12, 2020 Practitioners’ Guide to the Cape Town Convention and The Aircraft Protocol Published by the Aviation Working Group Copyright © 2020 All rights reserved. No part of this publication may be reproduced, stored in any retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of the Aviation Working Group. Although the Legal Advisory Panel, the Aviation Working Group and the various authors and contributors have made every effort to ensure the accuracy of content of this publication, they cannot accept any legal responsibility whatsoever for consequences that may arise from errors or omissions or from any opinions or advice given. This publication is designed to provide a summary guide to certain aspects of the Cape Town Convention. It does not purport to be comprehensive or to render legal, tax or other advice. Practitioners should not rely on this publication when engaging in any transaction or providing any advice in respect of the subject matter covered hereby. In no event shall the Legal Advisory Panel or the Aviation Working Group (or any member of either thereof) have any legal responsibility for, or duty or responsibility to provide any updates in respect of, the subject matter of or views expressed in this publication. This publication, and the views set out herein, reflect a consensus of the Legal Advisory Panel to the Aviation Working Group. They do not, however, necessarily reflect the views of individual members or their firms, organisations or associations on any particular point. This Guide has been produced in consultation with the Aviation Working Group, acting through its Secretary General, and is offered to assist those working on Cape Town Convention matters, but neither it nor the views expressed herein have any official status, are binding in any way, or should be relied upon as providing definitive guidance in actual transactions. Neither the Legal Advisory Panel nor the Aviation Working Group shall be deemed to have endorsed the views expressed in any other publication referred to herein, including the Official Commentary, Fourth Edition. Table of Contents I. INTRODUCTION TO THE CAPE TOWN CONVENTION .......................................... 1 II. CONVENTION BASICS ......................................................................................... 2 A. Principles of Interpretation ........................................................................................................ 2 B. Aircraft Objects ........................................................................................................................... 3 C. International Interests and Contracts of Sale ............................................................................ 4 D. Formal Requirements for an International Interest and Contract of Sale ............................................................................................................................................. 9 E. Power to Dispose ...................................................................................................................... 10 F. Pre-Existing Rights or Interests ................................................................................................ 14 G. Acquisition of International Interests by Subrogation ............................................................. 17 H. Non-consensual Rights or Interests ......................................................................................... 18 I. Effects of Registration of an International Interest – Priority Rules ........................................ 23 J. Prospective International Interests and Prospective Sales ...................................................... 25 K. Assignments and Novations ..................................................................................................... 27 L. Choice of Law and Jurisdiction ................................................................................................. 35 M. Procedural Rules of a Contracting State .................................................................................. 41 N. Declarations .............................................................................................................................. 42 O. Amendments ............................................................................................................................ 44 P. Subordinations ......................................................................................................................... 48 Q. National Interests Arising in Internal Transactions .................................................................. 49 R. Quiet Possession and Use ........................................................................................................ 51 S. Implementation ........................................................................................................................ 52 T. Using the Cape Town Convention Compliance Index .............................................................. 54 U. Global Aircraft Trading System ................................................................................................. 55 III. APPLICABILITY OF THE CAPE TOWN CONVENTION ........................................... 56 A. Sphere of Application and Connecting Factors ........................................................................ 56 B. Partial Application of the Cape Town Convention ................................................................... 60 C. Characterisation ....................................................................................................................... 61 D. Fractional and Multiple Party Interests .................................................................................... 62 E. Helicopters and Helicopter Engines ......................................................................................... 66 i Table of Contents F. Accessions ................................................................................................................................ 71 G. Non-Convention Interests ........................................................................................................ 72 H. Regional Economic Integration Organisations ......................................................................... 74 I. Relationship with Other Treaties ............................................................................................. 75 IV. REGISTERING AN INTEREST .............................................................................. 78 A. International Registry ............................................................................................................... 78 B. User Entities ............................................................................................................................. 79 C. Registration Process Overview. ................................................................................................ 84 D. Agents, Trusts and Representative Capacities ......................................................................... 90 E. International Registry Searches ............................................................................................... 93 F. Discharging an Interest and Transfers of the Right to Discharge ............................................. 99 G. Jurisdiction of the Irish Courts to Make Orders Directing the Registrar to Discharge an Interest ......................................................................................................... 103 V. INTERACTION WITH AVIATION AUTHORITIES ................................................. 105 A. Entry Points ............................................................................................................................ 106 B. IDERA ...................................................................................................................................... 108 VI. CONVENTION AND PROTOCOL REMEDIES ...................................................... 112 A. Default Remedy Basics ........................................................................................................... 113 B. Remedies under Lease Agreements and Title Reservation Agreements ............................................................................................................................ 122 C. Remedies for Security Agreements ........................................................................................ 124 D. Remedies Under Assignments ................................................................................................ 126 E. Advance Court Relief Pending Final Determination ............................................................... 126 F. Insolvency and Alternatives A and B ...................................................................................... 131 G. Deregistration and Export of Aircraft ..................................................................................... 139 H. Exercise of Remedies and Article 39 Non-consensual Rights or Interests .................................................................................................................................. 140 Annex A: Cape Town Applicability ................................................................................................
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