Security interests and remedies protecting creditors under the Cape Town convention & its aircraft protocol

This thesis addresses the International Interests in aircraft and its equipment’s in accordance with the Convention on International Interests in Mobile Equipment 2001 (the “Cape Town Convention” “CTC”) and its Protocol on Matters Specific to Aircraft Equipment (the “Aircraft Protocol”), both signed by Italy on 06/12/2001, in addition to the legal remedies stipulated for protection of the secured creditors in the event of default or insolvency of the debtor. The main purpose of the Cape Town Convention is to provide a uniform legal regime for the creation, registration and protection of a creditor’s interests held in high value types of mobile equipment, such as aircraft, railway and space objects. The Convention provides for the creation of an autonomous international interest in these types of equipment and establishes an electronic International Registry for recordation of interests in aircraft objects. The international interests are supported by an elaborate system of remedies exercisable in the case of the debtor’s default or insolvency. These features of the Convention are aimed at promoting predictability and transparency in the financing of mobile equipment which should reduce the risks and costs of borrowing to the benefit of all stake holders. This is an applied study in the light of the Italian legal regime and discusses prospective impacts on the related Italian legislation when Italy decides to ratify the Cape Town Convention and the Aircraft Protocol. The thesis examines the concept of the international interest under the Convention and the Protocol, explaining types of contracts creating international interests (Security, Title Retention, Leasing and Sale contracts), and discuss the corresponding provisions within the Italian legislation regulating such contracts. This study discusses, as well, the declarations available to the contracting states under the Convention and the Protocol at the time of ratification of the two instruments.