The Cape Town Convention on International Interests in Mobile Equipment (the Cape Town Convention) and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment (the Protocol) (the Cape Town Convention and the Protocol together the Convention), which came into effect on 1 March 2006, has as its main objective, the facilitation of aircraft finance by standardising transactions involving moveable property with respect to „aircraft objects‟ (airframes, aircraft engines and helicopters) by the creation of an electronic international registry of „international interests‟ which are recognised by those states that have implemented the Convention (Contracting State) and to provide various default remedies to a creditor (including in the context of insolvency) should the need arise.
To date the Convention has not been extended to Bermuda as it can only directly apply through implementation by the United Kingdom. However, it is expected that the United Kingdom will ratify the Convention later this year and a group of Bermuda specialists from the public and private sector, including Appleby, is currently working towards the implementation of the Convention and the enactment of domestic legislation in order to give effect to the relevant provisions of the Convention.
This article considers some aspects of the Convention and how the extension to Bermuda will benefit the future of its aircraft finance industry.
