King & Wood Mallesons

Asia-Pacific 100 position: 2

The Cape Town Convention and aircraft protocol — more to come

Australia has now enacted the implementing legislation to give effect to the Cape Town Convention in Australia. However, several steps remain to be taken before it is in effect, as described in this article. In addition, the interaction of the Cape Town Convention and other Australian law will need to be considered, and industry advisers will need to come to a view and agree a new approach to the documentation and registration of aircraft transactions.

Signed in Cape Town in November 2001, the Cape Town Convention and the relevant aircraft protocol (together the ‘convention’), bring into force a framework for an international standard for the protection of ownership rights and security interests in aircraft.

The convention establishes that an ‘international interest’ in aircraft assets (such as airframes, aircraft engines and certain helicopters) arises in favour of: the seller/conditional seller under a sale/title reservation agreement; the lessor under a lease agreement; and the creditor under a credit agreement…

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