Cape Town Agreement Insights

In order to determine the benefits and risks that may arise during the implementation of the agreement, it is necessary to first assess the available remedies, including national declarations from the end of the year. These remedial measures may include a faster recovery of an aircraft after a default, an early rescue of aircraft after bankruptcy, and the disinscribing of an aircraft registry. Risks should then be identified if one does not properly register one`s priority in the International Register, if one does not include the recourse of Cape Townal in their agreement or if one does not respect the few formalities of the convention. Cape Town fulfills two main missions: it establishes an international registry for the registration and prioritization of holdings in aviation-related assets and provides a set of rights and remedial measures for participation in aviation-related assets. The International Registry (IR), a web-based system, is the central place for recording what Cape Town calls „sales contracts” and „international interests” (together „Cape Town Interests”) in certain aviation-related assets (aircraft, aeronautical engines (but not propellers) and helicopters) called „aircraft objects”. Captownisat`s interests include property shares, security interest, leasing and conditional selling interest. Cape Town`s rules for registered interest are simple. As a general rule, the first part to record Cape Town`s interest in an aircraft object is a priority for that aircraft object, whether the registering party did or constructively informed of Cape Town`s prior interest in the same unregured asset. However, this „First to File” priority rule may not be taken into account if the parties to the transaction register a subordination agreement with the IR under which the parties agree to change their respective priorities. The aircraft protocol applies to a transaction in which three conditions are met: (i) the aircraft/engine meets certain size/power requirements; (ii) an „international interest” is established and (iii) the aircraft is registered in a contracting state that justifies the interest.