The New Regimen: Its History and Future after South Africa
Authors: Stanford Martin J. 
Published: April 2022

Abstract: The Convention on International Interests in Mobile Equipment and the Protocol thereto on Matters specific to Aircraft Equipment were opened to signature in Cape Town on 16 November 2001. Twenty-six States have to date signed both instruments and the signs are good for their early entry into force. The origins of UNIDROIT’s work in this area were both legal and economic in nature, legal in the sense that the lex rei sitae is not particularly appropriate for resolving disputes concerning the validity, enforceability and priority ranking of assets of a kind likely to be moving across or beyond national frontiers on a regular basis, economic by reason of the potential that asset-based financing could have in enhancing access to high-value mobile equipment for debtors in developing and emerging economies.

Considerable research by UNIDROIT, and in particular Professor R.C.C. Cuming, provided the basis for this work. A preliminary draft Convention, drawn up by a UNIDROIT study group, chaired by Professor Sir Roy Goode, between 1993 and 1997, and a preliminary draft Protocol on Matters specific to Aircraft Equipment, drawn up by a working group the core members of which were the International Civil Aviation Organization (ICAO), the International Air Transport Association (IATA) and the Aviation Working Group organized by Airbus Industrie and The Boeing Company, between 1997 and 1998, provided the basis for intergovernmental negotiations, co-sponsored by UNIDROIT and ICAO, between 1999 and 2000. The benefits of the new international regimen are intended to be extended to other categories of high-value mobile equipment, in the first place railway rolling stock and space assets. Governmental experts are already at work on a preliminary draft Protocol to the Cape Town Convention on Matters specific to Railway Rolling Stock. Governmental experts will commence consideration of a preliminary draft Protocol on Matters specific to Space Assets in December 2003. A Preparatory Commission was set up by the Cape Town diplomatic Conference, under the guidance and supervision of the ICAO Council, to act as Provisional Supervisory Authority for the establishment of the International Registry for aircraft objects that will underpin the Cape Town Convention and Aircraft Protocol. It was directed by the diplomatic Conference to ensure that the International Registry be set up at the latest by the time of the entry into force of the Convention and the Aircraft Protocol. Those States that participated in the diplomatic Conference and interested private parties were urged by the diplomatic Conference voluntarily to make available, at the earliest possible date, the start-up funding that will be needed for the Preparatory Commission and ICAO to carry out the tasks given to them by the diplomatic Conference. The new international regimen will greatly reduce the cost of credit for the financing of the different categories of high-value mobile equipment covered thereby. The economic gains expected to flow from effective implementation of the Convention and the Aircraft Protocol run to several billion dollars on an annual basis. It is anticipated that the novel solutions embodied in the new international regimen will filter through to the new generation of laws governing secured transactions in general being put in place. The new international regimen is likely to have special significance for developing countries, by providing them with the foreign capital investment needed to help them develop their infrastructure. The unique level of participation at all stages of the development of the new international regimen by representatives of the world of practice, and in particular the different business sectors involved, means that the Convention and its Protocols reflect industry consensus to an unprecedented degree and thus enhances the chances of the new international regimen attracting widespread acceptance.