The Cape Town Convention and its Aircraft Protocol

Malta has acceded to the Cape Town Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment (the “Cape Town Treaty”, or the “Treaty”) on 1st October, 2010 and these came into force in Malta on 1st February, 2011. The law implementing the Cape Town Treaty and its Aircraft Protocol is found in the First Schedule to the Aircraft Registration Act, 2010.

The Treaty lays down rules in respect of the recognition, enforcement and priority status of interests in mobile equipment. The Treaty provides for the establishment of an international interest which is proprietary in character and which encompasses security agreements, title reservation agreements, leasing agreements and their equivalents. International Interests are registered in the International Registry, which is established under the Treaty and which is an on-line, notice based registry.

Holders of an international interest are granted extensive remedies under the Treaty in the event of the debtor‘s default or insolvency.

It also establishes the right for registrants of aircraft, (as debtors) to grant an Irrevocable De-Registration and Export Request Authorization (IDERA) in the form stipulated in the Second Schedule to the Aircraft Registration Act, 2010, in favour of an authorised party (or its certified designee) to procure the de-registration and export of the aircraft. Where an IDERA has been issued in accordance with the Second Schedule to the Act and it has been submitted for recordation at the Civil Aviation Directorate, the Director General shall record the details of such IDERA, or any other power of attorney, irrevocable or otherwise, as the case may be.

Application of the Treaty

The treaty applies to the following aircraft and aircraft equipment:

• Airframes that are type certificated to transport:
  • At least eight (8) persons including crew; or
  • Goods in excess of 2750 kilograms (6050 pounds).
• Helicopters that are type certificated to transport:
  • At least five (5) persons including crew; or
  • Goods in excess of 450 kilograms (990 pounds).
• Jet propulsion aircraft engines with at least 1750 pounds of thrust or its equivalent.
• Turbine-powered or Piston-powered aircraft engines with at least 550 rated take-off horsepower or its equivalent.

The Treaty applies when, at the time of the conclusion of the agreement creating or providing for the international interest or a contract of sale, the debtor or seller, (as applicable) is situated in a Cape Town Convention State.

The Treaty also applies to a helicopter, or to an airframe pertaining to an aircraft registered in an aircraft register of a Cape Town Convention State which is the State of Registry.