Legal Issues On Application Of The Cape Town Convention

The 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, collectively as the"Cape Town Convention", is the most important international convention regarding financial leasing of aircraft equipment. The Cape Town Convention covers matters on purchase and lease of aircraft equipment, and establishes a uniform legal system for the security interest in the financial leasing deal with the detailed rights and obligations, and further, increases certainty and reduces risks. On June.1st, 2009, the Cape Town Convention became effective in China. Taking its major legal mechanism and deal background into consideration, this paper tries to probe into its potential benefits to China, to analyse China's declarations, and then to discuss legal issues on the Cape Town Convention's application to China.Apart from introduction and conclusion, this paper consists of three chapters.Chapter one is a summary on background and legal mechanism of the Cape Town Convention. From the aspects of necessity and feasibility, it firstly points out the significance and value of the Cape Town Convention. Then it introduces the major legal mechanism which mainly includes: the creation of international interests, default remedies, and recognition of international interests on insolvency. The Protocol also makes some important revision to the Convention in articles of application sphere, default remedies and remedies alternatives on insolvency. Chapter two is an analysis of the legal issues on China's entry into the Cape Town Convention. After introducing the general legal relationship of the financial leasing deal of aircraft equipment, it summarizes the current domestic laws and regulations and international conventions related to aircraft equipment financial leasing. Then it analyses China's declarations according to the four types of declarations which the Cape Town Convention authorizes. It also discusses the relationship between the Cape Town Convention and domestic laws and regulations, and its relationship with relevant international conventions, and finally finds out that, compared with domestic laws and regulations, there are some differences, and compared with the Geneva Convention, there is relationship of supplement.Chapter three is a discussion about the Cape Town Convention's practical application to China. It focuses on the legal issues in the registration process of international interests. Also, it covers the default remedies and remedies on insolvency that creditors can enjoy and consequent argument that debtors can make.In the last part, this paper prospects the effect that the Cape Town Convention brings to the market in China. In the recent couple of years, the Cape Town Convention will not change the existing market structure because China usually plays the role of debtor rather than creditor. However, in the long term, the Cape Town Convention will increases finance channels of aircraft equipment, decreases a large sum of costs and finally boosts the prosperity of aircraft industry in China.