Cape Town Treaty

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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, together usually referred to as the Cape Town Treaty, is an international treaty intended to standardize transactions involving movable property, particularly aircraft and aircraft engines.

The treaty creates international standards for registration of ownership, security interests (liens), leases and conditional sales contracts, and various legal remedies for default in financing agreements, including repossession and the effect of particular states' bankruptcy laws.

The treaty's Protocol applies to aircraft which can carry at least 8 people or 2750 kilograms of cargo, aircraft engines with thrust exceeding 1750 pounds or 550 horsepower, and helicopters carrying 5 or more passengers.

The treaty resulted from a diplomatic conference held in Cape Town, South Africa in 2001. The conference was attended by 68 countries and 14 international organizations. 53 countries signed the resolution proposing the treaty ^[1]. The Convention portion of the treaty came into force on April 1, 2004 ^[2], and has been signed by 28 countries. The Protocol (which applies specifically to aircraft and aircraft engines ) took effect on March 1, 2006 when it was ratified by 8 countries: Ethiopia, Ireland, Malaysia, Nigeria, Oman, Panama, Pakistan, and the United States.

In the United States, the treaty was approved by the U.S. Senate in 2003, and implemented by the full Congress in the Cape Town Treaty Implementation Act of 2004.

The International Registry of Mobile Assets established to record international property interests in the equipment covered by the treaty is located in Ireland. Mediation cases for leasing disputes are to be heard in the High Court of Ireland^[3].