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Assuring the Enforcement of International Interests

Possibility of Private Enforcement

To the eyes of the creditor, the effective enforcement of the security interest as remedies for the default by the debtor is one of the key elements to evaluate the law on secured transactions. In this regard, the Cape Town Convention requires the States Parties to choose whether the remedies provided in the Convention are available out of court or only with leave of the court (art.54 (2) of the Convention). This is a mandatory declaration that must be made when a State becomes a Party to the Cape Town Convention. Even if the Contracting State declares that the remedies are available without going through the court procedure and, therefore, the private enforcement of its international interest may lawfully be exercised in that State, the creditor may apply for a court order granting the remedies anyway.[1]

Whether or not the private enforcement is possible, the creditor must exercise its right “in a commercially reasonable manner.”[2] It is obvious that the intention of the requirement is to protect the debtor’s interest. Still, the same provision deems the exercise of an international interest in conformity with a provision of the agreement to be exercised in a commercially reasonable manner, except where such a provision is manifestly unreasonable. Therefore, the provision in the agreement for creating an international interest is basically decisive.

  • [1] Article 8(2) and Article 10 (b) of the Base Convention.
  • [2] Article IX (3) of the Aircraft Protocol; Article VII (3) of the Luxembourg Rail Protocol; ArticleXVII (1) of the Space Protocol. The same phrase is used in Article 8(3) of the Base Convention,but the latter provision is excluded in the abovementioned provisions in the Protocols, to adapt tothe wider variety of remedies available under the Protocols.
 
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