Declarations by Malaysia to the Cape Town Convention
Seven years ago, Malaysia ratified the 2001 Cape Town Convention on International Interests in Mobile Equipment and the Protocol to the Cape Town Convention on International Interests in Mobile Equipment on Matters specific to Aircraft Equipment on 1 March 2006 and deposited several Declarations under the Cape Town Convention and its Protocol.
The Protocol especially for aircraft (which can carry at least eight people or 2750 kg of cargo and engines (with thrust 1750 lb force [7800 N] or 550 horse power [410 kW] and helicopters carrying five or more passengers) took effect on 1 March 2006. Airlines operate as the owners or leaseholders of an aviation asset. The Registry is based in Dublin, Ireland.
Chapter X deals with the “Rights or interests subject to declarations by Contracting States”. It covers Articles 39 and 40. With regard to Article 39(1)(a), “Malaysia declares that the following categories of non-consensual right or interest have priority under its laws over an interest in an aircraft object equivalent to that of the holder of a registered international interest and shall have priority over a registered international interest, whether in or outside insolvency proceedings.
- 1. liens in favour of airline employees for unpaid wages arising since the time of a declared default by that airline under a contract to finance or lease an aircraft object.
- 2. liens or other rights of an authority of Malaysia relating to taxes or other unpaid charges arising from or related to the use of that aircraft object and owed by the owner or operator of that aircraft object, and arising since the time of a default by that owner or operator under a contract to finance or lease that aircraft object; and
- 3. liens in favour of repairers of an aircraft object in their possession to the extent of service or services performed on and value added to that aircraft object.”
On general opt-in declarations under Article 39(1)(b)
“Malaysia declares that nothing in the Convention shall affect its right or that of any entity thereof, or any intergovernmental organization in which Malaysia is a member, or other private provider of public services in Malaysia, to arrest or detain an aircraft object under its laws for payment of amounts owed to the Government of Malaysia, any such entity, organization or provider directly relating to the service or services provided by it in respect of that or another aircraft object.”
Article 40 deals with registrable non-consensual rights or interests. On opt-in declarations under Article 40, “Malaysia declares that the following categories of non-consensual right or interest shall be registrable under the Convention as regards any category of aircraft object as if the right or interest were an international interest and shall be regulated accordingly.
- 1. Liens in favour of airline employees for unpaid wages arising prior to the time of a declared default by that airline under a contract to finance or lease an aircraft object.
- 2. Liens or other rights of an authority of Malaysia relating to taxes or other unpaid charges arising from or related to the use of an aircraft object and owed by the owner or operator of that aircraft object, and arising prior to the time of a declared default by that owner or operator under a contract to finance or lease that aircraft object; and
- 3. Rights of a person obtaining a court order permitting attachment of an aircraft object in partial or full satisfaction of a legal judgment.
Article 53 falls under Chapter XIV on Final Provisions covering Articles 47-62. Article 53 deals with Determination of courts. “Malaysia declares that all courts with competent jurisdiction under the laws of Malaysia are the relevant courts for the purposes of Article 1 and Chapter XII of the Convention.”
Article 54 deals with Declarations regarding remedies. On the mandatory declaration under Article 54(2), “Malaysia declares that any and all remedies available to the creditor under the Convention which are not expressed under the relevant provision thereof to require application to the court may be exercised without court action and without leave of the court.”