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The Current Status of Convention

Russian Federation accessed the Cape Town Convention (“Convention on international interests in mobile equipment”) in 2010 (Federal Law of 23.12.2010 N.361-FZ // Sobr. Zakonod. RF. 2011, N.36, Item 5124). The Convention is in force in Russia from the 1st of September of 2011. It was enforced together with the Protocol to the Convention on international interests in mobile equipment on matters specific to aircraft equipment on the 1st of September of 2011 (Federal Law of 23.12.2010 N.361-FZ // Sobr. Zakonod. RF. 2011, N.36, Item 5124) with a declaration made in accordance with Article XXXI under Article 60 of the Convention. The Declaration provides that Russian Federation will apply articles VIII and XIII of the Protocol. The Federal Law of the 5-th of June of 2012 N.60-FZ “On the Declaration of Russian Federation concerning Protocol to the Convention on international interests in mobile equipment on matters specific to aircraft equipment” provides that according to Part of Article XXXIII of the Protocol Russian Federation as a State Party of the Protocol shall apply articles VIII and XIII of the Protocol (Sobr. Zakonod. RF. 2012, N.24, Item 3077).

To summarize the main acts of implementation of the Cape Town Convention and the Protocol on matters specific to aircraft equipment into Russian legislation one can say that the national law is to play the main role in regulation of financing transport equipment and aircraft equipment particularly. But the application of

Russian legislation is subordinated to the Rules of Convention, especially the rule on the obligatory international registration.

The registration of civil aircrafts is a function of a state body - Federal Agency on transportation by air - “Rosaviazia” (Rosaviation). It registers the rights in the aircrafts also. According to the Federal Law of 14th of March 2009 No.31-FZ “On State Registration of the rights in aircrafts” Rosaviazia determines the order of registration including the procedure of interconnection between the registration body and the applicant. The Administrative Regulation on services in form of registration of rights in aircraft is enacted by the Order of the Transport Ministry of the 6th of May 2013 No.170. It is necessary to pay attention to the fact that at preset Rosaviazia has no function to deregistrate in case of sale of aircraft or transfer of the right in aircraft. The procedure of deregistration is necessary to be introduced in Russian legislation in order to secure the creditors’ interest as it is provided by the Cape Town Convention.[1]

The sphere of application of the Cape Town Convention and the sphere of application of Russian legislation on security interests do not coincide. The first is applicable in international business relations. Security interests have a wider sphere of application. The latter includes security interests in the business relations between national persons that is the relations which are developing within the state and are governed by the Russian legislation exclusively. Thus the absence of contradiction between national and international regulation was one of the arguments in favor of ratification of the Cape Town Convention. At the same time the rules coordinating different regimes of security interests were enforced in Russian Legislation by Federal Law on accession to the Cape Town Convention and the Protocol on the matters specific to Aircraft Equipment of 23 December of 2010 No.361-FZ.

1. According to Federal Law on accession to Cape Town Convention and Protocol on the matters specific to Aircraft Equipment of 23 December of 2010 No.361-FZ the following requirements of creditors will have priority when satisfied within the territory of Russian Federation in cases of insolvency: on current payments; on payments with the aim to prevent technological and ecological catastrophe caused by the insolvency of the debtor; the requirements of a person to the debtor responsible for damage of health and requirement of compensation of moral damage; salaries and payments according to labor contracts with hired personnel.

The mentioned requirements will have priority before the requirements as a result of an - international interest registered in International Registry. Article 39 of Convention provides for the possibility of rights that have priority without registration in case of Contracting State deposit corresponding declaration with the depository.

2. According to Federal Law on accession to the Cape Town Convention and the Protocol on the matters specific to Aircraft Equipment of 23 December of 2010 No.361-FZ the disputes connected with the application of Convention and

Protocol shall be solved by the state courts (arbitration courts) that are specialized in economic disputes. This provision corresponds to Art. 53 for the purposes of Art.1 and Chapter XII “Jurisdiction” of the Convention.

  • 3. According to Federal Law on accession to the Cape Town Convention and the Protocol on the matters specific to Aircraft Equipment of 23 December of 2010 No.361-FZ the remedies available to creditors under any provision of the Convention, which are not expressly defined as a mode of protection of the secured interest that require application to the court, may be exercised without leave of the court (art 1 Part 4 of the Law). This provision of the Law corresponds to Part 2 of Art.54 of the Convention.
  • 4. According to Federal Law on accession to Cape Town Convention and Protocol on the matters specific to Aircraft Equipment of 23 December of 2010 No.361-FZ The Russian Federation, following the Part 3 of Art. XXX of the Protocol, will apply the entirety of Alternative A of Art.XI of Protocol and time period will be 60 days.

According to Art. XI of the Protocol on matters specific to Aircraft equipment Alternative A applies only where the Contracting Party is the primary insolvency jurisdiction. So as it is provided in the abovementioned Law of Russian Federation the insolvency related event may result in the transfer of the possession of the aircraft object to the creditor by the order of insolvency administrator with the waiting period not later than 60 days.

  • [1] Юрьев Ю.С., Евстигнеева И.С. Особые способы защиты лизигодаелей по КейптаурскойКонвении о международных гapaнияx в отношении подвижного oбopудoвaния 2001г. //Закон.2014, №4, с.158
 
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