Home Law Implementing the Cape Town Convention and the Domestic Laws on Secured Transactions
The Model of the Registry of Movables in the Context of the Cape Town System
The Registry of Movables (Registro de Bienes Muebles) has been designated as the national entry point for the purposes of the Cape Town Convention upon the accession to the Aircraft Protocol - more specifically, the Registro Provincial de Bienes Muebles de Madrid -.
As a “legal registry”, the Registry of Movables is expected to share all the aforementioned general principles. Even if that statement is quite certain today, a full coherency of registry principles among all registries has not been totally achieved. Indeed, scholars disagree on the complete applicability of strong registry principles as devised for real state property to the Registry of Movables. A significant heterogeneity of “registries” (sections) covered by the organizational umbrella of the Registry of Movables complicates the devising of a consistent framework of principles governing the registration of titles and security interests on movables. In accordance with the additional provision of the Royal Decree 1828/1999, of December 3, the Registry of Movables comprises six sections whose scope and nature appreciably differ: ships and aircrafts; automobile and other motor vehicles; industrial machinery, commercial premises and equipment; other security interests; other registrable movable property; standards contract terms.
From its inception, the Registry is evolving to become a real registry of personal property with the registration of titles and security interests on identifiable movable property (along with the registration of standard contract terms). However, scholars disagree on the complete transformation of the nature of the Registry. In fact, it is argued that the Registry is still far from operating as a real registry of personal property that is a desideratum more than a reality in the current state of evolution. Important consequences derive from such an uncertain nature. In particular, effects on the transfer of titles and third parties’ rights will be different in each case.
Among other reasons, the proper categorization of the Registry as a registry of titles is questioned insofar as the prior registration of ownership over the object as a condition to register further interests on it is not compulsory in all cases but merely facultative. Notwithstanding, within the field of our interest, in the case of ships and aircrafts the first registration has to be that of the ownership; otherwise, the Registrar will refute any further registration of interests on an aircraft or a ship lacking the registration of the ownership.
Thus, currently, the scope of the Registry of Movables is the registering of the following: agreements referred to personal property, such as sales, with or without deferred payment, ordinary leasing agreements and special leasing agreements (financial leasing, renting, lease back), movable mortgages and non-possessory pledges, naval mortgages, notices of seizure and notices of lawsuits and any other security interest, encumbrance or limitation on such assets with effects against third parties. Likewise, standard contract terms and court orders about them are registrable as well.
From an organizational viewpoint, it is organized as an asset-based model; accordingly, the registry system is based on registration against assets. Likewise, in general terms, it replicates a “full documentary model” in contrast to the notice- based formula of the International Registry. In that regard, a pair of considerations has to be made. Firstly, after a subsequent reform, the Registry is not a depositary of contracts but an extract of the agreement is transliterated for the purposes of the registering. Secondly, despite that the general rule is that only public deeds, administrative documents or court orders can access to the Registry, this formality has been attenuated in the case of hire purchase agreements, since private documents in an official form are admitted for the purposes of registration. The traditional limits to private documents were explained by their lack of a prior control ensuring veracity and accuracy by the corresponding competent organ.
Priority rules overall work on a time basis. Then priority is given to the secured creditor who filed first. In the same way, those registrable interests that however are not duly registered will exert no detrimental effect on third parties. Interestingly, on the occasion of the accession to the Convention, Spain did make no declarations under Articles 39 and 40, but as expected, upon the accession to the Aircraft Protocol, Spain has made several subsequent declarations under Articles 39(1)(a), 39(1)(b) and 40. Any further declaration will take effect under the conditions laid down by Article 57.
Unlike the Cape Town system, the actual knowledge of the existence, or more exactly, the lack of actual knowledge, may still have some relevance in the Spanish legal system on secured transactions, albeit with an uncertain extent. As a matter of law, the creation of a non-possessory pledge will not have any detrimental effect on previous third parties’ rights on the object as perfected in a document with a previous authentic date (if these rights are not registrable). Likewise, it is stated that any acquirer of an object acquires its interest in it subject to any previous interest (ordinary) pledge insofar as he/she knew it or should have known it. It has to be remembered that ordinary (or possessory) pledge are not registered. Nevertheless, considering the doubtful nature of the Registry of Movables as a real registry of personal property, the applicability of the presumption of good faith to those third parties relying on the registered data seems to be questionable.
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