Treatment of Types of International Interests
Under the Cape Town Convention an “international interest” includes three types of interests: the interest granted by a chargor to a chargee under a security agreement (i.e., a security interest securing an obligation), the interest of a conditional seller under a title reservation agreement, and the interest of a lessor under a leasing agreement. The Convention leaves to the applicable law the determination of which category of international interest is created by an agreement. Under USA law (i.e., UCC Article 9), interests in aircraft assets, rail assets, and space assets that are created under a security agreement and under a title reservation agreement are treated identically—as security interests under Article 9’s unitary system. Leasing agreements covering such assets, on the other hand, are governed by UCC Article 2A. Of course, the provisions of UCC Articles 9 and 2A must yield to the Cape Town Convention in the case of any inconsistencies.