Home Law Implementing the Cape Town Convention and the Domestic Laws on Secured Transactions
Because of the strong need to create security interests in movables without depossession, title-based securities are often used in business practices. As such, transfer of ownership, retention of title, or lease are mainly utilized.
The Supreme Court has recognized the rights of title-based security holders. It is important to note that these rights are not considered equivalent to ownership. As discussed below, the Supreme Court often treats them like secured creditors who holds a security interest.
The Aircraft Mortgage Act (KdMki Teito Ho) specially provides for mortgages of aircraft. According to this Act, a creditor can acquire a security interest in an aircraft without possession, similar to a real estate mortgage. It is possible to perfect the mortgage by registration in the registry established by the Aviation Act (Кбкй Ho). However, a lease plays an important role in the practice of aircraft finance.
The Railway Mortgage Act (Tetsudo Teito Ho) makes it possible to create a mortgage covering railway rolling stocks. According to this Act, a mortgage can be created on a railway estate, which comprises real estate connected with railway (e.g., railway premises and station buildings), and movables used for railway (e.g., rolling stocks and machines for maintenance).
Historically, a car trust was used as a means of finance of rolling stock. Today, a lease and lease-back are utilized.
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