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The International Interest

The International Interest Under the Cape Town Convention

I. The Convention rules the constitution and effects of an international interest in certain categories of mobile equipment and associated rights (Article 2(1)).

Paragraph 2 of Article 2 defines “international interest in mobile equipment”, for the purposes of the Convention, as “an interest, constituted under Article 7, in a uniquely identifiable object of a category of such objects listed in paragraph 3 and designated in the Protocol:

  • (a) granted by the chargor under a security agreement;
  • (b) vested in a person who is the conditional seller under a title reservation agreement; or
  • (c) vested in a person who is the lessor under a leasing agreement”.

Paragraph 4 of Article 2 clarifies that “the applicable law determines whether an interest to which paragraph 2 applies falls within sub-paragraph (a), (b) or (c) of that paragraph”.

II. The Convention does not specify any condition to qualify an agreement or contract as a “security agreement”, a “title reservation agreement” or a “leasing agreement”. It is incumbent to the applicable law determined by the conflict of laws rules of the forum to answer the question if a “title reservation agreement”[1] or a “leasing agreement” must be considered an “international interest in mobile equipment”, for the purposes of the Convention.

In principle, the Convention does not apply to security interests created by a unilateral act (“negocio juridico unilateral”). However, through declaration of a Contracting State, the Convention may become applicable to certain categories of non-consensual rights or interests created in accordance to a national law (Articles 39 and 40 of the Convention).

In any case, these expressions - as also the expressions used in other provisions of the Convention - should be interpreted autonomously, beyond any national law. Regard is to be had to the purposes of the Convention as set forth in the preamble, to its international character and to the need of promoting uniformity and predictability in its application.

The Convention does not include a contract of sale other than a title reservation agreement in its material scope; indeed, such an agreement does not create any special security that binds the debtor.

Nevertheless, Article 41 states that the Convention shall apply to the “sale” or “prospective sale” of an object as provided for in the Protocol with any modifications therein.[2]

  • [1] About the law applicable to “title reservation agreement”, L. Lima Pinheiro, A venda com reservada propriedade em direito international privado, Lisboa, 1991, specially, p. 87 ff.
  • [2] Article III of the Aircraft Equipment Protocol; Article IV of the Space Assets Protocol.
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