The 21st of December 2010 brought about the expansion in relation to the registration of aircraft under Maltese jurisdiction. The Aircraft Registration Act has provided for a range of initiatives which did not feature prior to its introduction.
The 1st of February 2011 witnessed the enforcement of the Cape Town Convention and its Protocol thereby harmonising Maltese legislation with that of other signatories placing us in an advantageous and competitive standing in relation to other players.
The Cape Town Convention was drafted in order to regulate international interests in mobile equipment together with the Protocol to the Convention on international mobile equipment on matters specific to aircraft equipment. Its aim was to create a legal framework for international interests in such equipment and for that purpose, to create an international registration system for their protection as it is set out in the Convention’s preamble.
The Cape Town Convention establishes a variety of key features which are considered to be novel concepts incorporated into Maltese legislation. The overhauling and innovative introduction brought about by the Cape Town Convention instituted the possibility of registering an international interest over and above the ability of registering an interest under a national register which is contemplated under the Aircraft Registration Act. Moreover, the international registry introduced the establishment of an electronic registry which is set on a notice-based system with the additional characteristic of providing priority ranking in favour of the registered interest.
The Convention also provides for the decrease in risk relating to aircraft transactions dealing with aircraft. Indeed, the largest impact the Cape Town Convention has on the aviation industry is the broadening of rights particularly with regard to their recognition and protection as well as remedies available to the creditor.
Malta’s legislation in relation to the aviation industry was derived from English law thereby introducing novel concepts to a principally civil law system. In fact with the implementation of the Cape Town Convention the following concepts were thus introduced:
· Security interests which were not previously recognised under civil law;
· The concept behind the irrevocable mandate; as well as
· The security by title transfer.
Prior to the introduction of the Cape Town Convention and the Aircraft Registration Act, the Merchant Shipping Act provided for remedies to the mortgagee which featured:
· Possession of the aircraft or the interest therein;
· Sale of the aircraft; as well as
· The ability to apply extensions, pay fees or receive certificates.
Following the enforcement of the Cape Town Convention, the following remedies were made available to a mortgagee with the unique characteristic of not involving judicial approval and may be listed under the following remedies:
· The possibility of leasing the aircraft in order to derive income;
· Any income derived from the management of the aircraft; as well as
· The cancellation of the registration of an interest.
Needless to say The Cape Town Convention together with its Protocol and the Aircraft Registration Act may not be spoken of without the other. Each of their enforcement is vital in order to boost the industry and make the most of the incentives which are provided to the industry.
