Remarks
The main insufficiency of the Geneva Convention lies in the fact that it merely recognises certain foreign rights established in aircraft.
These rights, although covering the most common financing techniques, are not sufficient from today’s perspective.
Especially from a common law, perspective the Geneva Convention restricts methods of financing, due to the common law’s wider range of interests as opposed to the numerus clausus of civil law.
The Geneva Convention replaces the lex rei situs principle with the lex
registry.
Although a very reliable and comprehensible solution, it has often
provided problems with respect to the choice of registration of aircraft.
Thirdly, the only enforcement remedy provided for by the Geneva
Convention is the judicial sale.
It is known that an announced judicial sale is
not under all circumstances the best way to sell an aircraft, moreover such
procedure is very time consuming.
Lastly, the Geneva Convention, although very wide spread, has not
been ratified by some major air faring nations as the United Kingdom,
Canada, Australia, Japan and others.
This has not facilitated aviation
financing with these countries.
As a conclusion one can say that something had to be done in order to
reform the legal framework for aviation finance.
The Convention on International Interest in Mobile Equipment is replacing the Geneva Convention.
It remains to be seen if this new Convention can replace the
Geneva Convention and improve aviation finance.
This will be the subject matter of the following chapter.