With these extensions it soon became clear that the problems were
formidable. Prior international commercial law instruments had steered clear
of what were regarded as taboo subjects: property rights, priority rules, rules
affecting insolvency law in some degree.
Now we were proposing to invade all these areas and, to that end, not only to create a brand-new type of interest but also to establish an international registry for its protection.
Even definitions presented a problem. How to define an aircraft? an aircraft engine? How to deal with the concepts of internationality and mobility (interestingly, the
Convention is entirely silent on these two issues, treating them as inherent in
the categories of equipment covered
What transformed the entire process was the involvement of Airbus
Industrie and The Boeing Company, which together established the Aviation
Working Group under the leadership of Jeffrey Wool, a specialist aviation
finance lawyer who had already been engaged as consultant to UNIDROIT. The
AWG, which is now a semi-permanent organisation and a great driving force
in the project, began to come up with a series of papers, including detailed
drafts, which were of inestimable value.
Even so, some of the nuts were hard to crack. The aviation industry spent six months working out definitions of aircraft objects and aircraft engines and even then did not get it right the first time.
Then default remedies had to be fashioned, provisions devised for the International Registry and priorities.
In fact, the priority rules governing international interests are remarkably simple and are all gathered together in a single article, Article 29.
The drafters eschewed the complexity of national laws and went for simplicity.
More complex are the priority rules governing assignments of associated rights, that is, rights to payment or other performance under the security, etc., agreement. The rules for the International Registry proved to be complex.
There had to be provisions for a Supervisory Authority to control the International Registry, the immunity of the Supervisory Authority, the liability of the registrar (strict) and provisions for insurance.
The next question arose from the fact that work on aircraft objects,
railway rolling stock and space assets was proceeding under different working
groups operating at different speeds.
How, for example, was the work on aircraft objects to avoid being held up pending progress with railway rolling stock and space assets? That was where Lorne Clark, General Counsel of the International Air Transport Association (IATA), came up with a brilliant solution.
Why not adopt a two-instrument approach: a framework Convention
604
which would apply to all three categories of assets without differentiation and
then separate Protocols for each category of asset, which would, unusually,
control the Convention, adapting it to the needs of the particular industry
sector affected, while allowing each group to proceed at its own pace.
Interestingly, this proved quite controversial.
There were those who argued for
a series of stand-alone Conventions, and the argument was so fierce that it was
only on the first day of the diplomatic Conference in Cape Town that
opponents of the two-instrument approach finally bowed to the will of the vast
majority of delegates speaking on the issue.
The advantages are manifest: a
single Convention allowing of uniform interpretation of provisions not specific
to a particular category of equipment, as opposed to a series of Conventions
drafted by different hands; a text not cluttered by detailed technical definitions
of the assets covered or the varying requirements of the different sector; and
the avoidance of the need for two, or even three, diplomatic Conferences or
alternatively one enormous Conference lasting for several weeks
In collaboration with the AWG UNIDROIT advanced the project through
the Study Group and various specialist groups, in particular an Insolvency
Working Group, a Public International Law Working Group and an
International Registry Task Force.
Meanwhile UNIDROIT had been joined by
IATA and finally, as co-sponsor of the project and co-organiser of the
diplomatic Conference, by the International Civil Aviation Organization.
Innovative features were added:
a system of declarations which enabled States
for whom a particular provision might run counter to its basic legal
philosophy to opt into or opt out of the provision; a new default remedy of deregistration and export of aircraft; an extension of the Convention registration
and priority rules to cover outright sales of aircraft objects and, later, of space
assets. The AWG, IATA and ICAO also commissioned an economic impact
assessment from INSEAD in Paris and the New York University Salomon
Center, and the resulting report estimated that on conservative assumptio