assignment and subordination shall be registered to ensure the holder of them of its rights.
What impact the Convention and Aircraft protocol has on national law
The national law will still be of significant importance in the Contracting States. The two instruments with various alternatives to enter them, are giving them more or less direct effectiveness in the own territory. The more of the “harder” rules a state adopts, the more effective the instruments become. The alternatives to make them “softer” were however necessary in the compromising. However, even if a state disapplies some of the provisions, the interest will still be goverend within the frames of the Convention, and still will some predictability be achieved.
The Contracting State which choose to adopt the harder provisions of the Convention and the Aircrafts Protocol, so to say “the whole package” will therefore gain the full economic benefits from this. The formula advocated by the drafters of the Convention seems quite simple: the stronger possibilities one gives foreign investors to protect their rights, the stronger the prospective debtors in the own territorys’ position in negotioation becomes. Through giving the Convention more impact on the national law the Contracting State becomes a more attractive place to invest in. Lower risks shall lead to cheaper and smother financing. Interesting to see, quite many of the Contracting States have choosen to adopt alternative A of Article XI AP on insolvency proceedings.84
Among the more important declarations a Contracting State can make, to protect its own interests, are the ones regarding non-consensual rights and interests. By these declarations, the Contracting State effectively can affect and limit the Convention and Protocol’s impact to a desirable extent. This might contribute to making the states more susceptible to adopt even the hard-law provisions. After analyzing the instruments, one would consider this to be the preferable way to enter the Convention and the Aircraft Protocol: adopting the for the efficiency important provisions of the Aircraft Protocol, XI Alt. A, VIII, XIII and X, and impedeing any unwanted impact these might have through declarations under Articles 39 and 40 CTC on non-consensual interests. This would not only lead to a high level of predictability for the side of the creditor, but also for the Contracting States’ own courts and insolvency administrators.
The accession by the European Union could give rise to a problem for its Member States. The step to change the national law to reflect the underlying principles of the Convention and Protocol for the kind of equipment covered by them might, even though the substantive outcome will be the same as making the declarations, deter the states or at least delay the time for accession. This may be the reason why some of the European Union Member States, such as France and Germany who signed the Aircraft Protocol, still have not deposited their documents of ratification with any
84 Status of the Aircraft Protocol
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declarations to the depositary. However, the European Union choice was between making the declarations and thereby binding all member states who wanted to enter into them or not to make them, withthe consequence that its member states would not be able to declare.