Of much greater significance are the provisions of the Aircraft Protocol relating to
insolvency.
Article XI, which depends on an opt-in by the Contracting State that
is the primary insolvency jurisdiction, has two alternative forms: Alternative A
and Alternative B. Alternative A is based on § 1110 of the US federal Bankruptcy
Code23 and provides that unless the debtor or the insolvency administrator cures
all defaults (other than the insolvency) and agrees to perform all future obligations
under the agreement before the end of the waiting period, possession must be given
to the creditor.
There can be no judicial stay and no extension of time.
Experience has shown that the availability of this powerful remedy, which
significantly assists financing, has had the beneficial effect of restoring US airlines to profitable trading.
In contrast, Alternative B leaves it to the court to determine whether to order the
giving up of possession.
Every Contracting State except Mexico has so far opted for Alternative A; however, Contracting States have an option to make no declaration and continue to apply their domestic insolvency law.
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G Benefits of the Cape Town Convention and Aircraft Protocol
There is no doubt that airlines operating in Contracting States which have adopted
Alternative A and have selected other appropriate declarations such as the provisions
on self-help and speedy advance relief have secured substantial savings in financing
costs. Meanwhile, creditors have benefited from the effect of the Cape Town
discount on export credit insurance.24
The Cape Town discount is the discount that members of the Organisation for
Economic Co-operation and Development offering export credits for civil aircraft
are permitted by the Sector Understanding on Export Credits for Civil Aircraft (the
ASU, September 2011).
The discount allows such members to take advantage ofthe minimum premium rate after ratifying the Cape Town Convention and Aircraft Protocol with a specified set of qualifying declarations.
In addition, the existence of a central international registry, coupled with an international legal regime providing speedy advance relief on default and clear priority
rules, will undoubtedly strengthen security, increase certainty and reduce the
expenses involved in having to ensure perfection and priority in multiple jurisdictions.
H The Official Commentary It is quite common to have Explanatory Reports prepared for the approval of a diplomatic Conference describing the objectives of an international convention and analysing its provisions for the benefi t of delegates. However, it is less common for a diplomatic Conference to approve of the preparation of an Official Commentary by a single individual after the diplomatic Conference.
Nevertheless, it was a sensible decision here because, though an Explanatory Report was prepared for the diplomatic Conference, it could not have addressed the range of issues that arose fi ve and a half years later when the Cape Town Convention and Aircraft Protocol entered into force and the International Registry became operative. Indeed, when the fi rst edition of the Official Commentary appeared in 2002 neither of these events had occurred, so it was very much a transitional publication.
A revised edition was published in 2008 and a substantially expanded third edition in the summer of 2013,25
Sir Roy Goode, Official Commentary on the Convention on International Interests in
Mobile Equipment and the Protocol Thereto on Matters Specific to Aircraft Equipment (UNIDROIT, 3rd ed, 2013).
the last of which took account of a range of issues raised by the aviation industry in light of its experiences, as well as huge advances in the registry system.26
A further reason for the preparation of new editions was that I was also mandated
to prepare similar Offi cial Commentaries covering the Luxembourg and Space
Protocols, and each time a new Protocol was adopted, which required a new Offi cial
Commentary, it was necessary to revise the earlier publications so as to ensure that in their treatment of the Cape Town Convention provisions all the Official Commentaries said the same thing!
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The Offi cial Commentary, being of persuasive value only, is not binding on courts.
However, several statutes enacting the Cape Town Convention and Aircraft Protocol
expressly provide that in interpreting these instruments courts may have regard to
the Offi cial Commentary.
Among the states whose implementing legislation has included such an interpretative
provision are Canada, Ireland and Singapore.
I Reasons for Success
The success of the Cape Town Convention and Aircraft Protocol is in large measure
due to extensive consultation, a focus on clear rules uncluttered by the complexities
of domestic legislation and the investment by the aviation industry of a huge amount
of effort and resources to ens