The Cayman Islands government has been preparing for the extension of the Convention on International Interests in Mobile Equipment and the Protocol (the "Protocol") to the Convention on International Interests in Mobile Equipment on matters specific to aircraft equipment (which was concluded at Cape Town, South Africa on 16 November 2001) (together the "Convention") to the Cayman Islands.
Accordingly, the Cayman Islands government has recently passed the International Interests In Mobile Equipment (Cape Town Convention) Law, 2015 which will only come into force once the Convention has been extended to the Cayman Islands. The purpose of this legislation is to implement local legislation that would give effect to the Convention once it is extended to the Cayman Islands. Other legislation which has been passed in preparation for the extension of the Convention to the Cayman Islands are the Bills of Sale (Amendment) Law, 2015, the Civil Aviation Authority (Amendment) Law, 2015 and Mortgaging of Aircraft Regulations, 2015.
The ratification of the Convention by the UK is expected to take place imminently and with the Cayman Islands having now passed the necessary domestic legislation, we are in a position to have the Convention extended to the Cayman Islands as soon as possible thereafter.
The extension of the Convention to the Cayman Islands will entitle the Cayman Islands to international recognition as a territorial unit of a contracting state to the Convention and to recognition of the declarations deposited by the UK government on behalf of the Cayman Islands government with the International Institute for the Unification of Private Law acting as depository pursuant to Article 62(1) of the Convention and Article XXXVII(1) of the Protocol - UNIDROIT.
As extended to the Cayman Islands, the Convention will meet the requirements for the Cayman Islands to have made qualifying declarations as defined in the OECD Aircraft Sector Understanding.
The Existing Regime of Registration of Security Interests in the Cayman Islands
The consequence of the extension of the Convention to the Cayman Islands is not to do away with the existing regime of the registration of security interests locally, because there will be circumstances where it cannot be used (for example, where the owner of an aircraft is located in a non-contracting state or the aircraft does not meet the weight qualifications to fall within the Convention).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.