Cape Town Convention, 2001

News: The Rajya Sabha passed the Protection of Interests in Aircraft Objects Bill, 2025. The Bill seeks to give legal effect to the Convention on International Interests in Mobile Equipment (also known as Cape Town Convention of 2001) and Protocol to this Convention in their application to India.

About Cape Town Convention, 2001

• It is an international treaty that aims to facilitate asset-based financing and leasing of high-value mobile equipment like aircraft, helicopters, and aircraft engines by providing a uniform legal framework and international registration system.
• It was adopted at a conference in Cape Town in November 2001 under the International Civil Aviation Organisation (ICAO) and the International Institute for the Unification of Private Law (UNIDROIT).
• Objectives:
  • Facilitate asset-based Financing
  • Protect lenders and investors
  • Create an international registry
  • Standardize legal framework across countries
• India’s status: India is a signatory to the convention (in 2008), but the Indian Parliament has not ratified the same. Once the legislation is enacted, the Convention will get legal backing in India and ensure compliance with the international norms related to leasing of aircraft.

About Protection of Interests in Aircraft Objects Bill, 2025

• Key Provisions of the Bill:
  • Legal compliance: It empowers the central government to make rules to implement the provisions of the Convention and the Protocol.
  • Creditor remedies: In case of default, allows creditors or lessors to reclaim possession of aircraft within two months or a mutually agreed period.
  • Domestic registry: It designates the Directorate General of Civil Aviation as the registry authority for the convention.
  • Mandatory registration: It requires all financial interests in aircraft to be registered in the International Registry under Cape Town Convention.