Τρίτη 15 Ιουλίου 2014

International Academy of Comparative Law - 2014 Congress

Την επόμενη εβδομάδα, θα λάβει χώρα στη Βιέννη το Διεθνές Συνέδριο ( της Académie Internationale de Droit Comparé (

Έχω τη χαρά και την τιμή να είμαι εθνική εισηγήτρια σε ένα από τα θέματα, το οποίο επιπλέον μου είναι ιδιαιτέρως αγαπημένο, διότι είχα συμμετάσχει στις εργασίες και στην ολοκλήρωση αυτής της Διεθνούς Σύμβασης - βλ. προηγούμενες αναρτήσεις:

Δυστυχώς δεν θα μπορέσω να πάω στη Βιέννη, δεν είχα προλάβει να οργανώσω το ταξίδι αυτό αλλά και ούτε τον χρόνο θα είχα να το πραγματοποιήσω, λόγω πολλών και διαφόρων υποχρεώσεων.

Οι εισηγήσεις - Γενική και εθνικές - θα εκδοθούν από τον εκδοτικό οίκο Springer (

Οι ελληνικές εθνικές εισηγήσεις θα δημοσιευθούν - όπως πάντα, στα συνέδρια αυτά που γίνονται κάθε τέσσερα χρόνια - στη Revue Hellénique de Droit International.

                          Οι δύο πρώτες φωτογραφίες είναι από το Freiburg, στη Γερμανία.

Αυτό το κείμενο είναι η δική μου εισήγηση. Επειδή οι εθνικές εισηγήσεις "απαντούσαν" σε συγκεκριμένο ερωτηματολόγιο, οι μονολεκτικές απαντήσεις θα σας φανούν μάλλον ακατανόητες...!

Security interests burdening transport vehicles – The Cape Town Convention and its implementation in national law


                                        Elina N. Moustaira

As it is well known by now, the initial idea, when the text of the Cape Town Convention was being prepared, was to create a uniform security interest, following the model of the “security interest” of the article 9 of the USA’s Uniform Commercial Code, assimilating practically the conditional sale agreements and the leasing agreements with the security agreements[1]. Τhis “functional” approach was partly abandoned afterwards, because it was thought that it might find hindrance in the non-common law States[2].
Nevertheless, the “basic framework” of the Cape Town Convention is “that which applies to secured transactions in the UCC and other legal systems which have been influenced by the UCC”[3].
Finally, Cape Town Convention applies to all three mentioned  agreements which create the so-called by the Cape Town Convention “interest”. What is more, it is foreseen that the according to the rules of conflict of law applicable law will have the competence to determine if and in what category among the covered by this common name, will an international interest be included[4].
Its rules are valid as a uniform law and they apply, not only to the international cases, but also to absolutely national [internal] transactions, except if a Member State declares that, as far as it is concerned, the Cape Town Convention will not be applied to the internal transactions[5].
            Greece has ratified the Geneva 1948 Convention on the International Recognition of Rights in Aircraft (Law Decree 543/1970), but has neither signed nor, obviously, ratified the Cape Town Convention.

1)    Registration system
As far as the recognition of foreign [security] interests is concerned, it is the law of the State of reception that decides whether a certain form of publicity – here, the registration – constitutes a part of the international public order[6].
a) No.
b) The registration of aircraft, in Greece, is the responsibility of the Civil Aviation Authority (CAA). According to article 1 of the Law 1340/1983: “The Civil Aviation Authority constitutes a Public Service of the Ministry of Transport, Infrastructure and Networks and is administered by its Director and Assistant Director”.
The following records, inter alia, are maintained with the CAA:
a)    Record of mortgages over aircraft and engines;
b)    Record of Arrests of aircraft and engines;
c)    Record of Ownership Claims over aircraft and engines;
d)    Record of Aircraft Leases.
There is no separate register maintained in respect of spare parts.
According to article 1339 of the Civil Code, which is applied to aircraft by analogy (art. 73 of the Code of Aviation Law), it is provided that the mortgage registers are public and anyone may consult them. The mortgage should also be noticed in the aircraft’s Certificate of Registration (article 108 par. 3 of the Presidential Decree 7/1931).
A Presidential Decree should be issued concerning the manner of keeping the above records, but until now no such Decree has been issued. Consequently, the CAA currently does not keep a Register of Claims over aircraft and engines or a Register of Aircraft Leases. The relevant registrations are made in the general register.
The mortgage covers the aircraft, its engines and – if there is no agreement to the contrary – its accessories (article 51 Code of Aviation Law).
A mortgage may also be recorded over an aircraft under construction, on the condition that the aircraft has been registered in the appropriate register (article 52 Code of Aviation Law). An engine not attached to an aircraft may be subject to a separate mortgage, provided that it has been recorded with the appropriate registry (article 53 par. 1 Code of Aviation Law)[7].
The mortgage may be of two types: a simple mortgage and a preferred mortgage. The simple mortgage is granted by unilateral declaration of the owner, written and registered in the Record of Mortgage (article 50 Code of Aviation Law). The preferred mortgage is granted by contract (article 58 Code of Aviation Law) and may be registered only over aircraft of a maximum take-off weight of over 5,700 Kg (article 65 Code of Aviation Law).
The simple mortgage grants priority to the mortgagee over subsequent mortgagees, simple or preferred, and other simple creditors, but does not give a right to private sale or to the possession and management of the aircraft. The preferred mortgage gives the mortgage a right to the management of the aircraft as soon as his claim becomes due and payable or in any other case provided for by the terms of the preferred mortgage (article 57 Code of Aviation Law). Each and every detail must be noted in the Record of Mortgages[8].
Registration of a mortgage secures priority for the mortgagee over all other mortgages which will be registered later in time. In case more mortgages are registered on the same day, they will be considered of equal value and will rank in the same order – pari passu (article 1272 Civil Code)[9].
A registered mortgage attaches the whole aircraft, its engines and any accessories – the latter, only if there is no agreement to the contrary (article 51 Code of Aviation Law).
Everything about an aircraft mortgage that is not regulated by the Code of Aviation Law, is governed by the provisions of the Civil Code, applied by analogy. According to article 973 of the Civil Code, the mortgage is a “real right”.
A big percentage of the investments of many industrial and commercial enterprises refers to such assets of professional equipment, as the aircrafts. It is well known, that in international commerce the aircrafts financing is very often taking place by leasing agreements[10].
 According to the Greek law, the aircraft may constitute object of leasing (article 1 par. 3 Law 1665/1986, as amended by article 11 par. 2 Law 2367/1995).
Article 1 par. 1 Law 1665/1986 allows that the entrepreneur, who is interested in acquiring the use of the aircraft for his/her business’s equipment, is addressed to a leasing company, which buys in its name from the supplier or imports from abroad the aircraft in which the lessee is interested, pays the price and assigns its use to the entrepreneur – lessee.
The lessee pays a certain instalment over the duration of the leasing contract and at the end of it, the lessee has the options either to extend unilaterally the leasing for a certain time period, at a certain rent, or to consider the leasing as terminated or to buy, on a unilateral declaration, the leased object, by paying the agreed amount.
According to article 1 par. 2 Law 1665/1986, the object of the leasing agreement may be a movable that the leasing company had previously bought from the lessee (lease-back). A lease-back agreement allows that a business owner of an asset, sells it to the leasing company, keeping it though in its possession and using it as a lessee, on paying its value.
The lessee obtains the possession of the aircraft in order to use and exploit it during the whole time of the leasing agreement. The lessee has the obligation to preserve the leased aircraft accordingly to the agreed use. He assumes the risk of the leased aircraft’s accidental destruction or deterioration and has the obligation, according to the article 5 par. 2 Law 1665/1986, to insure the aircraft for the risk of its accidental destruction or deterioration.
From the above, it follows that the lessee assumes not only the use of the aircraft but also its commercial exploitation.
In order that the ownership right of the leasing company is secured – as a security interest –, the leasing agreement must be in writing and the relevant document must be registered with the specific Records kept by the First Instance Courts (article 4 paragraphs 1 & 2 Law 1665/1986).
The leasing agreement will be null, according to the article 159 par. 1 Civil Code, if it is not in writing and if it is not registered[11].
Some commentators believe that the financing of mobile equipment suffers from the differences between the national laws and that adopting a uniform regulation would contribute to stop the increase of the cost of credit transactions for airline companies[12].
Things are not so simple and the differences between the various legal systems cannot be deleted just by forcing upon them a new, internationally agreed, regime.
c) The Cape Town Convention, following the opinion of its initial drafters, common law lawyers, adopted the “notice-filing” system. It had been considered as the best possible one, since the “only aim” of the registration, according to the Cape Town Convention would be to assure the priority of an international interest on an object, over other international interests, of creditors who have acquired a preference (privilege) by judgment or by law and of insolvency administrators[13].
The legal system of Greece, as far as the registration of security interests is concerned, falls under the category of the “document-filing” systems[14]. The advantages of this system are, among others, the following: the users of the national registries consider as very important the fact that they can have access to all documents gathered in one place. Furthermore, is also considered as very important the fact that whoever is interested to proceed in some transaction over an object, may be informed about previous transactions over the same object.
d) As it was above mentioned, specific interests constituted by a security agreement, a title reservation agreement and a leasing agreement, “merge to form an autonomous international interest”. Or, according to another, very accurate, description, the “international interest” under the Convention is a property interest which derives its force from the Convention and not from national law, “it is an artificial concept”[15].
Nevertheless, it is rightly pointed out that the characterization of these legal devices which will constitute the basis of an international interest is of the utmost importance[16]. In many civil law States, there is a clear distinction between proprietary and contractual rights, between real rights and personal rights. Under the national property laws of these States, the interests derived from a title reservation agreement and/or a leasing agreement are not treated the same as the interests derived by a security agreement. And that is the case for Greece, too[17].
Title reservation agreement’s definition by the Cape Town Convention is broader than the definition provided by Greek law, according to which[18] title retention (reservation) only secures the purchase price payable by the buyer[19].
The term “security agreement” is very broad. It reflects the mentality of the USA’s Uniform Commercial Code and, although some commentators say that this fact should not impede the other States from adopting the Cape Town Convention, it really creates many difficulties.
The absence of exceptions to the ‘first in time to register’ principle may provide greater certainty to a creditor who registers its interest in the International Registry, nevertheless a dual, parallel system could be somewhat created in the States in which there are differences between the various agreements which constitute the basis for international interests according to the Cape Town Convention.

2)    Enforcement of a security interest

a)No. For a security interest to be enforced, an enforceable title is needed. The documents which constitute such titles are final court judgments, notarial deeds and foreign titles declared enforceable in Greece (articles 904 & 905 Code of Civil Procedure).
A mortgagee who has a preferred mortgage on a Greek aircraft may take possession of the aircraft when his claim becomes due and payable, without any court process provided that the mortgagee is in the form of a notarial deed[20].
There are various issues that create concerns to the jurists of the non-common law countries. One of them is the “Relief pending final determination”, of the article 13. As it is very well described by a commentator, it “does not seem to correspond to any relief traditionally found in national legal systems” and, among other problems, one can have strong doubts whether there could be a harmonized procedural remedy, when there is the international customary rule that procedure is governed by the lex fori[21].
Furthermore, there are doubts about this article’s qualities: Is it an interim relief or not? For example, the Aircraft and the Luxembourg Protocols allow contracting states to add to the remedies of Article 13 the sale of the object, an issue that had caused heated discussions during the Cape Town Diplomatic Conference, since the sale of the object had been initially included in the remedies. In common law systems, a sale may be a form of interim relief, while in other systems of law it is not the case. “Selling the object is not an interim measure”, “it actually enforces the interest”[22].

3)    Treatment of Security Interests under the Insolvency Procedure

The international interest, created by the Cape Town Convention, as a supranational substantive law instrument, supersedes any conflict of laws rule. Nevertheless, Cape Town Convention is not an all-inclusive codification of asset-based secured financing. Therefore, there is room for application for domestic substantive law rules, which will be determined either directly by uniform conflict of laws rules of the Cape Town Convention, or indirectly domestic conflict of laws rules[23].
In case of a company’s insolvency the international insolvency law and the private international law of real rights, of proprietary rights, are on a crossroad[24]. So, when a creditor claims having a contractual security that confers to him a proprietary right, that is, a security interest, according to the Greek law he will be able to exercise it, without it being automatically or by order of the insolvency administrator stayed. Publicity of this security interest is absolutely required.
As far as the title reservation agreement is concerned, some decades ago, the predominant view in the case law (courts’ decisions) was that this agreement had no effect whatever in case of the purchaser’s insolvency. However, the view of part of theoreticians of law was that if the title reservation agreement had no effect in case of the purchaser’s insolvency, in the name of the creditors’ protection, then this agreement would practically have no validity in transactions between merchants and this would be a “coup dur” for the credit agreements, which are of vital importance for the national economy.
Actually, it is accepted by both theory and courts, that title reservation agreement is “saved” in case of the purchaser’s insolvency and that the seller – proprietor of the asset may take possession of the asset, since the insolvent purchaser had never acquired the ownership of it and therefore it could not be included in the insolvency estate[25].

4)    General Considerations

a)    One could say that it has been customary, these last years, due to influences by the mentality of foreign laws, mainly those of the common law tradition.

b)   Generally, yes. Still, the Cape Town Convention is considered by Greek jurists as very much complicated and difficult to be adopted by Greece, given the system that is already in existence[26].

A very important issue is that of the Public Service and the way the Cape Town Convention deals with it. Things in Greece’s economy and the structure of it, change fast, too fast most probably. The three Protocols took different approaches, or, to be more accurate: they took non-identical approaches, in relation to this issue. The least interested in dealing “directly with the on-going possibility of a public interest in protecting certain assets from creditor repossession” is the Aircraft Protocol. It might be because, as it is pointed out, “governments are persuaded that the political gain of facilitating cost-effective private sector finance for aircraft operators, and therefore a highly competitive aviation industry and cheap flights for the public, outweighs the political downside of withdrawal of service”[27], but it is not always so simple and, obviously, not all governments have the same attitude.
In Greece, by law 3710/2008, the National Council of Railways was constituted, which became the competent institution for the purchase of the railway services. By law 3891/2010, all necessary legislatives were taken for the restructuring of the rail sector, while, in parallel, the Regulative Authority of Railways was constituted, being mainly competent for the purchase of railway services.
The article 29 of the law 4111/2013 provides that the “Hellenic Company of Preservation of Rail Rolling Stock” will be competent, as the agent of the Hellenic State, for the management and the leasing to third parties of the rail rolling stock that either belongs to the Hellenic State or belongs to EUROFIMA and is leased by the Hellenic State.
The Luxembourg Protocol follows a “successful” Cape Town Protocol, as far as the success is counted on the number of ratifications. The problems persist though, and, for example, a much discussed issue of the Luxembourg Protocol is that of the prospective liability of the Registrar[28].
As already mentioned, in Greece many things change and one of them is that many public sectors are being privatized or, at least, using private financing[29].
This fact has stirred a lot of heated debates and one could express the opinion that the picture of the legal and economic system is not yet clear.
The Space Assets Protocol, for now, does not really concern Greek jurists. HellasSat, the only satellite that Greece had, has been purchased by foreign capitals, a few years ago.
Let me repeat once more, that the Cape Town Convention and Protocols, as legal texts are brilliantly structured, nevertheless very much complicated in practice and very difficult to be implemented in the various and very different between each other legal systems, especially since the whole texts’ mentality is more or less evidently common law oriented.

[1] M. Stanford, La future Convention d’UNIDROIT relative aux garanties internationales portant sur des matériels d’équipment mobiles : premier projet d’articles, Uniform Law Review 1996, 275, 277 ; R.C.C. Cumming, International Regulation of Aspects of Security interests in mobile equipment, Uniform Law Review 1990-1, 62-206.
[2] E.N. Moustaira, Convention on International Interests on Mobile Assets as it is applied in aircraft equipment [in Greek], Koinodikion 2001, p. 367-390.
[3] M. Deschamps, The perfection and priority rules of the Cape Town Convention and the Aircraft Protocol. A comparative law analysis, Cape Town Convention Journal 2012, 51, 53.
[4] B. Foex, La réserve de propriété dans l’avant-projet de Convention d’UNIDROIT : un point de vue suisse, Uniform Law Review 1999-2, 409, 416.
[5] H.-G. Bollweg/K. Kreuzer, Entwürfe einer UNIDROIT/ICAO – Konvention über Internationale Sicherungsrechte an beweglicher Ausrüstung und eines Protokolls über Luftfahrtausrüstung, ZIP 2000, 1361, 1364.
[6] K. Kreuzer, La propriété mobilière en droit international privé, 259 Recueil des Cours de l’Académie de Droit International 1996, 254 (9-318); E.N. Moustaira, Security interests and private international law [in Greek], Koinodikion 1999, 29, 31-32. 
[7] A. Kalantzis/C. Metaxotou-Bontza/L. Roufos-Kanakaris/H. Warren-Kalaidopoulos, GREECE, in: Aircraft Finance. Registration, Security and Enforcement, Volume 2, May 2012, 8-9.
[8] A. Kalantzis/C. Metaxotou-Bontza/L. Roufos-Kanakaris/H. Warren-Kalaidopoulos, GREECE, in: Aircraft Finance. Registration, Security and Enforcement, Volume 2, May 2012, 15.
[9] A. Kalantzis/C. Metaxotou-Bontza/L. Roufos-Kanakaris/H. Warren-Kalaidopoulos, GREECE, in: Aircraft Finance. Registration, Security and Enforcement, Volume 2, May 2012, 13.
[10] G. Mauri, La Convenzione di Cittá del Capo e il protocollo aeronautico, Contratto e Impresa/Europa 1-2009, 503, 506.
[11] R. Chadjinikolaou-Angelidou, The Aircraft as an Object of Transactions [in Greek], 3rd edition, Sakkoulas Editions, Athens – Thessaloniki 2001, 261-267.
[12] V. Sagaert, The UNIDROIT Convention on International Interests in Mobile Equipment: a Belgian Perspective, European Review of Private Law 1-2004 [75-90] 89-90.
[13] Ch.W.Mooney, Jr. Relationship between the prospective UNIDROIT International Registry, Revised Uniform Commercial Code Article 9 and national civil aviation registries, Uniform Law Review 1999-2, 335, 337-338.
[14] E.N. Moustaira, Convention on International Interests on Mobile Assets as it is applied in aircraft equipment [in Greek], Koinodikion 2001, p. 367-390.
[15] H. Kronke, Financial Leasing and its Unification by UNIDROIT – General Report, Uniform Law Review 2011, [23-44] 35.
[16] B.P. Honnebier,  The Dutch real rights of airlines can be the basis of international interests under the Convention of Cape Town, just like their equivalent American security interests, European Review of Private Law 1-2004 [46-66] 62.
[17] A. Kalantzis, Greece, in: Aircraft Liens & Detention Rights (up to date to July 1, 2013), Sweet & Maxwell, 1, 7.
[18] The same is true, according to other laws too.
[19] M. Deschamps, The perfection and priority rules of the Cape Town Convention and the Aircraft Protocol. A comparative law analysis, Cape Town Convention Journal 2012, 55.
[20] A. Kalantzis/C. Metaxotou-Bontza/L. Roufos-Kanakaris/H. Warren-Kalaidopoulos, GREECE, in: Aircraft Finance. Registration, Security and Enforcement, Volume 2, May 2012, 24.
[21] G. Cuniberti, Advance relief under the Cape Town Convention, Cape Town Convention Journal 2012, 79, 80.
[22] G. Cuniberti, Advance relief under the Cape Town Convention, Cape Town Convention Journal 2012, 84.  
[23] K. Kreuzer, Jurisdiction and choice of law under the Cape Town Convention and the Protocols thereto, Cape Town Convention Journal 2013, 149, 156-157.
[24] E.N. Moustaira, La mise en œuvre des sûretés dans le cadre d’une faillite internationale, Revue Hellénique de Droit Internationale 51 (1998) 89, 96.
[25] N. Rokas, Title reservation agreement in case of bankruptcy of the purchaser [in Greek], Nomiko Vima 22 (1974) 449, 456-460; E.N. Moustaira, La mise en œuvre des sûretés dans le cadre d’une faillite internationale, Revue Hellénique de Droit Internationale 51 (1998) 97-98.
[26] However, there are also voices in favour of the adoption and ratification of the Cape Town Convention. For example, I. Voulgaris, La location-financière (leasing) en Grèce, Revue Hellénique de Droit International 2010, 223, 239, believes that is not possible that Greece adheres to the UNIDROIT Ottawa Convention 1988, which includes ships and other naval constructions, but, on the contrary, considers the idea of adoption and ratification by Greece of the Cape Town Convention and Protocols as rather positive.
[27] H. Rosen, Public Service and the Cape Town Convention, Cape Town Convention Journal 2013, 131, 133.
[28] H.-G. Bollweg/K. Schnell, Liability of the Registrar for the Registration of International Interests Pursuant to the Luxembourg Railway Protocol, Uniform Law Review 2007, 559, 571-572.
[29] The same thing ascertain H.-G. Bollweg/K. Kreuzer, Das Luxemburger Eisenbahnprotokoll. Zum Protokoll zum Übereinkommen über international Sicerungsrechte an beweglicher Ausrüstung betreffend Besonderheiten des rollenden Eisenbahnmaterials vom 23.2.2007, IPRax 2008, 176.

       Αυτή η φωτογραφία είναι από το Μουσείο Αμερικανικής Τέχνης, στη Washington D.C.

Στην πόλη αυτή προσπαθεί να πάει ο δεκάχρονος ήρωας της ταινίας "Ο Απρόβλεπτος Κος Σπίβετ", για να παραλάβει το βραβείο του!

Είδα την ταινία το Σάββατο βράδυ και μου άρεσε πολύ. Μην ακούτε πάντα τις κριτικές!! Προσέξτε τις κριτικές του κοινού.

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