Cape Town: Rail Just Around the Bend, Satellites Just over the Horizon

Unidroit and the Intergovernmental Organisation for International Carriage by Rail have scheduled for this February in Luxembourg a diplomatic conference for the finalization and adoption by Unidroit's member countries of a rail protocol that would make the Cape Town Convention applicable to the leasing and financing of rolling stock. The Cape Town Convention and the rail protocol would then govern rolling stock leasing and financing transactions in each country that later ratifies them.

What is the Cape Town Convention? It is an international convention governing the rights of parties in certain mobile equipment through the use of international registries and the enactment of substantive laws governing the rights of secured lenders, lessors, and others in such equipment. The Convention was adopted by 21 of Unidroit's member countries at a diplomatic conference in Cape Town, South Africa in November 2001. Its signatories include the United States, Canada, France, Germany, and the United Kingdom. The Convention alone, however, does not apply to any particular equipment. It is designed so that particular types of mobile equipment become subject to its provisions by way of adoption and ratification of individual 'protocols,' the first of which being the Aircraft Protocol adopted at the same time as the Convention. The Aircraft Protocol first became effective in seven countries, including the United States and Ireland, on March 1, 2006 and is now effective in 11 countries.