Securing Financing and Lease of Aircraft in Croatia in the light of Cape Town Convention
Autors: Dr. Iva Savić, Danijela Simeunović
Adoption of the Cape Town Convention on International Interests in Mobile Equipmen t in 2001, together with the Aircraft Protocol, created a new international framework for financing and leasing of aircraft. This complex international instrument that introduces a novel approach to establishing and registering international interests in aircraft objects has now been offered to countries that need to recognize it and embrace it. Although aviation industry is global in so many ways, national practices and laws regulating proprietary and obligation rights in this area (and their conflict of law rules) are still diverse, which poses costs and legal insecurity for aircraft owners and financiers all over the world.
Regardless of reticent importance of Croatian aviation sector in global terms, and having a rather modest number of aviation transactions in Croatia, regulatory framework and local practices of purchase and lease, as well as financing and collateralisation are constantly developing. Due to the distinctly international character of aircraft industry, legal structures of aircraft finance and aircraft lease used in Croatia, are very similar to ones used in rest of the world. However, Croatian legal framework, especially in relation to rights in rem and creation of securities has its own peculiarities that rest on the “old” system of Geneva Convention.
Although Croatia has not yet ratified the Cape Town Convention, growth of the importance of this instrument for international aircraft (and aviation) industry, together with its solutions which are becoming globaly accepted, accounts for a need to settle the scene in Croatian legal systemas well.
Having in mind the complexity of the Cape Town Convention and its economic and legal implicacies, this paper aims to detangle existing legal and practical issues related to securing aircraft finance and lease in Croatia, as well as to give a precise analysis of its legal regulation.Therefore, in our paper we will give an overview of typical manners of securing claims, such as hypothecation (mortgage), assignment of claims from the lease agreement and pledge over movables (in case when only parts of the aircraft and not the entire aircraft, are pledged) in Croatian legal system, followed by an analysis of the most important principles and newly introduced instruments of the Cape Town Convention in relation to it. In this context, this paper aims at clearing out issues of legal nature, especially in cases when holders of proprietary rights on aircraft and aircraft parts are not the same persons, and tackle potential obstacles for implementation of Cape Town Convention in Croatia.
