Of Swords and Shields: The Role and Limits of Courts in the Enforcement of the Cape Town Convention’s Substantive Repossession Remedies
The Cape Town Convention and its Aircraft Protocol (the ‘CTC’) create a system whereby courts having jurisdiction over the territory where an object is located can be used as a ‘sword’ to obtain speedy repossession of mobile assets, but cannot be used as a ‘shield’ to delay or frustrate such repossession activity, especially on the basis of national law principles that are inconsistent with the CTC. Improper shielding actions can arise in particular from (1) a failure by courts to enforce the Convention’s substantive remedies (including the issuance of blocking or injunctive orders contrary to the Convention) or (2) the improper application of the Convention’s jurisdictional rules. This is not to say that the CTC overrides all national laws (although it does override national law on matters within its scope), or that the CTC does not contain any debtor protections (which it does; see, for example, the obligation to exercise remedies in a commercially reasonable manner as will be discussed below). Nor does this mean that a creditor should always win in any repossession case brought under the CTC. Instead, we are deploying this formulation to emphasize that the CTC creates a state responsibility (applicable through the relevant state’s judiciary) to adjudicate matters consistent with CTC jurisdictional rules and to provide creditors with the substantive remedies and protections intended by the treaty text, state declarations and party agreements.