The International Interests in Mobile Equipment (Aircraft) Act 2006 (Act 659)

The Cape Town Convention and Aircraft Protocol

This Convention and Protocol provide for two important bases of jurisdiction, namely, the law of the contracting state where the aircraft is registered and the where the debtor is situated. The two jurisdictions may or may not coincide. Owners of aircraft and engines can now register their interests under the local domestic laws.

It is to be noted that aircraft can now be bought on hire-purchase. Before the dawn of the Convention, the owners registered their aircraft in any country but the International Civil Aviation Organisation (ICAO) now allows only for one registration because of cross-border leasing arrangements. When the aircraft are not airworthy problems can arise. However, registration under the Cape Town Convention protects the owner. Since the airlines suffered two major air disasters in 2015, the airlines is declared “technically bankrupt” with a re-structuring to follow.[1]

In Malaysia, MAS and other aircraft are registered in Ireland. All Malaysian registered civil aircraft have a prefix 9M. MAS has entered into dry and wet leasing arrangements too. The Cape Town Convention enables the tracking of the aircraft under various leasing and sub-leasing agreements for the regulation of the industry. In their airline manufacture and operating industries, several states are involved. For example, there is the state of design, the state of production, the state of registration and the state of the operator. The Cape Town Convention focuses on the registration of financial interests.

  • [1] BBC News, Malaysia Airlines “technically bankrupt”, accessed on 23 October 2015.
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