The Kingdom of the Netherlands, the European Union and the Cape Town Convention
The position of the Netherlands with regard to the Cape Town Convention is rather complicated. This is due to the internal (constitutional) structure of the country itself, the recent changes in that structure, and its position as a Member State of the European Union (EU). Let me first discuss the constitutional structure of the country, then the resulting (non-)applicability of European Union law, followed by the consequences for the (non-)applicability of the Cape Town Convention.
Until October 10, 2010 the Kingdom of the Netherlands consisted of three “countries”: in Europe the Netherlands and overseas the Netherlands Antilles and Aruba. On that date this structure was modified, such that, next to the Netherlands, the islands of Aruba, Curasao and Sint Maarten are now autonomous countries (with internal self-government) within the broader framework of the Kingdom of the Netherlands. The islands of Bonaire, Sint Eustatius/Statia and Saba (the so- called “BES islands”) became public bodies (municipalities) of the Netherlands, constituting the Caribbean part of the Netherlands, next to a European part of the Netherlands. Until that date all of the Caribbean islands were not a part of the European Union. They were “Overseas Countries and Territories” (they had “OCT status”) in the sense of article 198 of the Treaty on the Functioning of the European Union (TFEU). After the new structure of the Kingdom of the Netherlands became effective that status remained, also with regard to the islands of Bonaire, Sint Eustatius and Saba. This could change in case the Dutch government might decide to apply for any of the Caribbean islands to obtain the status of Outermost Region
(“OR status”) according to article 349 TFEU, in which case EU law would apply. This could happen in a few years when the new status of the islands is evaluated.
Effective September 1, 2010 the Kingdom of the Netherlands acceded to the Cape Town Convention on May 17, 2010. The accession was explicitly limited to Aruba and the Netherlands Antilles. According to a “Nota Verbale” of the Dutch government to UNIDROIT, the new structure of the Kingdom did not affect the applicability of treaties, even with regard to what is now the Caribbean part of the Netherlands (Bonaire, Sint Eustatius and Saba), although with regard to these islands, according to the nota verbale, “the Government of the Netherlands will now be responsible for implementing these agreements.” This means that the Dutch government is responsible for the implementation of the Convention in the Caribbean part of the Netherlands, but that it is not bound by the Convention with regard to the European part of the Netherlands, except in as far as it is bound as an EU Member State because of the accession by the European Union on April 28, 2009, effective from August 1, 2009. For the implementation on Aruba, Curasao and Sint Maarten their respective governments are responsible. It should also be noted that Dutch civil law is not applicable on these islands, which have their own Civil Code, although it should immediately be added that their civil law closely follows Dutch law.
The European part of the Netherlands, being a Member-State of the European Union, is bound by European Union law. Because the European Union has competence in the area of private international law and was therefore involved in the negotiations resulting in the Cape Town Convention, the European Union had to accede to the Convention to facilitate accession by its Member States. The accession was, however, limited to those legal aspects where it had explicit competence. The European Union acceded in its capacity as “Regional Economic Integration Organisation” under article 48 of the Convention and article XXVII of the Aircraft Protocol. To make clear that it had the explicit competence to act, the Council Decision by which it was approved that the European Union would accede to the Cape Town Convention made explicit reference to the Brussels I Regulation, the Insolvency Regulation, and the Rome I Regulation. All three regulations deal with topics which were also dealt with in the Convention: recognition and enforcement of judgments, insolvency and choice of law. The European Union also made several so-called “declarations” or decided explicitly not to make a “declaration”: statements to opt-in or opt-out of certain arrangements under the Convention regime. A declaration the European Union made concerns article XXI of the Aircraft Protocol. This article reads: “For the purposes of Article 43 of the Convention and subject to Article 42 of the Convention, a court of a Contracting State also has jurisdiction where the object is a helicopter, or an airframe pertaining to an aircraft, for which that State is the State of registry.” Article 43 of the Convention is about jurisdiction and article 42 about choice of forum. The declaration made is the following: “In accordance with Article XXX(5) of the Aircraft Protocol, Article XXI thereof will not apply within the Community and Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters will apply to this matter for the Member States bound by the said Regulation or by any other agreement designed to extend its effects.” The background of this declaration is that the Brussels I Regulation should not be set aside by a special rule of jurisdiction based on the lex situs of the registry in cases where the object is a helicopter or an airframe. This example concerns an opt-out declaration to protect the coherence of European law. An example of an
7 See Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels I Regulation), OJ 16.01.2001, L 12/1; Council Regulation (EC) No 1346/2000 of 29 May 2000 on insolvency proceedings (Insolvency Regulation), OJ 30.06.2000, L 160/1; Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I Regulation), OJ 4.7.2008, L 177/6.
explicit choice not to opt-in by declaration, again to protect the coherence of European law, concerns article XI of the Aircraft Protocol. This article contains provisions of substantive law concerning remedies on insolvency and is aimed at the protection of secured creditors, e.g. by obliging the insolvency administrator or the debtor to give the creditor possession of an aircraft object. This article “applies only where a Contracting State that is the primary insolvency jurisdiction has made a declaration pursuant to Article XXX(3)”. The EU Insolvency Regulation in its article 5, however, contains a substantive provision of private international law, stating that the rights in rem of third parties shall not be affected by the opening of insolvency proceedings. No reference is made here to the law of the state in which the proceedings are opened or to the lex rei sitae for deciding whether or not the object is part of the insolvent’s estate. The EU, therefore, decided not to opt in to this article of the Aircraft Protocol, although, remarkably enough, J. Wool (Secretary and General Counsel of the Aviation Working Group) at a UNIDROIT seminar on the European Community and the Cape Town Convention argued that article XI of the Aircraft Protocol is “the most important (...) by far” of “declarations that will maximise the economic advantages” of acceding to the Cape Town Convention. It seems as if the European Union saw more economic advantage in regional than global integration or, at least, valued the internal coherence of European law more than global uniformity.
The position of the Netherlands is therefore as follows. The European part of the Netherlands is bound by the EU accession to the Cape Town Convention, but the Caribbean islands are not. For these islands accession by the Kingdom of the Netherlands was required, which indeed happened. This means that in both the European and the Caribbean part of the Netherlands the conflict of laws provisions of the Convention regime apply, although for the European part of the Netherlands European private international law has been given precedence over this regime by explicit decisions either not to opt-in or to opt-out of Cape Town Convention provisions. The accession by the EU does not have an impact on the substantive insolvency law of the Member States. With regard to that legal area they remain competent. That same conclusion was drawn by the Kingdom of the Netherlands regarding the insolvency law of the Caribbean islands - and consequently the European part of the Netherlands - when accession for these islands was proposed to the Dutch Parliament. The Kingdom of the Netherlands, as the European Union, explicitly decided not to opt-in to the insolvency regime of article XI of the Aircraft Protocol. It is still unclear - and most likely will not become clear in the near future - where the exact border line can be found separating what falls under the exclusive competence of the European Union from what remains within the realm of the Member States.
As mentioned earlier, in order to make the Cape Town Convention applicable on the Caribbean islands the Kingdom of the Netherlands had to accede to the Convention and Aircraft Protocol. It did this only for those islands and deliberately not for its European territory. The Caribbean islands are, therefore, bound by the full Convention regime, taking into account the various opt-in/opt-out choices made. As the Kingdom of the Netherlands decided only to accede to the Convention for, at present, Aruba, Curasao and Sint Maarten as “countries” within the Kingdom and by nota verbale declared that the accession for the Caribbean part of the Netherlands (Bonaire, Sint Eustatius and Saba) remains to be effective, the European part of the Netherlands still is not bound by the substantive provisions of the Convention and the Aircraft Protocol. The Dutch government, acting as the government of the Caribbean part of the Netherlands, is bound by the full Convention, whereas the Dutch government acting as the government of the European part of the Netherlands is only bound by the limited EU accession.
In the following paragraphs I will briefly discuss why this for a small country as the Netherlands so incredibly complicated decision not to ratify the Cape Town Convention for the European part of the Netherlands, but to ratify it only for the Caribbean islands was taken.
-  A visual explanation might clarify the situation. See http://isleofholland.com/images/2013/01/Kingdom-of-the-Netherlands.jpg.
-  Article 198 TFEU reads: The Member States agree to associate with the Union the non-European countries and territories which have special relations with Denmark, France, the Netherlands and the UnitedKingdom. These countries and territories (hereinafter called the ‘countries and territories’)are listed in Annex II. The purpose of association shall be to promote the economic and social development of thecountries and territories and to establish close economic relations between them and theUnion as a whole. In accordance with the principles set out in the preamble to this Treaty, association shallserve primarily to further the interests and prosperity of the inhabitants of these countriesand territories in order to lead them to the economic, social and cultural development towhich they aspire. For more information on the OCT status see: http://ec.europa.eu/europeaid/where/octs_and_greenland/index_en.htm. Cf. also Council Decision of 27 November 2001 on the association of theoverseas countries and territories with the European Community (‘Overseas Association Decision’)(2001/822/EC), OJ 30.11.2001, L 314/1.
-  Article 349 TFEU reads: Taking account of the structural social and economic situation of Guadeloupe, FrenchGuiana, Martinique, Reunion, Saint-Barthelemy, Saint-Martin, the Azores, Madeira and theCanary Islands, which is compounded by their remoteness, insularity, small size, difficulttopography and climate, economic dependence on a few products, the permanence andcombination of which severely restrain their development, the Council, on a proposal fromthe Commission and after consulting the European Parliament, shall adopt specific measures aimed, in particular, at laying down the conditions of application of the Treaties tothose regions, including common policies. Where the specific measures in question areadopted by the Council in accordance with a special legislative procedure, it shall also acton a proposal from the Commission and after consulting the European Parliament. The measures referred to in the first paragraph concern in particular areas such as customsand trade policies, fiscal policy, free zones, agriculture and fisheries policies, conditions forsupply of raw materials and essential consumer goods, State aids and conditions of accessto structural funds and to horizontal Union programmes. The Council shall adopt the measures referred to in the first paragraph taking into accountthe special characteristics and constraints of the outermost regions without undermining theintegrity and the coherence of the Union legal order, including the internal market and common policies. For more information see: http://ec.europa.eu/regional_policy/activity/outermost/index_en.cfm.
-  See the parliamentary history of the so-called “tacit” acceptance by the Dutch Parliament:Parliamentary document no. 32 227 (R 1904), A and nr. 1, Verdrag inzake Internationale zakelijkerechten op mobiel materieel en Protocol bij het Verdrag inzake internationale zakelijke rechten opmobiel materieel betreffende voor luchtvaartmaterieel specifieke aangelegenheden; Kaapstad, 16November 2001, Letter by the Minister of Foreign Affairs and Informative Note.
-  Cf. Council Decision of 6 April 2009 on the accession of the European Community to theConvention on international interests in mobile equipment and its Protocol on matters specific toaircraft equipment, adopted jointly in Cape Town on 16 November 2001 (2009/370/EC), OJ15.5.2009, L 121/3 and B. Crans, The implications of the EU accession to the Cape TownConvention, Air and Space Law 2010, p. 1 ff. Reference can be made particularly to recitals 6 and
-  of the Council Decision: (6) The Community has exclusive competence over some of the matters governed by theCape Town Convention and the Aircraft Protocol, while the Member States have competence over other matters governed by these two instruments. (7) The Community should therefore accede to the Cape Town Convention and the AircraftProtocol.
-  Council decision, COM(2008) 508 final, p. 5.
-  Council decision, COM(2008) 508 final, p. 4.
-  Seminar - The European Economic Community and the Cape Town Convention (Rome, 26November 2009), Summary Report prepared by the UNIDROIT Secretariat, p. 3, to be found onthe website of the Aviation Working Group: www.awg.aero. See also a paper by J. Wool and a.Littlejohns, Cape Town Treaty in the European context: The case for Alternative A, Article XI ofthe Aircraft Protocol, also to be found on the website of the Aviation Working Group. They argue(footnote 1): “It is understood that, based on issues of the respective competence of the EU and itsMember States, it may be necessary, desirable, or otherwise agreed that countries should effect thedecision to adopt Alternative A via amendments to national law”.
-  Council decision on accession, Annex I, under II(4): “This Declaration is not applicable in thecase of the territories of the Member States in which the Treaty establishing the EuropeanCommunity does not apply and is without prejudice to such acts or positions as may be adoptedunder the Aircraft Protocol by the Member States concerned on behalf and in the interests of thoseterritories.”
-  Council decision on accession, Annex I, Under II(6): “The Member States keep their competenceconcerning the rules of substantive law as regards insolvency.”
-  Parliamentary document no. 32 227 (R 1904), A and nr. 1, p. 6 and p. 19.
-  Council Decision on accession, Annex I, under II(7): “The exercise of competence which theMember States have transferred to the Community pursuant to the Treaty establishing the EuropeanCommunity is, by its nature, liable to continuous development. In the framework of that Treaty, thecompetent institutions may take decisions which determine the extent of the competence of theCommunity. The latter therefore reserves the right to amend this Declaration accordingly, withoutthis constituting a prerequisite for the exercise of its competence with regard to matters governedby the Aircraft Protocol.” See also the Netherlands Minister of Foreign Affairs in his reaction tocritical remarks by the Council of State on his draft proposal for tacit acceptance of the Cape TownConvention, asking for an (explicit) list of provisions from the Cape Town Convention which arebinding upon the Netherlands and which are not (Parliamentary history, document no. 32 227 (R1904), B and no. 2, p. 2): “Een lijst van bepalingen die onder de exclusieve bevoegdheid van de EGvallen, is niet beschikbaar om de reden dat de uitoefening van bevoegdheden die de lidstaten uithoofde van het EG-Verdrag aan de Gemeenschap hebben overgedragen uit de aard derzaak voort-durend aan ontwikkeling onderhevig is. Door in Hoofdstuk III, onder 1, te verwijzen naar de rel-evante Verordeningen zijn de onderdelen van het Verdrag en het Protocol aangegeven waar de EGin casu de exclusieve bevoegdheid heeft.” (To summarise: No list of provisions from the CapeTown Convention which fall under the exclusive competence of the European Community can beoffered in light of the continuous development of the competencies which the Member States havetransferred to the Community. Only references to specific European regulations can be given.). Cf.also Crans, The implications of the EU accession to the Cape Town Convention, p. 5, who adds onthat same page that the “practical consequences of the Community’s accession appear to belimited”.
-  Before the 2010 changes in the internal structure of the Kingdom, as described above, the islandsof Bonaire, Sint Eustatius and Saba belonged to the “Netherlands Antilles”, being a “country”within the Kingdom of the Netherlands next to the Netherlands and Aruba.