Bill to Recognise Cape Town Convention

On 10th February 2025, the Minister for Civil Aviation tabled the Protection and Enforcement of Interests in Aircraft Objects Bill, 2025, in Rajya Sabha.

The Bill seeks to enforce the Convention on International Interests in Mobile Equipment, 2001, or the Cape Town Convention (CTC), to standardize dispute resolution related to aviation assets such as aircraft and engines.

Key Points

Recognition of CTC: The Bill aims to give the CTC and its Protocol the force of law in India, ensuring compliance with international aviation financing and leasing standards.
Regulatory Authority: The Directorate General of Civil Aviation (DGCA) will be responsible for issuing directions and overseeing the implementation of the CTC provisions.
Debtor Obligations: The legislation mandates that debtors maintain and submit records of dues arising from the ownership or use of aircraft or aircraft objects.
Creditor Rights: Creditors can exercise remedies under the CTC but must notify the DGCA in case of default.
Insolvency Provisions: The Bill allows resolution professionals to retain aircraft assets for up to 60 days during insolvency proceedings, provided maintenance and usage payments are made.
Background: Though India signed the CTC in 2008, it has not ratified it, making its provisions non-binding. The passage of this Bill in Parliament will close this legal gap.