To which major air law treaties is your state a party? Is your state a party to the New York Convention of 1958?
The Cayman Islands is not a signatory (or a party by extension from the UK) to the Rome Convention, the Geneva Convention or the Chicago Convention. It is now a party to the Convention on International Interests in Mobile Equipment and the associated Protocol to the Convention on International Interests in Mobile Equipment on matters specific to aircraft equipment (collectively, the Cape Town Convention).
In relation to the Chicago Convention, however, certain provisions of that Convention with which the United Kingdom is obliged to ensure that its overseas territories (including Cayman) comply are reflected in the Air Navigation (Overseas Territories) Order 2013 and Overseas Territories Aviation Requirements, applicable in Cayman.
The Cape Town Convention came into force in the Cayman Islands on 1 November 2015 following ratification of the Cape Town Convention by the United Kingdom and its extension to the Cayman Islands at its request. Upon such ratification and extension of the Cape Town Convention by the United Kingdom, the Cayman Islands Cape Town Convention Law 2009 was repealed. The aim of that legislation had been to mimic the principles and framework for the registration, recognition and enforcement of international interests contained in the Cape Town Convention in the absence of the Convention actually being in force in the Cayman Islands.
The Cayman Islands is, by Order-in-Council from the United Kingdom, a party to the New York Convention.
2. Domestic legislation
What is the principal domestic legislation applicable to aviation finance and leasing?
The principal domestic legislation is as follows:
- the Air Navigation (Overseas Territories) Order, 2013 as amended;
- the Mortgaging of Aircraft Regulations, 2015 (these regulations have superseded the former 1979 regulations, inter alia, to take account of the introduction of the Cape Town Convention into Cayman Islands law as referenced in question 1); and
- the International Interests in Mobile Equipment (Cape Town Convention) Law 2015.
3. Governing Law
Are there any restrictions on choice-of-law clauses in contracts to the transfer of interests in or creation of security over aircraft? If parties are not free to specify the applicable law, is the law of the place where the aircraft is located or where it is registered the relevant applicable law?
Save for public policy considerations, there are no restrictions under Cayman Islands law on the parties’ freedom to choose the governing law of such arrangements.
Reproduced with permission from Law Business Research Ltd. Getting the Deal Through: Aviation Finance & Leasing 2018, (published in July 2018; contributing editors: Mark Bisset, Clyde & Co LLP). For further information please visit http://gettingthedealthrough.com/area/66/aviation-finance-leasing-2018