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Part of the book series: Ius Comparatum - Global Studies in Comparative Law ((GSCL,volume 22))

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Abstract

Many of us may board an aeroplane without a second thought on issues relating to financing, sale, lien or mortgage of the aircraft. Why do we even want to know? We need to know this because there are many issues regulating the different parts of the aircraft that we board. Different from principles of public air law found in the Convention on International Civil Aviation signed on 7 December 1944 by 52 States, the present private law Convention on aircraft financing is called the Cape Town Convention on International Interests in Mobile Equipment (also called the Cape Town Convention) and Aircraft Protocol. It was adopted by UNIDROIT on 16 November 2001 and it entered into force on 1 March 2006. The two Conventions do meet at some point in relation to mortgages and financing of aircraft engines and parts. With 59 contracting States, the Cape Town Convention represents a very important private commercial law treaty which sets out the law on security and related interests in aircraft objects. Upon ratifying the Convention, it assists States in the uniform adoption of national laws in this field. Professor Sir Roy Goode’s works in drawing up the Official Commentary on the Convention and Aircraft Protocol are only too well-known.

This article seeks to acccount for the implementation of the Cape Town Convention in Malaysia, and to this end highlights the various laws and regulations that impact upon the area before and after the adoption of the Convention . The paper highlights certain lacunae and uncertainties where applicable, particularly the Questionnaire. Systematically reviewing publicly accessible documents and information shows that in Malaysia, there is some systematisation in the implementation of the Cape Town Convention processes delivering on our legislative obligations to meet the Convention’s objectives.

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Notes

  1. 1.

    Business News, Budget 2014: Logistics sector to be improved, aviation hub role e yed, http://www.thestar.com.my/Business/Business-News/2013/10/25/Logistics-sector-to-be-improved-Govt-eyes-aviation-hub-role/?style=biz, 28 November 2014.

  2. 2.

    Mail takes flight. Singapore Philatelic Museum http://clients.theadventus.com/spm_revamp/web/htdocs/exhibition/past_exhibition/mail_takes_flight.html accessed 22 March 2014.

  3. 3.

    Flight into fantasy, ALPAS Singapore http://www.alpas.org/list.php?c=aviationscene accessed 22 March 2014.

  4. 4.

    Straits Steamship Company. http://infopedia.nl.sg/articles/SIP_1056_2008-01-05.html accessed 22 March 2014.

  5. 5.

    Flight into Fantasy. ALPAS Singapore http://www.alpas.org/list.php?c=aviationscene accessed 22 March 2014.

  6. 6.

    Singapore Airlines – Our History http://www.singaporeair.com/en_UK/about-us/sia-history/ accessed 22 March 2014.

  7. 7.

    Malaysia Airlines – Our Story. http://www.malaysiaairlines.com/my/en/corporate-info/our-story.html accessed 22 March 2014.

  8. 8.

    http://www.malaysiaairlines.com accessed 22 March 2014.

  9. 9.

    Aviation Department, Ministry of Transport http://www.mot.gov.my/en/Services/Pages/Aviation.aspx accessed 22 March 2014.

  10. 10.

    Department of Civil Aviation http://www.mot.gov.my/en/Sectoral/Pages/Aviation.aspx accessed 22 March 2014.

  11. 11.

    Air Services Agreement. Ministry of Transport http://www.mot.gov.my/en/Sectoral/Pages/Aviation.aspx accessed 22 March 2014.

  12. 12.

    http://www.malaysiaairports.com.my/ accessed 22 March 2014.

  13. 13.

    http://www.senaiairport.com/ accessed 22 March 2014.

  14. 14.

    http://www.fireflyz.com.my/ accessed 22 March 2014.

  15. 15.

    http://www.maswings.com.my/ accessed 22 March 2014.

  16. 16.

    http://www.airasia.com/ accessed 22 March 2014.

  17. 17.

    http://www.airasia.com/ accessed 22 March 2014.

  18. 18.

    https://www.berjaya-air.com/about-us/our-history/ accessed 22 March 2014.

  19. 19.

    http://www.malindoair.com/en/AboutUs accessed 22 March 2014.

  20. 20.

    KLIA2 Malaysia’s Next Generation Hub http://www.klia2.info/about-klia2 accessed 22 March 2014.

  21. 21.

    Source: Malaysia Airports Holdings Berhad and Senai Airport Terminal Services Sdn. Bhd.

  22. 22.

    Malaysia Airlines Annual Report 2012 http://ir.chartnexus.com/mas/doc/ar/ar2012.pdf accessed 22 March 2014; Malaysia Airlines - Our Story http://www.malaysiaairlines.com/my/en/corporate-info/our-story.html accessed 22 March 2014; Singapore Philatelic Museum SPM “Mail Takes Flight” http://clients.theadventus.com/spm_revamp/web/htdocs/exhibition/past_exhibition/mail_takes_flight.html accessed 22 March 2014; Straits Steamship Company http://infopedia.nl.sg/articles/SIP_1056_2008-01-05.html Airline Pilots Association of Singapore ALPAS “Flight into Fantasy” http://www.alpas.org/list.php?c=aviationscene accessed 22 March 2014; Ministry of Transport, Malaysia Aviation Division http://www.mot.gov.my/en/Sectoral/Pages/Aviation.aspx accessed 22 March 2014; Malaysia Airports Holdings Berhad and Senai Airport Terminal Services Sendirian Berhad 2013 Unpublished Paper;

    KLIA2 Malaysia’s Next Generation Hub http://www.klia2.info/about-klia2 accessed 22 March 2014; Malaysia Airlines – Business Turnaround Plan 2011 http://www.malaysiaairlines.com/content/dam/mas/master/en/pdf/corporate-info/Business%20Turnaround%20Plan%20(BTP%201).pdf accessed 22 March 2014; Malaysia Airlines Fleet http://www.malaysiaairlines.com/au/en/mh-experience/our-fleet/boeing-737-800.html accessed 22 March 2014; Air Asia Annual Report 2012 http://www.airasia.com/iwov-resources/my/common/pdf/AirAsia/IR/annual-report-2012.pdf; Cape Town Convention 2001 http://www.unidroit.org/english/conventions/mobile-equipment/aircraftprotocol.pdf.

  23. 23.

    BBC News, Malaysia Airlines “technically bankrupt” http://www.bbc.com/news/business-32955818, accessed on 23 October 2015.

  24. 24.

    Lorraine Cheah and Grace C G Yeoh, “Getting the Deal Through – Restructuring and Insolvency: Malaysia” (2009), http://www.shearndelamore.com/assets/templates/images/pdf/paper_publications/Restructuring_and_Insolvency_2009.pdf accessed on 22 March 2014.

  25. 25.

    Lee Tat Boon, “Security over Collateral” http://www.lexmundi.com/Document.asp?DocID=1027 accessed on 22 March 2014 on the forms of security that may be created in Malaysia include a charge, pledge, lien, legal assignment, set-off, hypothecation, guarantee and indemnity.

  26. 26.

    Roger Tan, “Rights of Assignors and Assignees to sue under an Absolute Assignment and Assignment by way of Charge Used as a Security for Loan” (2003), http://www.malaysianbar.org.my/index2.php?option=com_content&do_pdf=1&id=97, accessed on 26 December 2013. Upon receipt of the notice, the debtor must make all payments of the debt to the assignee and not the assignor and if he pays the assignor without the consent of the assignee, he may have to pay the assignee all over again. (Malayawata Steel Berhad v Government of Malaysia & Anor [1980] 2 MLJ 103, even though it involved an equitable assignment. See also Malaysian International Merchant Bankers Bhd v Malaysian Airlines Sytem Bhd [1982] 2 MLJ 59.)

  27. 27.

    All three Protocols provide alternatives that differ in the extent of the power that the creditor can exercise in case of insolvency of the debtor. However, even under an alternative less favourable to the creditor (Alternative B), the insolvency administrator or debtor in possession shall either cure all defaults and agree to perform all future obligations or give the creditor the opportunity to take possession of the secured object. Alternative C of Art.IX of the Rail Protocol seems to be the only exception, which enables the insolvency administrator or the debtor to apply to the court for an order suspending its obligation.

  28. 28.

    Anthony Saunders, Anand Srinivasan, Ingo Walter & Jeffrey Wool, The Economic Implications of Secured Transactions Law Reform: A Case Study, University of Pennsylvania Journal of International Economic Law, Vol. 20, p.309, at 324

  29. 29.

    Jeffrey Wool, Treaty Design, Implementation, and Compliance Benchmarking Economic Benefit – a framework as applied to the Cape Town Convention, [2012-4] Uniform Law Review, 633.

References

  1. Lee Tat Boon, “Security over Collateral” http://www.lexmundi.com/Document.asp?DocID=1027.

  2. Cheah, Lorraine and Grace C.G. Yeoh. 2003. Getting the deal through – Restructuring and insolvency: Malaysia, http://www.shearndelamore.com/assets/templates/images/pdf/paper_publications/Restructuring_and_Insolvency_2009.pdf.

  3. Wool, Jeffrey. Treaty design, implementation, and compliance benchmarking economic benefit – A framework as applied to the Cape Town Convention [2012–4]. Uniform Law Review, 633.

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  4. Roger Tan, “Rights of Assignors and Assignees to sue under an Absolute Assignment and Assignment by way of Charge Used as a Security for Loan” (2003), http://www.malaysianbar.org.my/index2.php?option=com_content&do_pdf=1&id=97.

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George, M., Teong, S.E. (2017). Implementation of the Cape Town Convention in Malaysia. In: Kozuka, S. (eds) Implementing the Cape Town Convention and the Domestic Laws on Secured Transactions. Ius Comparatum - Global Studies in Comparative Law, vol 22. Springer, Cham. https://doi.org/10.1007/978-3-319-46470-1_6

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  • DOI: https://doi.org/10.1007/978-3-319-46470-1_6

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