LONDON – Following today’s law signing by Russian President Vladimir Putin over leased aircraft belonging to Russian carriers, it’s clear that The Cape Town Convention makes no difference to him.
Such a bold move by the Russian government means that leasing companies are even more unlikely to receive their aircraft, as the country responds to sanctions imposed by the West.
What Is The Cape Town Convention?
Known as The Cape Town Convention on International Interests in Mobile Equipment, this treaty is designed to standardize and protect transactions involving movable property.
The Aircraft Protocol side of the treaty applies for aircraft which can carry at least eight people or 2,750kgs of cargo as well as aircraft engines with thrust exceeding 1,750 pounds-force.
Russia has been a part of this protocol since 2018 and is bound by this convention, particularly in the area of returning aircraft to leasing companies.
With Putin clearly violating this convention on the grounds of such nationalization, including registration changes, we will probably see lawsuits opening up in the High Court of Ireland where such mediation takes place.
Could Russia Win in Ireland?
With the Cape Town Convention enacted under United Nations members, their viewpoint would have to be heard.
But with the European Union part of this convention and the fact that the organization has targeted Russia with sanctions, it is pretty clear Russia would have a lot of opposition to this case.
It is probably unlikely that Russia would win a ruling, but even if the ruling was placed against them, whether they would follow it or not is a different question in itself.
As mentioned to Al Jazeera by Richard Aboulafia, the Managing Director of AeroDynamic Advisory, it wouldn’t matter if the Russians won because its aviation industry would be in pieces.
“Russia will be the world’s largest country with a developed economy and an aviation industry no better than North Korea’s”.
“Aviation sanctions are easy to enforce. Airlines can’t fly. They will have to completely redo their aircraft plans, which at the moment, are built on Western technology.”
Cape Town Doesn’t Phase Putin…
It is pretty clear that the treaty doesn’t phase Putin one bit and that the lessors will now have the long and hard wait ahead of them to try and fight this.
The easiest way out of this for the lessors would be if Putin agreed to pay the companies for the aircraft, but of course, there hasn’t been any indication this will be the case.
Signing the law represents Putin doubling down on his belief in this conflict, and it could be weeks, if not months before we see him back down in any way.
But if he does, then things on the aerospace side will get messy, as it will give leasing companies free rein to seize the aircraft back if successful in the High Court of Ireland.
Now that Putin has made his next move, all eyes are now going to be on the aircraft leasing companies by the end of this month.
With sanctions giving the companies a deadline to collect the aircraft, it is pretty clear this is not going to be met, and of course, the Russians will not hand those aircraft over easily.
We could probably expect to see some activity happening in the High Courts in the next few weeks, but this will only be for effect, rather than actual actions happening.
These aircraft will more than likely only be returned if Putin backs down during this crisis, which he is showing no indication of doing so at this point.
As long as Putin requests ambitious and crazy demands from Ukraine, this conflict in the aerospace side of the war will continue.