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Advance Relief under the Cap Town Convention Prof. Gilles Cuniberti University of Luxembourg Oxford, September 6th, 2012.

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Presentation on theme: "Advance Relief under the Cap Town Convention Prof. Gilles Cuniberti University of Luxembourg Oxford, September 6th, 2012."— Presentation transcript:

1 Advance Relief under the Cap Town Convention Prof. Gilles Cuniberti University of Luxembourg Oxford, September 6th, 2012

2 Gilles Cuniberti, Université du Luxembourg 2 Introduction  Possible rationales for Article 13  The Scope of Harmonization of Article 13

3 Gilles Cuniberti, Université du Luxembourg 3 Two Possible Rationales Article 13 could be used for two purposes  Interim protection of rights established by the CTC  Early enforcement of rights established by the CTC → Essential issue for beneficiaries of Article 13

4 Gilles Cuniberti, Université du Luxembourg 4 Interim Relief  Purpose: protecting substantive rights  Rights may not be enforced before judicial recognition  Rights might be violated before such recognition  Interim relief is available to protect them pending judicial (final) determination at certain conditions

5 Gilles Cuniberti, Université du Luxembourg 5 Interim Relief  Conditions: 1. Likelihood of existence of the substantive rights  Lower standard of proof 2. Existence of a good reason to prevent the debtor behaving as he wishes  He has not been found to be bound by the rights  Typically: later enforcement of rights will be difficult

6 Gilles Cuniberti, Université du Luxembourg 6 Interim Relief  Features: 1. Interim relief should be provisional 2. Often a need for an ex parte procedure 3. Interim relief is not a favour of the debtor to the creditor  In Germany, interim relief is a fundamental right  No need for prior agreement of the parties

7 Advance Enforcement Remedy  Purpose: early enforcement of substantive rights  Creditor is offered the possibility to get satisfaction The court orders immediate enforcement The procedure has the same goal as the main proceedings  A special reason must exist for the remedy to be granted The existence of the right is obvious: a quick decision is possible The parties have agreed on the availability of the remedy Gilles Cuniberti, Université du Luxembourg 7

8 Advance Enforcement Remedy  Conditions:  The Court must find that the right exists Standard of proof is normal  The relevant special reason must be present Special reason could entail that standard of proof be higher Gilles Cuniberti, Université du Luxembourg 8

9 Advance Enforcement Remedy  Features: 1. Remedy should not be provisional  If it were, it might not be in practice 2. No reason to take debtor by surprise  No need for an ex parte procedure 3. Remedy is not available as of right Gilles Cuniberti, Université du Luxembourg 9

10 Article 13 as an Autonomous Remedy  The goal of Article 13 is to establish an autonomous remedy  If Article 13 does not address an issue, however, interpreters might want to seek inspiration from comparative civil procedure to determine which rule should be adopted  Rule would become part of the autonomous regime of Art 13 Gilles Cuniberti, Université du Luxembourg 10

11 Article 13 as an Autonomous Remedy  Article 13 is not entirely autonomous, however Article 14 - Procedural requirements Subject to Article 54(2), any remedy provided by this Chapter shall be exercised in conformity with (est soumis à) the procedure prescribed by the law of the place where the remedy is to be exercised.  Some procedural issues are governed by national law  To determine which national rules apply, it is necessary to characterize Article 13 pursuant to national law Gilles Cuniberti, Université du Luxembourg 11

12 Content 1. Legislative Intent 2. Two Models for Article 13 Gilles Cuniberti, Université du Luxembourg 12

13 13 Gilles Cuniberti, Université du Luxembourg What did drafters of Article 13 intend? Legislative Intent

14 Gilles Cuniberti, Université du Luxembourg 14 Article 13 Article 13 — Relief pending final determination (1) Subject to any declaration that it may make under Article 55, a Contracting State shall ensure that a creditor who adduces evidence of default by the debtor may, pending final determination of its claim and to the extent that the debtor has at any time so agreed, obtain from a court speedy relief in the form of such one or more of the following orders as the creditor requests: (a) preservation of the object and its value; (b) possession, control or custody of the object; (c) immobilisation of the object; and (d) lease or, except where covered by sub-paragraphs (a) to (c), management of the object and the income therefrom.

15 What is Article 13 Remedy? Preliminary remark:  Article 13 is implicitly characterized as interim relief Article 13 (4) Nothing in this Article affects the application of Article 8(3) or limits the availability of forms of interim relief other than those set out in paragraph 1. Gilles Cuniberti, Université du Luxembourg 15

16 What is Article 13 Remedy? Does it protect or enforce substantive rights?  Seemingly protective  (a) preservation of the object and its value;  (b) possession, control or custody of the object;  (c) immobilisation of the object; and  (d) lease or, except where covered by sub-paragraphs (a) to (c), management of the object and the income therefrom.  But these remedies are also available as final remedies Gilles Cuniberti, Université du Luxembourg 16

17 What is Article 13 Remedy? Does it protect or enforce substantive rights?  Initially Art. 13 also included the sale of the aircraft  Clearly amounts to enforcing the creditor’s right  Delegations objected that the sale had « an element of finality which was not normally associated with interim relief »  Compromise: the sale became an opt in remedy in protocols. Gilles Cuniberti, Université du Luxembourg 17

18 Standard of Proof Legislative History:  Original language:  « Adduce prima facie evidence of default »  Not sufficiently high standard  Proposal (2000):  « Adduce clear evidence of default »  Delegations are fine with or without « clear »  Final Language:  « Adduce evidence of default » Gilles Cuniberti, Université du Luxembourg 18

19 Standard of Proof Other versions of the Convention:  French:  « le créancier qui apporte la preuve de l’inexécution »  Spanish:  « el acreedor que aduce prueba del incumplimiento »  Russian:  « Представляет доказательство » Gilles Cuniberti, Université du Luxembourg 19

20 Standard of Proof Conclusion :  The standard of proof in Article 13 is not lower or higher Gilles Cuniberti, Université du Luxembourg 20

21 Other requirement?  Is Article 13 remedy available only when the creditor can show that the enforcement of his substantive right is at risk?  A real risk that the judgment may go unsatisfied  No such indication in the text of Article 13  Is it implicit with mobile equipment? Gilles Cuniberti, Université du Luxembourg 21

22 Agreement  Article 13 clearly provides that it is only available if the debtor has agreed to it  This is incompatible with the concept of interim relief  Interim relief is a right, not a favour of the debtor  Unless one considers that national law would afford it Gilles Cuniberti, Université du Luxembourg 22

23 Is Article 13 Remedy Provisional?  English text is silent  It provides that Article 13 is available « pending final determination of the claim »  French Title  Article 13 – Mesures Provisoires  Spanish Title  Article 13 - Medidas provisionales sujetas a la decisión definitiva  Suggests that Art. 13 remedy might lapse if creditor loses on the merits Gilles Cuniberti, Université du Luxembourg 23

24 Gilles Cuniberti, Université du Luxembourg 24 Is Article 13 Remedy available ex parte?  The Convention does not expressly settle the issue  Does Art. 13 mean that the norm is ex parte orders? Article 13(3) Before making any order under paragraph 1, the court may require notice of the request to be given to any of the interested persons.

25 Gilles Cuniberti, Université du Luxembourg 25 Conclusion Delegation of the USA, March 2000:  “Articles 14 of the Convention and X of the Aircraft Protocol have become excessively complex. Perhaps this was unavoidable given their documentary history, namely as a hybrid between a final remedies provision and one that addresses interim relief”. We believe a better approach to this economically driven issue can be found. We suggest that the Plenary consider a more direct approach which addresses the core problem: the indeterminable length of judicial proceedings relating to the enforcement of remedies under the Convention.”

26 Gilles Cuniberti, Université du Luxembourg 26 Conclusion Delegation of the USA, March 2000:  Proposal: an opt in provision in the aircraft protocol Judicial proceedings 1.A Contracting State shall ensure that judicial proceedings relating to the remedies under the Convention will be completed within the period set forth in a declaration to this Protocol. 2.During the period contemplated by the preceding paragraph, the debtor shall preserve the aircraft object and maintain it and its value in accordance with the agreement. 3.Nothing in this Article affects the availability of interim relief available under the applicable law.

27 27 Gilles Cuniberti, Université du Luxembourg Way Forward

28 Gilles Cuniberti, Université du Luxembourg 28 Option 1 Design an entirely novel remedy  A hybrid between an interim and an early enforcement remedy  Literal interpretation of Article 13  Problem: what would be the point?  Goal is not to be faithful to a text  Goal is to design a useful remedy for the parties

29 Gilles Cuniberti, Université du Luxembourg 29 Option 2 Offer an authoritative interpretation of the purpose of Article 13  Interpretation would choose between the two possible purposes  Irreconcilable language would be ignored  Problems:  Which authority?  Choice would be arbitrary

30 Gilles Cuniberti, Université du Luxembourg 30 Option 3 Let the parties decide  The Chapter on remedies is almost entirely variable  Parties may write whichever Article 13 clause  Recall: the parties must write a clause anyway  Assumptions:  Parties are sophisticated  Parties know best what their needs are

31 Gilles Cuniberti, Université du Luxembourg 31 Option 3 Let the parties decide  Model clauses should be drafted  clarifying the purpose of the remedy  Providing for the corresponding legal regime  There would be at least two model clauses  An Interim Relief Clause  An Early Enforcement Clause

32 Gilles Cuniberti, Université du Luxembourg 32 Option 3 Issues:  Very short clauses might still exist  How should they be interpreted?  What is the scope of Article 14?  Some issues might be governed by the lex fori  National law might not allow contractual variations

33 33 Questions or Comments


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