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Transfin v. Stream Aero Investments

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Cape Town Convention and NCRIs

Although the Cape Town Convention does not provide for the registration of non-consensual rights or interests (NCRIs), Article 39 creates a vehicle for a Contracting State to preserve such rights as may be available under national law. To preserve such rights, the Contracting State must make a declaration pursuant to Article 39.

 

Article 40 NCRIs are registrable NCRIs which to be effective require to be registered. To create registrable NRCIs a state must make a declaration pursuant to Article 40 specifying the NCRIs to be covered.

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Facts
Transfin, contemplating sale of an aircraft it owned to Stream Aero Investments, executed the standard letter of intent. Stream Aero had entered into concurrent negotiations to sell the aircraft on to Star Jet. The negotiations between Transfin and Stream Aero fell through. Transfin then entered into direct negotiations with Star Jet. Stream Aero brought a claim in the Oklahoma courts for an agency fee or commission in respect of the sale and also registered a non-consensual right over the aircraft in the International Registry of Mobile Equipment.

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The Contracting States of the participating parties were Panama and Russia who had not at that time ratified the type of consensual rights which Steam Aero sought to register.

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In this case, no court order had been made by local courts directing Steam Aero to discharge the registrations.

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Ruling

The Irish Courts determined that the proceedings fell within Order 11 Rule 1F and/or Rule 1G or the Rules of the Superior Court

In this case, no court order was in existence directing Stream Aero to discharge the registrations.  The Irish Courts ultimately determined that the proceedings fell within Order 11 Rule 1F and/or Rule 1G of the Rules of the Superior Courts which empowers the courts to take seisin of disputes if

(1F) the action is founded or a tort committed within the jurisdiction; or

(1G) any injunction is sought as to anything to be done within the jurisdiction or any nuisance within the jurisdiction ought to be prevented or removed whether damages are or are not also sought in respect thereof.
here
Essentially the Commercial Court determined that the registration, which could not have been a valid registration amounted to a tort committed and/or a nuisance and/or something which necessitated action to be taken within Ireland given that the Registry is based in Ireland.  The Commercial Court determined therefore that it had jurisdiction over Stream Aero to make an in-personam order directing it to discharge the non-consensual right or interest. The Commercial Court deemed the registration to be invalid and without any basis and ordered that the registration be discharged. 

Donal Gallagher, Registry Official at Aviareto Limited[1] has commented that:

"The Transfin case is of particular importance due to the willingness of the Irish courts to accept jurisdiction in matters involving the Registrar and registrations on the International Registry.  This is certainly so in cases involving registrations which should not have been made." He further commented that the Transfin case “illustrates the possibility of initiating proceedings in Ireland immediately, rather than first seeking a local order and then subsequently taking further proceedings in Ireland seeking an order against the Registrar to have that order enforced”.

It remains to be seen whether the Irish Courts will be willing to assert jurisdiction in less clear-cut cases, where the registration type is valid and it is necessary to substantively consider and determine the merits of the registration itself. 
 

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