Draft Convention on International Interests in Mobile Equipment 2001

CHAPTER IX (5) - ASSIGNMENTS OF INTERNATIONAL INTERESTS AND RIGHTS OF SUBROGATION

Article 43

Formal requirements of assignment

1. - The holder of an international interest ("the assignor") may make an assignment of it to another person ("the assignee") wholly or in part.

2. - An assignment of an international interest shall be valid only if it:

(a) is in writing;

(b) enables the international interest and the aircraft object to which it relates to be identified;

(c) in the case of an assignment by way of security, enables the obligations secured by the assignment to be determined in accordance with this Convention but without the need to state a sum or maximum sum secured;

(d) is consented to in writing by the debtor, whether or not the consent is given in advance of the assignment or identifies the assignee. (6)

Article 44

Effects of assignment

1. - An assignment of an international interest in an aircraft object made in conformity with the preceding Article transfers to the assignee, to the extent agreed by the parties to the assignment:

(a) all the interests and priorities of the assignor under this Convention; and

(b) all associated rights.

2. - Subject to paragraph 3, the applicable law shall determine the defences and rights of set-off available to the debtor against the assignee.

3. - The debtor may at any time by agreement in writing waive all or any of the defences and rights of set-off referred to in the preceding paragraph, but the debtor may not waive defences arising from fraudulent acts on the part of the assignee.

4. - In the case of an assignment by way of security, the assigned rights revest in the assignor, to the extent that they are still subsisting, when the obligations secured by the assignment have been discharged.

Article 45

Debtor's duty to assignee

1. - To the extent that an international interest has been assigned in accordance with the provisions of this Chapter, the debtor in relation to that interest is bound by the assignment, and, in the case of an assignment within Article 44(1)(b), has a duty to make payment or give other performance to the assignee, if but only if:

(a) the debtor has been given notice of the assignment in writing by or with the authority of the assignor;

(b) the notice identifies the international interest; [and

3 the debtor [consents in writing to the assignment, whether or not the consent is given in advance of the assignment or identifies the assignee] [has not been given prior notice in writing of an assignment in favour of another person]].

2. - Irrespective of any other ground on which payment or performance by the debtor discharges the latter from liability, payment or performance shall be effective for this purpose if made in accordance with the preceding paragraph.

3. - Nothing in the preceding paragraph shall affect the priority of competing assignments.

Article 46

Default remedies in respect of assignment by way of security

In the event of default by the assignor under the assignment of an international interest made by way of security, Articles 12 to 14 and 16 to 20* apply in the relations between the assignor and the assignee (and, in relation to associated rights, apply in so far as they are capable of application to intangible property) as if references:

(a) to the secured obligation and the security interest were references to the obligation secured by the assignment of the international interest and the security interest created by that assignment;

(b) to the chargee and chargor were references to the assignee and assignor of the international interest;

(c) to the holder of the international interest were references to the holder of the assignment; and

(d) to the aircraft object were references to the assigned rights relating to the aircraft object.(7)

Article 47

Priority of competing assignments

Where there are competing assignments of international interests and at least one of the assignments is registered, the provisions of Article 41 apply as if the references to an international interest were references to an assignment of an international interest.

Article 48

Assignee's priority with respect to associated rights

Where the assignment of an international interest has been registered, the assignee shall, in relation to the associated rights transferred by virtue of or in connection with the assignment, have priority under Article 41 [only to the extent that such associated rights relate to:

(a) a sum advanced and utilised for the purchase of the aircraft object;

(b) the price payable for the aircraft object; or

(c) the rentals payable in respect of the aircraft object;

and the reasonable costs referred to in Article 12(5).]

Article 49

Effects of assignor's insolvency

The provisions of Article 42 apply to insolvency proceedings against the assignor as if references to the debtor were references to the assignor.

Article 50

Subrogation

1. - Subject to paragraph 2, nothing in this Convention affects the acquisition of an international interest by legal or contractual subrogation under the applicable law.

2. - The priority between any interest within the preceding paragraph and a competing interest may be varied by agreement in writing between the holders of the respective interests.

Next Annual Meeting

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