UNIDROIT is one of the world’s leading intergovernmental organisations in the field of access to credit and has adopted several conventions, model laws, legislative guides, and other instruments in this area.

In particular, UNIDROIT is well known for having negotiated the Cape Town Convention system, one of the most successful commercial law systems in history. Designed to enhance security for the acquisition and financing of high value equipment, the Cape Town Convention on International Interests in Mobile Equipment was adopted in 2001 and presently has over 80 Contracting States and the support of 1 one regional economic integration organisation (the European Union).

The Convention on International Interests in Mobile Equipment (Cape Town Convention) is regarded as one of the most impactful developments in commercial treaty law over the past 50 years and has the capacity to produce billions of dollars worth of economic benefits for Contracting States. The Convention itself is an umbrella treaty which has had its operation extended to specific industries by way of adoption of additional Protocols:



UNIDROIT also has other instruments that deal with Secured Transactions Law. These include instruments on Factoring, Leasing and Franchising. Additionally, UNIDROIT also presently has several ongoing projects in this area.

Leasing and Factoring

Learn more about the 1988 UNIDROIT Convention on International Financial Leasing.

Learn more about the 1988 UNIDROIT Convention on International Factoring.


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The purpose of the Cape Town Convention and its various Protocols is to provide an international secured transactions regime applicable to high value, mobile, and uniquely identifiable equipment. The system provides for the establishment of international registries under each Protocol to enable the creation, registration, and enforcement of priority rights within assets of in that sector (aircraft objects, railway rolling stock, space assets and mining, agriculture and construction equipment). By facilitating internationally enforceable security interests, the Convention provides confidence to financiers within these industries, allowing them to lend in new markets and at lower rates. The primary objectives of the Cape Town Convention are:

  1. to facilitate the acquisition and financing of internationally mobile assets by creating rights recognised in all Contracting States;
  2. to establish an electronic registry of international interests which serves to give notice to third parties and ensures priority;
  3. to give creditors recourse to basic default and insolvency-related remedies designed to offer rapid relief;
  4. to ensure that the specific needs of an industry with respect to financing are met through various Protocols; and
  5. to give prospective creditors a greater degree of confidence when extending credit to borrowers.

Cape Town Convention Academic Project

The Cape Town Convention Academic Project seeks to assist scholars, students, practicing lawyers, judges, government officials, and industry by providing a central informational and educational hub for the Convention and its Protocols. The project is a joint undertaking between UNIDROIT and the University of Cambridge Faculty of Law, under the auspices of the Centre for Corporate and Commercial Law (3CL). The Aviation Working Group is the founding sponsor of the project.

Learn more about the project by clicking the image below:

Designed to facilitate asset-based financing and leasing of aviation equipment, the Aircraft Protocol of the Cape Town Convention expands financing opportunities available to entities looking to build their fleets, and reduces the costs associated with acquiring finance to do so, thereby providing substantial economic benefits for operators and the economies within which they function. The Protocol was adopted alongside the Convention in 2001 and has over 80 Contracting States.

Advantages for aircraft financiers/lessors

For creditors, the Cape Town Convention and its Aircraft Protocol:
– Bring speed, certainty and cost savings to repossession, deregistration and export of aircraft objects in cases of debtor insolvency or default where the aircraft object is in a country whose laws would otherwise not be creditor-friendly;
– Protect creditors’ interests in aircraft objects by providing for the registration of international interests in those aircraft objects at a single, web-based, International Registry that is open 24/7;
– Subjecting those interests to a simple priority regime whose main principles are that registered international interests beat unregistered ones; earlier registrations beat later registrations; and the parties can vary priorities by agreeing and (for increased protection) registering subordination arrangements at the International Registry.

Advantages for airlines/aircraft operators

For debtors, the Cape Town Convention and its Aircraft Protocol:
– Reduce the cost of borrowing and getting access to finance by providing a secure ecosystem for creditors to lend in;
– Broaden the options available for acquiring finance for aircraft objects by allowing lenders from different jurisdictions to securely invest worldwide;
– Create opportunities to upgrade to a more modern and cost effective fleet hence reducing the cost of doing business and increasing profit margins;
– Making it easier to compete with other players on the international market by creating an equally opportune system of financing;
– Allowing for greater security in the purchasing or leasing of second-hand or old aircraft objects.

Adopted in 2007, the Luxembourg Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Railway Rolling Stock extends the benefits of the Cape Town Convention regime to the rail sector and establishes a secured transactions regime for trade within the rail industry. It creates a new type of global security interest and leasing for railway rolling stock, internationally recognised with established priorities. This interest can be registered in an online public international registry and creates a common system for enforcing creditor rights on debtor default or insolvency.

Scope of the Protocol

The Protocol is designed to apply to  all rolling stock, broadly defined as “vehicles movable on a fixed railway track or directly on, above or below a guideway”. This definition covers inter-urban and urban rolling stock from high-speed trains to commuters; metro trains; cable cars and trams; freight trains; specialist boring equipment and other rail mounted equipment; people movers/shuttles at airports; cranes at ports.

Economic, social and environmental benefits

The Luxembourg Rail Protocol’s aim is to facilitate financing over rail rolling stock by lowering the risk of lenders and thereby reducing the cost of credit as well as widening financing opportunity in developed and developing economies. Thus,

  • It is expected to attract more private sector lenders and lessors into the rail market, resulting in cheaper finance for operators and a wider choice in relation to types of financing, including operating and finance leasing
  • It will also allow States to concentrate public resources on rail infrastructure, relying on private or public-private capital to procure rolling stock

The Luxembourg Rail Protocol will, moreover, foster economic and social development by enhancing sustainable mass transportation of people (urban and extra-urban) and transportation of freight by railways, also cross-border, in line with many of the goals of the global sustainable agenda of the United Nations.

Economic benefit studies for the Rail Protocol:

Europe, UK, Africa, South Africa, 1520 gauge States.

Adopted in 2012, the Space Protocol to the Cape Town Convention is an international regime of secured transactions designed specifically for the space industry. It introduces a uniform and transparent scheme to improve creditors’ rights and facilitate the flow of capital into the space sector. Based largely on the Aircraft Protocol of the Cape Town Convention, the Space Protocol has been adapted to specifically suit the needs of the space industry while respecting the public service aspect of space activities.

How does it work?

The Space Protocol creates a uniform regulatory regime for the recognition and protection of security interests in space assets. This ensures that issues such as conflict of laws or differing insolvency remedies, that are normally encountered in asset-based financing, are surpassed.

It provides uniform rules for the creation, registration and priority of legal interests in space assets, as well as facilitating expeditious and efficient enforcement of remedies in the event of a default or insolvency of the debtor. The Protocol also ensures that adequate protection is given to public services that are provided by space assets and that these services are not interrupted.

Anticipated Benefits

– The creation of an international registry for space assets which will allow debtors and creditors to register international interests in space assets;
– The creation of a global system of internationally enforceable security interests in space assets;
– The provision of an ecosystem where financiers and investors can confidently give their money to companies in the space sector;
– The availability of an international regime onto which domestic laws can be based on in order to provide secured lending for the space industry.
– The ability for developing countries and emerging markets to develop their space industries.

Adopted in 2019, the fourth Protocol of the Cape Town Convention for Matters Specific to Mining, Agriculture and Construction Equipment (MAC Protocol) is UNIDROIT’s most recent treaty. The treaty was adopted at a Diplomatic Conference in Pretoria, South Africa with over 150 participants representing more than 40 States and industry in attendance.

How does it work?

Similar to the other three existing Protocols to the Cape Town Convention, the MAC Protocol provides for an international electronic registry which will allow creditors to protect their legal interests over high value MAC equipment, regardless of its location. The MAC Protocol provides uniform rules governing the creation, registration and priority of legal interests in MAC equipment, as well as facilitating expeditious and efficient enforcement of remedies in the event of a default or insolvency of the debtor. The MAC Protocol contains several specialised articles that adapt the Convention’s operation to the mining, agriculture and construction sectors, including rules on inventory financing and immovable property.

The MAC Protocol will allow financiers to operate in more markets and provide credit globally at cheaper rates. This will allow end users of MAC equipment to gain greater access to capital, bolstering their production and in turn, the economy of the State in which they function.

Anticipated Benefits

The current value of MAC equipment being traded annually exceeds 117 billion USD. The MAC Protocol is expected to have an annual global economic impact of $23 billion USD in developing countries and $7 billion USD in developed countries. A 2018 independent economic assessment of the MAC Protocol is available here.

The MAC Protocol will provide benefits to parties engaged in different aspects of the MAC sector, mining, agriculture and construction entities will have increased access to modern MAC equipment at a lower cost; manufacturers will increase their output; dealers will be able to export to new markets; and financiers will have more confidence in issuing credit.