LUXEMBOURG PROTOCOL TO THE CONVENTION ON INTERNATIONAL INTERESTS IN MOBILE EQUIPMENT ON MATTERS SPECIFIC TO RAIL ROLLING STOCK
The Luxembourg Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Rail Rolling Stock (hereinafter referred to as the Rail Protocol), was adopted by a diplomatic Conference, held in Luxembourg, on 23 February, 2007.
The Rail Protocol provides a mechanism for recognising and registering international security interests in railway rolling stock to facilitate cross-border and domestic financing of such assets. The rail sector was chosen as one of the sectors to be covered by the Cape Town Convention on International Interests in Mobile Equipment (hereinafter referred to as the Convention) to facilitate risk management for international financiers in relation to assets which, by their nature, can cross borders. In addition, even in relation to rolling stock which does not cross borders, the Convention, together with the Rail Protocol, creates an additional security for lenders financing rolling stock. The Rail Protocol is aimed at being an international legal framework which provides security to private investors and encourages private investment in the railway sector.
For a more detailed overview of the Rail Protocol please see the following:
ULR 2012-4, pp. 609-632.
Howard Rosen / Martin Fleetwood / Benjamin von Bodungen The Luxembourg Rail Protocol – Extending Cape Town Benefits to the Rail Industry
Committees of Governmental Experts
In 1996, a drafting committee of governmental experts (hereinafter referred to as the Committee) was set up for the preparation of the Rail Protocol. Pursuant to the decision taken by the UNIDROIT Governing Council at its 79th session (Lisbon, 10 to 13 April 2000) and the fourth General Assembly of OTIF (Athens, 8 to 11 September 1997), it was decided that this Committee would be sponsored jointly by UNIDROIT and the Organisation for International Carriage by Rail (OTIF).
The first session of the Committee was attended by participants of 20 States, six observers and four International Organisations, and was held at the seat of OTIF in Berne on 15 and 16 March 2001. (UNIDROIT 2001 - Study LXXII H - Doc. 5) Prof. Karl F. Kreuzer (Germany) was elected as chairman of the session. The chairman of the Rail Working Group, Mr. Howard Rosen explained the economic background of the Convention and in particular the need to have a Rail Protocol.
The main working paper was the “Preliminary draft Protocol to the draft Convention on International Interests in Mobile Equipment on Matters specific to Railway Rolling Stock” (OTIF/JGR/2 – UNIDROIT 2000 Study LXXIIH – DOC. 4). This preliminary draft Rail Protocol had been discussed and established by the Rail Working Group.
During its session, the Committee proceeded to carry out a first reading of the preliminary draft Protocol. It was agreed that the task of implementing the amendments agreed during that reading should be carried out by a restricted Drafting Committee (Drafting Committee) composed of representatives of certain governments represented in Berne. This Drafting Committee met in Rome from 4 to 6 February 2002 and amended the text of the draft Protocol as per the discussions held at the first session and also made the changes in order to incorporate the necessary amendments following the adoption, on 16 November 2001, of the Convention in Cape Town and the Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Aircraft Equipment (Aircraft Protocol).
The second sessionof the Committee was held at the seat of UNIDROIT in Rome from 17-19 June 2002 (UNIDROIT 2002 - Study LXXII H - Doc. 7) and was attended by 45 delegates, representing 25 States and by four Organisations. Ms Inès M. Weinberg de Roca (Argentina) chaired the second session.
The revised text of the preliminary draft Rail Protocol (UNIDROIT 2002 - Study LXXII H - Doc. 6) was submitted to the Committee and some changes were suggested, which would be carried out by the Drafting Committee. The Drafting Committee met at the UNIDROIT headquarters from 23 to 25 October 2002 to implement the decisions taken during the second session. The UNIDROIT and OTIF Secretariats transmitted, to the member States of the two organisations and to interested international organisations, the text of the draft Rail Protocol as revised by the Drafting Committee in English and French (UNIDROIT 2002 - Study LXXII H - Doc. 8).
The third session of the Committee was held at Berne from 5-13 May 2003 (UNIDROIT 2003 - Study LXXII H - Doc. 13). Ms I. Weinberg De Roca (Argentina) was the chairperson of the Committee. The draft Rail Protocol, as revised by the Drafting Committee in English and French, was submitted to the Committee.
The third session was unusually long (the first and second sessions lasted only two and three days respectively) and enabled the special Rail Registry Task Force (established by the Committee at the first session) to meet several times and thus to achieve a compromise on the draft Rail Protocol's registry provisions. For the first time, the Committee had sufficient time to consider the entirety of the provisions of the draft Protocol and the Drafting Committee was able to meet three times to finalise the text finally adopted by the Committee its third and last meeting ( UNIDROIT 2003 - Study LXXII H - Doc. 14).
The Governing Council of UNIDROIT had noted with satisfaction that consensus had been established around the latest version of the draft Rail Protocol at the third session of the Committee and encouraged the organisation of regional seminars envisaged by the Secretariats of UNIDROIT and of OTIF. The regional seminars were to promote awareness of the future Rail Protocol and the benefits it could bring in states evidently in urgent need of private foreign investment in their railway infrastructures but which had not participated in the meetings of the Committee. Seminars in Eastern Europe, Latin America and Africa were envisaged.
In co-operation with the Government of Poland, a regional seminar for the states of Central and Eastern Europe was held in Warsaw on 15 and 16 April 2004 (UNIDROIT 2004 - Study LXXVII H - Doc. 15) at the headquarters of the Organisation for the Collaboration between Railways (OSJD). Representatives from around twenty States in the region as well as numerous interested business persons participated.
The second seminar, for countries in America, was held on 11 and 12 October 2004 (UNIDROIT 2004 - Study LXXVII H - Doc. 16 [in English/Spanish]) under the auspices of the Government of Mexico and the MexicanCenter of Uniform Law whose Director is M. Jorge Sánchez Cordero, a member of the Governing Council of UNIDROIT. The seminar was opened by the Mexican Minister of Foreign Affairs in the presence also of the Minister of Transport.
The third seminar, for countries in Africa, was held in Lomé (Togo) on 17 November 2006, organised jointly by AFRICARAIL and UNIDROIT: "The Cape Town Convention and its Rail Protocol - A new driving force for rail investments in Africa". This seminar was designed for players in the field of rail investments in Africa and explained all the economic benefits States and investors can draw from the application of the future Railway Protocol.
The Government of Luxembourg decided to convene a diplomatic Conference to adopt the draft Rail Protocol. The Conference was held under the joint auspices of UNIDROIT and OTIF in Luxembourg from 12 to 23 February 2007 and the Rail Protocol was officially adopted on 23 February 2007.
For the Final Act of the Diplomatic Conference, please click here.
Special Rail Registry Task Force
At its first session, the Committee agreed to establish a special Rail Registry Task Force, the task of which would be to report back to the Committee on the following issues:
- the extent to which the conclusions reached by the International Registry Task Force (that had carried out preparatory work on the international registration system for aircraft equipment) could be applied to the operation of the Rail Registry;
- an analysis of existing or possible future railway rolling stock registration systems;
- the advantages and disadvantages of making special provision for registration systems in unified transnational railway networks;
- the unique identification criteria for railway rolling stock and how they were registered;
- the utility and cost of a lexicon of equivalent descriptions of railway rolling stock and any other technical or operational issues and relevant legal implications.
Mr F. Croccolo (Italy), later replaced by Mr H. Kjellin (Sweden), and Mr P. Bloch (United States of America) were appointed as co-Chairmen of the special Rail Registry Task Force which met for the first time in Rome from 20 to 22 March 2002, for the second time in Washington, D.C. on 19 and 20 March 2003, for the third time in Brussels from 21 to 23 September 2004 and for the fourth time in Rome from 22 to 24 February 2005.
The last meeting of the Special Rail Registry Task Force was preceded by the “Cape Town Registry Workshop” held on February 21 2005 in the course of which Mr Jeffrey Wool, Secretary to and General Counsel of the Aviation Working Group, introduced and explained the solutions provided by the Aircraft Protocol with respect to the registration system, thereby enabling participants to discuss the advisability of retaining some of them in the draft Rail Protocol.
In accordance with the provisions of the Rail Protocol, the Special Rail Registry Task Force discussed the establishment of the International Rail Registry (hereinafter referred to as the International Registry) and laid out the functions and fee structure of the International Registry.
The Preparatory Commission for the establishment of the International Rail Registry
For the work of the Preparatory Commission, please click here.
Rail Working Group
The Rail Working Group is a non-profit association based in Switzerland. It was established in 1996 as per the request of UNIDROIT and OTIF to represent the rail industry when adopting and implementing the matters relating the Rail Protocol. The Rail Working Group had an observer status both at the Cape Town Diplomatic Conference adopting the Convention and the Luxembourg Diplomatic Conference, which adopted the Rail Protocol and it was involved in the drafting phase of both instruments.
Today, the Rail Working Group has a growing worldwide membership of key rail stakeholders, including a number of rail and transport associations, and operates in numerous countries (Belgium, Denmark, France, Germany, India, Italy, Luxembourg, Malta, Mexico, North American countries, South Africa, South-East Asian countries, Spain, Switzerland and United Kingdom) with the contact groups in order to work closely with governments and industry stakeholders on their country's ratification process for the Rail Protocol. The Rail Working Group also regularly attends and organizes conferences, seminars on rail sector and issues newsletters, articles, etc. on the topics regarding the Rail Protocol.
For more details on the Rail Working Group, please click here.