Vol 19 (2022) - Issue 4

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High Court of Australia Decision in the Virgin Australia Administration: A World First under the Cape Town Convention and Aircraft Protocol

Synopsis
In a world-first decision of an ultimate appellate Court on the Aircraft Protocol to the Cape Town Convention on International Equipment, the High Court of Australia recently dismissed the appeal of an aircraft engine lessor (Willis Lease Finance Corporation) which was seeking redelivery of its engines against the administrators of Virgin Australia: see Wells Fargo Trust Company, National Association (as owner trustee) v VB Leaseco Pty Ltd (administrators appointed) [2022] HCA 8.
This decision will have important ramifications for financing of the global airline industry. The Convention on International Interests in Mobile Equipment ('Cape Town Convention') and the Aircraft Protocol to the Cape Town Convention ('Aircraft Protocol') require uniformity and predictability in their application in the 87 countries that have adopted them. The High Court's judgment will be influential in other jurisdictions applying the Convention and Protocol and currently provides the most authoritative statement as to the effect of Art XI of the Protocol relating to 'Remedies in Insolvency'.