The Cape Town Convention’s International Registry: Decoding the Secrets of Success in Global Electronic Commerce

Abstract

The International Registry, established pursuant to the Cape Town Convention on International Interests in Mobile Equipment, is a new global electronic commerce system for recording interests in aircraft equipment. Other examples of global electronic commerce systems include the airline computer reservation system, the SWIFT financial network, and the credit and debit card networks. The International Registry may be the most successful global electronic commerce network ever built in terms of the speed with which it was developed and implemented, its adoption rate, and the dearth of controversy surrounding its operation. This paper will identify some of the factors that have contributed to its remarkable success, and note how the absence of some or all of these factors has limited the success of other global electronic commerce systems. While some aspects of the Cape Town Convention - such as notice filing and creditor self-help rights - may have been controversial, its electronic commerce framework has attracted much less attention. The real “driver” of the International Registry’s success is the aviation industry’s interest in a more efficient aircraft financing regime - the design of the International Registry is a secondary factor that “enables” the realization of the primary goal. Another important contributor to the success of the International Registry is its tight integration into an international “hard law” system rooted in national property rights. Use of the International Registry is mandatory for any party wishing to enjoy the benefits conferred by the Convention. The electronic commerce dimensions of the International Registry evolved organically together with the property rights dimensions, as a result of CTC provisions that are both technology neutral and technology promoting. The governance system for the International Registry has proven to be flexible and dynamic in adapting to the needs of stakeholders, as well as stable. No other global electronic commerce systems have benefited from such a wide array of institutional factors favoring their success.

Keywords: Cape Town Convention, International Registry, electronic commerce, computer reservation system, credit card network, SWIFT, digital signature, electronic signature

JEL Classification: K33, K20