Practitioners involved in aircraft financings are likely to be familiar with the Convention on International Interests in Mobile Equipment, more commonly known as the "Cape Town Convention." The Cape Town Convention (the Convention) is an international trade convention sponsored by UNIDROIT (the International Institute for the Unification of Private Law), that was adopted in 2001 and is designed to create a multijurisdictional system of enforceable rights in mobile equipment. The reason aircraft financiers are generally knowledgeable about the Convention is because its first protocol (or supplement) was the "Protocol on Matters Specific to Aircraft" (the Aircraft Protocol). The Aircraft Protocol, which entered into force in contracting states in March 2006, now has more than 80 contracting countries and an international electronic registry that has handled hundreds of thousands of registrations.

In April 2017, this column discussed the second protocol to the Cape Town Convention, namely the Luxembourg Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Railway Rolling Stock (The Luxembourg Rail Protocol Steams Ahead, 65 N.Y.L.J. 257 (April 6, 2017)). The Luxembourg Rail Protocol (the Protocol), as it is generally known, which was signed on Feb. 23, 2007 in Luxembourg, aims to provide a multijurisdictional system of enforceable security interests in railway rolling stock, analogous to the system operating for aircraft under the Aircraft Protocol. This requires each item of rolling stock to be uniquely and permanently identified, but there is currently no global system for uniquely identifying rolling stock, whereas airframes and aircraft engines are uniquely identifiable through their manufacturer, model and serial number. Accordingly, an additional feature of the Luxembourg Rail Protocol is that it necessarily facilitates a new global unique numbering system—URVIS (Unique Rail Vehicle Identification System)—where an URVIS number will be allocated by the international registry and then permanently fixed to rolling stock. Rules on how the number is affixed are currently being developed by the UN.

The Protocol system for registering and recognizing interests in railway rolling stock includes the rights of secured creditors, lessors under leasing agreements, and equipment vendors under conditional sale agreements and other title reservation agreements. It accomplishes this through URVIS. URVIS would allow each item of rolling stock to be uniquely and permanently identified by a 16 digit number, and would be accompanied by an easily consultable registry. This international registry, once established, would be Internet-accessible and enable simplified filing of interests recognized by all contracting states. It would provide notice to third parties, and also establish priority as between registered, and unregistered or subsequently registered, claimants.