The Protection of Interests in Aircraft Objects Bill, 2025  (Bill No. IX of 2025) (Cape Town Bill, 2025) was introduced in the Rajya Sabha (the Upper House of the Indian Parliament) on February 10, 2025, with the primary aim of implementing the provisions of the Cape Town Convention and Protocol.

Key provisions of the Cape Town Bill, 2025 are set out below:

• The Directorate General of Civil Aviation (DGCA) is empowered to issue necessary directions for implementation of the Cape Town Convention and Protocol.
• A “debtor” (chargor/lessee) is required to maintain and submit to the DGCA records of dues arising from, related to or owed in regard to the ownership or use by the owner or operator of the aircraft, in the form and manner prescribed.
• A “creditor” (charge/lessor) will not be entitled to exercise any remedy under the Cape Town Convention or Protocol unless such creditor declares the occurrence of default by notifying the DGCA in the form and manner prescribed.
• The provisions of Article XI (Remedies on insolvency) of the Protocol will apply provided inter alia the international interest of the agreement has been registered in accordance with the Cape Town Convention and Protocol.  Thus, upon the occurrence of an insolvency-related event, the administrator/debtor is required to give possession of the aircraft to the creditor at the end of the waiting period (two calendar months) or the date on which the creditor would be entitled to possession of the aircraft if Article XI of the Protocol did not apply, whichever is earlier.
• Subject to the provisions of the Bharatiya Vayuyan Adhiniyam, 2024 (or rules thereunder), the provisions of Article XIII (De-registration and export request authorisation) of the Protocol apply to the de-registration and export request.
• The High Court having territorial jurisdiction will be the relevant court.
• In the case of any inconsistency between a provision of the Cape Town Bill, 2025 and any other law, the provisions of the Cape Town Bill, 2025 will prevail to the extent of the inconsistency.
• The provisions of the Cape Town Bill, 2025, the Cape Town Convention or the Protocol will not affect the rights of the Central Government (or other Government entity, provider of public services in India or inter-government organisation of which India is a member) to arrest or detain an aircraft for payment of any amount due to the Government of India (or such entities aforementioned).

While the Government had addressed the insolvency related issues by way of the October 3, 2023 notification issued by the Ministry of Corporate Affairs, the Cape Town Bill, 2025, once given the force of law in India, will serve as a comprehensive code to aid lenders and lessors in repossession of aircraft assets in India, and should go a long way in significantly reducing India jurisdiction risk of overseas lenders and lessors thereby lowering leasing and financing costs for Indian airlines.