Nigeria has made history by becoming one of the few countries to issue Federal High Court (FHC) Practice Directions aimed at improving compliance with the Cape Town Convention on International Interest in Mobile Equipment, a treaty that regulates the financing and leasing of aircraft equipment.
The new directions were issued during a meeting of the Presidential Enabling Business Environment Council (PEBEC), presided over by Vice President Kashim Shettima at the Presidential Villa in Abuja.
In line with one of the five key objectives of Minister of Aviation and Aerospace Development, Mr. Festus Keyamo, SAN, the new practice directions are designed to address longstanding legal barriers to compliance with the Cape Town Convention. Prior to this development, Nigeria had a low compliance rating with the convention due to judicial delays that impeded the timely relief sought by creditors, as outlined under the convention’s provisions.
Nigeria’s non-compliance with the convention had significant ramifications for the country’s aviation sector, including blacklisting by the Aviation Working Group (AWG). This resulted in higher costs for Nigerian airline operators seeking to lease aircraft, as manufacturers like Boeing and Airbus viewed Nigeria as a risky market.
The issuance of these practice directions is expected to resolve this issue by eliminating legal impediments, ensuring that Nigeria complies with the timelines and remedies set by the convention. This change will boost investor confidence, allowing Nigerian airlines to acquire aircraft more easily and at lower costs, which will, in turn, support the growth of the aviation industry.
The minister, with the support of President Bola Tinubu, Vice-President Shettima and the Attorney General of the Federation, worked with key judicial stakeholders to bring about these reforms. The new practice directions are a significant step forward for Nigeria’s aviation sector, positioning the country to compete more favourably in the global aviation market.
As a signatory to the Cape Town Convention, Nigeria is required to ensure that its courts and administrative bodies adhere to the terms of the treaty. This includes providing timely remedies to creditors when aircraft leasing agreements are not honored. The new practice directions will ensure that the country’s judicial system supports the aviation industry in meeting international standards.
Keyamo expressed his gratitude to all stakeholders involved in the process, emphasising that this development marks the beginning of a new era for Nigeria’s aviation industry. The new rules will clear up Nigeria’s reputation in the global aviation market and open doors for greater investment in the sector, which will create jobs and contribute to economic growth.
This historic reform is expected to enhance the competitiveness of Nigerian airlines, increase their contribution to the national economy, and enable the country to fully benefit from the global aviation industry.
